Martens v Indigenous Land Corporation

[2017] FCCA 896

FEDERAL CIRCUIT COURT OF AUSTRALIA

MARTENS v INDIGENOUS LAND CORPORATION & ANOR [2017] FCCA 896

Catchwords:
INDUSTRIAL LAW – General protections claim involving dismissal – where applicant dismissed following disciplinary process – whether process a sham designed to avoid redundancy provisions – process not a sham – application dismissed.

Legislation:

Fair Work Act 2009, ss.12, 61(2), 119, 340(2), 341, 342, 343, 352, 361(1), 389(2), 542, 543, 550(1)

Cases cited:
Barnett v Territory Insurance Office (2011) 196 FCR 116

Daw v Schneider Electric (Australia) Pty Ltd (2013) 280 FLR 361
Rahman v Commonwealth of Australia as represented by the Australian Taxation Office [2014] FCCA 6
Salby v Macquarie University & Anor [2016] FCCA 3

Applicant: ASHLEY MARTENS

First Respondent: INDIGENOUS LAND CORPORATION

Second Respondent: MICHAEL DILLON

File Number: BRG 1000 of 2015

Judgment of: Judge Jarrett

Hearing date: 30 August 2016

Date of Last Submission: 30 August 2016

Delivered at: Brisbane

Delivered on: 4 May 2017

REPRESENTATION

Solicitor for the Applicant: Mr Pratt

Solicitors for the Applicant: Franklin Athanasellis Cullen

Counsel for the Respondents: Mr Douglas

Solicitors for the Respondents: Australian Government Solicitor

ORDERS

1. The application filed on 23 October, 2015 is dismissed.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT BRISBANE

BRG 1000 of 2015

ASHLEY MARTENS

Applicant

And

INDIGENOUS LAND CORPORATION

First Respondent

MICHAEL DILLON

Second Respondent

REASONS FOR JUDGMENT

1. Between February, 1998 and July, 2015 Mr Martens was employed by the first respondent as Director of Capital Works.  His employment was terminated on 24 July, 2015.  These proceedings arise from the events leading to and the termination of Mr Martens employment. 

2. Mr Martens alleges that the first respondent took adverse action against him in breach of the Fair Work Act 2009 (Cth). He claims compensation and the imposition of pecuniary penalties upon the first respondent for that adverse action. He alleges that the second respondent, Mr Dillon, was involved in the first respondent’s contraventions of the Act for the purposes of s.550(1) of that Act and that he too, is liable to the imposition of pecuniary penalties for the first respondent’s contraventions.

3. Mr Marten’s case is that between 19 August, 2014 and early 2015 Mr Dillon began a review of the Capital Works Directorate of the first respondent which Mr Martens headed as the Director.  He alleges that Mr Dillon decided to effectively abolish the Directorate and make Mr Martens’ position redundant.  However, if he was made redundant, Mr Martens would have been entitled to about $107,171.74 (gross) in redundancy pay plus accrued leave entitlements. Mr Martens contends that to avoid paying him his redundancy entitlements:

   a)in early April, 2015 Mr Dillon, without a valid reason, instructed employees of the First Respondent to search through Mr Martens’ email history to find any material that might have constituted grounds for a conduct-based dismissal;

   b)Mr Dillon initiated a disciplinary process against Mr Martens and suspended him from his employment while that was undertaken;

   c)Mr Dillon required him to submit to a medical examination as a condition of granting an extension of time within which to respond to the allegations made against him; and

   d)the first respondent terminated his employment on the basis of misconduct.

4. Mr Martens argues that those actions taken by the first respondent, through the acts of Mr Dillon, contravened ss.340, 343 and 352 of the Fair Work Act.

5. The respondents’ case is that following an appropriate investigation, Mr Martens’ employment was terminated for misconduct in accordance with clause 69 of his employment contract.

6. It is important to bear in mind that the appropriateness or fairness of Mr Martens’ dismissal is not in contest n these proceedings.

7. For the reasons that follow, I am not satisfied that the first respondent took adverse action against Mr Martens in circumstances that attract the operation of the Fair Work Act. Neither am I satisfied that the first respondent engaged in coercion in contravention of s.343 of the Fair Work Act. Consequently, there is no basis to suggest that Mr Dillon has any accessorial liability for any contraventions of the Act by the first respondent. Mr Martens application must be dismissed.

The legal framework

1. It is useful to set out at the commencement of these reasons the legal framework within which Mr Martens prosecutes his claims. 

2. A person must not take adverse action against another person because that other person has a workplace right, has or has not exercised a workplace right; proposes or proposes not to exercise a workplace right, or take any action to prevent the exercise of a workplace right by the other person: s.340 of the Fair Work Act.

3. As between an employer and employee, an employer takes adverse action against an employee if the employer:

   a)dismisses the employee; or

   b)injures the employee in his or her employment; or

   c)alters the position of the employee to the employee’s prejudice; or

   d)discriminates between the employee and other employees of the employer.

4. Mr Martens identifies four matters which he argues constitute adverse action taken against him by the first respondent.  They are:

   a)the initiation of an investigation into Mr Martens’ email account in April, 2015;

   b)commencing a disciplinary process, described by Mr Martens in submissions as “a show cause process”, by issuing a letter to him to that effect and suspending him from employment, despite him being on sick leave at the time;

   c)imposing a demand on Mr Martens that he either respond to the relevant show cause letter within three days or submit to an examination by a doctor of the respondents’ choosing; and

   d)dismissing Mr Martens from his employment on 22 July, 2015.

