Kelsey v Logan City Council & Ors (No. 8)
[2021] QIRC 114
•1 April 2021
QUEENSLAND INDUSTRIAL RELATIONS COMMISSION
CITATION:
Kelsey v Logan City Council & Ors (No.8) [2021] QIRC 114
PARTIES:
Kelsey, Sharon Rae Marie
(Applicant)v
Logan City Council
(First Respondent)Smith, Timothy Luke
(Second Respondent)Dalley, Cherie Marie
(Third Respondent)Lutton, Russell Bruce
(Fourth Respondent)Swenson, Stephen Frederick
(Fifth Respondent)Smith, Laurence William
(Sixth Respondent)Pidgeon, Phillip Wayne
(Seventh Respondent)Schwarz, Trevina Dale
(Eighth Respondent)Breene, Jennifer Rachael Julie
(Ninth Respondent)CASE NO:
PID/2017/3 PROCEEDING:
Application for an Injunction about a reprisal DELIVERED ON:
1 April 2021 HEARING DATES:
17, 18, 19, 20 and 21 December 2018
4, 5, 6, 7, 8, 11, 12, 13, 14 and 15 February 2019
2 and 29 May 2019
30 July 2019
14 February 2020
2, 8, 9 and 10 June 2020MEMBER:
HEARD AT:
O'Connor VP
Brisbane
ORDERS:
1. The Application against the First to Ninth Respondents is dismissed.
2. I will hear the parties on the orders to be made.
CATCHWORDS: PUBLIC INTEREST DISCLOSURE - APPLICATION FOR INJUNCTION ABOUT A REPRISAL - where applicant made a public interest disclosure - whether public interest disclosure is an industrial law.
INDUSTRIAL LAW - WORKPLACE RIGHT - whether applicant has exercised a workplace right - whether conduct breach of adverse action provisions - where applicant seeking declarations that the councillors had taken adverse action against her by voting to terminate her employment - where applicant seeking damages and penalties.
INDUSTRIAL LAW - APPLICATION FOR REINSTATEMENT - where applicant seeking injunctive relief - where applicant must establish accessorial liability in respect of the vote to terminate her employment - where applicant must establish actual knowledge on behalf of the alleged accessory of each of the essential elements of the offence - where applicant must show that the third to ninth respondents knew of the proscribed intention in not only their own votes but in the votes of others - whether contravention of civil penalty provision.
LEGISLATION:
CASES:
Industrial Relations Act 2016 (Qld), s 284, s 285, s 306, s 314, s 539, s 580
Public Interest Disclosure Act 2010, s 3, 13, 17, 40, 48
Criminal Code 1899, s 408C
Local Government Act 2009, s 11, s 12, s 13, s 162, s 170
Crime and Corruption Act 2001 (Qld), s 38
Corporations Act 2001 (Cth), Part 9.4AAACivil Aviation Act 1988
Privacy Act 1988
Constitution of Queensland 2001 (Qld), s 70
Fair Work Act 2009 (Cth)Civil Aviation Regulations 1988, r 51, r 215(9)
Local Government Regulation 2012, r 254EAustin v Honeywell Ltd (2013) 277 FLR 372
Australian Building and Construction Commissioner v Parker (2017) 266 IR 340; FCA 564Australian Licenced Aircraft Engineers Association v Sunstate Airlines (Qld) Pty Ltd (2012) 208 FCR 386
Board of Bendigo Regional Institute of Technical and Further Education v Barclay (2012) 86 ALJR 1044; 220 IR 445; 290 ALR 647; [2012] HCA 32
Briginshaw v Briginshaw (1938) 60 CLR 336
Construction, Forestry, Mining and Energy Union v Anglo Coal (Dawson Services) Pty Ltd (2015) 238 FCR 273
Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd (2014) 253 CLR 243
Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd [2017] FCAFC 50
Construction, Forestry, Mining and Energy Union v De Martin & Gasparini Pty Ltd (No.2) [2017] FCA 1046
Construction, Forestry, Mining and Energy Union v Endeavour Coal Pty Ltd (2015) 231 FCR 150
Curwen & Ors v Vanbreck Pty Ltd (2009) 26 VR 335Dalley & Ors v Kelsey & Ors [2019] ICQ 008
Fair Work Ombudsman v Priority Matters Pty Ltd [2017] FCA 833
Federal Commissioner of Taxation v Whitfords Beach Pty Ltd (1982) 150 CLR 355
General Motors-Holden's Pty Ltd v Bowling (1976) 12 ALR 605; 51 ALJR 235
Hanley v AMWU (2000) 100 FCR 530
Kelsey v Logan City Council and Another [2018] QIRC 009Kelsey v Logan City Council & Ors (No 7) [2019] QIRC 085.
Loft v Minister for Local Government, Minister for Racing and Minister for Multicultural Affairs [2018] QSC 96
Masters Home Improvement Australia Pty Ltd v North East Solutions Pty Ltd [2017] VSCA 88
Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd and others [1992] 110 CLR 445; HCA 66Smith v Kelsey & Ors; Dalley & Ors v Kelsey & Ors [2020] QCA 55
Tattsbet v Morrow (2015) 233 FCR 46
Tesco Ltd v Nattrass [1971] UKHL 1; [1972] AC 153
The Environmental Group v Bowd (2019) 288 IR 396
Trustees of the Property of Cummins (a bankrupt) v Cummins (2006) 227 CLR 278
Unsworth v Tristar Steering and Suspension Australia Limited [2008] FCA 1224APPEARANCES: Mr C. Murdoch QC with Ms H Stephanos of Counsel, instructed by MinterEllison Lawyers for the Applicant.
Mr A. Herbert of Counsel, instructed by King & Company Solicitors for the First Respondent.
Mr M Trim of Counsel, instructed by Gadens Lawyers for the Second Respondent.Mr W. Friend QC with Mr C. Massy of Counsel, instructed by McInnes Wilson Lawyers for the Third to Ninth Respondents.
Reasons for Decision
[1]Ms Sharon Rae Marie Kelsey (the Applicant) was appointed as Chief Executive Officer (CEO) of the Logan City Council (the First Respondent/the Council) on 2 June 2017. At that time, the Second Respondent was the Mayor.
[2]The Applicant was CEO of the First Respondent. The Third to the Ninth Respondents were Councillors of the First Respondent.
[3]Ms Kelsey's contract of employment contained a six-month probation period during which her employment could be ended on two weeks' notice. The contract had a nominal expiry date of 25 June 2021.
[4]On 10 October 2017, Cr Dalley, Cr Schwarz and Mayor Smith (the Second Respondent) conducted a performance review meeting with Ms Kelsey. During this meeting the Councillors present told Ms Kelsey there were concerns with her performance.
[5]On 12 October 2017 Ms Kelsey made a Public Interest Disclosure (the PID) to the Council, Minister for Local Government and to the Crime and Corruption Commission (the CCC) alleging possible misconduct on behalf of Mayor Smith.
[6]After the PID was made the Councillors received legal advice that they could not take the PID into account when considering Ms Kelsey's employment.
[7]On 1 December 2017, Ms Kelsey commenced proceedings against the Council and the Second Respondent, alleging contraventions of s 285 of the Industrial Relations Act 2016 (Qld) (the IR Act) and s 48 of the Public Interest Disclosure Act 2010 (Qld) (the PID Act).
[8]On 1 February 2018 the Applicant was successful in obtaining injunctive orders from the Queensland Industrial Relations Commission (the Commission) that the Second Respondent was prohibited in taking part in any resolution by the Council in respect of the Applicant's employment.[1]
[1] Kelsey v Logan City Council and Another [2018] QIRC 009.
[9]On 5 February 2018 the CCC wrote to each of the Councillors informing them of the penalties involved in taking action against a person because they had made a PID and advising that they would be investigating any action taken in respect of the Applicant's employment.
[10]On 6 February 2018 the Applicant's solicitors wrote to the First Respondent asserting that if a Councillor voted for her termination then they would have to individually justify the reason for that decision.
[11]On 7 February 2018 the Applicant's employment at the Council was terminated as a consequence of a vote of the Council. Councillors Dalley, Lutton, Swenson, L.W. Smith, Pidgeon, Schwarz, and Breene all voted in favour of the termination of her employment. Her employment was brought to an end by the giving of two weeks' notice.
[12]The Applicant subsequently amended her application to include the named Councillors as Respondents. The relief sought included orders for reinstatement as CEO, injunctive relief preventing the Councillors from voting on her employment until the completion of the contract term on 25 June 2021, declarations that the Councillors had taken adverse action against her by voting to terminate her employment and damages.
[13]On 10 July and 18 November 2018, the CCC informed the Councillors and Mayor Smith that it was investigating the Mayor's conduct.
[14]On 17 December 2018 the substantive hearing commenced, and the evidence was heard over 15 days concluding on 15 February 2019. The parties were due to give their closing submissions on 2 and 3 May 2019.
[15]On Friday 26 April 2019 the Second to the Ninth Respondents were each arrested by officers of the CCC and charged with fraud under s 408C of the Criminal Code 1899, on the basis that they dishonestly caused a detriment to Ms Kelsey by terminating her employment.
[16]The Appellants applied to the Commission for a stay of the proceedings on the basis that the Commission proceedings would require the Commission to determine the same factual matters that would need to be determined by the jury in the criminal trial, and that the likely publicity associated with that determination would prejudice the fair trial of the criminal charges.
[17]The Commission refused to grant the stay.[2]
[2] Kelsey v Logan City Council & Ors (No 7) [2019] QIRC 085.
[18]That decision was then appealed to the Industrial Court of Queensland (ICQ). The appeal was dismissed.[3]
[3] Dalley & Ors v Kelsey & Ors [2019] ICQ 008.
[19]The decision of the ICQ was appealed to the Queensland Court of Appeal and dismissed.[4]
[4] Smith v Kelsey & Ors; Dalley & Ors v Kelsey & Ors [2020] QCA 55.
Applicable Legislation
[20]The relevant legislation is set out hereunder.
Public Interest Disclosure Act 2010 (Qld)
3. Main objects of Act
The main objects of this Act are -
(a)to promote the public interest by facilitating public interest disclosures of wrongdoing in the public sector; and
(b)to ensure that public interest disclosures are properly assessed and, when appropriate, properly investigated and dealt with; and
(c)to ensure that appropriate consideration is given to the interests of persons who are the subject of a public interest disclosure; and
(d)to afford protection from reprisals to persons making public interest disclosures.
13. Disclosure by a public officer
(1)This section applies if a person who is a public officer has information about -
(a)the conduct of another person that could, if proved, be -
(i)corrupt conduct; or
(ii)maladministration that adversely affects a person's interests in a substantial and specific way; or
(b)a substantial misuse of public resources (other than an alleged misuse based on mere disagreement over policy that may properly be adopted about amounts, purposes or priorities of expenditure); or
(c)a substantial and specific danger to public health or safety; or
(d)a substantial and specific danger to the environment.
(2)The person may make a disclosure under section 17 in relation to the information to a proper authority.
(3)For subsection (1), a person has information about the conduct of another person or another matter if -
(a)the person honestly believes on reasonable grounds that the information tends to show the conduct or other matter; or
(b)the information tends to show the conduct or other matter, regardless of whether the person honestly believes the information tends to show the conduct or other matter
17 How disclosure to be made
(1)A person may make a disclosure to a proper authority in any way, including anonymously.
