Lee v North Richmond Community Health Ltd
[2018] FCCA 2774
•27 September 2018
FEDERAL CIRCUIT COURT OF AUSTRALIA
| LEE v NORTH RICHMOND COMMUNITY HEALTH LTD | [2018] FCCA 2774 |
| Catchwords: INDUSTRIAL LAW – Purported breach of an enterprise agreement – whether the Respondent breached s.50 of the Fair Work Act 2009 – application dismissed. |
| Legislation: Fair Work Act 2009 (Cth), ss.50, 340, 342, 361, 793 |
| Cases cited: Board of Bendigo Regional Institute of TAFE v Barclay (2012) 248 CLR 500 |
| Applicant: | RENEE LEE |
| Respondent: | NORTH RICHMOND COMMUNITY HEALTH LTD |
| File Number: | MLG 1855 of 2016 |
| Judgment of: | Judge Hartnett |
| Hearing date: | 23, 24, 25 May & 15 June 2018 |
| Delivered at: | Melbourne |
| Delivered on: | 27 September 2018 |
REPRESENTATION
| The Applicant: | In Person |
| Counsel for the Respondent: | Mr Harrington |
| Solicitors for the Respondent: | Minter Ellison |
THE COURT ORDERS THAT:
The application is dismissed.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLG 1855 of 2016
| RENEE LEE |
Applicant
And
| NORTH RICHMOND COMMUNITY HEALTH LTD |
Respondent
REASONS FOR JUDGMENT
Preliminary
In this proceeding, the Applicant (‘Ms Lee’) alleged North Richmond Community Health Ltd (‘NRCH’) committed 4 breaches of the general protections provisions contained in the Fair Work Act 2009 (Cth) (‘the Act’) in the taking of adverse action as described in s.342 of the Act being:-
a)threatening in January 2016, to change her work status from full-time to part-time and/or to dismiss her from her employment. Ms Lee alleged these adverse actions were taken by Dr Hall, a General Manager of NRCH;
b)making adverse comments about union membership intending to prevent Ms Lee from exercising her workplace rights. Ms Lee alleged this action was taken by Ms Coughlan, Human Resources Manager of NRCH;
c)in or about May 2016, selecting her position of Health Promotion Officer for redundancy; and
d)terminating her employment;
The selection of Ms Lee’s position for redundancy, and the termination of the employment of Ms Lee, was adverse action within the meaning of s.342 of the Act. Ms Lee claimed that NRCH took these adverse actions, together with those alleged by her, for the reason, or for reasons including that Ms Lee had exercised and/or proposed to exercise workplace rights as described in paragraphs 12 to 16 inclusive of the Statement of Claim, those paragraphs being:-
“a) on or about 7 and 8 January 2016, [Ms Lee] made a complaint to Mr [sic] Martin Hall, Mr Demos Krouskos and Ms Natalie Coughlan of NRCH in relation to her employment, in particular in relation to her seating arrangements at work;
b) on or about 12 January 2016, [Ms Lee] told Dr Hall that she proposed, to take long service leave on half pay in the future;
c) on or about 14 January 2016, [Ms Lee] made a complaint to Mr Krouskos in relation to her employment, in particular in relation to Mr [sic] Hall's conduct towards her in January 2016 including in relation to the matters on 12 January 2016 when Ms Lee informed Mr [sic] Hall of her plans to take long service leave and then retire and Mr [sic] Hall threatened Ms Lee with termination of employment;
d) on or about 25 February 2016, [Ms Lee] told Ms Coughlan that she proposed, and she did in fact propose, to take long service leave on half pay in the future;
e) on or about 25 February 2016, [Ms Lee] told Ms Coughlan that she was considering joining the union. Ms Coughlan responded with words to the effect of “No, don't join the union. They are horrible people. Whatever benefits other staff get you will get anyway”. Ms Coughlan’s comments were intended to prevent the Applicant from exercising her workplace rights;
f) on or about 18 May 2016 in a meeting with Mr Krouskos in relation to the Applicant’s employment a discussion took place concerning The Applicant’s entitlement to long service leave. Mr Krouskos said to the Applicant words to the effect that “but we will still save money because when you are on long service leave you will generate more leave, so we will still be saving money”;
g) on or about 20 May 2016 in a discussion with Mr Krouskos where the Applicant requested Mr Krouskos to consider allowing the Applicant to work on a part-time basis, Mr Krouskos said to the Applicant words to the effect that “no, no. That's impossible. We can't afford to have staff taking long service leave and retire from there. The Centre simply can't afford it.”
…
13. Further and in the alternative, on or about 12 January 2016, Mr [sic] Hall threatened to change the Applicant’s status to part-time and/or dismiss the Applicant from her employment.
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14. The said threat was made in response to the Applicant having raised concerns about the seating arrangements and notification that she intended to work full time for another year and then take long service leave at the end of 2017.
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15. The said threat was adverse action within the meaning of s.342 of the Act.
16. The threat to dismiss was because of the Applicant’s proposed exercise of her workplace right, or her having the workplace right, to take long service leave on half pay in the future.”
Ms Lee had each of the following workplace rights:-
a)the right to long service leave under cl.43 of the relevant workplace agreement, the Community Health Centre (Stand Alone Services) Social and Community Service Employees Multi Enterprise Agreement 2013 – 2015 (‘the Agreement’);
b)the ability to make a complaint or inquiry in relation to her employment; and
c)the benefit of a workplace law, namely under Part 2-2 of the Act, to take forms of leave as prescribed by the National Employment Standards.
NRCH admitted Ms Lee had the above stated workplace rights. It admitted she had exercised the right to make two complaints in January 2016, one as to her seating allocation by Mr Krouskos, and the other as to Dr Hall’s conduct. NRCH admitted Ms Lee had a right to long service leave and other leave, all of which accrued, as of right under statute, during her period of employment.
NRCH denied it contravened the Act in selecting Ms Lee’s position for redundancy and then dismissing Ms Lee from employment. NRCH argued there was a restructure of the organisation and Ms Lee’s position was redundant.
NRCH denied in part Ms Coughlan’s comments regarding the union and denied Dr Hall’s alleged threatened dismissal.
Further, Ms Lee alleged contraventions by NRCH of cls.13 and 18 of the Agreement. By her pleading, Ms Lee in effect alleged two breaches of s.50 of the Act.
Clauses 13 and 18 of the Agreement were, relevantly, as follows:-
“13.1 Where an employer has made a definite decision to introduce major changes in production, program, organisation, structure or technology that is likely to have significant effects on employees, the employer shall notify the employees who may be affected by the proposed change and the union.
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13.3 The employer shall discuss with the employees affected and the union, amongst other matters, the introduction of changes referred to in clause 13.1, the effects the changes are likely to have on employees, measures to avert or mitigate the adverse effects of such changes on employees and/or the union in relation to the changes.
13.4 The discussions shall commence as early as practicable after a definite decision has been made by the employer to make changes referred to in clause 13.1.
13.5 For the purpose of such discussion, the employer shall provide in writing to the employees concerned and to the union, all relevant information about the changes including the nature of the changes proposed, the expected effects of the changes on employees and any other matters likely to affect employees, provided that the employer shall not be required to disclose confidential information, the disclosure of which would be inimical to the employer's interests.
…
18.3 Where a redundancy dispute arises and discussions occur in accordance with this clause the employer will, as early as possible, consult on measures taken to avert or to minimise any proposed redundancies and measures to mitigate the adverse affects of any proposed redundancies on the employees concerned.”
Specifically, Ms Lee alleged the following breaches of the Agreement:-
a)a contravention of cl.13.3, 13.4 and 13.5 of the Agreement. Ms Lee claimed that after making a definite decision to introduce major changes, NRCH did not discuss the changes, namely that Ms Lee’s role was to be made redundant, with her and the union and did not provide in writing to her all required information about the change within a reasonable period of time (which is denied by NRCH); and
b)a contravention of cl.18.3 of the Agreement. Ms Lee alleges she notified a redundancy dispute (which is denied by NRCH) and NRCH failed to then consult with her and/or the union on measures taken to avert or to minimise the proposed redundancies on the employees concerned, including Ms Lee.
NRCH submitted each claim of a General Protections contravention of the Act fails on the evidence adduced before the Court. Further, NRCH submitted that it did not contravene cls.13 or 18 of the Agreement, there being no major changes in the organisation and there being no notification by Ms Lee of any dispute about the redundancy.