5. It is clear that each of those actions might, at law, amount to adverse action as alleged by Mr Martens.  The respondents do not contend to the contrary.

6. The existence of a workplace right is essential to Mr Martens’ action because adverse action taken by an employer against an employee is only actionable where the employer takes the adverse action against the employee because that employee had a workplace right, exercised a workplace right or proposed to exercise that workplace right: s.340 of the Act. There must be a causal connection between the taking of the adverse action and the workplace right or its exercise by the employee. If an employer takes adverse action against an employee for other reasons not specified in s.340 of the Act, the adverse action is not actionable under the Fair Work Act.

7. Workplace right is defined in s.341 of the Fair Work Act. That section provides:

   341  Meaning of workplace right

   Meaning of workplace right

   (1)  A person has a workplace right if the person:

   (a)  is entitled to the benefit of, or has a role or responsibility under, a workplace law, workplace instrument or order made by an industrial body; or

   (b)  is able to initiate, or participate in, a process or proceedings under a workplace law or workplace instrument; or

   (c)  is able to make a complaint or inquiry:

   (i)  to a person or body having the capacity under a workplace law to seek compliance with that law or a workplace instrument; or

   (ii)  if the person is an employee—in relation to his or her employment.

8. Mr Martens’ adverse action claim is premised on the proposition that he was possessed of a number of workplace rights namely:

   a)a right to a redundancy payment should his position with the first respondent become redundant;

   b)a right to make a complaint or an enquiry about his employment; and

   c)a right to enjoy his personal leave without being bothered by his employer while he was taking that leave.

9. Mr Martens identifies that his right to a redundancy payment is sourced in both his employment contract and in the provisions of the Fair Work Act. Insofar as his contract of employment is concerned, it provided:

   75. If the Employee has become redundant to the ILC’s requirements, consistent with a genuine redundancy as that term is used in section 389 of the FW Act, the Employee will be:

   (a) entitled to a redundancy payment calculated at the rate of 2 weeks of salary for each completed year of service and a pro rata payment for completed months of service since the last completed year of service up to a maximum of 48 weeks’ salary;

   (b) entitled to a period of notice which shall be 4 weeks or 5 weeks for an employee over 45 years old and with at least 5 years consecutive service;

   (c) provided with such outplacement assistance as the Chief Executive Officer of the ILC may consider appropriate;

   (d) provided with financial counselling to the value of $500 on production of receipts or invoices for services rendered; and

   (e) entitled to payment in lieu of annual leave and long service leave.

10. However, contractual entitlements are not generally seen as workplace rights for the purposes of s.341(1)(a) of the Act. An employment contract is not a workplace law, workplace instrument or order made by an industrial body. The point was considered by Mansfield J in Barnett v Territory Insurance Office (2011) 196 FCR 116. His Honour said:

    [31]  In my judgment the expression “an instrument made under or recognised by a workplace law …” in the definition of “workplace instrument”, in conjunction with the definition of “workplace law” means an instrument must be given legal significance by reason of a particular workplace law.

    [32]  The definition of ‘workplace law’ refers to enactments of a particular character.  The specified enactments may give particular legal significance to an instrument or to a role adopted under an instrument. It is the status of the instrument or of the activity under an instrument to which attention is drawn by the particular ‘workplace law’. The mere fact of the existence of a contract of employment does not enliven the relevant concept of recognition contained within the definition of ‘workplace instrument’. If it were simply the existence of a contract of employment on which the particular enactment operated, the expression of ‘made under or recognised by’ would have been unnecessary. It would have been easy to have indicated that s 340(1)(a) includes a right under a contract of employment. It is also more consistent with the grouping of ‘workplace law’, ‘workplace instrument’ and ‘order made by an industrial body’ in s 341(1)(a) that the reference to recognition by a workplace law in the definition ‘workplace instrument’ should refer to an instrument that is given legal effect or legal life by a provision of an enactment. Those three sources of the existence of a ‘workplace right’ may be taken to have a common type of origin, or genus, in either an enactment or some formal process provided for by an enactment. That, too, is consistent with the genus in the ‘workplace law’ definition, as (d) of that definition is confined to enactments as distinct from private contracts. That interpretation also avoids the potentially idiosyncratic outcome that a written contract of employment might contain a term which would give rise to a workplace right (if the argument for the appellant were accepted), whereas an oral contract of employment providing for the same term would not because it could not be an instrument.

11. His Honour’s decision was applied in Salby v Macquarie University & Anor [2016] FCCA 3; Rahman v Commonwealth of Australia as represented by the Australian Taxation Office [2014] FCCA 6 and Daw v Schneider Electric (Australia) Pty Ltd (2013) 280 FLR 361.

12. Thus, the contractual entitlement to redundancy payments is not, per se, a workplace right in the sense defined in s.341 of the Fair Work Act.

13. However, clause 75 of Mr Martens’ contract is a safety net contractual entitlement for the purposes of the Act.  The phrase safety net contractual entitlement is defined in s.12 of the Act as follows:

    Safety net contractual entitlement means an entitlement under a contract between an employee and an employer that relates to any of the subject matters described in:

    (a)  subsection 61(2) (which deals with the National Employment Standards); or

    (b)  subsection 139(1) (which deals with modern awards).