(2)However, if a proper authority has a reasonable procedure for making a public interest disclosure to the proper authority, the person must use the procedure.
(3)Despite subsection (2), if the proper authority is a public sector entity, the person may make the disclosure to -
(a)its chief executive officer; or
(b)for a public sector entity that is a department -the Minister responsible for its administration; or
(c)if the proper authority that is a public sector entity has a governing body -a member of its governing body; or
(d)if the person is an officer of the entity - another person who, directly or indirectly, supervises or manages the person; or
(e)an officer of the entity who has the function of receiving or taking action on the type of information being disclosed.
Examples of officers for paragraph (e) -
1an officer of an entity's ethical standards unit, if the disclosure is made under section 13(1)(a)(i)
2a health officer or environmental officer of a department having a statutory or administrative responsibility to investigate something mentioned in section 12(1)(a), (b) or (c) or section 13(1)(c) or (d)
3the officer of an entity in charge of its human resource management if the public interest disclosure is made under section 12(1)(d) and is about detriment to the career of an employee of the entity
(4)This Act does not affect a procedure required under another Act for disclosing the type of information being disclosed.
(5)If a public interest disclosure is properly made to a proper authority, the proper authority is taken to have received the disclosure for the purposes of this Act.
40 Reprisal and grounds for reprisal
(1)A person must not cause, or attempt or conspire to cause, detriment to another person because, or in the belief that -
(a)the other person or someone else has made, or intends to make, a public interest disclosure; or
(b)the other person or someone else is, has been, or intends to be, involved in a proceeding under the Act against any person.
(2)An attempt to cause detriment includes an attempt to induce a person to cause detriment.
(3)A contravention of subsection (1) is a reprisal or the taking of a reprisal.
(4)A ground mentioned in subsection (1) as the ground for a reprisal is the unlawful ground for the reprisal.
(5)For the contravention mentioned in subsection (3) to happen, it is sufficient if the unlawful ground is a substantial ground for the act or omission that is the reprisal, even if there is another ground for the act or omission
48 Right to apply to industrial commission
(1)An application for an injunction about a reprisal may be made to the industrial commission if the reprisal -
(a)has caused or may cause detriment to an employee; and
(b)involves or may involve a breach of the Industrial Relations Act 2016 or an industrial instrument under that Act.
(2)The application may be made by -
(a)the employee; or
(b)an industrial organisation -
(i)whose rules entitle it to represent the industrial interests of the employee; and
(ii) acting in the employee's interests with the employee's consent; or
(c)the Crime and Corruption Commission acting in the employee's interests with the employee's consent if -
(i) the employee is a public officer; and
(ii)the reprisal involves or may involve an act or omission that the Crime and Corruption Commission may investigate.
(3)The Industrial Relations Act 2016, section 473 applies to the application, but this part prevails if it is inconsistent with that section.
(4)If the industrial commission has jurisdiction to grant an injunction on an application under subsection (1), the jurisdiction is exclusive of the jurisdiction of any other court or tribunal other than the Industrial Court.
(5)Without limiting this section, the application is an industrial cause within the meaning of the Industrial Relations Act 2016.
Industrial Relations Act 2016
284 Meaning of workplace right
(1) A person has a workplace right if the person -
(a)has a right to the benefit of, or has a role or responsibility under, an industrial law, industrial instrument or order made by an industrial body; or
(b)is able to start, or participate in, a process or proceedings under an industrial law or industrial instrument; or
(c)is able to make a complaint or inquiry -
(i)to an entity having the capacity under an industrial law to seek compliance with that law or an industrial instrument; or
(ii)if the person is an employee - in relation to his or her employment.
(2)In this section -
industrial body means -
(a) the commission; or
(b)the court, or another court or commission (however called), exercising industrial law functions and powers corresponding to the commission's functions and powers.
285 Protection
(1) A person must not take adverse action against another person -
(a) because the other person -
(i)has a workplace right; or
(ii)has, or has not, exercised a workplace right; or
(iii)proposes to or proposes not to, or has at any time proposed to or proposed not to, exercise a workplace right; or
(b) to prevent the exercise of a workplace right by the other person.
Note -
This subsection is a civil penalty provision.
(2)A person must not take adverse action against another person (the second person) because a third person has exercised, or proposes to or has at any time proposed to exercise, a workplace right for the second person's benefit or for the benefit of a class of persons to which the second person belongs.
Note -
This subsection is a civil penalty provision.
Local Government Act 2009
13 Responsibilities of local government employees
(1)All employees of a local government have the same responsibilities, but the chief executive officer has some extra responsibilities.
(2)All employees have the following responsibilities -
(a)implementing the policies and priorities of the local government in a way that promotes -
(i)the effective, efficient and economical management of public resources; and
(ii)excellence in service delivery; and
(iii)continual improvement;
(b)carrying out their duties in a way that ensures the local government -
(i) discharges its responsibilities under this Act; and
(ii) complies with all laws that apply to local governments; and
(iii) achieves its corporate plan;
(c) providing sound and impartial advice to the local government;
(d) carrying out their duties impartially and with integrity;
(e)ensuring the employee's personal conduct does not reflect adversely on the reputation of the local government;
(f) improving all aspects of the employee's work performance;
(g) observing all laws relating to their employment;(h)observing the ethics principles under the Public Sector Ethics Act 1994, section 4;
(i)complying with a code of conduct under the Public Sector Ethics Act 1994.
(3) The chief executive officer has the following extra responsibilities -
(a) managing the local government in a way that promotes -
(i)the effective, efficient and economical management of public resources; and
(ii)excellence in service delivery; and
(iii)continual improvement;
(b)managing the other local government employees through management practices that -
(i) promote equal employment opportunities; and
(ii)are responsive to the local government's policies and priorities;
(c)establishing and implementing goals and practices in accordance with the policies and priorities of the local government;
(d)establishing and implementing practices about access and equity to ensure that members of the community have access to -
(i) local government programs; and
(ii)appropriate avenues for reviewing local government decisions;
(e) the safe custody of -
(i)all records about the proceedings, accounts or transactions of the local government or its committees; and
(ii) all documents owned or held by the local government;
(f) complying with requests from councillors under section 170A -
(i)for advice to assist the councillor carry out his or her role as a councillor; or
(ii)for information, that the local government has access to, relating to the local government.
Crime and Corruption Act 2001 (Qld)
38 Duty to notify commission of corrupt conduct
(1)This section applies if a public official reasonably suspect that a complaint, or information or matter (also a complaint), involves, or may involve, corrupt conduct.
(2)The public official must notify the commission of the complaint, subject to section 40.
The Adverse Action Claims
[21]The general protections scheme under the IR Act protects employees from adverse action taken against them by their employer because they have exercised or not exercised a workplace right or proposes to exercise or not exercise a workplace right. Under s 282(1) of the IR Act:
(1) Adverse action is taken by an employer against an employee if the employer -
(a) dismisses the employee; or
(b) injures the employee in his or her employment; or
(c) alters the position of the employee to the employee's prejudice; or
(d)discriminates between the employee and other employees of the employer.
[22]To constitute adverse action, relevantly the incident or event must constitute something that injured Ms Kelsey or altered her position to her detriment.
[23]It is not contentious that termination of employment is sufficient to amount to adverse action.[5]
[5] Closing Submissions of Applicant dated 19 March 2019, [2.41].
[24]The Third to Ninth Respondents concede that the following was the exercise of a workplace right for the purposes of s 285 of the IR Act:
i. conduct described at [2.65] (a) to (c) of the applicant's submissions;
ii. correspondence of 12 October 2017 to the Council, so far as it complained about the applicant's probation process; and
iii. commencement of this proceeding.[6]
[6] Third to Ninth Respondents' Closing Submissions dated 23 April 2019, [61].
The Exercise of Workplace Rights
[25]In the Further Amended Application,[7] the Applicant alleges that she has exercised a variety of workplace rights from August 2017 until the filing of this proceeding in December 2017.
[7] Applicant's Further Amended Application dated 10 April 2018, [26]-[28].
[26]The definition of "industrial law" in the IR Act is in materially the same terms as the definition of the phrase "workplace law" contained in s 12 of the Fair Work Act 2009 (Cth) (FW Act) and the cases decided under the FW Act provide guidance in respect to how that phrase ought to be interpreted.
[27]In Australian Licenced Aircraft Engineers Association v Sunstate Airlines (Qld) Pty Ltd (ALAEA)[8] Logan J considered the definition of "workplace law" in s 12 of the FW Act. That case involved the question whether regulations 51 and 215(9) of the Civil Aviation Regulations 1988 (CA Regulations) made under the Civil Aviation Act 1988, were workplace laws. Those regulations relevantly provided:
51 Reporting of defects in Australian aircraft - general
(1)Where a person who, in the course of his or her employment with an employer, is engaged in the maintenance of an Australian aircraft becomes aware of the existence of a defect in the aircraft, the person shall report the defect to his or her employer.
...
(4)If the holder of the certificate of registration for an Australian aircraft becomes aware of the existence of a defect in the aircraft, he or she must:
(a) have an investigation made of the defect;
...
[8] (2012) 208 FCR 386.
215 Operations manual
...
(9) Each member of the operations personnel of an operator shall comply with all instructions contained in the operations manual in so far as they relate to his or her duties or activities.
[28]In ALAEA, Logan J said:
... it is not fatal to the case which the ALAEA seeks to make against Sunstate that the sources of what it particularises as a workplace right are regulations, not provisions in an enactment.
It does not follow from this conclusion that the two particularised CA Regs are a law of the Commonwealth "that regulates the relationships between employers and employees". It is trite that this descriptive clause must be construed as a whole. Not only must the law "regulate" but there must be an object of regulation of a particular specified kind - "relationships between employers and employees".
A regulation which, like reg 51 or reg 215(9) of the CA Regs, imposes a duty on a person as an incident of undertaking a particular task in the course of employment - "engaged in the maintenance of an Australian aircraft" (reg 51) or as an incident of a particular type of employment - operations personnel of an operator (reg 215(9)) does not regulate the relationship between that person and his employer. Having regard to the dictionary definitions cited by Barker J in ALAEA v International Aviation Service, each of these provisions in the CA Regs might readily be characterised as a provision which "regulates" the conduct of a person to whom it applies but the object of that regulation is not the relationship between that person as an employee and his employer but rather that of air safety by the imposition of particular reporting obligations. Common to the definitions of "workplace instrument" and "workplace law" in s 12 of the Fair Work Act is the object of the relationship between employer and employee. Provisions which do no more than use the status of employer or employee as an incidental touchstone for the imposition of duties serving other ends do not fall within the terms of these definitions. (Emphasis added)
Insofar as there may, because of this feature of the definitions, otherwise be room for debate as to whether provisions in statutes or regulations dealing with occupational health and safety matters had as their object the relationship between employer and employee, that debate is quelled by the express inclusion of such provisions in the definition of "workplace law". That express inclusion also sets the limit of the additional reach of the definition.[9]
[9] (2012) 208 FCR 386, [31]–[34].
[29]The Third to the Ninth Respondents referred the Commission to the decision of the Federal Court in The Environmental Group v Bowd.[10] In that case the applicant was the CEO of a publicly listed company who was subject to adverse action by the employer and its managing director in the form of an investigation into the CEO's conduct, suspension and dismissal because he exercised "workplace rights" under s 341 of the FW Act.
[10] (2019) 288 IR 396.