In these proceedings, Ms Lee relied upon:-
a)a Statement of Claim filed on 12 January 2017;
b)affidavits of evidence affirmed by her on 1 May 2017 and 14 June 2017;
c)outline of submissions filed on 9 May 2018 and 15 June 2018;
together with evidence and material in the proceedings including that as contained in the Court Book filed 16 May 2018.
In these proceedings, NRCH relied upon:-
a)A Response filed 21 September 2016;
b)affidavit of evidence sworn by Mr Krouskos on 30 May 2017;
c)affidavit of evidence affirmed by Ms Coughlan on 30 May 2017;
d)affidavit of evidence affirmed by Dr Hall on 29 May 2017;
e)contentions of fact and law filed 9 May 2018;
f)outline of submissions filed 22 May 2018;
together with evidence and material in the proceedings including that as contained in the Court Book filed 16 May 2018.
NRCH was required to discharge the onus under s.361 of the Act, whilst Ms Lee carried the onus of proving each element of the statutory cause of action. NRCH called in particular, as a witness, Mr Demos Krouskos, the Chief Executive Officer of NRCH and the person solely responsible for the making of the relevant decisions, namely to determine which positions in the organisation of NRCH should be made redundant, and to determine the termination of Ms Lee’s employment.
Background
Statements of fact in these reasons are findings of fact on the balance of probabilities.
NRCH is a community health organisation. It is principally funded by the State of Victoria. In 2016, it employed approximately 136 persons to carry out its charter of providing community health services and programs to the local Richmond and broader community.
Ms Lee commenced employment with NRCH on 29 July 1991 in the role of language interpreter. She was promoted to the role of Health Promotion Officer on 3 February 2003. This was a full time position. Her in-line manager, at the relevant time for the purposes of these proceedings, was Mr Krouskos. Ms Lee reported directly to Mr Krouskos. She did not report to any of the three general manager positions, who also reported to Mr Krouskos. Ms Lee had historically reported to the Executive Manager of the Medical and Allied Services program (that position is now known as General Manager under the reporting structure) and to the Health Promotion Coordinator. However, the Health Promotion Coordinator role ceased to exist and additionally, when the Executive Manager left the organisation, that position was not filled due to financial difficulties being incurred at NRCH. Thus there was a reassignment of Ms Lee's reporting line. Ms Lee, along with a number of other staff who previously reported to the Executive Manager, began reporting directly to Mr Krouskos. This was intended to be a temporary arrangement but as the financial position of NRCH remained problematic, the arrangement continued until the date that Ms Lee's employment was terminated. That termination was in May 2016.
At the time of her position becoming redundant and subsequent termination, Ms Lee was on a salary of approximately $67,000 together with superannuation payments. She had been working in a non-executive and non-managerial role from July 1991 until May 2016.
Ms Lee’s duties included the operation of four programs. The programs and Ms Lee’s duties were:-
a)a Chair-based Exercise Group. Ms Lee’s tasks were mostly administrative and involved community liaison, program promotion, client registration, client attendance keeping, seeking feedback from clients and organising the bi-monthly morning tea. Additionally Ms Lee was required to write the funding submission to the City of Yarra and acquittal report in respect of that funding;
b)a social connectedness through English conversation classes. Ms Lee delivered this class, co-ordinated client registration and client attendance keeping, sought feedback from clients and prepared a funding submission and acquittal report each year to the City of Yarra;
c)the Homework Support Group. This program was conducted by a group of volunteer tutors. Ms Lee’s tasks involved coordinating client registration, client attendance keeping, seeking feedback from clients, arranging fruit and refreshments for the sessions and ensuring the tutors had the necessary tools to conduct the sessions. Ms Lee also prepared the same funding and acquittal documents to the City of Yarra; and
d)a community gym membership program. Ms Lee’s tasks were to project manage, with some assistance from other staff, the administration of the service.
Additionally, Ms Lee was involved in the setting up of a Tai Chi group that she had intended to promote and oversee once it was established. That program had been set up by the Allied Health Team and the funding for the program had been obtained by that team. Ms Lee’s proposed role was to be administrative in nature.
NRCH received funding in the sum of $240,000 per year from the Department of Health and Human Services (‘DHHS’) under the ‘Community Health Integrated Health, Promotion Plan.’ In order to take part in the program, NRCH needed to prepare a four year “Integrated Health Promotion Plan” (‘the Plan’). Part of the Plan, under the heading of Mental Health and Wellbeing 2013-2017, was to “increase social connectedness for people on the housing estate” on which property NRCH was located. Objective 1 of the Plan was to “provide 10 group activities for clients of NRCH per year”. Other objectives were to “build capacity of NRCH staff to address mental health and wellbeing” and to “increase opportunities of freedom from discrimination and violence”. Overall, the plan and its funding dealt with a wide range of health initiatives. Some of those initiatives existed within the programs run by Ms Lee. Others did not. The funding provided by the DHHS was funding for ten different group activities or programs, together with funding for staff. The result was that the DHHS were providing funding of approximately $6,000 for each group activity. Ms Lee’s evidence was that the monies received from the DHHS were to be used to fund her position. This was not the case. The funding received by NRCH was directly referrable to achieving the objectives as set out in the Plan. It could not be applied solely to the expenses associated with Ms Lee’s position.
Ms Lee’s position was not tied to specific funding received from the Commonwealth or Victorian Government or the City of Yarra. In that sense, NRCH had to fund the full time position out of its consolidated revenue, not from specific program funding revenue.
Mr Krouskos, Ms Coughlan and Dr Hall
Mr Krouskos has been employed by NRCH since 1991. He is the Chief Executive Officer of NRCH. Mr Krouskos worked with Ms Lee for approximately 25 years.
Mr Krouskos gave evidence as to the overarching operational structure of NRCH. Relevantly, he noted, NRCH had essentially ten program areas. They were:-
a)the Oral Health Program;
b)Medical Practice;
c)Nursing & Allied Health;
d)Alcohol and Drug Program;
e)Counselling/Casework Program;
f)the Centre for Culture, Ethnicity and Health;
g)Inner Melbourne Post Acute Care;
h)Administration;
i)Shared Services including HR, Finance, Quality & Risk, Data;
j)Performance & Planning; and
k)Support Services.
Senior management responsibility for the program areas was divided between three General Managers. Each had responsibility for the overall management of operational and financial matters for the program areas in each of their respective domains. However, at the relevant time, in the context of these proceedings, management for the program areas was divided amongst Mr Krouskos and only one General Manager. One of the three NRCH General Managers was on long service leave and as stated earlier, due to the financial position of the organisation, NRCH could not afford to replace the other General Manager when she left. Each program had an assigned Program Manager. That person was responsible for service provision and program operations. Program Managers reported to the CEO and the single General Manager, Dr Hall.
Dr Hall was employed by NRCH for approximately 19 years. He first commenced employment with NRCH in 1997 as a Dentist and then occupied the role of Senior Dentist and Manager of the Dental Program from 1998 until 2015. From April 2015 until April 2016, when Dr Hall left NRCH, he was employed in the role of General Manager of Oral Health and Clinical Services. Dr Hall reported to Mr Krouskos.
Ms Coughlan has been employed by NRCH in the position of Human Resources Manager since May 2015. Prior to this Ms Coughlan was employed by NRCH, from April 2012, in the position of Human Resources Advisor. Ms Coughlan reports to Mr Krouskos.
When examining the evidence in these proceedings, the Court finds that Mr Krouskos, Dr Hall and Ms Coughlan were honest and credible witnesses who each gave considered evidence. Much of their evidence was unchallenged by Ms Lee. Where it was challenged, the Court preferred the evidence of each of Mr Krouskos, Dr Hall and Ms Coughlan to that of Ms Lee. Where material, the evidence of Mr Krouskos, Dr Hall and Ms Coughlan was consistent.
Seating Change
In October 2015, NRCH was running a program jointly with St Vincent’s Hospital. Some of its staff were housed at NRCH. Those staff members were sitting in the same area as Ms Lee. In November 2015, Ms Cordina, the Data, Performance and Planning Manager at NRCH, provided a report to the executive management team. That report noted, that the co-location, with the existing employees of another group of St Vincent's employees who were coming across to NRCH, was desirable. As a result of this recommendation, Mr Krouskos made the decision to move Ms Lee and a number of other employees, who were seated in the area where it was proposed the incoming St Vincent's employees were to be located, to other workstations. Mr Krouskos’ evidence as to the seating change was as follows:-
“95. I asked Ms Lee to move to the ground level as I thought that would be a good location given that is where the other community services are located. I explained this to Ms Lee on at least two (2) occasions. I explained that the reason for her move was to accommodate the St Vincent’s Hospital staff. I said it was also part of the general review which had recommended those staff all be situated together. I also said to Ms Lee it would be a good opportunity for her to interact with the community services staff. …
96. On 8 January 2016, Ms Lee sent an email to me, and copied Dr Hall and Ms Coughlan regarding her new seating arrangement.