14. Clause 75 of Mr Martens’ contract represents an entitlement under his contract that relates to a subject matter described in s.61(2) of the Act – the National Employment Standards. One of the subject matter areas listed in that subsection is notice of termination and redundancy pay: s.61(2)(i) of the Act.

15. The respondents argue that a safety net contractual entitlement is not a workplace right for the purposes of s.341 of the Act and cannot found a general protections claim. The respondent’s point out that additionally, the Court cannot make any order in respect of a contravention of the safety net contractual entitlement because it is not a civil penalty provision.

16. However, the Fair Work Act gives an employee a remedy in respect of contraventions or non-observance of safety net contractual entitlements. The Act provides:

    542  Entitlements under contracts

    (1)  For the purposes of this Part, a safety net contractual entitlement of a national system employer or a national system employee, as in force from time to time, also has effect as an entitlement of the employer or employee under this Act.

    (2)  The entitlement has effect under this Act subject to any modifications, by a law of the Commonwealth (including this Act or a fair work instrument), a State or a Territory, of the safety net contractual entitlement.

    543  Applications for orders in relation to statutory entitlements derived from contracts

    A national system employer or a national system employee may apply to the Federal Court or the Federal Circuit Court to enforce an entitlement of the employer or employee arising under subsection 542(1).

17. There is no dispute that the first respondent was a national system employer or that Mr Martens was a national system employee.

18. In my view, Mr Martens had an entitlement under the Fair Work Act (a workplace law) to apply to the Federal Court or this Court to enforce an entitlement that arose under s.542(1) of the Act. That entitlement – a safety net contractual entitlement – arose not from his contract of employment, although the existence of a contractual term about it was a necessary precondition to the statutory entitlement, but from the relevant workplace law itself – s.543 of the Fair Work Act.

19. Additionally, Mr Martens had the ability to initiate and participate in a process or proceedings under a workplace law – namely the process provided for by s.543 of the Act. On the facts for which Mr Martens contends, his position was to be made redundant and there being a case of genuine redundancy, his entitlements under cl.75 of his contract were engaged. If engaged, they took effect as an entitlement under the Fair Work Act enforceable by application pursuant to s.543 of the Act. To the extent that the respondents contend to the contrary, I reject those submissions.

20. However, Mr Martens’ case is not that any adverse action was taken against him because he had those rights or he intended to exercise them. The respondent did concede that Mr Martens could rely on s.96 and 97 of the Act (the National Employment Standard personal or sick leave provisions) and s.119 of the Act (the National Employment Standard redundancy pay provisions) to maintain that he had relevant workplace rights for the purposes of s.341(1)(a) of the Act.

21. Mr Martens also argues that he had a workplace right that sprang from s.389 of the Fair Work Act. That section defines the circumstances in which a person’s dismissal will be seen as a genuine redundancy (s.389(1)) and when it will not( s.389(2)). That definition is relevant to that part of the Fair Work Act that deals with unfair dismissals. Specifically, it is relevant to when a person will be seen to have been unfairly dismissed for the purposes of s.385 of the Fair Work Act. It does not create a workplace right in the sense promoted by Mr Martens in this case.

22. Section 361 of the Act is important. It creates a statutory presumption that casts upon an employer in appropriate circumstances the burden of proving that its actions did not constitute adverse action for a proscribed reason. A person takes action for a particular reason if the reasons for the action include that reason (s.360 of the Act). However, the reason must be a substantive or operative factor in order for there to be a contravention.

23. The onus cast upon an employer by s.361 of the Act is usually discharged by the decision-maker giving evidence (accepted by the Court) that the reasons for taking the adverse action did not include a prohibited reason.

24. However, before s.361 is engaged, an applicant must prove the existence of the objective facts which are said to provide the basis of the employer’s contravening conduct. Section 361 is not engaged unless and until an applicant establishes the elements of each of the general protections upon which he seeks to rely. It is not enough to merely make assertions, they must be determined objectively and have a foundation in evidence.

25. Against that legal framework, it is necessary to turn to the facts of the case.

Consideration

1. Many things are agreed between the parties, including that the first respondent took adverse action against Mr Martens.  I will come to those matters shortly.  What is in dispute is the real reason for the adverse action taken against Mr Martens. 

2. The parties agree that the first respondent took adverse action against Mr Martens by sending to him a letter that required him to respond to certain allegations about his conduct and by subsequently terminating his employment. The respondents agree that in the circumstances of this case, the operation of s.361(1) of the Fair Work Act has been triggered and the burden and onus of proof falls upon the first respondent to show that the adverse action taken against Mr Martens was not taken for a proscribed reason, or for reasons which included a proscribed reason.

3. Whilst Mr Martens alleges that the real reason was a proscribed reason, the first respondent alleges that the action was taken as a response to serious misconduct by Mr Martens and was not, therefore taken for a proscribed reason.

4. There is no dispute that Mr Martens was employed by the first respondent as a senior executive employee from February,1998. He was, it seems, employed on a series of consecutive contracts. Relevantly, his most recent employment contract commenced on 17 April, 2014 and was to cease on 16 March, 2017. His employment was governed by, amongst other things, the Fair Work Act and a document described as a “Code of Conduct” which was incorporated into the terms and conditions of his employment by his employment contract. No award or enterprise agreement applied to his employment.