[30]Whilst the CEO relied on numerous workplace rights, the two main issues were whether a CEO report issued to the Board about the CEO's concerns with the governance of the company generally, were a complaint or inquiry in respect of his employment. Steward J concluded that it was not. His Honour found that the CEO Report was not, as a matter of substance, about Mr Bowd's employment as CEO. It was not directed at his relationship of employment. Rather, it was directed at or concerned with, the state of The Environmental Group of companies as at January 2017. It was made as part of The Environmental Group's processes of corporate governance.[11]
[11] Ibid [127].
[31]The second issue was whether the making of a whistle-blower complaint to the Australian Securities and Investments Commission (ASIC) was engaging in a process under a workplace law.
[32]The relevant provisions of Part 9.4AAA of the Corporations Act 2001 (Cth) adopt materially the same structure as the PID Act and provide for a discretionary disclosure to be made by a category of persons, including employees. The discloser is then protected from any adverse treatment as a consequence of making those disclosures.[12]
[12] Ibid [10].
[33]Steward J recited the argument made by the CEO to the effect that he could initiate a process pursuant to Part 9.4AAA which was a process under a workplace law. That is, the making of a disclosure was the exercise of a workplace right. His Honour said:
It was also submitted that s 341(1)(b) was satisfied because, at the very least, Mr Bowd could 'initiate' pursuant to these rules a process 'under a workplace law'. For the moment, I am prepared to accept that a complaint made to ASIC could initiate a process, namely an investigation. However, I do not think that Pt 9.4AAA is a law that regulates, or comprises rules that regulate, relationships between employees and employers. In my view, no relevant provision of Pt 9.4AAA is a workplace law.[13]
[13] Ibid [138].
[34]After citing ALAEA[14] with approval, Steward J held:
To secure the benefit of the protections afforded by Pt 9.4AAA, the disclosure must qualify for protection by satisfying the requirements of s 1317AA of the CA. I consider these in more detail below. For the moment, it may be noted that the provisions of Pt 9.4AAA are not only concerned with employees. They extend to disclosures made by suppliers of goods and services to a company, and to employees of such suppliers, which have been made to ASIC, to the company's auditor, to a person authorised to receive such disclosures or to certain senior identified executives. Their object is not the regulation of relations between employees and employers. Rather, their object is to encourage compliance with the terms of the CA by giving statutory protection to "whistleblowers". It may be accepted that the provision recognises that employees of a company are likely to be such "whistleblowers", and thus expressly refers to employees and provides for a right of reinstatement. But what is being regulated is not that employee's relationship with the company, but rather, and ultimately, that company's potential contravention of provisions of the CA. The relevance of an employee to the provisions contained in Pt 9.4AAA is to that person in his or her capacity as a whistleblower, who perhaps also happens to be an employee, rather than as someone employed by a company. As was the case in Australian Licenced Aircraft Engineers Association, s 1317AA and Pt 9.4AAA more generally, deploy "the status of an employer or employee" for the "imposition of duties serving other ends", namely the regulation of corporate behaviour. If it matters, the same conclusion should also apply to ss 182 and 183 of the CA. Each provision is directed at the regulation of corporate governance.
Did s 341(1)(c) of the definition of "workplace right" apply?
For the foregoing reasons, I am also not satisfied that the making of the complaint to ASIC was a complaint "to a person or body having the capacity under a workplace law to seek compliance with that law" for the purposes of s 341(1)(c)(i). That is because, for the reasons given, Pt 9.4AAA of the CA is not a "workplace law".[15]
[14] (2012) 208 FCR 386.
[15] (2019) 288 IR 396, [140], [141].
[35]For the following reasons, I accept that s 13(2) of the LG Act is an industrial law. However, the PID and CC Act are not industrial laws for the purposes of the IR Act. Whilst each piece of legislation imposes obligations upon either an employee or an employer, neither Act seeks to regulate the relationship between employees and employers.
Local Government Act
[36]The Applicant submits that the LG Act is an industrial law due to the nature of the Act and particularly s 13 which regulates the relationship between the Local Government and its employees, including the Applicant. The Applicant had a workplace right under s 284(1)(a) of the IR Act due to her responsibilities under s 13 of the LG Act.
[37]As to whether the matter is an "industrial cause" and an "industrial matter", the Applicant referred to the various non-publication orders which have been made under ss 539(c) and 580(5) of the IR Act. It is submitted that the Respondents did not oppose such orders and on that basis, it is argued that the Respondents accept the matter involves an "industrial cause" as set out in Schedule 5 and s 9 of the IR Act. Schedule 1 of the IR Act sets out a list of industrial matters referred to in s 9(3) including Items 16, 17 and 21.
[38]The Applicant submits that she exercised a workplace right under the LG Act. Insofar as the LG Act is concerned, it is contended that the right derives from s 13(2)(b) and (g). It is argued by the Applicant that s 13 of the LG Act prescribes responsibilities of all local government employees, including additional responsibilities on the CEO.
[39]Contrary to the Applicant's submissions, the question is not whether the statute as a whole can be described as an "industrial law", but rather whether the specific provision being relied upon can be characterised in that way.
[40]After considering the reasoning of Logan J in ALAEA,[16] the First Respondent submits that in respect of those parts of the LG Act which make specific prescription for the exercise of control by the employer and the Chief Executive Officer over local government authorities, then s 13 of the LG Act "… appears to be a workplace law."[17]
[16] (2012) 208 FCR 386.
[17] Closing Submissions of First Respondent undated, [112].
[41]Equally, the Third to Ninth Respondents accept that s 13 of the LG Act is an industrial law.
[42]However, the Second Respondent takes a different position arguing that the Applicant did not exercise a workplace right under the LG Act as it is not an industrial law for the purposes of the IR Act.[18]
[18] Closing Submissions of Second Respondent dated 18 April 2019, [121].
[43]I accept that s 13(2) of the LG Act is a law which regulates the relationship between employers and employees and is accordingly an industrial law within the meaning of the IR Act.
Public Interest Disclosure Act
[44]The Applicant submits that s 48 of the PID Act is an industrial law as the provision allows an 'employee' to make an application for an injunction about a reprisal where the reprisal has caused or may cause detriment to an employee and involves or may involve a breach of the IR Act or an industrial instrument under that Act.
[45]Further, given the wording and requirements of the provision, the provision regulates the relationship of the employee and the employer as it relates to a reprisal. The section itself states that such applications are industrial causes.
[46]The Applicant argues that the effect of s 48 of the PID Act is to protect employees from detriment arising as a result of them making a PID. A finding that s 48 of the PID Act is not an industrial law for the purposes of s 284(1)(b) of the IR Act would be inconsistent with that protection and the sole application of the section to an employee.
[47]It is contended that this construction is confirmed by s 48(5) of the IR Act which deems any application to be an industrial cause for the purposes of the IR Act. The identification of the proceeding as an industrial cause enlivens the range of procedural and substantive powers conferred in the IR Act on the Commission when dealing with an industrial cause.[19] If s 48 of the PID Act was an industrial law, being a law that regulated the relationship between an employer and an employee, there would be no need to deem such proceedings as an industrial cause. They would by their very nature fall within that definition.
[19] Industrial Relations Act 2016, s 539.
[48]Moreover, given the width of s 9 and Schedule 1 even without the express statement of s 48 of the PID Act, the Applicant submits that the definition is so broad that the subject matter of this application ought to be considered an "industrial matter" and thus an "industrial cause".
[49]The Applicant in the Further Amended Application makes it clear that the Council Complaint and CCC Referral under ss 13 and 17 of the PID Act was the exercise of a workplace right for the purposes of the s 284 of the IR Act. However, the Applicant exercised no workplace right under s 48 of the PID Act.
[50]Section 48(1)(a) of the PID Act gives the Applicant the capacity to apply to the Commission for an injunction about a reprisal if the reprisal has caused or may cause detriment to an employee. It does not seek to regulate the relationship between an employer and an employee. All that is necessary is that the person who is suffering a detriment by virtue of the reprisal be an employee and that there may be a contravention of the IR Act.
[51]The First Respondent argues that if the PID Act is not an "industrial law" as defined, then the making of a PID cannot amount to the exercise of a workplace right as asserted, as such activity cannot be the commencement of, or participation in, a process under an industrial law.
[52]The First Respondent submits that the standing of the PID Act as an "industrial law" is not directly pleaded. Rather the Applicant's further amended application alleges the workplace rights relied upon in accordance with the definition in s 284(1)(b) of the IR Act was (in part) the ability to start or participate in a process or proceeding under the PID Act.[20] In addition, the Applicant's submissions suggest the exercise of a workplace right for the purposes of these proceedings by making various complaints. Part of the correspondence has been characterised as a PID under the PID Act.
[20] Applicant's Further Amended Application dated 10 April 2018, [26.2].
[53]As submitted in the First Respondent's written submissions, ss 13 and 17 of the PID Act do not, and do not purport in any way to, regulate the employment relationship between the Applicant and the First Respondent.[21]
[21] Closing Submissions of First Respondent undated, [120].
[54]There is nothing within the Objectives of the PID Act[22] or in ss 13 or 17 which suggests that the conferral of entitlements and obligations is referrable to the regulation of employment. By designating a public officer as being a person who has a right to act against any other person pursuant to ss 13 and 17 of the PID Act cannot constitute those sections as being an "industrial law" as defined, nor can action taken in reliance upon those sections properly be construed as being a role or responsibility, or the commencement of a proceeding, under an "industrial law".
[22] Public Interest Disclosure Act 2010 (Qld), s 3.
[55]In order for a law to answer the description as an industrial law, it must have as its object the regulation of the relationship between employers and employees. That focuses attention on the purpose of the regulation contained within the relevant statute.
[56]It will be recalled that Logan J found in ALAEA that provisions which do no more than use the status of an employer or an employee as an incidental touchstone for the imposition of regulation or other duties serving other ends, do not fall within the definition of a workplace law. That was because those provisions did not have the object of regulating the relationship between employers and employees.[23]
[23] (2012) 208 FCR 386, [33].
[57]Sections 13 and 17 of the PID Act are not directed towards regulating the relationship between the public official and their employer, but are provisions which are directed towards the control and investigation of corrupt behaviour, and which designates certain persons as having particular entitlements (in the context of reporting corrupt behaviour) in the broadest possible sense, rather than merely being the actions of the specific employer of the disclosing person.
[58]The First Respondent submits that this is an insufficient connection. The fact that legislation of this kind may contain particular remedies that will be available, under limited circumstances, for disclosers who happen to be employees, does not change the character of the provisions under which the initial disclosure was made.
[59]In ALAEA, Logan J rejected a submission that in order for an Act to fall within the definition, the entire Act had to be a law which regulated the relationship between employers and employees.[24]
[24] Ibid [24],
[60]This approach is consistent with the Full Court's conclusion in Tattsbet v Morrow.[25]It is not necessary for the entire PID Act to be described as an industrial law. It is only necessary that the sections under which the Applicant made the alleged PID, being ss 13 and 17 of the PID Act, be industrial laws.
[25] (2015) 233 FCR 46, [102].
[61]There is no basis to construe ss 13 and 17 of the PID Act as laws which have the purpose of regulating the relationship between employers and employees. The purpose of those provisions is to facilitate the ability of persons (regardless of whether they are employees) to report concerns about corruption and not in any way to regulate the employment relationship.
[62]For the reasons set out above, ss 13 and 17 of the PID Act are not industrial laws and accordingly, the correspondence of 12 October 2017, so far as it constituted a PID, did not constitute the exercise of a workplace right.