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97. On 12 January 2016, I received an email from Dr Hall in which he described some discussions he had had with Ms Lee over the proceeding days. He addressed the discussion with Ms Lee about her seating arrangement and a suggestion he had made to Ms Lee about changing her hours to part time. Ms Coughlan was also copied to the email. … I did not ask Dr Hall to make the suggestion to Ms Lee that she work part time. I was not aware that he intended to do so.
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100. On 14 January 2016, I received an email from Ms Lee in which she raised further concerns about her seating arrangement in the context of stating that she believed she had been bullied at work. In that email Ms Lee also raised concerns about Dr Hall's conduct during the discussions she had with him around 12 January 2016.
101. On about 13 or 14 January 2016, I spoke with the Facilities Officer, Chris L’lagia, regarding what we could do to reduce some of the problems Ms Lee was experiencing with her seating arrangement.
102. On 15 January 2016, I responded to Ms Lee’s email of 14 January 2016 confirming the steps I had taken to address some of her concerns.
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103. Knowing the reasons why Ms Lee was assigned a different desk (the St Vincent’s’ staff) and having read Dr Hall's version of what occurred in the discussions, I did not consider that Dr Hall had engaged in any bullying conduct.
104. Following this and until the termination of her employment, Ms Lee did not raise any further issues about her seating arrangement with me or any further concerns regarding Dr Hall's conduct towards her.”[1]
[1] Affidavit of Mr Krouskos sworn 30 May 2017.
The email exchanges referred to in the above paragraph are necessary to include here. They are:-
Email from Ms Lee to Mr Krouskos, copied to Dr Hall and Ms Coughlan with the subject line ‘My new seating position’ sent on 8 January 2016 at 11.04am:
“Hi Demos,
I am sending you this email to let you know that I am stressed with my new seating arrangement. Firstly, I can smell the toilet whenever the doors are opened, which is quite off putting. Secondly, I realised that the afternoon sun covered half my desk and the table was warm to touch (and it was only 23 degrees yesterday, I hate to think what it's like when the temperature is higher). Additional heat is hard to deal with for a menopausal woman like me. The glare also causes me concern, as I am prone to getting headaches. I have asked Chris Laga’aia for a stronger shade but he said that there is not much he could do as the blinds we have are the strongest available.
Whilst I understand and willing to cooperate when it is necessary to move staff, I can't help to feel that I was the most disadvantaged as a result of the changes. As you would remember I was also the only one that was moved from the casework and counselling room less than two years ago when the MI Fellowship team moved in.
I would sincerely appreciate if you could consider the issues I have raised and review my seating position.
With thanks,
Renee”
Email from Dr Hall to Mr Krouskos, copied to Ms Coughlan, with subject line “Renee lee” sent on 12 January 2016 at 6.06pm:
“Hi Demos
I have had a couple of conversations with Renee Lee who is what you would describes [sic] as a disgruntled employee.
On Friday she was distressed about the move to the new position and you have seen the email from her a day or two earlier. Apart from what is mentioned in the email she feels “disrespected” regarding the move and particularly regarding the fact that she moved and Anisha ended up staying up stairs in her preferred position.
During this conversation she said that “...if Demos doesn't want me here he should tell me, make me an offer and I will go..” She also mentioned that she plans to stay 12— 18 months and would like to leave with a sense of achievement.
After some consideration over the weekend I thought that she might find a part time solution attractive in terms of a reduced impact from her new seating position while still maintaining a sense of achievement in the work. I discussed this with her today however she is not interested in a reduction in hours and I believe was quite suspicious that I was sent on an errand by you in a conspiracy to further disrupt her. I clarified with her that my only interest was a solution to her complaints, however that I was aware that there was a funding issue with respect to her position. She repeated that if she is not wanted/needed here she would accept a package.
Her situation regarding heat, sun glare and toilet smell requires further attention as with a quick assessment the temp at her desk is 2-3 degrees warmer than next door desk and there is glare, tomorrow’s 40+ will definitely reinforce this issue. Additional heavy blinds similar to other areas in the building would be advised. Cannot comment on toilet smell however Maggie and Lidya supported this to some extent. At the moment Renee's obvious displeasure is being “noticed” by the others in that area but cannot say if this is impacting their work. Its probably time for you to have a discussion with her to sort this out before it does starts to impact on her work and others around her.
Cheers
Martin”
Ms Coughlan replied to the email of Dr Hall (above) at 8.28pm and said the following:-
“Renee came to see me after speaking to you, Martin and she did indeed view the conversation as a conspiracy by Demos to get rid of her. She was very angry - all Cristiana and myself could do was listen and try to calm her down.
We can look at the blind situation, however it is surprising that in the two years Cheryl has occupied that desk she has not had any issues.
The other solution is to swap Renee and Cheryl as Cheryl does not care where she sits.
Nat”
Mr Krouskos replied to Dr Hall and Ms Coughlan’s emails (above) at 9.57pm and said the following:-
“This is all terribly disappointing. There is certainly no ‘conspiracy’ to get rid of anyone. I met with Renee on two occasions and explained my reasons for the change in seating arrangements. I informed that she should see this as an opportunity to spend time with clients and visitors so that she is better informed about developing her health promotion activities. If there are OH&S issues with her desk position then I'm happy to address them. I will speak with Chris tomorrow about changing the blind to reduce glare and heat. Not sure we can do anything about the toilet apart from closing it during working hours and ask all staff to use the level 1 staff toilets. I’m [sic] certainly won't be offering any redundancy on the basis that a staff member is disgruntled. Redundancies are only for operational purposes. I’m happy to meet again with Renee tomorrow however she seems to gave [sic] personalised this matter so there may not be much value in this approach.”
Ms Lee sent a further email to Mr Krouskos on 14 January 2016 at 2.17pm with the subject line ‘a few things’, it is as follows:-
“Dear Demos,
I am sending you this email to let you know that my mental health is not fit for work for the time being.
I am deeply distressed by several incidents that had happened to me and believe I have been bullied at work. Some of what I believe has contributed to my belief is:
* I sent you an email (and cc [Dr Hall] and [Ms Coughlan]) to raise the issues about my new seating arrangement and no one has responded at all.
* I expressed my concerns to [Dr Hall], including my feeling of “being ignored”. After a few days (on Tuesday 12th January at 4.00pm) he told me to see him and he suggested that I should consider working part time. I was shocked by his suggestion and asked “how is that going to sort the problem?” He said “then you will only have to deal with the problem half the time.” I told him I don't have the intention to work part time this year. Martin then said “the Centre is running on deficit and your position is not funded and it will be reviewed soon anyway”. I was very upset by this comment and felt that I was being threatened.
* When I returned to my desk, half of it was covered by the afternoon sun, so I went back to [Dr Hall’s] office and asked him to have a look at the problem I have been raising. He came and said “ok, you should get a thermometer and see how hot it will get. You need the proof for the Centre to do something.” Is it not enough to see the evidence, that the sun does shine through and covered more than half of my desk and that I am having problem ? Cheryl said to me that sometimes she has to wear her sunglasses when she works on the computer…
* Yesterday, I called the reception team to inform them that I was not well and asked them to put me on the “in and out” system. I was shock to see that they had announced this to the whole Centre through an 'all staff' email. When I followed this up I was told “they had made a mistake”. Really? I found this very hard to believe.
[Mr Krouskos], I regret that all of these unpleasant incidents have happened after nearly 25 years working at NRCH. As I have mentioned to you, I am in my final years working with NRCH. I want to finish by working hard and create something good for the Centre and the community. However, whether staff are at the beginning of their careers, or nearing the end (which is the case for you and me) I believe all staff should be looked after equally and be treated with dignity and respect. This has certainly not been the case for me in recent weeks.
Renee”
Mr Krouskos replied to Ms Lee’s email of 14 January 2016 (above) on 15 January 2016 at 2.16pm:-
“Thanks Renee. I’m sorry to hear that you are unwell and wish you a speedy recovery. In regard to the concerns that you raised in your email I have undertaken the following action:
·Chris has recommended that the window adjacent to your desk be tinted to reduce heat, glare and sunlight. I have authorise[d] Chris to proceed with tinting the window
·I spoke with reception about the distribution to all staff of the email regarding your absence from work. They informed me that the email was sent in error. Please also refer to the NRCH policy regarding notification of absence from work. The policy stipulates that staff inform their manager directly by email, text or phone rather than contacting reception
Trust these action address some of your concerns.