5. Mr Martens commenced his employment as a field assessor based in the first respondent’s eastern divisional office in Brisbane.  After two promotions, one in 2000 and the other in 2002, Mr Martens was appointed Director of Capital Works for the first respondent in 2007.  He remained in that position until his employment was terminated on 24 July, 2015.

6. Mr Dillon was, at all relevant times, the Chief Executive Officer of the first respondent, although he no longer works for the first respondent.  He was based in Canberra.  Mr Martens reported to Mr Craig North who was the Executive Director Program Delivery with the first respondent.

7. In August, 2014 there was a meeting between Mr Martens and Mr Dillon in the first respondent’s Brisbane office.  The meeting was impromptu and took Mr Martens a little by surprise.  At the meeting there was discussion between the two about a division of the first respondent, in which Mr Martens worked, called the Capital Works Directorate.  Mr Martens’ perception of the discussion was that Mr Dillon told him that “he would be undertaking and (sic) a review of the Capital Works Directorate within the next six months.”  Mr Dillon’s perception of the conversation was that he said that he intended to review the Capital Works Directorate in the “medium term” or in the “intermediate future”.  However, he conceded in cross-examination that he may well have used the time frame of six months.

1. Although neither Mr Martens nor Mr Dillion give evidence of anything that was said directly to this effect, Mr Martens formed the view that his employment was in jeopardy because of the foreshadowed review.  Although there seems to have been nothing that occurred in relation to the review between the August meeting and January, 2015 Mr Martens nonetheless agreed with his wife for her to take up an offer of employment in far north Queensland and to move there with their two children.  Mr Martens remained in Brisbane and continued his work for the first respondent.

2. On 4 February, 2015 Mr Martens wrote an email to his supervisor, Mr North in the following terms:

   Hi Craig,

   You might recall the CEO’s visit to Brisbane Office in October last year when he met with me and informed me in a subtle manner that he intended to ‘review’ CWD early in 2015.  With that time now upon us, it would be beneficial for all concerned if you, me and Allister could meet on your return to the office to clarify whether the so-called review is going to proceed and if so, when.

   At the time, and from the tone of the CEO’s remarks, I was left in no doubt whatsoever that the ‘review’ was simply a means to justify termination of CWD.  Against the background of my lengthy service at the ILC in senior management roles, I found it to be disrespectful and offensive.  It needlessly created uncertainty that my family and I have had to endure since then including across the Christmas break.  Any reasonable person would understand and acknowledge that.  Christmas was indeed a time to ‘reflect’ for me and my family but not to also ‘relax and refresh’ as the CEO advocated in his Christmas message to staff.

   When an opportunity emerged for Jo to take up a teaching position at Kuranda this year in a particular field that she has an interest in, we felt it was best to take it knowing that there is a distinct possibility that my position may be terminated.  It means the dislocation of the family unit which is regretted, but it provides an income stream that the family may have to depend upon for survival if CWD is terminated.

   I should say I recognise that a CEO has an entitlement to run an organisation how he/she sees fit.  That aside, I was particularly aggrieved by the appearance that the CEO visited Brisbane Office expressly for the purpose of confronting me to tell me that he intended to have the review.  In the absence of any prior notice, I felt ambushed which has only compounded my anxiety since then.

   I was dismayed by the CEO’s Christmas message where he acclaimed certain properties including Mossman Gorge Centre (MGC) as significant achievements of the ILC.  He seemed to be unaware that I had a principal role in managing the development of MGC and for that matter with several other major construction projects that now have ‘flagship’ status for the ILC. And beyond that, CWD has a solid work schedule for the remainder of 2015 and into the first half of 2016.  The housing refurbishment at Jumbun itself will be complex and demanding.  It intrigues me what could possibly constitute a sound rationale basis for terminating CWD in these circumstances.

   The busy work schedule requires my full commitment, but the ongoing threat of termination and the negative psychological impact associated with it is at odds with the professional standards that must be observed.  Against that background, any light you might be able to shed on the situation would be most welcome.

   Regards,

   Ash

3. The respondents accept that the email of 4 February, 2015 from Mr Martens to Mr North could amount to the exercise of a workplace right to make a complaint or inquiry for the purposes of s.341(1)(c) of the Act. I am satisfied that, as Mr Martens alleges, this email was an enquiry by him in relation to his employment and was the exercise by him of a workplace right for the purposes of s.341 of the Fair Work Act.

4. On 9 February, 2015 Mr North met with Mr Martens and Mr Martens’ colleague Mr Allister McCaffrey, concerning the matters raised in that email.  Mr North did not give evidence in the proceedings, but Mr Martens claimed that Mr North told he and Mr McCaffrey that he had spoken to Mr Dillion about the matters raised in Mr Martens’ email including the proposed review.  He told them that the review was not happening at that stage.  Mr North said that he was authorised to pass that message on to Mr Martens and Mr McCaffrey.

5. Mr Dillon accepted that he had spoken to Mr North about Mr Martens’ email and the concern that Mr Martens’ raised about the review of the Capital Works Directorate.  He gave evidence that he was not given the email to read and had not read it until it was brought to his attention in these proceedings.  Mr Dillon said that Mr North suggested that he tell Mr Martens that there was no review and Mr North agreed with that.  I accept Mr Dillon’s evidence that when he spoke to Mr North about Mr Martens’ email, he was not then undertaking a review of the Capital Works Directorate, but was intending to at some point.