[63]Further, the First Respondent submits that any claim under the IR Act based upon the assertion that adverse action was taken because of the making of a PID, pursuant to ss 13 and 17 of the PID Act, by way of the letter of 12 October 2017, must also fail.
Crime and Corruption Act
[64]As Chief Executive of the First Respondent, the Applicant was, for the purposes of the CC Act, a public official of a unit of public administration.
[65]Section 38 of the CC Act places a requirement on the Applicant to notify the CCC in circumstances where she reasonably suspects that she has information involving corrupt conduct. It is contended that the duty imposed on the Applicant arises as a direct result of the Applicant's employment with the First Respondent. Accordingly, the Applicant submits that the CC Act regulates the relationship between her and her employer due to the duties it places on the Applicant in her role as a public official within a unit of public administration.
[66]The Respondents argue that the CC Act is not an industrial law for the purposes of the IR Act. Whilst the CC Act imposes an obligation on the Applicant to report corrupt conduct, it does not seek to regulate the relationship between an employee or employer.
[67]In Austin v Honeywell Ltd,[26] the applicant claimed that, during a pre-employment screening process, the respondent required her to provide, amongst other things, an electronic copy of her signature and a digital copy of her passport. The applicant declined to provide those things because she was concerned about identity theft and the bona fides of the agent who was engaged by the respondent to conduct the pre-employment screening.
[26] (2013) 277 FLR 372.
[68]The respondent withdrew the offer of employment it had made to the applicant. The applicant claimed that this constituted adverse action because the applicant had exercised a workplace right that arose under a workplace law, namely, the Privacy Act 1988.
[69]After considering the reasoning of Logan J in ALAEA, Riley FCCJ concluded that the Privacy Act 1988 was not a workplace law. It was held that at most, the Privacy Act 1988 incidentally imposes duties on prospective employers to achieve ends that do not primarily concern the regulation of the relationship between employers and employees.[27]
[27] (2013) 277 FLR 372, [60].
[70]As s 4(1)(b) of the CC Act makes clear, one of the purposes of the Act is to continuously improve the integrity of, and to reduce the incidence of corruption, in the public sector. The CC Act serves the function of guarding against corrupt practices of various kinds and is not of itself concerned with the regulation of the employment relationship.
[71]As Logan J found in ALAEA the CA Regulations were directed to the object of air safety and that the reporting of defects in aircraft was a part of that objective.[28] The fact that the aircraft engineer who discovers the irregularity is an employee of the airline operator who owns and maintains the aircraft, and therefore the person to whom they must report it, does not render the CA Regulations as an industrial law. It is a provision in which that relationship is used as a mere touchstone by which duties which serve another purpose are imposed, namely the duty to ensure air safety.
[28] (2012) 208 FCR 386, [33].
[72]By analogy, the CC Act nominates a particular type of person by reference to the office that they hold, and requires them to report certain types of conduct which may or may not have anything to do with their employer, and forms no part of the employment relationship or the regulation thereof.
[73]For this reason, the CC Act is not an industrial law for the purposes of the IR Act.
Onus of Proof
[74]As a matter of general principle, in proceedings before the Commission the legal onus of proof lies with the person who alleges the thing that must be proved. The Applicant accepts that, subject to the application of the reverse onus of proof, she bears the onus of proving the facts alleged in her claim.[29]
[29] Closing Submissions of Applicant dated 19 March 2019, [2.94]-[2.96].
[75]The Applicant also recognises that in order to succeed in her claim against the Respondents she needs to prove these matters subject to the degree of proof as recognised in Briginshaw v Briginshaw (Briginshaw).[30]
[30] (1938) 60 CLR 336.
[76]The Briginshaw principle, at its simplest, is understood as requiring the exercise of care when making findings of fact in determining serious civil matters. The principle was explained by Dixon J where his Honour wrote:
…when the law requires the proof of any fact, the tribunal must feel an actual persuasion of its occurrence or existence … It cannot be found as a result of a mere mechanical comparison of probabilities.[31]
[31] Ibid [361].
[77]His Honour went on to express the standard as one of "reasonable satisfaction". He observed:
… reasonable satisfaction is not a state of mind that is attained or established independently of the nature and consequences of the fact or facts to be proved. The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer … In such matters "reasonable satisfaction" should not be produced by inexact proofs, indefinite testimony, or indirect inferences.[32]
[32] Ibid [361]-[362].
[78]In Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd and others,[33] Mason CJ, Brennan, Deane and Gaudron JJ stated as follows:
The ordinary standard of proof required of a party who bears the onus in civil litigation in this country is proof on the balance of probabilities. That remains so even where the matter to be proved involves criminal conduct or fraud. On the other hand, the strength of the evidence necessary to establish a fact or facts on the balance of probabilities may vary according to the nature of what it is sought to prove. Thus, authoritative statements have often been made to the effect that clear or cogent or strict proof is necessary "where so serious a matter as fraud is to be found". Statements to that effect should not, however, be understood as directed to the standard of proof. Rather, they should be understood as merely reflecting a conventional perception that members of our society do not ordinarily engage in fraudulent or criminal conduct and a judicial approach that a court should not lightly make a finding that, on the balance of probabilities, a party to civil litigation has been guilty of such conduct …[34] (citations omitted)
[33] [1992] 110 CLR 445; HCA 66.
[34] Ibid [2].
[79]Let me now turn to the "reverse onus" provisions in s 306 of the IR Act. Section 306 of the IR Act provides:
306 Reason for action to be presumed unless proved otherwise
(1) Subsection (2) applies if -
(a)in an application in relation to a contravention of a provision of this part, it is alleged that a person took, or is taking, action for a particular reason or with a particular intent; and
(b) taking that action for that reason or with that intent would be a contravention of the provision.
(2)It is presumed that the action was, or is being, taken for that reason or with that intent, unless the person proves otherwise.
(3) Subsection (2) does not apply in relation to orders for an interim injunction.
[80]The equivalent provision in the FW Act is s 361.
[81]The High Court considered the effect of s 361 of the Act in Board of Bendigo Regional Institute of Technical and Further Education v Barclay (Barclay).[35] In that case, the alleged reason for the adverse action was that the employee was an officer or member of an industrial association or engaged or proposed to engage in particular kinds of industrial activity. French CJ and Crennan J said:
There is no warrant to be derived from the text of the relevant provisions of the Fair Work Act for treating the statutory expression "because" in s 346, or the statutory presumption in s 361, as requiring only an objective inquiry into a defendant employer's reason, including any unconscious reason, for taking adverse action. The imposition of the statutory presumption in s 361, and the correlative onus on employers, naturally and ordinarily mean that direct evidence of a decision-maker as to state of mind, intent or purpose will bear upon the question of why adverse action was taken, although the central question remains "why was the adverse action taken?".
This question is one of fact, which must be answered in the light of all the facts established in the proceeding. Generally, it will be extremely difficult to displace the statutory presumption in s 361 if no direct testimony is given by the decision-maker acting on behalf of the employer. Direct evidence of the reason why a decision-maker took adverse action, which may include positive evidence that the action was not taken for a prohibited reason, may be unreliable because of other contradictory evidence given by the decision-maker or because other objective facts are proven which contradict the decision-maker's evidence. However, direct testimony from the decision-maker which is accepted as reliable is capable of discharging the burden upon an employer even though an employee may be an officer or member of an industrial association and engage in industrial activity.[36] (citations omitted)
[35] (2012) 86 ALJR 1044; 220 IR 445; 290 ALR 647; [2012] HCA 32.
[36] Ibid [44]-[45].
[82]French CJ and Crennan J adopted the reasons of Mason J (with whom Stephen and Jacobs JJ also agreed) in General Motors-Holden's Pty Ltd v Bowling[37] where their Honours said:
The protection of trade unions and their representatives from discrimination and victimization by employers does not require an interpretation as extreme as that favoured by Isaacs J. It would unduly and unfairly inhibit the dismissal of a union representative in circumstances where other employees would be dismissed and thereby confer on the union representative an advantage not enjoyed by other workers, to penalize a dismissal merely because the prohibited factor entered into the employer's reasons for dismissal though it was not a substantial and operative factor in those reasons.[38]
[37] (1976) 12 ALR 605; 51 ALJR 235.
[38] (1976) 12 ALR 605, [616]; 51 ALJR 235, [241].
[83]Gummow and Hayne JJ adopted a similar position in Barclay observing:
In determining an application under s 346 the Federal Court was to assess whether the engagement of an employee in an industrial activity was a "substantial and operative factor" as to constitute a "reason", potentially amongst many reasons, for adverse action to be taken against that employee. In assessing the evidence [said] to discharge the onus upon the employer under s 361(1), the reliability and weight of such evidence was to be balanced against evidence adduced by the employee and the overall facts and circumstances of each case; but it was the reasons of the decision-maker at the time the adverse action was taken which was the focus of the inquiry.[39]
Heydon J wrote:
To search for the "reason" for a voluntary action is to search for the reasoning actually employed by the person who acted. Nothing in the Act expressly suggests that the courts are to search for "unconscious" elements in the impugned reasoning of persons in Dr Harvey's position. No requirement for such search can be implied. This is so if only because it would create an impossible burden on employers accused of contravening s 346 of the Act to search the minds of the employees whose conduct is said to have caused the contravention. How could an employer ever prove that there was no unconscious reason of a prohibited kind? An employer's inquiries of the relevant employees would provoke, at best, nothing but hilarity. The employees might retort that while they could say what reasons they were conscious of, they could say nothing about those they were not conscious of.[40]
[39] (2012) 290 ALR 647, [127].
[40] Ibid [146].
[84]For the Applicant to succeed, the reason for the adverse action must be "a substantial and operative factor" in the reasons for the adverse action. The Commission must consider the conscious reasons of the Third to Ninth Respondents and does not require analysis of unconscious or subconscious reasons.
Background to the evidence
[85]The Applicant was appointed the Chief Executive of the First Respondent following a competitive recruitment process undertaken by Davidson Recruitment.
[86]Preceding the Applicant's appointment, the Council experienced a period of significant instability. Prior to Ms Kelsey commencing as CEO, the Council had four permanent and interim CEOs in a 14-month period - Mr Chris Rose, Mr John Oberhardt, Mr Andrew Milner and Mr Todd Roh1.[41] Many Councillors gave evidence of their dissatisfaction with the performance of certain of these CEOs.[42]
[41] Exhibit 1 - Affidavit of Sharon Rae Marie Kelsey dated 11 January 2018, [3]-[6].
[42] TR4-24, LL43-44 (Cr Power); TR7-13, LL26-28 (Cr Lutton); TR8-26, LL22-24 (Cr Pidgeon); TR11-33, LL40-42 (Cr Dalley); TR15-20, LL43-45 (Cr Schwarz).
[87]The appointment of Ms Kelsey brought with it a degree of optimism that her engagement would usher in a new era of stability for Logan City. However, as the evidence demonstrates, that was not to be.
[88]As the evidence unfolded, it became apparent that the Council was divided. Councillors were divided broadly between those who supported Ms Kelsey and those who did not. The depressing saga that this matter became was set against a background of pettiness, distrust and vitriol; a factionalised Council consumed by self-interest and point-scoring.
