Lees v Asaleo Personal Care Pty Ltd

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FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)

Lees v Asaleo Personal Care Pty Ltd [2021] FedCFamC2G 347

File number(s): MLG 2194 of 2020
Judgment of: JUDGE RILEY
Date of judgment: 10 December 2021
Catchwords: INDUSTRIAL LAW – adverse action claim – whether being presented with a draft performance improvement plan and being dismissed constituted adverse actions for prohibited reasons – whether there were breaches of an employment contract by not conducting formal annual performance reviews after 2016 and not establishing a short term incentive plan in 2018 – whether the applicant’s position was made redundant.
Legislation: Fair Work Act 2009 (Cth), ss 119, 340, 341, 342, 360 and 361
Cases cited:

Alam v National Australia Bank (2021) 393 ALR 629; [2021] FCAFC 178

Construction, Forestry, Mining and Energy Union (CFMEU) v Coal and Allied Operations (1999) 140 IR 131; [1999] FCA 1531

Community and Public Sector Union v Telstra Corp Ltd (2001) 107 FCR 93; (2001) EOC 93-134; (2001) 104 IR 195; [2001] FCA 267

Cigarette and Gift Warehouse Pty Ltd v Whelan (2019) 268 FCR 46); (2019) 285 IR 290; [2019] FCAFC 16

Finance Sector Union of Australia v Commonwealth Bank of Australia (2001) 111 IR 241; [2001] FCA 1613

Gamboni v Bendigo and Adelaide Bank Ltd (2013) 39 VR 578; [2013] VSCA 92

General Motors-Holdens Pty Ltd v Bowling (1976) 12 ALR 605; (1976) 51 ALJR 235

Guerinoni v Synthes Australia Pty Ltd [2016] FCCA 1710

Kimpton v Minister for Education of Victoria (1996) 65 IR 317

Klein v Metropolitan Fire and Emergency Services Board (2012) 208 FCR 178; [2012] FCA 1402

Mackay Taxi Holdings Ltd t/a Mackay Whitsunday Taxis v Wilson (2014) 240 IR 409; [2014] FWCFB 1043

McAlister v Yara Australia Pty Ltd (2021) 307 IR 300; [2021] FCCA 1409

Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 195 CLR 1; (1998) 153 ALR 643; (1998) 72 ALJR 873; [1998] 8 Leg Rep 2; (1998) 27 ACSR 535; (1998) 16 ACLC 1041; (1998) 79 IR 339; [1998] HCA 30

PIA Mortgage Services Pty Ltd v King (2020) 274 FCR 225; (2020) 292 IR 317; [2020] FCAFC 15

Qantas Airways Ltd v Australian Licensed Aircraft Engineers Association (2012) 202 FCR 244; [2012] FCAFC 63

Shea v TRUenergy Services Pty Ltd(No 6) (2014) 314 ALR 346; (2014) 242 IR 1; [2014] FCA 271

Unsworth v Tristar Steering and Suspension Australia Ltd (2008) 216 FCR 122; (2008) 175 IR 320; [2008] FCA 1224
Division Division 2 General Federal Law
Number of paragraphs: 154
Date of last submission/s: 16 November 2021
Date of hearing: 14 and 15 October 2021
Place: Melbourne
Counsel for the applicant: Rohan Millar
Solicitor for the applicant: McDonald Murholme Solicitors
Counsel for the respondent: Leigh Howard
Solicitor for the respondent: Clayton Utz

ORDERS

MLG 2194 of 2020

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN:

Stuart Lees
Applicant
AND: Asaleo…
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Details
Case
[2021] FedCFamC2G 347
Decision Date

CaseChat Overview and Summary

Lees v Asaleo Personal Care Pty Ltd was a case heard by the Fair Work Commission, in which the applicant, Mr Lees, brought forward claims of adverse action against the respondent, Asaleo Personal Care Pty Ltd. Mr Lees alleged that the respondent had dismissed him without just cause or excuse and that this dismissal constituted an adverse action for a prohibited reason. He also claimed that the respondent breached his employment contract by not conducting formal annual performance reviews after 2016 and by not establishing a short term incentive plan in 2018. Finally, Mr Lees argued that his position had been made redundant, and he was entitled to 10 weeks redundancy pay under the Fair Work Act.

The legal issues before the court were whether Mr Lees' dismissal constituted adverse action for a prohibited reason, whether there were breaches of the employment contract, and whether Mr Lees' position had been made redundant. The court considered these issues and found that Mr Lees' adverse action claims and his claim about annual performance reviews had been made out. The court accepted that Mr Lees' position was not redundant and that he was not entitled to a redundancy payment.