6. During the Easter break in 2015, Mr Martens sustained a shoulder injury while he was away from work.  He notified Mr North of the injury and contacted him on several subsequent occasions to give updates about the status of the injury and his treatment. 

7. Mr Martens’ doctors issued medical certificates which collectively certified Mr Martens’ unfitness for work from 7 April, 2015 to 3 August, 2015 (i.e. after his termination date on 24 July, 2015). The medical certificates were provided to the first respondent progressively on several occasions in May and June, 2015.  The last was provided on 25 June, 2015 (i.e. approximately one month prior to Mr Martens’ dismissal).

8. I am satisfied that the taking of personal leave while he was unwell was the exercise of a workplace right by Mr Martens. That right sprang from ss.96 and 97 of the Fair Work Act.

9. In early April, 2015 Mr Dillon swears that he became aware of certain emails written and received by Mr Martens.  The emails were discovered during a search of the first respondent’s records in relation to an unrelated matter.  When cross-examined about this, Mr Dillon could not recall what that other matter was.  What he was able to recall was that the first respondent’s general counsel was undertaking “a range of research into legal and litigation matters, and over a period of time”.

10. Mr Dillon says that he approved further searches being conducted by the first respondent’s General Counsel on 7 April, 2015.  Mr Dillon gave evidence that he did not instigate the searches, but rather the request emanated from the first respondent’s General Counsel.  Mr Dillon approved the request.  There is no evidence to the contrary.  I accept Mr Dillon’s evidence on this point.

11. Mr Dillon accepted that he had also authorised searches of Mr McCaffery’s email accounts.

12. Mr Dillon swears, and I accept, that he was unaware that Mr Martens was on paid sick leave when he authorised the searches of Mr Martens’ email account.

13. Mr Martens contends that “the Investigation (including the searches before and after the Second Respondent's directing, on 7 April 2016, further searches of the Applicant's emails) injured the Applicant in his employment and/or prejudicially altered his position, and was therefore adverse action within the meaning of section 342 of the FW Act.”. The difficulty with Mr Martens’ argument, however, is that the facts do not support it.

14. First, there is no evidence that Mr Dillon directed any searches of Mr Martens’ email accounts.  He was asked for authority to search by others and gave that authority.

15. Second, the searches that occurred before Mr Dillon was asked to give authority were undertaken for a purpose unrelated to Mr Marten.  The only evidence is that they were undertaken for an unrelated matter.  In those circumstances it is difficult to conceive of how those searches might be seen to be adverse action for the purposes of the Act insofar as Mr Martens is concerned or how it might be said that, if they did constitute adverse action, that action was undertaken because Mr Martens had some workplace right, had exercised that right or proposed to exercise that right.

16. It is clear, however, that after the contents of the emails discovered by the searches were made know to Mr Dillon he decided to subject Mr Martens to a disciplinary process.  He was concerned by the emails and he thought that Mr Martens may have engaged in conduct that was inconsistent with the Code of Conduct set out in his employment contract.  Mr Dillon decided to put those concerns to Mr Martens for his response and to suspend Mr Martens on full pay pending that response.

17. Despite the apparent conflict in the authorities on this point (see Police Federation of Australia v Nixon (2008) 168 FCR 340 on the one hand and Jones v Queensland Tertiary Admissions Centre Ltd (No 2) [2010] FCA 399 on the other) I am prepared to assume that the commencement of the disciplinary process in this case was adverse action for the purposes of the Act. In saying that, I make no finding that the process so commenced was not bona fide or was not commenced in good faith. I think that it was.

18. The suspension of Mr Martens from duty, but on full pay, was not adverse action taken by the first respondent against Mr Martens.  As Murphy J discussed in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Visy Packaging Pty Ltd (No 3) [2013] FCA 525 at [114]:

    In my view the removal of an employee from their employment against his or her will, even temporarily, will usually be adverse to their interests. To say otherwise would be to deny the benefit one gains from the successful pursuit of activity in a field of expertise. The observation that active employment is a source of more than simply financial benefit is neither new, nor should it be considered controversial: see Squires v Flight Stewards Association of Australia (1982) 2 IR 155 at 164 per Ellicott J; Blackadder v Ramsey Butchering Services Pty Ltd (2005) 221 CLR 539 at [32] per Kirby J, and Callinan and Heydon JJ at [80]; Quinn v Overland [2010] FCA 799 at [101]-[103] per Bromberg J.

19. Here, Mr Martens was absent from the workplace in any event. The period of his suspension was six days. He does not give evidence that he was prevented from enjoying any of the benefits of his employment over that six day period. He was on personal leave. However, he was not required to use his personal leave credits for that period. That was a benefit to him rather than a detriment. I accept the respondents’ submissions that on the facts, the suspension of Mr Martens from duty for that six day period was not adverse action for the purposes of the Fair Work Act.

20. Mr Martens contends that the real reason for the investigation into his emails was that Mr Dillon hoped that he would find evidence upon which a conduct-based dismissal could be founded so that the first respondent could avoid the cost of making Mr Martens redundant.  Mr Martens also suggests that Mr Dillion was offended by the remarks he made in his email of 9 February, 2015 about Mr Dillon.