Overview of the Applicant's evidence
[89]Ms Kelsey holds the degrees of Bachelor of Laws and Master of Laws and is admitted as a Barrister and Solicitor. She has a history of work in senior local government positions in South Australia and Victoria, in the legal profession and with an anti-corruption body.[43]
[43] Exhibit 7 - Affidavit of Sharon Rae Marie Kelsey dated 20 November 2018, [13]-[14].
[90]Ms Kelsey was appointed following a long selection process. One part of this process was an interview with Councillors. All Councillors present at Ms Kelsey's interview were entitled to ask Ms Kelsey questions including about her experience, and the difference between Council and local government across jurisdictions. Some took the opportunity to do so.
[91]At a Special Council meeting on 2 June 2017, Cr Schwarz moved to appoint Ms Kelsey as the Council CEO. This was seconded by Cr Laurie Smith and was resolved unanimously.[44]
[44] Exhibit 67 - Affidavit of Silvio Giovanni Trinca dated 12 April 2018, SGT2.
[92]Ms Kelsey commenced at the Council on 27 June 2017.
[93]Prior to her making various complaints during her employment, the Mayor and others had provided Ms Kelsey with positive feedback about her performance including, that she was 'doing a tremendous job understanding this complex organisation and as I've said before a level of calm we haven't seen in some time'.[45]
[45] Exhibit 7 - Affidavit of Sharon Rae Marie Kelsey dated 20 November 2018, [18]-[20]; Exhibit 8, Tab 20.
[94]To the extent that various Councillors raise in their affidavits, concerns in relation to Ms Kelsey's appointment as CEO, the recruitment process in which Ms Kelsey was engaged or her performance at interview were matters never raised with Ms Kelsey or with Cr Power.
[95]Councillors had not raised concerns about Ms Kelsey's performance with her or with Cr Power from June 2017 when she commenced until after her PID was made.[46]
[46] Exhibit 49 - Affidavit of Darren Ross Power dated 18 May 2018, [25]-[26] and DP3-1.
[96]The five non-Respondent Councillors' views in relation to Ms Kelsey's performance were positive.
[97]Council staff were said to be supportive of the Applicant, being impressed with her commitment to her role and her performance. This is apparent from the feedback given to other Councillors, the feedback given to Ms Rachel Hunter and detailed in Ms Hunter's Probation Report, their reaction to her termination and the numerous cards, letters and other well wishes Ms Kelsey received following her termination.[47]
A SUMMARY OF KEY ISSUES
[47] Exhibit 3 - Affidavit of Sharon Rae Marie Kelsey dated 12 March 2018, [107]-[119].
Formal Titles
[98]Within the first month of Ms Kelsey's employment, Mayor Smith indicated to Ms Kelsey that:
(a) he thought things were too casual;
(b) he wanted to be called 'Mayor' or 'Mr Mayor' and councillors to be referred to as 'Councillor'; and
(c) he had raised this issue with councillors.[48]
[48] Exhibit 4 - Affidavit of Sharon Rae Marie Kelsey dated 16 April 2018, [6(b)(ii)(C)].
[99]As a result, when sending out her introductory letter to staff, Ms Kelsey included phrasing to the effect that staff should treat Councillors on a professional basis and use proper titles.[49] This letter was also sent to all Councillors. Cr Laurie Smith responded to the letter with praise. Only Councillors Lutton and Laurie Smith raised the issue of formal titles with Ms Kelsey. This occurred sometime after the Applicant's letter was sent. They indicated to the effect they would ignore the direction.[50]
[49] Exhibit 8, tab 36; see also Exhibit 4 - Affidavit of Sharon Rae Marie Kelsey dated 16 April 2018, [6(c)(ii)(C)]; Exhibit 7 - Affidavit of Sharon Rae Marie Kelsey dated 20 November 2018, [83]-[86] and SK7-2.
[50] Exhibit 4 - Affidavit of Sharon Rae Marie Kelsey dated 16 April 2018, [6(c)(ii)(C)]; TR2-9, LL15-20.
[100]When the issue was raised, Cr Power approached Ms Kelsey who advised him that it was a direction of the Mayor.[51] On or around January 2018, Ms Kelsey advised Councillors that the direction came from the Mayor.
[51] Exhibit 7 - Affidavit of Sharon Rae Marie Kelsey dated 20 November 2018, [94].
[101]Despite their alleged concerns, no Councillors ever asked Ms Kelsey, or took other steps to formally rescind the direction in Ms Kelsey's letter nor have they instructed Mr Trinca to do so. The Councillors also agreed that when they were referred to by their formal title, they could (and do) simply request that they are called by their first name.[52]
[52] TR8-33, LL35-41 (Cr Pidgeon); TR7-6, LL6-20 (Cr Lutton); TR9-11, LL37-43 (Cr Swenson).
Concerns regarding the Mayor
[102]During her employment Ms Kelsey said she became concerned about the actions of the Mayor in relation to Ms Jane Frawley, the acting Director - Innovation and City Transformation. These concerns included:
(a) the recruitment process followed in relation to the permanent Director - Innovation and City Transformation role;
(b) Ms Frawley's appointment to the Director - Innovation and City Transformation role;
(c) the remuneration for the Director - Innovation and City Transformation role;
(d) the information shared between Ms Frawley and the Mayor;
(e) the intervention by the Mayor into Ms Frawley's performance review/probation process; and
(f) inappropriate joint travel involving Ms Frawley and the Mayor.[53]
[53] Exhibit 1 - Affidavit of Sharon Rae Marie Kelsey dated 11 January 2018, [7]-[83]; Exhibit 2- Affidavit of Sharon Rae Marie Kelsey dated 22 January 2018, [5] and [8] - [15]; Exhibit 7 - Affidavit of Sharon Rae Marie Kelsey dated 20 November 2018, [255] - [261]. See also Exhibit 8 at tabs 2, 3, 4, 5, 6, 7; TR3-19, LL32-39.
[103]Of particular concern for Ms Kelsey was the nature of the Mayor's relationship with a subordinate executive who reported to her. Ms Kelsey had been involved in Ms Frawley's recruitment into her Director role and had noted an unusual and interventionist approach by the Mayor in support of her candidacy.
[104]Later, it became apparent to Ms Kelsey that the Mayor and Ms Frawley had, what has been described as an unusually close relationship with a considerable amount of direct communication. She observed the Mayor continuing to intervene in support of Ms Frawley, including specifically in connection with Ms Frawley's probationary review, which was Ms Kelsey's responsibility to conduct.
[105]Although some Councillors now purport to allege concerns about Ms Kelsey's relationships with employees including Ms Frawley, no Councillor raised such issues with Ms Kelsey.
[106]Ms Kelsey's concerns in relation to the Mayor and his relationship with Ms Frawley were shared by other Councillors.[54]
[54] Exhibit 8, tab 1; Exhibit 114 - Affidavit of Trevina Dale Schwarz dated 27 September 2018, TS-27, page 81; Exhibit 48 - Affidavit of Darren Ross Power dated 16 April 2018, [16](b)(iv)].
Relocation Conduct
[107]From approximately 1 September 2017, Ms Kelsey was involved in Council considerations regarding the refurbishment and/or relocation of the Mayor's office. On that date, the Second Respondent emailed Council and advised them about options for the accommodation, relocation and refurbishment of the Mayor's Office:
(i) Kirby Orr, Chief of Staff to the Mayor, and Narelle Cowan, Senior Adviser, Office of the Mayor, would speak to Ms Kelsey in relation to the matter;
(ii) Ms Orr spoke on behalf of the Mayor;
(iii) Ms Kelsey should treat Kirby as a Director; and
(iv) his expectation was that when Kirby communicated with Ms Kelsey, Ms Kelsey was to take that as if the communications were coming from the Mayor.[55]
[55] Exhibit 3 - Affidavit of Sharon Rae Marie Kelsey dated 12 March 2018, [5].
[108]On or about 5 September 2017 the Applicant met with the Second Respondent at which time she was advised that:
(a) the Second Respondent indicated to the effect that he wanted a report to Council about the relocation or refurbishment of his office stopped; and
(b) the Second Respondent advised the Applicant that Ms Orr and Ms Cowan had strong views about the matter.
[109]Shortly after meeting with the Second Respondent, the Applicant met with Ms Orr and Ms Cowan in her office. They discussed whether a report regarding the funds to be utilised for the refurbishment/relocation needed to be provided to Council; queried why the Applicant could not approve the trust funds without a report to Council; and queried what triggered the need for the report to Council.[56]
[56] Exhibit 3 - Affidavit Sharon Rae Marie Kelsey dated 12 March 2018, [6]-[8].
[110]The Second Respondent communicated with Mr R. Strachan and the Applicant on a number of occasions between 11 and 17 September 2017 querying whether existing money allocated to accommodation matters in the budget could be utilised for the refurbishment/relocation.
[111]Mr Strachan indicated to the effect that the funds could be used through a resolution and could not be reallocated without a report.
[112]On 18 September 2017, the Mayor said to Ms Kelsey that he was not happy about a report going to Council because that would be politically difficult, he would not want a report to go up because of politics and questioned using the trust funds without a report. Ms Kelsey indicated to the effect that if you draw down trust reserves you need to have a report to Council. Legal advice was obtained by Mr Strachan. The Second Respondent did not respond but had what the Applicant described as, "… an unhappy and unimpressed expression".[57]
[57] Exhibit 3 - Affidavit of Sharon Rae Marie Kelsey dated 12 March 2018, [22].
Media Release regarding Operation Belcarra
[113]On around 26 September 2017, Ms Kelsey spoke with the Council media team about a request from Ms Kirby Orr that the Council release a press release suggested by Gadens and the Mayor regarding a 7:30 Report on the Operation Belcarra Report, a CCC investigation relating to local government elections which specifically involved the Mayor.[58]
[58] Exhibit 7 - Affidavit of Sharon Rae Marie Kelsey dated 20 November 2018, [107]-[108].
[114]On 28 September 2017, Ms Kelsey had a number of interactions with the Mayor and Ms Orr in which the Mayor and Ms Orr sought that Ms Kelsey issue, on behalf of Council, a media release drafted by his lawyers in relation to the Belcarra Report.
[115]Ms Kelsey declined to provide a media release without consideration of Council's position, including consultation with the media team.[59]
[59] Exhibit 1 - Affidavit of Sharon Rae Marie Kelsey dated 11 January 2018, [100(d)]; Exhibit 3 - Affidavit of Sharon Rae Marie Kelsey dated 12 March 2018 [28]-[31].
[116]Ultimately, Council issued its own media release separate from what had been sought by the Mayor. Despite this, the local media received two media releases which purported to be from Council. In fact, only one had been released by the media team and the contents of the second release reflected the contents requested by Ms Orr on behalf of the Mayor.
Relay for Life
[117]The Relay for Life was an event that, in 2017, was held on the divisional boundary of Councillors Schwarz and Koranski's respective divisions.
[118]Cr Koranski invited Ms Kelsey to attend and Ms Kelsey agreed to be part of Cr Koranski's team which also included Councillors Power and McIntosh. Ms Kelsey considered the event, which raised money for charity and celebrated cancer survivors, to be a great cause.[60] No such invitation was provided by Cr Schwarz.[61]
[60] Exhibit 4 - Affidavit of Sharon Rae Marie Kelsey dated 16 April 2018, [13].
[61] Exhibit 7 - Affidavit of Sharon Rae Marie Kelsey dated 20 November 2018, [115].