Looking forward to having you return to work.
Kind regards
Demos”
NHRC concedes that the complaints made by Ms Lee in relation to her seating arrangements were employment complaints, which Ms Lee had a workplace right, as defined in s.341 of the Act, in respect of.
Dr Hall’s comments to Ms Lee
Dr Hall’s evidence, as to his comments made to Ms Lee, was that on 8 January 2016, Ms Lee came to see him to ask if he could speak with Mr Krouskos about her desk move. She requested that she be moved back to her former desk space. Dr Hall did not know why Ms Lee approached him about this. He told Ms Lee that Mr Krouskos likely would not agree to that as the move needed to occur to enable the staff from St Vincent's Hospital to access the desk where she previously sat.
During this conversation, Ms Lee described to Dr Hall how unhappy she was about her new seating arrangement. Dr Hall gave evidence that Ms Lee then stated words to the effect that Mr Krouskos should just make her an “offer to go” if he did not want her at work anymore. Dr Hall thought this was a very strange comment for Ms Lee to make, and thought that Ms Lee appeared to personalise the process. Ms Lee then said to Dr Hall that she wanted to take long service leave in 12 to 18 months’ time and then leave NRCH with a sense of achievement. Dr Hall recalled that Ms Lee also said to him that she wanted to take her long service leave at half pay.
On 12 January 2016, Dr Hall approached Ms Lee for a follow-up conversation from the 8 January 2016 discussion and as alleged by Ms Lee, and conceded by Dr Hall, made the suggestion about part time work to her. Ms Lee questioned Dr Hall about how his suggestion would help her issues with the seating arrangement. At that point Dr Hall made, what he considered to be a light-hearted joke, saying to Ms Lee that it would mean that she “would only have to deal with the problem half of the time”. Ms Lee became immediately angry.
Dr Hall did say further to Ms Lee, as conceded by Dr Hall, that he was aware that there was a funding issue with her position so it might help Mr Krouskos if she did go part time. Dr Hall told Ms Lee that it appeared her concerns regarding the heat on her desk were founded, and that he would take it up with Mr Krouskos.
Dr Hall denied he was aggressive in this conversation with Ms Lee. He did not mention that Ms Lee’s position was being reviewed, and did not state or suggest that Mr Krouskos would ‘do something about it’.
Ms Coughlan gave evidence that in January 2016, Ms Lee came into her office to tell her about a conversation she had with Dr Hall. Ms Lee told Ms Coughlan that Dr Hall thought she should change her hours to part time hours. Ms Lee also mentioned a conspiracy by Mr Krouskos to get rid of her. Ms Coughlan assured Ms Lee there was no conspiracy. Ms Lee did not say to Ms Coughlan, during this conversation, that Dr Hall had threatened to terminate her employment. Ms Lee also did not tell Ms Coughlan that she had told Dr Hall that she intended to work full time for another year and a half and then take long service leave at the end of 2017 and retire after that. She did not mention anything about Dr Hall saying that Mr Krouskos would have to ‘do something’ about her position because it was not funded.
Mr Krouskos gave evidence that he heard nothing more about the complaint after his email to Ms Lee of 15 January 2016. He believed that Dr Hall and Ms Lee would “resolve that matter between themselves.”
Contrary to Ms Lee’s assertion, Dr Hall was not responsible for her seating arrangements. This was, as Ms Lee knew, a decision in relation to which responsibility was solely that of Mr Krouskos.
Dr Hall had no power to employ or make redundant and/or terminate Ms Lee’s employment, nor to direct any changes to Ms Lee’s employment. He had no power to change “her status” and made no threat about such status. Dr Hall was not Ms Lee’s manager. Dr Hall asked a question of Ms Lee about considering part time employment. He then made a ‘joke’ as to why she might consider part-time employment, and referred that idea back to the complaint about seating allocation. The Court finds no threat of any adverse action, but rather, as Dr Hall said in evidence, an “unfortunate joke”. There was no threat of dismissal by Dr Hall. Ms Lee well knew he was not her manager, and did not have that power.
Indeed, Ms Lee conceded in cross-examination that:-
a)Dr Hall did not have any authority to hire or fire employees. That delegated authority was with the CEO, Mr Krouskos;
b)Dr Hall had never threatened her with part time employment;
c)Dr Hall did not issue a threat about relegating her or changing her conditions to part time; and
d)Dr Hall put a question to her: “why don’t you think about going part time?”
Dr Hall knew nothing of the complaint that Ms Lee made about his conduct of January 2016 until the commencement of these proceedings.
There was no breach of the general protections provisions under the Act. Even if Dr Hall had engaged in any contravening conduct, which the Court finds he did not, Ms Lee did not plead a case of attributed liability pursuant to s.793 of the Act such that NRCH is liable for any alleged unlawful conduct of Dr Hall.
Ms Coughlan’s comments about Union
Ms Coughlan denied that she said to Ms Lee, as asserted by Ms Lee, “No, don't join the union. They are horrible people. Whatever benefits other staff get you will get anyway”. The Court prefers the evidence of Ms Coughlan as to what actually occurred. That was, that in response to Ms Lee considering whether or not to join the union, and telling Ms Coughlan that “the union had told employees that if they did not join up they would not be entitled to the same benefits as managers”, Ms Coughlan said words to the effect of “That’s rubbish, you are legally covered by the agreement and whatever benefits anyone else gets you will get too”. Even if the comment attributed to Ms Coughlan was made, which the Court finds it was not, the comment itself is not an adverse action.
In any event, as discussed hereafter, the assertion that Ms Coughlan influenced any decision taken by Mr Krouskos is not made out on the facts. Whatever the nature of the conversation between Ms Lee and Ms Coughlan regarding the union, it was not an operative reason in the decision of Mr Krouskos to select Ms Lee’s position for redundancy and to terminate of her employment on that basis.
The Redundancy
It is not disputed between the parties that NRCH had recurring budgeting deficits. In each of the 2014 and 2015 financial years, the budget deficit was in the vicinity of $250,000. In the financial year ending 30 June 2016, there was, by 7 April 2016, a projected budgetary deficit of $505,592. Nor was it disputed between the parties that the responsibility for addressing that issue lay with Mr Krouskos, and that in the process of addressing the issue it was necessary for Mr Krouskos to make some decisions which had the effect of saving money to reduce the deficit.
The evidence of Mr Krouskos and Dr Hall was that as early as June 2015, there were discussions at the executive level about the organisation experiencing financial trouble.
Around February 2016, Mr Krouskos had discussions with Dr Hall, and Ms Michal Morris, the two General Managers at the time, about how to reduce the budget deficit. Before discussions could progress, Ms Morris resigned from NRCH. Mr Krouskos evidence as to the effect of this resignation was as follows:-
“It was not financially possible for NRCH to immediately employ a replacement for Ms Morris’ position. Therefore, Dr Hall and I agreed to split the management of all of the program areas between the two of us. Dr Hall was, at that point in time, the only General Manager employed by NRCH and not on leave.”[2]
[2] Affidavit of Mr Krouskos sworn 30 May 2017, 31.
Around this time, in February 2016, Mr Krouskos began to involve Ms Coughlan also, as the Human Resources Manager. He informed her about the financial position of the organisation and the need to consider redundancies as an option to lower expenditure. He had a number of discussions with Ms Coughlan about mechanisms for determining areas in NRCH where positions may no longer be required. Together they initially looked at the Counselling/Casework program, as the focus of that program was largely youth work. That work was not a service area that NRCH were focused on as an organisation. However it soon became clear that that was not a viable option.
In about late April or early May 2016, Mr Krouskos asked Ms Coughlan to prepare a spreadsheet of all of the positions in the organisation including a description of the general duties that position undertook in the organisation. Mr Krouskos intended to use the spreadsheet as a tool to identify positions in the organisation which could be excised or discontinued without a significant impact on NRCH operations and the safety and well-being of NRCH staff. Mr Krouskos was also conscious of ensuring that NRCH would still able to meet its obligations to its funders under its arrangements with them. Mr Krouskos did not want to make redundant any position that might affect NRCH’s ability to deliver on its obligations to its funders.