21. Mr Martens argues that I should draw one or both of those inferences because:

    a)in early April 2015, Mr Dillon was conducting a review of the Capital Works Directorate and knew that the likely result of that review was the abolition of the Directorate resulting in Mr Martens redundancy;

    b)Mr Martens service with the first respondent meant that he was entitled to more than $107,000 in redundancy pay if his employment was terminated on the basis of redundancy;

    c)Mr Dillon was Chief Executive Officer of the first respondent and answerable to its board of directors in respect of his responsibilities to manage the day-to-day administration of the first respondent;

    d)Mr Dillon was primarily accountable for the efficient use of the first respondent’s funds and for the hiring and firing of staff;

    e)Mr North had discussed the contents of the February email and Mr Martens’ complaints with Mr Dillon;

    f)Mr Martens sent the email of 4 February, 2015 a relatively short time before Mr Dillon directed that the investigation commence on 7 April, 2015;

    g)the February Email criticised Mr Dillon’s management, his handling of the meeting with Mr Martens in August, 2014 and his approach to the proposed review of the Directorate; and

    h)Mr Dillon had made Mr Martens’ co-worker in the Capital Works Directorate, Mr McCaffery a casual employee and then brought his employment to an end without having to pay him any redundancy payment.

22. Mr Martens’ case is that the first respondent and Mr Dillion in particular commenced an investigation into Mr Martens emails in April, 2015.  There is no evidence, however that is so.  The evidence of Mr Dillion is that there had been inquiries made in relation to another matter by the first respondent’s General Counsel.  It was that person who requested authority from Mr Dillion to access Mr Martens’ emails over a larger period of time.  To characterise the circumstances as the “Respondents comenc[ing] the investigation in to the Applicant’s emails” is to mischaracterise what in fact occurred.

23. I am not satisfied the real reason that Mr Dillon approved those further searches was because Mr Martens had written the email of 4 February, 2015 or because of any of its content.  Authority to conduct the further searches into the emails was requested by the first respondent’s General Counsel (who did not give evidence). 

24. On 18 May, 2015 Mr Dillon tried to set up a meeting with Mr Martens, but because Mr Martens was not at work that day because of his injury he was unable to do so.  On 19 May, 2015 Mr Martens and Mr Dillion spoke by telephone.  Mr Dillion told Mr Martens that he was suspending him from his employment on full pay for alleged breaches of the first respondent’s Code of Conduct.  Mr Martens was surprised by the action.  He was not expecting it.

25. The conversation between Mr Dillion and Mr Martens was confirmed by an email received by Mr Martens on 19 May, 2015.  The email enclosed a letter which alleged that Mr Martens had breached the first respondent’s Code of Conduct and required him to respond to the allegations by 27 May, 2015.  It notified Mr Martens that he had been suspended from his employment on full pay pending his response.  An extension was until 15 June, 2015 was subsequently given for Mr Martens’ response.

26. Mr Martens argues that purported reason for his suspension – so the allegations against him could be investigated and dealt with as quickly as possible was without substance because:

    a)it was unnecessary to suspend him from duty at that time because he was on sick leave at that time;

    b)a suspension from duty could be of no legitimate purpose “other than to add the appearance of formality to the Respondent’s process”; and

    c)the evidence upon which the allegations were made and the allegations themselves were such that it was unreasonable for the first respondent to suspend Mr Martens from duty in circumstances where he had a hitherto unblemished record.

27. Mr Martens argues that the real reason for suspending him from duty was Mr Dillon’s offence to the remarks made by Mr Martens’ about his management in the email sent by Mr Martens to Mr North on 4 February, 2015.  He argues that the suspension was a necessary step in Mr Dillon’s “sham disciplinary process leading to the Applicant’s conduct-based dismissal so that the first respondent would avoid the $107,000 cost of making the Applicant redundant”.

28. However, I reject those contentions.  The evidence shows that suspending Mr Martens from his duty was not taken for any proscribed reason.  The action was taken, as Mr Dillion explained in his evidence, so that the issues concerning Mr Martens’ conduct arising out of the emails could be dealt with quickly.  He viewed the allegations as serious and as subsequent events show, the conclusion reached by Ms Gumley was that Mr Martens’ conduct was so serious that it warranted dismissal.  In any event, as I have set out above, Mr Martens’ suspension from duty was not in the circumstances adverse action for the purposes of the Act.

29. On 10 June, 2015 Mr Martens’ solicitors sent a letter to the first respondent’s solicitors in which they raised a concern that Mr Dillon should not act as the investigator of the allegations against Mr Martens or determine any sanction upon him. That was because one of the allegations related to matters touching upon the office of the Chief Executive Officer.

30. In his solicitor’s correspondence of 10 June, 2015 Mr Martens requested a further extension of time to respond to the allegations against him.  He sought the further extension on the basis that his shoulder injury and anxiety about his employment circumstances meant that it was unfair and potentially unlawful to require him to respond in those circumstances.  He provided some medical evidence that said, in effect, that Mr Martens’ doctor did not think it was appropriate for Mr Martens to participate in the investigation.

31. By their letter of 12 June, 2015 the respondents agreed to an extension of time to respond but only if Mr Martens attended a medical examination organised by the respondents. Mr Martens argues that this “ultimatum” was the taking of adverse action against him in contravention of the Fair Work Act. I do not think that it was.