[119]Prior to attending the event, Ms Kelsey said she advised the Mayor of her invitation to the event, her intention of attending with other Councillors as part of Cr Koranski's team and that she would attend in a co-ordinated costume with Cr Power. The Mayor, being the person directly responsible for managing Ms Kelsey, did not raise any issues with Ms Kelsey about her attendance at the event prior to her going. No challenge was made to Ms Kelsey's evidence on these points.[62]
[62] Exhibit 1 - Affidavit of Sharon Rae Marie Kelsey dated 11 January 2018, [100](g); Exhibit 4 - Affidavit of Sharon Rae Marie Kelsey dated 16 April 2018, [13]; TR 2-41, L37 - TR2-42, L3.
[120]Throughout the event Ms Kelsey:
(a) interacted with Councillor Schwarz and her husband;
(b) walked a number of laps with the community and approximately two laps with Councillor Power and many other members of Councillor Koranski's team;
(c) purchased drinks from Councillor Schwarz's tent; and
(d) interacted with the Mayor including serving tea with him to attendees.[63]
[63] Exhibit 4 - Affidavit of Sharon Rae Marie Kelsey dated 16 April 2018, [13(d)].
[121]Ms Kelsey received a thank you card for attending. She also received positive and appreciative feedback from the community.[64]
[64] Exhibit 48 - Affidavit of Darren Ross Power dated 16 April 2018, [40].
[122]As confirmed by Cr Power, the event was not a political rally and was instead held to support charity. He noted Ms Kelsey interacting with Cr Schwarz and the Mayor and other residents. He also confirmed that the attendance of Ms Kelsey was not raised with him by Cr Schwarz. As with Ms Kelsey, he had only received positive feedback and had not received any negative feedback for his attendance. Similarly, concerns about Ms Kelsey's attendance at the event were not raised with Cr Bradley, Cr Koranski or Cr -McIntosh from either members of the community or other Councillors.
[123]Despite not saying so to Ms Kelsey when she advised him of her intention to attend the event prior, after she had attended the event, the Mayor indicated to Ms Kelsey that this was 'not a good look'. However, he told Ms Kelsey that it would be highly inappropriate for her to address this with Councillors. Cr Dalley was copied into that email so she knew the Mayor had directed Ms Kelsey not to address her attendance with the Councillors at the CLC.[65]
[65] Exhibit 4 - Affidavit of Sharon Rae Marie Kelsey dated 16 April 2018, [6(b)(ii)(D)].
The Probationary Process
[124]Pursuant to s 12 of the LG Act, Mayor Smith had a statutory obligation to undertake a probation review of the CEO.
[125]On 10 October 2017, the Mayor in association with Councillors Dalley and Schwarz initiated a probationary process in relation to the Applicant.[66]
[66] Exhibit 98 - Email from Luke Smith dated 8 October 2017.
[126]When the Applicant arrived at the meeting, she was handed a near complete Probationary Conversation Report form only at the commencement of their meeting, which the Applicant believed made unfair and unsubstantiated comments about her and her performance, including providing her with a number of unsatisfactory ratings, with no prior notice or opportunity to review the form.[67]
[67] Exhibit 1 - Affidavit of Sharon Rae Marie Kelsey dated 11 January 2018, [91]-[100]; TR11-51, L32 - TR11‑63.
[127]The Mayor then indicated that the Mayoral Cabinet wished to discuss the report with the Applicant and that she would be given an opportunity to respond to it both in that meeting and at a later date.
[128]Ms Kelsey said she was surprised when she entered the room and was presented with the probation report. She said she was disappointed and was at a disadvantage as she was not in a position to respond to the report.
[129]Both prior to, and during the early days of her employment, Ms Kelsey agreed with the Mayor, Cr Dalley, Mr Rohl and Mark Goldsworthy, Manager of People and Culture, at various times that a 100 Day Report would be prepared for her probationary review.[68] Despite this, shortly after Ms Kelsey commenced a probationary review for Ms Frawley, the Mayor commenced a purported probationary process with Ms Kelsey.
[68] Exhibit 1 - Affidavit of Sharon Rae Marie Kelsey dated 11 January 2018,[84]-[87]; Exhibit 2 - Affidavit of Sharon Rae Marie Kelsey dated 22 January 2018, [16(c)].
[130]During the meeting Mayor Smith advised Ms Kelsey that Council wanted to extend her probation until 2 January 2018, though it was later agreed between Ms Kelsey and the Council on 1 December 2017 that the probation would be extended until 30 January 2018.
[131]Ms Kelsey expressed her concerns that she was at a disadvantage on several occasions and expressed her view that the 100 Day Report would form the basis for her probation review.
[132]It was contended that only after Ms Kelsey raised concerns, was she given the opportunity to take the form away to prepare her response. As set out in her affidavit materials, Ms Kelsey said she had a response to each of these matters which she compiled when she had the time to do so.
[133]The Applicant submits that the statements made in the probation conversation report were not consistent with and were contradicted by the Hunter Report.
[134]The Mayor also raised issues in the Probation Conversation Report which Ms Kelsey had raised with Ms Frawley, including whether she was 'apolitical' and suggesting a 360 review process after Ms Kelsey had suggested this for Ms Frawley.
[135]Whilst the Applicant claims that she had an agreement with the Second Respondent that her probation review would be satisfied by the giving of a 100 Day Report, the draft probation report provides the following:
PROBATION REVIEW AND PROCESS
The first review, in conjunction with the Deputy Mayor and City Treasurer, will be held on 10 October 2017. The 2nd and 3rd reviews will be taken within appropriate timeframes. We will engage an independent resource to undertake a 360 degree assessment to gather balanced feedback on your performance and achievements in readiness for the finalisation of your probation.[69]
[69] Exhibit 1 - Affidavit of Sharon Rae Marie Kelsey dated 11 January 2018, SK2, 11.
[136]The Applicant appears to recognise the fact that the probation conversation was only a part of the probationary process.
[137]On 25 September 2017, Mayor Smith sent an email to Ms Kelsey seeking a response in respect of a number of issues. Relevantly, the Mayor wrote:
7. We need to schedule a three month probation meeting at some point within the next two weeks - I will do this in conjunction with the Deputy Mayor and City Treasurer so we will have to wait for Trevina to get back from leave.[70]
[70] Exhibit 1 - Affidavit of Sharon Rae Marie Kelsey dated 11 January 2018, [87]; Exhibit 8, tab 8.
[138]Ms Kelsey responded to Mayor Smith on 27 September 2017 as follows:
Noted - I have prepared a 100 Day Report to be discussed as part of my probation meeting. I look forward to your invitation.[71]
[71] Exhibit 1 - Affidavit of Sharon Rae Marie Kelsey dated 11 January 2018, [87].
[139]The Respondent argued that the contemporaneous language used by Ms Kelsey in the email is inconsistent with the position she now asserts was agreed.
[140]On 10 October 2017 at 3.07 pm, an hour or so after the probationary conversation, the Second Respondent sent an email which relevantly said:
Good afternoon, Sharon. Following our brief conversation at your first probation with the Mayoral Cabinet, I would like to close out a number of matters given your request not to participate further at this time.[72]
[72] Exhibit 113 - Affidavit of Trevina Dale Schwarz dated 11 April 2018, TS-8.
The email continues:
I would first like to ensure that you understand this meeting was to be a constructive conversation about your performance.
At page 10 of the probation conversation report it states:
If the timeframe for addressing the Mayoral Cabinet expectations and deliverables does not suit, please let us know.[73]
The email further states:
To be fair to the process, it is important we regroup as soon as possible to continue this conversation in a professional constructive and supportive manner. As mentioned, to allow the Deputy Mayor to be part of the process, we will need the meeting to be rescheduled and your comments made available by Friday.[74]
[73] Exhibit 1 - Affidavit of Sharon Rae Marie Kelsey dated 11 January 2018, SK2, 10.
[74] Exhibit 113 - Affidavit of Trevina Dale Schwarz dated 11 April 2018, TS-8.
[141]The Applicant did not respond to the email of Mayor Smith dated 10 October 2017.
[142]The next day, Mayor Smith emailed the Applicant in the following terms:
I hope you are well - quick email to check on how you are … and also to follow up on the below. Can you please come back to us regarding this - happy to discuss if needed.[75]
[75] Exhibit 113 - Affidavit of Trevina Dale Schwarz dated 11 April 2018, TS-8.
[143]Ms Kelsey replied by email:
Thank you, Mr Mayor. I will be back in touch in due course.[76]
[76] Exhibit 113 - Affidavit of Trevina Dale Schwarz dated 11 April 2018, TS-8.
[144]In cross-examination by Counsel for the First Respondent, the following exchange took place:
MR HERBERT: You didn't intend to - - -?
MS KELSEY: Yes.
MR HERBERT: …do anything such thing, did you? You had already unleashed the MinterEllison letter on the mayor at that point, hadn't you?
MS KELSEY: I can't - I - again, I'm not absolutely sure what time that - that letter went out.
MR HERBERT: But you said you were going to get in touch?
MS KELSEY: Yes.
MR HERBERT: This was 48 hours after the meeting, 36 hours after the emails, or 24 hours after the emails - - -?
MS KELSEY:Yes.
MR HERBERT: …the last email had come to you. You say there and said absolutely nothing to your mayor after he had behaved - - -?
MS KELSEY:Mmm.
MR HERBERT: …so appropriately in relation to the matter. You just said you were going to get in touch, and you didn't mean that, did you? Your idea of getting in touch was the MinterEllison letter?
MS KELSEY: Yes, it would appear so.[77]
[77] TR3-90, LL7-23.
[145]In her oral evidence, the Applicant accepted that not all of the entries contained in the probation conversation report were negative;[78] the report indicated that there would be a further conversation at four months, five months and a 360 degree review prior to Council reaching a decision in respect of the applicant's employment;[79] that she was told that she could respond to the document later;[80] that many of the passages of the report spoke in terms of the future of the Applicant's employment and did not reference any intention to bring her employment to an end.[81]
[78] TR2-83, L29.
[79] TR3-17, LL40-47; TR3-18, L1.
[80] TR2-83, L36.
[81] TR3-76, LL35-40; TR3-78, LL1-2.
[146]The Applicant was invited by Mayor Smith to the probation meeting and was aware of the purpose of the meeting.[82] The meeting was set down for 1 hour between 1:30 pm and 2:30 pm in the Mayor's office.[83]
[82] Exhibit 36 - Extract of Diary 10 October 2017.
[83] TR2-84, LL1-2.
[147]The Applicant contended that her probationary process was different to that of Mr Andrew Milner, the previous CEO. The differences are set out in full in the Affidavit of the Applicant of 12 March 2018.[84] The Applicant's submissions summarised them as follows:
[84] Exhibit 3 - Affidavit of Sharon Rae Marie Kelsey dated 12 March 2018 [58]; Exhibit 8, tab 26.
(a) only the Mayor being involved in the review process for Mr Milner;
(b) no reference to comments from the Mayoral Cabinet Team, Deputy Mayor or Treasurer in Mr Miler's document;
(c) no comments on Mr Milner's performance in relation to any of the areas of 'Part 1 - Assessment against the Leadership and Performance Capability Framework' or 'Part 2 - Assessment against the position description'. Very detailed comments were made in Ms Kelsey's report in the September/October Review;
(c) despite the lack of comments (and also the fact that, as many Councillors agreed, Mr Miler's performance was far from satisfactory), Mr Milner received all 5s in Part 1;
(d) no reference to 'MAYORAL CABINET TEAM EXPECTATIONS AND DELIVERABLES FOR CEO' which was detailed in Ms Kelsey's report; and
(f) no reference to 'PROBATION REVIEW AND PROCESS' which was detailed in Ms Kelsey's report.[85]
[85] Closing Submissions of Applicant dated 19 March 2019, [3.50].