Ms Coughlan’s evidence as to her involvement in the redundancy process was as follows:-
“13. … I assisted Mr Krouskos with the redundancy process, including by:
(a) assisting him to undertake a review of all of the positions in the organisation;
(b) advising him on the process to be followed in consulting with staff regarding the changes; and
(c) preparing a Change Impact Statement and communications to staff and by attending some of the redundancy meetings.
14. I was not responsible for making any decisions about which positions in the organisation, including the position occupied by Ms Lee, would be made redundant. I did not make the decision to make Ms Lee's position redundant. While I am able to advise the CEO on matters such as redundancies and termination of employment more generally, I do not have authority to make decisions regarding the dismissal of staff from their employment at NRCH. Under NRCH's Instrument of Delegations, the Board has delegated its authority to dismiss staff to the CEO alone.
15. I recall that sometime in February 2016, I had a discussion with Mr Krouskos in which … he said to me that he would need to make changes in the organisation to ensure it remained financially viable. He said to me that he was considering redundancies because staff salaries were NRCH's largest expenditure.”
Mr Krouskos decided that NRCH needed to reduce its payroll expenditure by making certain positions redundant. He had been reluctant to take this step, indeed deferring the process in the hope that NRCH would receive an increase in funding from the Victorian or Commonwealth Governments in the May 2016 budgets. Unfortunately, there was no significant increase in any funding for community health service providers, including NRCH, in those budgets.
The first meeting as to the making of positions redundant, which occurred in May 2016, involved a discussion about staffing levels and the roles performed by staff members. Mr Krouskos, Dr Hall and Ms Coughlan met to discuss a spreadsheet containing all staff names (136) and brief job descriptions. Ms Coughlan was directed to divide up the positions into clinical (services) and non-clinical roles (support or other). There is no evidence before the Court that at this first meeting any person made any reference to any complaint made by Ms Lee or her long service leave entitlements and when those entitlements might be used.
Dr Hall said as to his involvement in the first meeting:-
“As I was fairly new to the position of General Manager, I did not feel that I had as much background knowledge as Mr Krouskos. I did not have a detailed knowledge about the funding of positions outside of my program areas so I could not offer much information in that respect. Within my areas of responsibility, I suggested that there were possibly three roles that could be made redundant in the Oral Health program. I do recall that some of those positions were contract positions. I was aware those contract employees were currently in the midst of projects for which NRCH had received funding so I said it might be a difficult to make them redundant.”[3]
[3] Affidavit of Dr Hall affirmed 29 May 2017, 19.
Ms Coughlan’s evidence as to the first meeting was as follows:-
“19. In or around late April or early May 2016, Dr Krouskos came and spoke to me and told me that he needed to progress our redundancy discussions. He said he wanted to talk more broadly about restructuring roles and responsibilities in the organisation. He said that he first wanted to undertake a review of all of the positions at NRCH. He asked me to prepare a spreadsheet which listed all of the current positions in the organisation and which provided a general description of the role each position performed in the organisation.
20. Mr Krouskos then arranged a meeting with Dr Hall, General Manager, and myself to discuss the redundancy process. This meeting occurred in early May 2016. At the time, there were two other General Manager positions at NRCH. Each General Manager was responsible for overseeing a particular, or multiple of, the program areas delivered by NRCH. However, at the time of these discussions, one of the General Manager positions was vacant and the other was occupied by an employee who was on long service leave. As an interim arrangement, Dr Hall and Mr Krouskos had divided responsibility for the program areas managed by the other General Manager positions amongst the two of them. It is NRCH's standard practice to involve the General Managers in discussions regarding organisational restructure as these managers needed to understand any changes that would affect the programs that they were responsible for overseeing.
21. During this meeting Mr Krouskos again explained the financial position of the organisation and said that it was probable that there would need to be around four to six positions made redundant in order to reduce expenditure to the level required. I do not recall there being any discussion at this meeting about particular positions that should, or could, be made redundant. Mr Krouskos looked at the spreadsheet of positions that I had prepared and asked me to prepare another version. He asked me to review the spreadsheet so as to achieve two things:
(a) first, group the positions into roles that were directly linked to clinical services provided by NRCH; and
(b) secondly, group the positions into support and/or other non-clinical related roles, like administration, purchasing and management.”[4]
[4] Affidavit of Ms Coughlan affirmed 30 May 2017.
A second spreadsheet was then created by Ms Coughlan. About 10 days later, in May 2016, a second meeting occurred between Mr Krouskos, Dr Hall and Ms Coughlan. According to Ms Coughlan’s evidence, and corroborated by the evidence of Mr Krouskos and Dr Hall, Mr Krouskos said in this meeting that “in order to determine which positions should be made redundant, he would consider whether there was a real and ongoing need for that particular position in the organisation”.[5] Out of this meeting a list of ten possible positions were identified by Mr Krouskos as liable to being made redundant without any significant impact on the provision of services by NRCH. There was a discussion between Mr Krouskos and Dr Hall about Ms Lee’s role and its importance to the organisation. Two other positions, that of Cleaner and Youth Worker were also discussed. There was analysis of the possibility of redundancy and the effect of that event on the delivery of services and programs. On the evidence of Mr Krouskos, Dr Hall and Ms Coughlan, and in particular as put by Ms Coughlan, “there was no discussion during this meeting that Ms Lee should be made redundant because of any complaints she made. There was no discussion or suggestion that Ms Lee should be made redundant because she had proposed to take long service leave, at half pay or otherwise, because she had a significant accrued personal leave entitlement or because she had spoken to me about joining a union”.[6]
[5]Ibid 24.
[6] Ibid 26.
Following the second meeting, Mr Krouskos told Ms Coughlan he would undertake the redundancies in two stages, with three positions to be made in the first stage. Mr Krouskos informed Ms Coughlan of those positions. He explained to her that he believed those positions could easily be absorbed into other roles in the organisation or could be undertaken by volunteers. Mr Krouskos told Ms Coughlan that he had not decided which positions would be made redundant in the second stage. Ms Coughlan did not have any further discussions with Dr Hall or Mr Krouskos about which positions were to be made redundant.
The positions identified as redundant for the purposes of the structural change to the organisation were non-clinical health roles. In respect of Ms Lee, Mr Krouskos made an assessment that the duties performed by her in her role did not justify a full-time position. Additionally, his assessment was that Ms Lee’s roles could easily be absorbed into other positions within the organisation. Mr Krouskos then acted on his decision as set out below.
Mr Krouskos gave evidence as to his reasons for making the decision to make three positions redundant and in doing so selecting Ms Lee’s position of Health Promotion Officer. That evidence was of course important for NRCH in order to discharge its evidentiary onus. Mr Krouskos’ evidence was compelling and corroborated by Dr Hall and Ms Coughlan where relevant. Whether Mr Krouskos’ consideration of Ms Lee’s position as being “largely administrative” was an accurate assessment, a matter disputed by Ms Lee, was simply not relevant to a proper consideration of this matter.
Mr Krouskos’ evidence in relation to Ms Lee’s redundancy, was, relevantly, as follows:-
“36. In early May 2016, I met with Ms Coughlan and Dr Hall to inform them that I had decided that there was a need to make around four (4) to five (5) positions redundant in order to reduce the deficit to what was approved by the Board. I used a working figure that one full-time position cost the organisation about $100,000 in expenditure. I therefore operated on the basis that 4 to 5 positions would need to be made redundant. I asked Dr Hall to attend this meeting as I thought it was appropriate, as a General Manager, that he should be kept abreast of the process I intended to adopt. I was keen for Dr Hall to understand the process in case there were redundancies in the program areas that he managed. I wanted Ms Coughlan to be present so that she could assist me with any of the process requirements in relation to the redundancies.
37. The first meeting was quite brief. I reviewed the spreadsheet that Ms Coughlan had prepared and decided that I wanted to see the positions grouped into clinical and non-clinical roles. I asked Ms Coughlan to do that so we could meet again and discuss in further detail.