32. Nonetheless, if I am wrong about that, I do not consider that Mr Dillion imposed that requirement for a proscribed reason.  Mr Martens argues that the real reason for the “ultimatum” “being issued was simply to force the Second Respondent’s desired result”.  He argues that “the Second Respondent needed the disciplinary process to speed up because he had already begun the process of redistributing the Applicant’s duties and notifying people that the Capital Works Directorate (of which the Applicant was the Director) was to be abolished”.  To support that submission, Mr Martens points to an email that he obtained from the respondents in which the abolition of the Capital Works Directorate and the redistribution of its work is discussed (see annexure AM24 to the affidavit of Mr Martens filed on 29 January, 2016).  However, in my view that email does not assist Mr Martens’ case because it was written on 3 July, 2015 well after Mr Martens was suspended from duty on 19 May, 2015 and well after Mr Martens was asked to undergo an independent medical examination.  Moreover, it was not written by Mr Dillion, but rather by Ms Annette Brown who was described in the email as the “Acting Manager HR”.

33. Mr Martens also argues that “The Ultimatum also had the effect of coercing the Applicant into performing work (to his detriment as noted above) when he was lawfully entitled to not perform work because of his workplace right to take sick leave”.  I reject that submission.

34. As the respondents submit, a person coerces another to act in a particular way if the first person brings about an outcome by force or compulsion. Coercion implies a high degree of compulsion and not some lesser form of pressure where a person is left with a realistic choice as to whether or not to comply. There are 2 elements to prove an ‘intent to coerce’ for the purposes of s.343 of the Fair Work Act:

    a)it must be shown that it was intended that pressure exerted which, in a practical sense, negated choice, and

    b)the exertion of the pressure must involve conduct that is unlawful, illegitimate or unconscionable.

35. Neither of those elements are met on the evidence in this case.  Mr Martens says the 12 June letter was intended to coerce him not to remain on paid personal leave.  Two alternatives were also advanced. It was to coerce Mr Martens to attend to work-related matters while absent on personal leave or to threaten to determine the misconduct investigation without regard to Mr Marten’s response.  But the terms of the letter did not attempt to coerce Mr Martens to return to work or to cut short his personal leave.  Nor did the terms of the letter attempt or suggest that he should do anything other than respond to the misconduct allegations in a timely way.

1. Moreover, to the extent that Mr martens argues that the letter was an attempt to force him into dealing with work related matters while he was on personal leave, his argument is inconsistent with his argument that the suspension was adverse action for the purposes of the Act because it deprived him of the benefit of his ability to attend work and successfully pursue his occupational activities.

2. Between 12 June, 2015 and 25 June, 2015 correspondence passed between Mr Martens’ solicitors and the first respondent. Mr Martens asserted his right to take personal leave without the stresses associated with work, including the first respondent’s request that he attend a medical examination while he was on a period of approved personal leave.   Mr Dillon, on behalf of the first respondent sent a proposed letter of instruction to an independent medical examiner for Mr Martens’ lawyers’ approval.  Appointments for the independent medical examination were made.  Nonetheless, Mr Martens did not agree to undergo the examination.

3. However, on 25 June, 2015 by a letter from his solicitors, Mr Martens responded to the allegations made in the 19 May, 2015 correspondence.

4. Mr Dillon was not satisfied by Mr Martens’ response.  Mindful of the suggestion that he should not be the decision maker in the matter, in early July, 2015 Mr Dillon asked Ms Kathleen Gumley, Executive Director Strategy, also employed by the first respondent, to consider the allegations against Mr Martens and his response and to decide in Mr Dillion’s stead on any disciplinary action that might be required.  Ms Gumley was based in the first respondent’s office in Canberra.  She had worked there since February, 2015 although Mr Dillon and Ms Gumley had worked together for a number of years at a different government organisation.  They knew each other very well.

5. Ms Gumley was a public servant in the Australian Public Service with a career spanning about 30 years.  Prior to being asked by Mr Dillion to conduct the investigation, she had met Mr Martens once at a senior executive meeting.  Otherwise, she only had very occasional contact with him by email during her time with the first respondent.

6. Ms Gumley agreed to take on the task offered to her.  A letter of engagement was sent to her by email on 17 July, 2015.  By that letter Mr Dillon confirmed his request that Ms Gumley take on the role of decision maker in relation to the misconduct process involving Mr Martens. 

7. I accept the evidence of both Mr Dillon and Ms Gumley that she had no discussions with Mr Dillon about the merit of the case or possible outcomes.  She was provided with all relevant material including a copy of the first respondent’s IT policy and a copy of his employment contact.

8. Ms Gumley swears that she considered the allegations and Mr Martens’ response carefully.  She did not consider it necessary to conduct further inquiries. She decided that Mr Martens had engaged in misconduct. She considered that misconduct to be significant particularly given his leadership role as a senior executive employee, the conduct was repeated and involved a less senior employee.

9. Ms Gumley knew from early in June, 2015 that the Capital Works Directorate was to be disbanded.  She knew from 16 June, 2015 that a decision had been made to do away with Mr Martens position.  However, she made the point in her cross-examination that doing away with Mr Martens position as director of the Capital Works Directorate did not mean that Mr Martens would not be redeployed elsewhere within the organisation.  He was a long-term employee with an unblemished record and subject to the matters that she needed to decide there was no reason to think that any one possibility was more likely than any other.