[472] Exhibit 67 - Affidavit of Silvio Giovanni Trinca dated 11 April 2018, [10].
[773]Evidence was given by Cr Smith regarding the use of "straw polls" to determine the numbers on a particular topic that came before Council. One would have expected that if a political alliance existed between the Third to Ninth Respondents, to the extent that they always voted together, then such a mechanism would be unnecessary.
[774]It will be recalled that in the evidence of Cr Dalley she expressed some uncertainty as to whether the numbers would be there to have the interlocutory matter proceed to be heard and determined in the Commission.[473]
[473] TR11-109, LL26-46; TR11-110, LL1-27.
[775]The other factors which mitigate against a conclusion of alignment include: Councillors Schwarz and Smith did not accept that managers should form part of the 360 degree review; when the straw poll was taken for the appointment of Ms Kelsey, Councillors Breene and Schwarz voted against her appointment; Cr Lutton was not a member of the WhatsApp group nor was he a member of any form of social media; Cr Pidgeon said he was aware that Logan Futures, an entity associated with Mayor Smith's election campaign, donated money to a Division 9 candidate to run against Cr Pidgeon; Mayor Smith was a member of the LNP; Cr Dalley was a member of the ALP and other Councillors were independents; Cr Lutton resigned from his position as a Council Chair over a difference of opinion with Mayor Smith; and Cr Schwarz voted in favour of Cr Power for a Chair position.
[776]The Applicant contends that the alignment between the Second to the Ninth Respondents was such that they voted en masse to terminate the employment of the Applicant. It must be remembered that the Third to Ninth Respondents received legal advice concerning the rights and responsibilities associated with the lodgement of the PID by the Applicant; correspondence from MinterEllison warning the Third to Ninth Respondents of the potential consequences flowing from any attempt to terminate the employment of the Applicant; correspondence of the CCC of 5 February 2018 informing them of the penalties involved in taking action against a person because they had made a PID; and advice from the CCC that they would be investigating any action taken in respect of Ms Kelsey’s employment. It seems to me inconceivable that the Third to Ninth Respondents would disregard the correspondence, advice and warnings and through some blind loyalty to Mayor Smith vote to terminate the Applicant for a proscribed reason.
[777]In the submissions of the Applicant, it is contended that the WhatsApp records reveal a visceral enmity against the Applicant which cannot be explained by any concerns about her performance which were generally held. The hatred demonstrated by the records is only explicable by reference to the PID and the attack against Mayor Smith.
[778]Whilst I accept that the WhatsApp transcripts reveal a level of hostility towards Ms Kelsey and demonstrate a distrust of her, they cannot be explained by reference to the lodging of a PID.
[779]A consistent theme in the evidence of the Third to Ninth Respondents has been concern over Ms Kelsey's ability to remain impartial. It was raised in the probation conversation report. That conversation was at a time which predated the lodgement of the PID.
[780]This case must be seen within a prism of what Councillors Lutton, Dalley and Swenson described as a toxic environment.[474] The divisions between the factions were deep seated. The WhatsApp transcripts clearly reflect the depth of feeling.
[474] TR11-87, L27; TR9-32, L12; TR9-31.
[781]Cr Swenson believed that Ms Kelsey had unknowingly started to be a pawn in Cr Power and Cr Bradley's attempts to get rid of Mayor Smith.[475] Cr Lutton thought that hatred had coloured the decision making and that Ms Kelsey, "as CEO should have been trying to break down the camp of the anti-mayoral thing, rather than fostering it".[476]
[475] TR9-37, LL26-28.
[476] TR6-99, LL28-29.
[782]The Applicant has been caught in a tussle between two competing forces. Unfortunately for Ms Kelsey, she has become embroiled in the battle. She is seen as favouring or supporting the opposition. As such she could not be trusted. In the eyes of the Third to Ninth Respondents, she had demonstrated partisanship. As far as they were concerned her position was untenable.
[783]However, the WhatsApp messages do not reveal in my view any degree of co-ordination of approach or any direction as alleged by the Applicant. The WhatsApp platform offered the Second to Ninth Respondents with an avenue to express their views and opinions. It involved both Council and non-Council related conversations but importantly, they do not reveal that the Third to Ninth Respondents made their decision to terminate Ms Kelsey's employment for a proscribed reason.
[784]Importantly, in the period immediately preceding the vote to terminate the Applicant's employment and after, there are no messages suggesting how Councillors should vote or enquiring as to how they proposed to vote. I accept the argument that the messages do not reveal an assignment of task, a co-ordination of effort or approach.[477]
[477] Closing Submissions of Third to Ninth Respondents dated 23 April 2019, [32].
[785]If it is the case that the Councillors altered the way in which they dealt with the Applicant, which is not immediately apparent on the evidence, it is explicable by the fact that they no longer trusted her as they had formed the view that she was partisan.
[786]It is apparent from the reasons advanced by the Third to Ninth Respondents that they were dissatisfied with the way in which Ms Kelsey was performing her duties.
[787]Whilst Ms Kelsey was described by a number of the Third to Ninth Respondents as litigious it does not necessarily follow that they were motivated by a proscribed reason for terminating her employment. It will be recalled that on 6 November 2017 Cr Schwarz made a comment to the effect that Ms Kelsey was litigious.[478] At that point, litigation had not yet been commenced but the Council had been the subject of a number of demands from Ms Kelsey’s solicitors in respect of the way in which the First Respondent would conduct its probation process.
[478] Exhibit 114 - Affidavit of Trevina Dale Schwarz dated 27 September 2018, TS-27, page 173.
[788]In terms of the First Respondent, the Applicant submits that it is liable for the act or acts of the Second Respondent. It is contended that under s 12 of the LG Act, the Second Respondent is given some very particular responsibilities by the legislation which include, at subsection (4)(c):
12
(4) The mayor has the following extra responsibilities -
(c) directing the chief executive officer of the local government under s 170.
[789]To the extent that the Second Respondent is performing the responsibilities in subparagraphs (c), (d) and (e) of s 12(4) of the LG Act, it is submitted that the Second Respondent is acting on behalf of the First Respondent. Mayor Smith was, it is contended, given those responsibilities by the Act and he was, in turn, acting as the hands and the mind of the First Respondent to the extent that he engaged in those actions.
[790]As discussed above, the LG Act does not constitute the Mayor or Councillors as servants, employees or agents of the First Respondent. Individual acts of Councillors cannot constitute an act of the First Respondent unless they are subject to a decision of Council. The First Respondent may, by resolution, delegate the authority of Council to an individual Councillor to carry out or perform some act or action on behalf of the First Respondent. Subject to the above, it must follow therefore that an elected member of a local government constituted by the LG Act is not a servant and/or agent of the First Respondent with actual or ostensible authority.[479]
[479] Closing Submissions of First Respondent undated, [96].
[791]The adverse action allegations against the Second Respondent must fail. First and foremost, adverse action can only be taken by the employer. Mayor Smith was not Ms Kelsey's employer. Irrespective, the conduct complained of by the Applicant can only constitute adverse action if Ms Kelsey's position has been altered in a meaningful and substantial way. The evidence does not support such a conclusion.
[792]Equally, the evidence does not support a causal link between the conduct alleged against Mayor Smith and the termination of Ms Kelsey's employment. Mayor Smith did not attend the meeting at which the resolutions relating to whether or not the Applicant's employment would be continued or terminated were discussed and voted upon. He was precluded from doing so by order of the Commission made on 1 February 2018.
[793]I accept that none of the Third to Ninth Respondents who voted to terminate the Applicant's employment were cross-examined in any material way about any specific act or omission of Mayor Smith nor was it suggested to them that it was anything that Mayor Smith did or did not do which caused their decisions. Accordingly, none of the Third to Ninth Respondents were given the opportunity to explain or deny any allegation that any particular conduct of the Mayor caused their decision to terminate the Applicant's employment.
[794]The Applicant suggests that inferences ought to be drawn against Mayor Smith, including because of the fact that he did not give evidence in the proceeding.
[795]The Second Respondent contends that the relevant evidence against him is impermissibly general, inexact and based on Ms Kelsey's or Cr Power's views or opinions which they seek to have the Commission accept without properly exposing any sensible basis for those opinions.
[796]The Second Respondent submits that the evidence must give "rise to a reasonable and definite inference, not merely to conflicting inferences of equal degrees of probability".[480]
[480] Trustees of the Property of Cummins (a bankrupt) v Cummins (2006) 227 CLR 278, [34].
[797]In Masters Home Improvement Australia Pty Ltd v North East Solutions Pty Ltd[481] the Victorian Court of Appeal wrote:
[481] [2017] VSCA 88.
The principles, relating to the drawing of inferences in civil cases, are well established. First, any inference must be based on facts established by admissible evidence. Secondly, the process of reasoning must constitute a valid inference, as distinct from speculation or guesswork. Thirdly, and importantly, where the inference is drawn in favour of the party which bears the burden of proof in the case, the conclusion must be 'the more probable inference' from those facts. In other words, the inference drawn by the judge must be reasonably considered to have a greater degree of likelihood than any competing inference…
In its recent decision in Marriner & Ors v Australian Super Developments Pty Ltd, this Court summarised the relevant principles as follows:
"A party seeking to establish that an inference ought to be drawn must demonstrate that that inference is the more probable one which arises from the established facts. The inference must be based on evidence rather than speculation …".[482] (citations omitted)
[482] [2017] VSCA 88, [101]-[102].
[798]I accept the Second Respondent's argument that inexact proofs (including views, conclusions or opinions) indefinite testimony (including where details were not provided but generic allegations are made) and indirect inferences are not enough.[483]
[483] Closing Submissions of Second Respondent dated 18 April 2019, [70(c)].
[799]Ms Kelsey maintained that she was "... concerned that the Mayor has had and has a continued role in the probation process, to my detriment …".[484] However, during cross‑examination Ms Kelsey accepted that Mayor Smith had not been involved in the selection of Managers to be interviewed as part of the Hunter Report and that Mr Wild had advised her of that fact.[485]
[484] Exhibit 1 - Affidavit of Sharon Rae Marie Kelsey dated 11 January 2018, [150].
[485] TR3-23, LL37-38.
[800]The Applicant conceded that in relation to some of her evidence she formed views and opinions which were not based on anything she had seen, but simply on her deductions or feelings.[486] Ms Kelsey also accepted that she had provided opinions or views as a consequence of what she read in documents: specifically in relation to the fact that no input had been sought from other Councillors, the executive team and other staff.[487]
[486] TR3-15, L20 - TR3-16, L21.
[487] TR3-16, LL4-21.
[801]Moreover, Ms Kelsey accepted that the Hunter process was a fair one; and she could not identify with any degree of particularity the reduction in meetings between herself, Mayor Smith and Councillors. In cross-examination she agreed that in her affidavits she had not identified any reduction in meetings. When pressed in cross-examination to identify the meetings she replied, "[i]t was much reduced, much reduced".[488] In her own evidence concerning reinstatement she said that she did not have significant day-to-day contact with Councillors.[489]
[488] TR3-28, L29.
[489] Exhibit 4 - Affidavit of Sharon Rae Marie Kelsey dated 16 April 2018, [18].