In conclusion, the court found that the respondent had indeed breached the employment contract by not conducting formal annual performance reviews and not establishing a short term incentive plan in 2018. The court made declarations accordingly and heard the parties on the further conduct of the matter.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

Also, Mr Lees said that his position had been made redundant, and he was entitled to 10 weeks redundancy pay under s.119 of the Act.BACKGROUND In his written submissions filed on 30 September 2021, Mr Lees provided the following more detailed background to this matter:1.On 20 October 2014, the Applicant commenced full-time employment with Asaleo Care Australia Pty Ltd (A.B.N. 62 004 191 324) in the position of Strategic Category Manager – Raw Materials & Finished Goods pursuant to a written contract of employment (First Employment Agreement).2.On or around 13 February 2018, the Applicant entered into a new employment agreement with Asaleo Care Australia Pty Ltd (A.B.N. 62 004 191 324) in the role of Sourcing Manager (Second Employment Agreement).3.There were terms and conditions of the Second Employment Agreement, inter alia:(a) that he would perform the role of Sourcing Manager;(b)that he would receive remuneration of $175,000 per annum plus superannuation at the rate of 9.5% (Remuneration Term);(c)that he would be subject to formal performance reviews at least annually (Performance Review Term);(d)that he was entitled to participate in the Respondent’s 2018 short term incentive plan (STIP) with a maximum bonus potential of 20% of the Applicant’s annual salary and was entitled to be eligible for an incentive payment in the event he met the requirements and criteria as set out in the STIP Rules (as defined) (the STIP Term); and (e)that he would report to David Elliston (Mr Elliston) – General Manager Supply Chain.4.The STIP Rules set out criteria for the eligibility for an incentive payment in accordance with the STIP Term.5.In late 2018 Asaleo Care Australia Pty Ltd’s (A.B.N. 62 004 191 324) Procurement Team underwent a restructure. As a result:(a)in late 2018 the Applicant became responsible for the recruitment of the new Procurement Team, and for preparation of the proposed restructure;(b)on 30 January 2019 in an email to Mr Elliston, the Applicant was listed as Procurement Manager in the Draft Proposed Procurement Structure 2019; and(c)in or around April 2019 Paul Honey (Mr Honey) – Executive General Manager: Manufacturing, transitioned to the role of Executive General Manager, Supply as part of the Executive Leadership Team and became Mr Elliston’s direct line manager.6.On 28 February 2019, the Applicant’s employment transferred from Asaleo Care Australia Pty Ltd to the Respondent (Transfer of Employment).7.On or around 5 April 2019 the Applicant’s remuneration increased to $178,500 per annum.8.On 12 July 2019, the Applicant attended a meeting with Mr Elliston, during which Mr Elliston advised the Applicant that, inter alia:(a)the Applicant would not be appointed to the position of Procurement Manager in the Respondent’s new Procurement Team; and(b)three Category Managers who had been reporting to the Applicant would now report to Mr Elliston instead.(Notice of Redundancy) 9.On 14 July 2019, the Applicant made a complaint to Mr Elliston and David Griss (Mr Griss) – People & Culture Manager about, inter alia:(a)several changes within the organisation had caused his position to become redundant;(b)Mr Honey had exhibited hostile behaviours toward him including personally and toward his career progression; and(c)he was alerted to the fact that Mr Honey may attempt to manage him out of the business to avoid funding a redundancy payment.(together, the First Employment Complaint)10.The Applicant made further workplace complaints about Mr Honey’s bullying behaviour and associated matters on the following occasions:(a)on 16 July 2019 to Mr Elliston and Mr Griss (Second Employment Complaint); and(b)on 1 November 2019 to Mr Elliston and Mr Griss (Third Employment Complaint).111.On 7 November 2019, the Applicant lodged an order to stop bullying with the Fair Work Commission (the Stop Bullying Application), which was resolved by agreement on 27 November 2019.12.On 14 February 2020 at 11:30am, the Applicant responded to an email from Lou Sherman (Ms Sherman) – Senior Packaging Technologist (New Zealand), copying in several other employees of the Respondent and stating, inter alia, “LOL, your panache never ceases to amaze me Lou; I like it!!” (the Panache Email).13.Following the Panache Email:(a)on 18 February 2020, Ian Shepherd (Mr Shepherd) – Technical Manager sent an email to the Applicant raising concerns about the tone and content of the Panache Email, believing it to be patronising and inappropriate;(b)on 18 February 2020, the Applicant sent an email complaint to Mr Elliston and Mr Griss about the timing of Mr Shepherd’s email being suspicious, given the events at the Fair Work Commission, and Ms Sherman’s inappropriate attitude towards him (the Fourth Employment Complaint);(c)on 19 February 2020, the Applicant sent an email to Ms Sherman confirming that he had escalated the matter to human resources, and that he had raised concerns about her behaviour towards him (the Fifth Employment Complaint);(d)on 3 March 2020, the Applicant met with Mr Elliston and Mr Griss, where he refuted Mr Griss’s assertion that the Panache Email was inappropriate, and complained about being undermined by Ms Sherman (the Sixth Employment Complaint). Mr Elliston presented the Applicant with a Performance Improvement Plan (PIP);(e)on 10 March 2020, the Applicant made a complaint to Mr Elliston and Mr Griss about, inter alia, the arbitrary nature of the PIP, lack of evidence and the PIP as a means to force the Applicant to resign (the Seventh Employment Complaint).14.On 11 March 2020, the Applicant attended a meeting with Mr Elliston and Mr Griss, during which Mr Elliston informed the Applicant, inter alia, that the Applicant’s employment was to be terminated effective immediately (Dismissal).(footnotes omitted)