38. A second meeting then occurred with Dr Hall and Ms Coughlan. I described to them the Redundancy Criteria and I then reviewed the spreadsheet prepared by Ms Coughlan in detail in order to apply the criteria to the positions. I asked Dr Hall to provide further information on the nature of the roles performed by employees in his program areas as they came up in my review. I asked Ms Coughlan to provide any knowledge she had about the tasks performed by employees, to the extent she had any further knowledge, as I completed my review. This was the extent of the information and assistance that Dr Hall and Ms Coughlan provided to me during the meeting
39. By the end of the meeting, I had developed a list of about ten (10) positions that I considered could be made redundant without a significant adverse impact on the organisation. … However, I have not been able to locate a copy of the note. Ms Lee's position was one of those on the list for possible redundancy. I recall that during the meeting I described to Ms Coughlan and Dr Hall that Ms Lee was primarily responsible for running three (3) community groups and a Gym program which had been running for a number of years. I stated that the tasks were discrete and were largely administrative in nature, rather than having a solely health promotions service delivery focus. Because those programs had been around for a while, the processes and procedures, and the funding application process for them, was established. I recall mentioning that Ms Lee's role had not really developed over time and she had seemed unwilling in my last conversation with her to take on any new programs. Dr Hall added that he had spoken with Ms Lee on at least one occasion about taking on the 'Smiles for Miles' program and she seemed unwilling. I also said that NRCH did not currently receive any additional funding outside the core NRCH funding for the programs run by Ms Lee. On the basis of what I had discussed with Ms Coughlan and Dr Hall, I put Ms Lee's position on the list of possible redundancies.
41. I did not place Ms Lee's name on that list because:
(a) Ms Lee had made a complaint in relation to her employment; and/or
(b) Ms Lee had stated that she might utilise her accrued long service leave at some point in the future.
42. The decision to place Ms Lee's name on the list was mine alone.
43. After I had been through the spreadsheet, I asked Ms Coughlan to arrange for Mr Mahindra to prepare a list of the salaries of the ten individuals who occupied the positions on the list of positions I had identified. Ms Coughlan provided me with that list shortly after the meeting. …
44. After this meeting I considered each of the positions on the list I had identified and determined that there were three (3) positions that most closely met the Redundancy Criteria. One of those positions was Ms Lee's position. The others were the Youth Worker and Cleaner positions.
45. I did not select Ms Lee's position as one of three positions because:
(a) Ms Lee had made a complaint in relation to her employment; and/or
(b) Ms Lee had stated that she might utilise her accrued long service leave at some point in the future.
46. The decision to place Ms Lee's name on the list was mine alone.
..
I considered that Ms Lee's position had developed away, over time, from her position description. The tasks she was performing were essentially administrative in nature. I considered that there was no longer a business need for a position that in large part administered four community programs. That was the sole reason for my selection of Ms Lee's position for redundancy.
…
50. The decisions referenced at paragraphs 44 to 48 above were made by me, and only me. I do not recall having any further discussions with Dr Hall or Ms Coughlan in between the time of my last meeting with them and when I advised them of my decision to make certain positions, including Ms Lee's position, redundant. This all happened in a very short time frame over the first couple of weeks of May.
…
53. During my discussion with Ms Coughlan we spoke about whether there might be any vacant positions in the organisation to which any of the three employees might be redeployed. Ms Coughlan told me that the only vacant position was the General Manager position which was an executive management level position. We agreed that it was not appropriate to redeploy any of the employees to this position.
…
56. The selection of Ms Lee's position for redundancy and the ultimate decision to make Ms Lee's position redundant were decisions made by me and only me. Those decisions were made for the reasons I have outlined above. Dr Hall and Ms Coughlan assisted me by providing support in relation to the processes to be followed in respect of the redundancies or provided information regarding the duties performed by certain employees. Neither person in any way influenced my decision to select Ms Lee for redundancy or the decision to make her position redundant.
…
111. To the extent that Ms Lee discussed her alleged plans as to long service leave with Dr Hall or Ms Coughlan, neither of them informed me of those discussions. When I made the decision to make Ms Lee's position redundant, I was not aware of the statements that Ms Lee alleges she made to Dr Hall on 12 January 2016 and to Ms Coughlan on 25 February 2016. I do not know if those statements were in fact made. The only time Ms Lee made any statement to me about long service leave was during the meeting on 18 May 2017. By that time, I had already made the decision to make her position redundant. The leave balances of employees, and their intentions to take leave, were not factors that entered into my decision-making process when I was reviewing and determining the positions that should be made redundant”[7]
[7] Affidavit of Mr Krouskos sworn 30 May 2017.
On 2 May 2016, Ms Lee took paid sick leave. Ms Lee worked on 3 May 2016. Ms Lee took time off in lieu on 4 and 5 May 2016 and then took annual leave on 6, 9 and 10 May 2016. Between 11 May and 17 May 2016, Ms Lee took compassionate/sick leave. On 18 May 2016, Ms Lee returned to her workplace after this short absence. Prompted by others in the workplace, she read an email dated 17 May 2016 from Mr Krouskos to all employees, notifying them of NRCH’s restructure. That correspondence was as follows:-
“Dear colleagues,
As many of you know, the health and community sector is undergoing considerable change in response to the shift to client-lead care and subsequent funding changes.
In the 2014/2015 financial year, NRCH recorded a $250,000 deficit in the budget and NRCH expects to record a $450,000 deficit in this financial year. My highest priority is to preserve jobs at NRCH and to provide an inclusive, respectful and rewarding workplace. However, given our financial result, NRCH has no option but to reduce expenditure by reducing staff numbers.
This means there will be redundancies, as well as changes to some staff roles and responsibilities. Some of these changes will be made immediately. If your position is to be affected by these changes, you will be notified separately within the next 24-48 hours.
This is going to be a difficult time for all staff, and it is a decision that has not been made lightly.
On a personal note, I would like to express my deep gratitude and admiration for all of our staff at NRCH, including those who will face redundancies. I am extremely proud that we have such a supportive, collegiate and knowledgeable workforce.
That any of our fantastic staff will be made redundant is great source of sadness. Every person employed at NRCH has made a great contribution to the community. For many years, this organisation has provided care to those who need it most.
This restructure is a necessary part of our efforts to ensure that NRCH continues to support its clients and community well into the future.
Our priority right now is to provide information and support to the staff directly affected by this restructure.
However, I recognise that many staff will be understandably concerned about their colleagues.
We will provide as much assistance and care for staff as possible during the coming weeks. In the meantime I welcome any staff concerned about these changes to discuss it directly with me, and ask that we all try to move forward with empathy and sensitivity during this difficult period.
More information will be available once all affected staff have been notified.
Kind Regards,
Demos [Kroustos]”
On 18 May 2016, before any discussion with Ms Lee occurred, Mr Krouskos and Dr Hall signed a ‘Change Impact Statement’. The Change Impact Statement had been prepared by Ms Coughlan on instructions from Mr Krouskos. Dr Hall was not privy to the discussions between Ms Coughlan and Mr Krouskos regarding how staff were to be informed of the restructure. Ms Coughlan forwarded the Change Impact Statement to the relevant unions and was not contacted by either union to challenge the legitimacy of the restructure.
Following her reading of the email from Mr Krouskos dated 17 May 2016, and on 18 May 2016, being within 24 hours of the email of 17 May 2016, Ms Lee was called into the office of Mr Krouskos, where Ms Coughlan was also present. What ensued was a discussion as to the impact upon Ms Lee of Mr Krouskos’ decision to make changes to the organisation structure of NRCH. Mr Krouskos told Ms Lee that the position of Health Promotion Officer had been identified as being affected by the restructure. Ms Lee was advised by Mr Krouskos that NRCH was selecting her position for redundancy.
On being told her position was to be made redundant, Ms Lee admitted she became angry and distraught, although subsequently in cross-examination denied she became agitated and distressed very quickly, as alleged by both Mr Krouskos and Ms Coughlan. One of her responses to the news of redundancy was to say “why didn’t you choose one of them; why did you choose me?” Her evidence was that she was “embarrassed” and “humiliated” by the decision. Ms Lee said that she was planning to take long service leave in 18 months’ time and asked Mr Krouskos if he could wait until then to make the position redundant.
Mr Krouskos said this was not possible. Mr Krouskos asked Ms Coughlan to tell Ms Lee what redundancy benefits she would receive. Ms Coughlan’s evidence as to this was as follows:-
“47. Although we had not intended to give Ms Lee notice of termination during this meeting, she had clearly expressed that she did not want to come back for a second meeting. It appeared to me that Mr Krouskos had decided to proceed on the basis that we were now giving her notice of termination. I told Ms Lee that she was entitled to a five week notice period and redundancy pay. Mr Krouskos then said that Ms Lee had the choice of working out her notice period or leaving at the end of the week. I recall that Ms Lee then said words to the effect of “I’ll leave. Why would I want to stay.” I offered to arrange a farewell for Ms Lee. Ms Lee said she did not want a farewell.