[802]The Applicant also accepted that she did not have firsthand knowledge of the probationary process undertaken by Mr Milner;[490] she could not say whether the document annexed to her affidavit was the full extent of the probationary process for him.[491]
[490] TR3-30, L33 - TR3-33, L18.
[491] TR3-31, LL29-31.
[803]It is submitted that the focus on whether the reasons were fair or reasonable is a distraction. The Third to Ninth Respondents were cross-examined at some length as to whether their reasons for terminating the Applicant's employment were fair, reasonable or justified. As the First and Third to Ninth Respondents submitted this is not an unfair dismissal case. Such an approach is not relevant for the Commission's consideration. What the employer's reasons were for terminating an employee is to be determined by what the decision maker or makers knew or believed at the time of the dismissal. It is only necessary to find that the stated reasons were the genuine reasons.
[804]The point is well illustrated in CFMEU v Anglo Coal (Dawson Services) Pty Ltd.[492] In that case, the Full Court was required to consider a claim for adverse action arising out of the taking of sick leave. The employer had dismissed the employee for falsely claiming that he was sick. The evidence at trial revealed that the employee was in fact sick. However, notwithstanding that the claim for sick leave was validly made, because the employer's reason was that the employee had been dishonest, the employer was found not to have contravened ss 340(1) or 352 of the FW Act. This was so notwithstanding the finding by Jessup J that the worker was wrongfully dismissed[493] or Rangiah J's finding that it was inevitable that the worker would have been successful with an unfair dismissal claim.[494] As Rangiah J held:
As it turned out, Mr Power's belief that Mr Byrne had acted dishonestly by taking sick leave was wrong. The primary judge found that Mr Byrne was genuinely sick. However, the question of what the employer's reasons for dismissing Mr Byrne were must be considered on the basis of what the employer knew or believed at the time of the dismissal. The primary judge found that the decision-maker genuinely, although wrongly, believed that Mr Byrne had acted dishonestly. That belief was brought about by Mr Byrne's conduct. The fact that it was demonstrated at the trial that Mr Byrne was in fact genuinely sick and entitled to take sick leave could not be determinative of the employer's reasons for dismissing him at an earlier time.[495]
[492] (2015) 238 FCR 273.
[493] Ibid [43].
[494] Ibid [136].
[495] Ibid [134].
[805]The nature of the allegations made in the PID were described as "salacious" and, in a view of some of the Third to Ninth Respondents, had the capacity to damage the reputation of a member of staff and Mayor Smith. The subject matter of the complaint did not involve the Third to Ninth Respondents. They could not understand why the PID had been sent to them. For some of the Respondents the way in which the PID was disseminated was a matter of concern. Whilst it was a matter of concern, it does not follow that the Third to Ninth Respondents would react in a prohibited way.
[806]The fact that some of the Third to Ninth Respondents have been critical of Ms Kelsey's performance or demonstrated animosity towards her does not suggest that a conclusion can be reached that it was as a consequence of her lodging a PID or commencing the proceedings in the Commission. Likewise, to the extent to which some of the Respondents described the Applicant as litigious or were critical of her affidavits, does not mean they were motivated by a proscribed reason in terminating her employment.
[807]The First Respondent argues that it is necessary for the Applicant to exaggerate the true position in order to succeed. In their submission, this is so because there is a complete absence of any tangible evidence of any plan, scheme, proposal or conspiracy to terminate Ms Kelsey's employment by reason of the fact that she made the PID or commenced proceedings.
[808]It must be borne in mind that the termination of the Applicant's employment was not undertaken by means of the First Respondent commencing a process that was as a consequence of the making of the PID or any associated disclosure. Rather, the procedure for the determination of whether or not Ms Kelsey would be terminated was contractual and was commenced before any relevant disclosure was made.[496] The process started at a time prior to the lodgement of the PID.
[496] Exhibit 1 - Affidavit of Sharon Rae Marie Kelsey dated 11 January 2018, [89].
[809]The argument against the Applicant is that by lodging the PID Ms Kelsey was affording herself the best opportunity to manage the probationary process.
[810]Notwithstanding that Ms Kelsey was given the opportunity to continue to engage in the probation conversation, she chose not to do so. Instead, Ms Kelsey submitted her response to the probation through her solicitors. In doing so, Ms Kelsey has intertwined her response to the probation conversation report with the PID.
[811]Rather than, separately making a PID to the relevant public body and the First Respondent's designated PID officer[497] and then separately responding to the Mayoral Cabinet concerning the probationary process, Ms Kelsey sought to inextricably bind up her act of making a complaint with respect to the suspected corruption with her response to the performance concerns arising out of the probationary process.
[497] TR5-44, LL31-34; Exhibit 80.
[812]The chronology of events paints an interesting picture. Ms Kelsey attended the probation conversation on 10 October 2017. On 12 October 2017 Ms Kelsey, through her solicitors, issued correspondence to each of the Councillors, the CCC and to the Minister for Local Government alleging possible misconduct on the part of Mayor Smith. The letter included a PID.
[813]The proceedings in the Commission were commenced on 1 November 2017 immediately after receiving the draft Hunter report. The relief sought by the Applicant was such that the First Respondent would not have been able to consider Ms Kelsey's employment prior to the expiration of her probationary period. This would have the effect of ensuring that Ms Kelsey completed her probationary period, irrespective of any concerns about her performance.
[814]The Applicant has attempted to control or manage the probationary process. In cross‑examination, the following was put to Ms Kelsey:
MR FRIEND: Throughout this process, by filing the PID, and then bringing these proceedings, you have sought to make yourself a protected species within the Logan City Council, haven't you?
MS KELSEY: No, that's not correct.[498]
[498] TR2-90, LL38-40.
. . .
MR FRIEND: You immediately sought that advice, immediately made the PID, immediately sent it to every councillor in a fairly open way and tried to take control of the whole process, didn't you?
MS KELSEY: I just wanted to make sure it was a - a fair process, and one that - that I was aware of.[499]
[499] TR2-85, LL1-4.
[815]Ms Kelsey asserts that there was an agreement that her probation period would be satisfied by her giving a 100 Day Report.[500] During the early days of her employment, Ms Kelsey says that she agreed with Mayor Smith, Cr Dalley, Mr Rohl and Mr Goldsworthy, Manager of People and Culture, that a 100 Day Report would be prepared for her probationary review.[501] Ms Kelsey agreed that there was nothing specified in her contract of employment to reflect how the probation was to be conducted.[502]
[500] Exhibit 1 - Affidavit of Sharon Rae Marie Kelsey dated 11 January 2018, [85].
[501] Exhibit 1 - Affidavit of Sharon Rae Marie Kelsey dated 11 January 2018, [84]-[87]; Exhibit 2 - Affidavit of Sharon Rae Marie Kelsey dated 22 January 2018, [16] and SK2-5; See also Exhibit 8, tab 8 and 49; TR2-83; LL6-18; TR3-15, L5.
[502] TR3-11, LL14-28.
[816]I do not accept the evidence that the submitting of the 100 Day Report would constitute the totality of the probationary process. It was clear from the email correspondence between Ms Kelsey and Mayor Smith on 27 September 2017 that the 100 Day Report was only a part of the probationary process.
[817]The Applicant was criticised by the Third to Ninth Respondents for the failure to directly confront some of the Respondents about their sworn reasons for voting to terminate Ms Kelsey's employment.
[818]The Third to Ninth Respondents relied on the Victorian Court of Appeal decision in Curwen & Ors v Vanbreck Pty Ltd[503] which dealt with the effect of a witness not being cross-examined. The Court wrote:
[503] (2009) 26 VR 335.
[27] If the appellants' submission is accepted without qualification, the fact that the party calling the witness is on notice that it is intended to challenge the witness's evidence or impugn the witness or party's conduct in a particular way means that compliance with the rule in that circumstance is no longer obligatory. But whatever the effect of 'notice', the burden of persuasion as to that fact does not shift. remains upon the party who seeks to establish the allegation. The cross‑examiner who because of 'notice' refrains from 'putting' the allegations to the witness embarks upon a potentially dangerous forensic course. The tribunal may not be persuaded of the fact in issue if there is no cross-examination on the issue. That risk increases where the party who makes the allegation can adduce no direct evidence as to it and the other party, having adduced no evidence in chief as to the issue, is not cross-examined.
[28] The rule facilitates the tribunal's assessment of the issue. If the tribunal's capacity to properly assess the merit of the allegation has been impaired because the issue was not explored with the witness, the cogency and weight to be attached to the allegation is likely to be affected. As Redlich J stated in Johnson Matthey (Aust) Pty Ltd v Dascorp Pty Ltd:
Credit issues need to be identified when the witness is cross-examined, and the trial unfolds. The judge's capacity to assess the credibility of witnesses ought not to be impeded. Any relaxation of the obligation to comply with the rule in Browne v Dunn has the potential to do so, thereby increasing the risk of injustice to a witness or party.
[29] Where, because there is 'notice', it is not considered necessary that the witness be cross‑examined, the risk arises that the tribunal will not be able to reach an affirmative conclusion on the issue. That is to say, the consequence of the forensic choice to abstain from challenging the witness may leave the tribunal unpersuaded as to the truth of the allegation so that it will decline to reach a conclusion adverse to the witness.[504] (citations omitted)
[504] (2009) 26 VR 335 [27]-[29].
[819]As the authorities suggest, issues of credit need to be identified when the witness is cross‑examined, and the hearing unfolds. A failure to do so may leave the tribunal of fact unpersuaded as to the truth of the allegation.
[820]Let me briefly identify some examples. Cr Swenson’s inability to remember the identities of persons involved in group text messages and who were the authors of particular messages, was a deliberate ploy about matters which he knew the truth of was not put to him. It was not suggested to Cr Lutton that his reasons for voting to terminate Ms Kelsey as identified in his affidavits, were not his reasons; Cr Laurie Smith was not cross-examined about the contemporaneous note that he made evidencing his reasons; equally the assertion that he was overwhelmed by his close political and personal relationship with Mayor Smith was not put to Cr Smith; and in regard to the evidence of Cr Pidgeon, it was only suggested to him that his reasons were a "construct".
[821]Overall, I did not find Ms Kelsey to be an impressive witness. She was unwilling to accept or to contemplate that there may have been some room for improvement or that on reflection she may have done something differently, or not at all. Throughout her evidence she had a tendency to deflect responsibility onto others and not to take responsibility in relation to what was submitted to Council for consideration.[505] The manner in which Ms Kelsey gave her evidence was such that it was difficult to determine whether the response to a question was a matter of reconstruction or recollection.
[505] TR2-34, LL32-34; TR2-42, LL1-3.
[822]Throughout these proceedings the question was asked by the Applicant: What changed after the probation interview? The answer is in reality a straightforward one. What changed was the fact that a probationary process was commenced. Initially, that process involved only the Mayor, Deputy Mayor and City Treasurer. The wider review involving the Hunter process gave those involved, in particular, the Third to the Ninth Respondents, the opportunity to reflect on Ms Kelsey's performance and to determine whether her employment ought to be extended beyond the probationary period. Ultimately, the Third to Ninth Respondents chose not to do so. Importantly, as I have determined elsewhere, they did not do so for a proscribed reason.
[823]Consistent with the reasons advanced above, I am of the view that the claims against the First to Ninth Respondents ought to be dismissed.
Orders:
1. The Application against the First to Ninth Respondents is dismissed.
2. I will hear the parties on the orders to be made.
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