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Mr Griss’ evidence on this point was not effectively challenged and I accept it. It follows that Mr Lees’ position was not redundant on 11 March 2020. He was not entitled to a redundancy payment. CONCLUSION As Mr Lees’ adverse action claims and his claim about annual performance reviews have been made out, I will make declarations accordingly, and hear the parties on the further conduct of the matter.

Ratio Decidendi

Legal Principle Established

In Qantas Airways Ltd v Australian Licensed Aircraft Engineers Association (2012) 202 FCR 244; [2012] FCAFC 63, the Full Court of the Federal Court said that:30.In Telstra the [Full Court of the Federal] Court explained the reach of the concept of prejudicial alteration at [17]-[18] as follows:17.The question is whether, by sending the email to its recipients, Telstra had altered the position of any of its employees to the employee’s prejudice within the meaning of s 298K(1)(c). In Patrick Stevedores at 18 the majority of the High Court held that the subsection covers “not only legal injury but any adverse affection of, or deterioration in, the advantages enjoyed by the employee before the conduct in question”. The majority also observed (at 20) that the reorganisation of companies within the Patrick Group resulted in the security of the employer companies’ businesses being “extremely tenuous” with the “security of the employees’ employment [being] consequentially altered to their prejudice”. The reorganisation did not directly affect or alter any legal rights or obligations of the employees but it left their future employment less secure. Although this issue was not in dispute, the majority appears to have had no difficulty in accepting reduced security of future employment as falling within s 298K(1)(c) because it brought about an adverse affection of, or a deterioration in, the advantages enjoyed by the employees before the reorganisation. 18.Where the alteration of position is alleged to be indirect or consequential, as in Patrick Stevedores and in the present case, a difficult question may arise as to whether a prejudicial alteration of position has in fact occurred. Answering that question may involve questions of degree. It is sufficient for present purposes to say that if the prejudicial alteration is real and substantial, rather than merely possible or hypothetical, it will answer the description in s 298K(1)(c).(Bold emphasis added in Qantas.) …32.The authorities thus establish that a prejudicial alteration to the position of an employee may occur even though the employee suffers no loss or infringement of a legal right. It will occur if the alteration in the employee’s position is real and substantial rather than merely possible or hypothetical. Again, Ms Sherman was purporting to give tasks to Mr Lees, who was more senior than her. He was justified in not allowing this, although he could perhaps have worded his response better. Mr Hockley’s email dated 28 November 2019 about Mr Lee’s emails is as follows (CB803):From: Peter Hockley Sent: Thursday, 28 November 2019 11:58 AMTo: Paul Honey; David Elliston; Hennie Peters Subject: FW: Concerns about packaging RfP process Attachments: RE: Flexibles update and timeline.; RE: Flexibles RFP preparation.; RE: Flexibles RFP Update.; RE: Flexibles update and timeline.; RE: Update on wrap tender timeline; procurement process leading up to Amcor contract renewal?Hi David,As we agreed at our last SLT team in Melbourne. I am providing feedback about one of your team.I would like to raise my concerns with you about Stuart Lees.I really am concerned that we have Stuart in a role dealing with people. I have dealt a lot with Neil Shaw in the past in the Sourcing role & he was very helpful / respectful and worked with the team to get the best result for the business.The Kawerau team struggles with Stuarts approach he comes across as arrogant / rude and not helpful. He always likes to tell us how busy he is and doesn’t want to do any of the investigation work or help us to solve a problem. I have sat in meetings where Paul Honey and Sid Takla are present and Stu’s behaviour is totally different , polite , professional.( My key point here is that Stuart likes the cream and the frills but not the hard yards)Some of his comments in the attached e-mail where Stuart has responded are not acceptable.Stuart is not a good communicator and I would expect in his role that he is involving the right subject matter experts from the Sites to get involved so we can get the best outcome for the business. Responses to e-mails like-1.[Lees, Stuart] This is document is commercial in confidence. It (or elements of it) are distributed on an as needed basis. You have the current SLA and Special Conditions; that should be more than enough for you to provide feedback on what you would like to see moving forward 2.[Lees, Stuart] Noted.3.[Lees, Stuart] A very cheeky list below; shows a certain level of panache ! J. This is a Procurement led initiative so we’ll continue to dive the process; thanks.I am happy to discuss this further and understand what you can do about the situation.Please read the full e-mail below.Thanks Peter Regards,Peter Hockley General Manager Manufacturing Kawerau Asaleo Care