48. At that point, Ms Lee ended the conversation. Given she was upset I asked her to come to my office. In my office, Ms Lee said to me that she was embarrassed and did not know how she would tell the community that she was leaving NRCH as she feared they would judge her. As Ms Lee was quite upset, I suggested that she go home and take the rest of the day off. Ms Lee then said that she would call in sick the next day. I said I understood if she wanted to do that.”[8]
Contrary to Ms Lee’s evidence, no termination date was mentioned at the 18 May 2016 meeting.
[8] Affidavit of Mr Krouskos sworn 30 May 2017.
Ms Lee was offered a further meeting with a support person later in the week for further discussions. She refused that offer. Ms Lee was offered a farewell and her response was “what’s the point?” That response was given, on Ms Lee’s evidence, because she did not consider it a “very genuine offer”.
On 19 May 2016, Ms Lee called in sick. Ms Coughlan sent Ms Lee a letter, upon instruction from Mr Krouskos, confirming the nature of the restructure and how it affected her. Ms Lee was advised that her employment would terminate by reason of redundancy on 20 May 2016. The correspondence of 19 May 2016 also attached a second version of the Change Impact Statement, which removed references to other positions that would be made redundant. The correspondence was as follows:-
“Dear Renee,
Re: Review of North Richmond Community Health Structure
The health and community sector is currently undergoing considerable change and transformation in response to the shift to client directed care and the subsequent funding changes. In order for North Richmond Community Health (‘NRCH’) to continue to provide a responsive and appropriate service that meets the needs of its clients, NRCH has recently been considering its organisational requirements.
As a result, NRCH has developed a proposal to restructure this function. Please find with this correspondence a Change Impact Statement that sets out the proposed change and its impact on existing positions, including your position.
Where a change that may have a significant impact on employees is proposed, it is appropriate for us to consult with those who may be affected and their representatives (such as a union or other representative).
We met with you on the 18th May 2016 to discuss the effects the changes are likely to have on you, and measures to avert or mitigate the adverse effects of such changes on you.
As discussed the position of Health Promotion Officer is no longer required. Regrettably this means your employment will terminate. This decision is not a reflection on your performance.
Your employment will end on the 20th May 2016. Based on your length of service, your notice period is 5 weeks. Instead of receiving that notice, you will be paid the sum of $6510.51 plus the redundancy entitlement set out below.
Due to your employment ending because of redundancy, you will also be paid redundancy pay of $15625.20 in accordance with Community Health Centre Stand Alone Services SACS Multi Enterprise Agreement 2013-2015. This amount represents 12 weeks' pay which is based on your 24 years of service.
You will also be paid your accrued entitlements and any outstanding pay, including - superannuation, up to and including your last day of employment.
NRCH has organised the services of an Outplacement provider, Outplacement Australia, which we would encourage you to utilize and we can provide these details to you. Our Employee Assistance Program is also available for your use.
NRCH would like to thank you for your valuable contribution during your employment with us.
Should you have any queries please do not hesitate to contact me to discuss further.
Yours sincerely
Demos Krouskos”
Ms Lee’s evidence was that she was shocked by the 19 May 2016 email from Mr Krouskos as she had expected to work another five weeks. On 20 May 2016, Ms Lee attended at the offices of NRCH. Ms Lee conveyed to Ms Coughlan that she was upset by the email. Ms Coughlan replied with words to the effect of “You made it clear that you were finishing up today, that’s what you said in our discussions’. At 12.40pm on 20 May 2016, Ms Lee sent an email to all staff at NRCH which had a subject line “Goodbye” and read as follows:-
“Dear All,
I am extremely sad to send you this email. I never thought my NRCH days would finish so suddenly, and so harshly.
As you all know, I have worked here for almost 25 years and have been very committed to working with our disadvantaged community, who I really care for. You will understand that it is most upsetting for me to not able to say goodbye to the community properly.
However, I have enjoyed working with you all and will treasure the special friendships made along the way. I would like to use this email to say goodbye, and wish each of you all the very best. And for some of you at least, I hope our paths might cross again in the future.”
Ms Coughlan interpreted this email as Ms Lee informing staff that she would be leaving NRCH that day. Ms Coughlan sent Ms Lee an email to clarify, to which she did not receive a response. Later that day, Ms Lee visited Ms Coughlan to say goodbye and stated “Why would I stay where I’m not wanted.”
Mr Krouskos’ evidence as to the meeting between Ms Lee and Ms Coughlan and himself and what followed thereafter was consistent with the evidence of Ms Coughlan. In particular, as to what occurred after Ms Lee was notified of her position being made redundant was as follows:-
“62. I then asked Ms Coughlan to tell Ms Lee what her redundancy entitlements were and she told Ms Lee that she was entitled to a five week notice period and redundancy pay. I then asked Ms Lee whether she wanted to work out the notice period or she could, if she wanted to, finish work at the end of the week and receive payment in lieu of the notice period. Ms Lee rejected that flatly and said that she was not interested in staying.
…
65. … I do recall Ms Lee asking at one point in the meeting if she could continue to be employed for a while so she could take her long service leave. I responded by saying that this was not possible as her position was redundant. Ms Lee never said anything in the meeting about any plans she had to take long service leave which she had discussed with Ms Coughlan.
…
68. On 19 May 2016, I received a text message from Ms Lee stating that she would not be coming into work that day. Later in the morning, Ms Coughlan contacted me and we discussed providing Ms Lee with formal paperwork regarding the redundancy. We agreed that, as Ms Lee had been very clear that she did not wish to work out her notice period, we would send her a termination letter confirming that her employment would end on Friday, 20 May 2016.
69. On that day, Ms Coughlan and I also talked about preparing a second version of the Change Impact Statement. The second version would not disclose the changes contained in that first change statement before the employees affected by those changes had been informed of them. We had not, at that point in time, met with all of the employees whose duties or reporting lines were changing as part of the restructure. We agreed that it was not fair for Ms Lee to have that information before the employees received it. We discussed that, given how upset Ms Lee was on 18 May 2016, it was likely she would tell those people immediately about the changes. I asked Ms Coughlan to prepare a second version of the Change Impact Statement that only referred to the three positions that were made redundant in stage 1.
70. Ms Coughlan prepared that second version of the Change Impact Statement and the redundancy letter to Ms Lee. She asked that I review and sign both documents, which I did. Ms Coughlan then sent the redundancy letter and Change Impact Statement to Ms Lee and copied me into that email.
…
78. On 20 May 2016… I asked Me Lee to step into a meeting room with me so that we could talk. … Ms Lee said to me that she was upset about the redundancy and she questioned again why it was necessary.
79. I raised with Ms Lee whether she was certain that she did not want to work out her notice period. I was concerned that her earlier statement (saying she would leave immediately) had been a knee-jerk reaction during our meeting on 18 May 2017. Ms Lee confirmed that she did not want to work through the notice period. The conversation ended shortly after this.”
It is clear on the totality of the evidence that Ms Coughlan and Dr Hall were not responsible for making the decision about which positions at NRCH should be made redundant. They were not involved in the decision taken by Mr Krouskos to make Ms Lee's position redundant. They took part in the discussions with Mr Krouskos as a consequence of their respective managerial roles at NRCH.
Ms Lee accepted that Mr Krouskos did not want to make staff positions redundant. He considered that approach a last resort to lower the budget deficit. The argument consistently advanced by Ms Lee in respect of the selection of her position for redundancy was that Mr Krouskos “had a lot of other people to choose but he chose me.”
Ms Lee, in her evidence given in the proceedings agreed, that prior to her meeting with Mr Krouskos on 18 May 2016, her employer had made a definite decision to make some changes. She agreed she had been notified, (albeit in an extremely short time frame) of those changes, she being a person affected by the decision. She agreed with the decision to restructure. She agreed that in reality there was a restructure. What Ms Lee did not agree with was that her position should have been selected for redundancy.
Ms Lee also did not accept the legitimacy of her redundancy. Her evidence was that her redundancy “was not genuine”. She gave evidence that NRCH, internally, re-advertised her position of health promotions officer in December 2017. Ms Lee conceded however that the job to which she referred was a two day a week position, not a five day a week position and thus it was not a permanent, full time position.