10. Nonetheless, Ms Gumley decided that it was appropriate to terminate Mr Martens’ employment under clause 69(e) of his contract.  She gave detailed written reasons on 22 July, 2015.  As her reasons reveal, Ms Gumley decided to terminate Mr Martens’ employment because of his misconduct.

11. By letter dated 24 July, 2015 from the AGS, which attached a letter dated 22 July, 2015 from Mr Dillon and a document entitled ‘Decision on Mr Martens’ signed by Ms Kate Gumley, Mr Martens was notified that his employment was terminated, effective 24 July, 2015.  Mr Martens’ dismissal was plainly adverse action taken against him by the first respondent.

12. Mr Dillion swears that by the time that Mr Martens’ employment was terminated, he had decided to make some changes as to how the first respondent managed its capital works program. Mr Dillon had not made any decisions about the future of Mr Martens’ role and at that time Mr Martens or his position was not considered excess to the first respondent’s requirements.  If Mr Martens’ role had subsequently become redundant, Mr Dillon swears that Mr Martens may have been redeployed or directed to undertake different duties in accordance with his contract of employment.

13. Ms Gumley said:

    I considered the allegations and Mr Martens’ response carefully. I did not consider it necessary to conduct further inquiries. I decided that Mr Martens’ [sic] engaged in misconduct. I considered that misconduct to be significant particularly given his leadership role as a senior executive employee, the conduct was repeated and involved a less senior employee. I decided to terminate Mr Martens’ employment under cl 69(e) of his contract.

14. However, Mr Martens points out that as early as 16 June, 2015 Ms Gumley knew that his position “was to be made redundant due to the restructure”.  To make this submission, Mr Martens relied upon an email sent by Mr Dillon to Mr North opn 16 June, 2015.  The email was also sent as a circulation copy to Ms Gumley, as well as others.  Relevantly, the email said:

    I confirm my decision to restructure the Capital Works team along the following lines. The position previously held by Mr McCaffery will be abolished. The position held by Mr Martens will be reviewed once the outcome of the present HR Investigation is finalised. The responsibility for capital works in subsidiaries should be transferred to them as of 1 July. …

15. Mr Martens argues that, “On that basis there simply was no logical or lawful reason why the Second Respondent and Ms Gumley thought it necessary to go through with the charade of formally assessing the Response and determining the conduct allegations. It was clear well before then that the Applicant’s role was gone by way of redundancy.” The real reason for conducting the final step of the disciplinary process, Mr Martens contends, was to give the appearance of a meritorious conduct­based dismissal. That would allow the first respondent and Mr Dillon to avoid making a redundancy payment to Mr Martens. It would also permit the first respondent to cease paying Mr Martens while he was on sick leave. Further, by terminating Mr Martens’ employment, the first respondent was not obliged to redeploy Mr Martens within its organisation as provided for in his employment contract and s.389(2) of the Fair Work Act.

16. Mr Martens also argues that “a substantial part of the reason for dismissing the Applicant was the Applicant’s “temporary absence” on” sick leave. His argument is that Mr Dillon did “that because at the time of the Applicant’s temporary absence the Second Respondent had already quietly commenced the process of making the Applicant’s job (the entire department no less) redundant. By the time the Applicant used up his entitlement to sick leave as he intended, returned to work and responded to the allegations, there would be no hiding the fact that the job he held no longer existed. So it is alleged as fact that a significant reason why the Respondent dismissed the Applicant was because of his temporary absence due to incapacity.”

17. However, those arguments must be rejected.  I am satisfied by the respondent’s evidence that the real reason for Mr Martens’ dismissal were those given by Ms Gumley.  She concluded that Mr Martens had breached his employment contract and the policies that applied to his employment in serious ways.  She concluded that his employment ought to be terminated.

18. Whilst she might have known of Mr Dillon’s plans to restructure the Capital Works Directorate, I am not satisfied that her knowledge of those plans played any part in her decision.  Moreover, even if the restructure of the Capital Works Directorate had been decided upon by the time of Mr Dillon’s email of 16 June, 2015, it is clear that it did not mean that Mr Martens’ employment would come to an end.  The first respondent could consider redeploying Mr Martens within its organisation.  Mr Dillon acknowledged this matter in his evidence.  Given that consideration of redeployment for Mr Martens was a likelihood, it was incumbent for the serious misconduct allegations to be dealt with so both Mr Martens and the first respondent knew the outcome in respect of them.

19. To the extent that the circumstances of the case engage s.361 of the Fair Work Act, I am satisfied that the first respondent has demonstrated that it did not take any adverse action against Mr Martens for a proscribed reason.

Conclusion

1. Mr Martens’ case depends upon the drawing of a number of inferences.  I am not prepared to draw those inferences in the face of the direct evidence led by the respondents and to which I have referred above.

2. I am satisfied that the first respondent and Mr Dillon took the actions that they did against Mr Martens for the reasons that they have given.  In those circumstances, Mr Martens’ application cannot succeed and must be dismissed.

I certify that the preceding ninety-five (95) paragraphs are a true copy of the reasons for judgment of Judge Jarrett delivered on 4 May, 2017.

Date: 4 May, 2017