In respect of Ms Lee’s assertion that NRCH employed Ms Barsoum to perform her duties one month after her redundancy, Mr Krouskos’ evidence was as follows:-
“Ms Lee states that I employed Maryanne Barsoum to perform her duties one month after the redundancy. I deny that assertion. Ms Barsoum was not appointed to perform any of Ms Lee's former duties. Ms Barsoum was engaged in about July 2016 as a part-time fixed term employee. She works two (2) days a week in the Client Directed Care Group. Her role is to assist with grant application writing and to assist NRCH with making the transition to the National Disability Insurance Scheme (NDIS) and Commonwealth Home Support Program. I was contacted by an employment agency in June 2016 who offered to subsidise her employment by $4,000 for six months. I accepted that assistance. Ms Barsoum then began assisting me to run the Homework Group when the casual employee who delivered the session left and I delivered the session myself for a period of time. I understand that Ms Barsoum continues to assist that casual employee with tasks such as organising things like the fruit and set up of the room. I have never told any staff members that I intend for Ms Barsoum to become an 'activity co-ordinator' because I do not have that intention. NRCH is not in a financial position to employ a full time unfunded position at this time.”[9]
[9] Affidavit of Mr Krouskos sworn 30 May 2017, 13(c).
Ms Lee had no knowledge about the matters deposed to by Mr Krouskos and her claim in this regard could not be in any way substantiated. At all relevant times Mr Krouskos made clear to Ms Lee that although her position was being made redundant, the programs in which she had engaged, were continuing. He indicated to Ms Lee that he would effect a distribution of her duties to other employees of NRCH, which for a time included Mr Krouskos himself.
Ms Lee gave evidence that although she did not mention to Mr Krouskos, in the meeting between them when she was told of her position becoming redundant, that she would take long service leave at half pay in a few years time, that she had done so in 2015. She claimed further to have indicated to Mr Krouskos that she was going to retire. Her evidence was that Mr Krouskos was not opposed to the taking of her long service leave and only requested of her to give him three months’ notice. I accept that may have occurred in some general and vague way. Thereafter however, Ms Lee did not put in any application for long service leave or give notice of any impending retirement. Ms Lee did understand that her entitlement to be paid out any of her accrued long service leave existing at the time of her cessation of employment, for any reason, and understood that was never an issue in her workplace. It was always going to be an obligation to be met by NRCH.
Consideration
General Protection Contravention
The central question to be determined is one of fact. It is: ‘Why was any adverse action taken?’[10] The inquiry is concerned with the subjective reasons for action by the decision-maker.[11] The inquiry is whether a proscribed reason was a ‘substantial and operative’ or ‘operative and immediate’ reason for the adverse action.[12] A proceeding alleging a breach of Part 3-1 of the Act (general protections) is not a broad-based inquiry as whether Ms Lee has been subjected to a procedurally or substantively fair outcome.[13]
[10] Victoria (Office of Public Prosecutions) v Grant (2014) 246 IR 441, 32.
[11] CFMEU v Endeavour Coal P/L (2015) 231 FCR 150, 91.
[12] Board of Bendigo Regional Institute of TAFE v Barclay (2012) 248 CLR 500, 103- 104.
[13] Ermel v Duluxgroup (Aust) Pty Ltd (No 2) [2015] FCA 17, 48; Khiani v Australian Bureau of Statistics [2011] FCAFC 109, 31.
Mr Krouskos gave unchallenged evidence that he was the sole decision maker. Mr Krouskos has, as CEO, amongst his various duties, delegated responsibility under an Instrument of Delegations, signed by the Board, to appoint and dismiss staff and to make changes in the organisational and leadership structure. He is not required to obtain Board approval to undertake any actions consistent with that delegation. Mr Krouskos is the only person in the organisation with a delegation of that nature.
At no time on the evidence, did Ms Coughlan or Dr Hall propose that Ms Lee’s position be made redundant.
There is no evidence before the Court to find that Mr Krouskos considered as a substantial and operative reason for the redundancy of Ms Lee’s position and termination of her employment:-
a)the fact that Ms Lee was entitled to an amount of accrued Long Service Leave or other leave including sick leave, about which he had no knowledge, and planned to take Long Service Leave at half pay; or
b)the fact that she had made complaints about her employment.
In fact, Mr Krouskos positively denied that any such reasons were operative in respect of the decision he made.
Mr Krouskos made the decision upon the reasons he set out in his evidence as referred to above. There is no evidence before the Court that any person influenced his decision.
There is no basis to find that, in May 2016, Mr Krouskos was actively aware that Ms Lee had any intention to take long service leave at any given time, or on half pay over a longer period of time. No application for long service leave was made by her to Mr Krouskos. The statement of claim pleads that Ms Lee raised the issue of taking such leave after she had been advised that her position was redundant and that termination of employment might follow. Ms Lee’s affidavit filed 14 June 2017 asserted, for the first time, that she had discussed long service leave with Mr Krouskos in ‘early 2015’, some 16 months earlier. The fact that Ms Lee asserted to Mr Krouskos in an email dated 14 January 2016 that ‘as you know, I am in my final years and I want to go out on a high’,[14] is not evidence of a discussion about an intention to take long service leave.
[14] Affidavit of Ms Lee affirmed 14 June 2017, 59.
The Court finds Ms Lee’s employment was terminated because of the restructure of NRCH, driven by necessary cost savings, and not for any unlawful or prohibited reason. The restructure actuated the decision to make the position redundant. The fact that Ms Lee may have had, or exercised, any workplace right, did not actuate or cause the fact of the restructure, the selection of her position for redundancy and/or consequent dismissal.
Mr Krouskos alone made the decision to select Ms Lee's position for redundancy and to then dismiss Ms Lee from her employment on redundancy grounds.[15] No prohibited reason was a substantial or operative factor in the decision to make Ms Lee's position redundant. The assertion made by Ms Lee that Dr Hall and Ms Coughlan were involved in the decision making process is not borne out by the facts proven. NRCH has discharged its evidentiary onus and demonstrated that no adverse action was taken because Ms Lee had exercised, or proposed to exercise, or in order to prevent her from exercising, any relevant workplace right.[16]
[15] Affidavit of Mr Krouskos sworn 30 May 2017, 46.
[16] Fair Work Act 2009 (Cth) s.361.
Agreement Contraventions
NRCH submits that cl.13 of the Agreement was not engaged by the May 2016 restructure because, factually and contextually, it was not a circumstance of major changes. Three positions of 136 positions were made redundant leading to the retrenchment/dismissal of three employees. There was minimal change to the business structure in that only three positions were removed. The structure of the business did not change save for the removal of roles. The business still carried out its major functions, including the provision of the four groups once administered by Ms Lee. The Court accepts this submission on the basis of the facts as found by the Court. Even if that were not the case, and I am wrong, the Court finds in the alternative that NRCH acted in compliance with its cl.13 of the Agreement obligations. If it can be said it made a definite decision to introduce major change, then as soon as practicable after making that decision, NRCH notified its workforce and the union. NRCH met with ‘affected’ employees. On 18 May 2016, it met with Ms Lee within 24 hours of the 17 May 2016 email announcement. There was a discussion as to how the major changes being the redundancies would affect Ms Lee. Ms Lee was upset and dismissive of any constructive discussion as to the matter, NRCH then offered to meet further with Ms Lee but she refused.
NRCH provided to Ms Lee and the relevant unions a revised Change Impact Statement under cover of letter dated 19 May 2016. NRCH met its obligations under the Agreement.
The claim alleging a breach of cl.13 of the Agreement, and thus a breach of s.50 of the Act, cannot succeed.
On 18 May 2016, Ms Lee became upset and agitated, when told of NRCH’s decision that her position was to be made redundant. She made clear that she did not want to attend a further meeting about the matter and wanted to cease work immediately and would not work through any notice period. Ms Lee took no steps to notify her employer of any dispute. Clause 18 of the Agreement is not engaged until a dispute arises.
The Court finds that cl.18 of the Agreement was neither enlivened nor engaged by Ms Lee. In the period of 18 to 20 May 2016, Ms Lee made no reference to the clause in her dealings with NRCH. Ms Lee was upset by the decision and its implementation, however she did not ‘notify’ her employer that the parties were in dispute over the redundancy. Absent proper notification, it was not possible for NRCH to know that any obligation under cl.18 of the Agreement had been triggered. There was no breach by NRCH of any obligation imposed by cl.18 of the Agreement. Again, if I am wrong, then as submitted by Counsel for the Respondent, by its conduct on 18 May 2016, the sending of a letter and the revised Change Impact Statement on 19 May 2016, NRCH met its obligations under clause 18.3 of the Agreement.
The application cannot succeed on any ground and shall be dismissed.
I certify that the preceding eighty-nine (89) paragraphs are a true copy of the reasons for judgment of Judge Hartnett
Date: 27 September 2018
Key Legal Topics
Areas of Law
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Employment Law
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Statutory Interpretation
Legal Concepts
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Breach
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Causation
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Statutory Construction
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Remedies
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