Milardovic v Vemco Services Pty Ltd (Administrators Appointed)
[2016] FCA 19
•29 January 2016
FEDERAL COURT OF AUSTRALIA
Milardovic v Vemco Services Pty Ltd (Administrators Appointed) [2016] FCA 19
File number: VID 42 of 2015 Judge: MORTIMER J Date of judgment: 29 January 2016 Catchwords: INDUSTRIAL LAW – whether adverse action by reason of exercise of workplace rights to make a complaint and to make a WorkCover claim in respect of bullying – whether breach of National Employment Standards through failure to pay termination notice pay and redundancy entitlements Legislation: Fair Work Act 2009 (Cth) ss 22, 44(1), 61(1), 117, 119, 120, 340, 341(1)(a), 341(1)(c)(ii), 342, 360, 361, 539, 546, 550
Accident Compensation Act 1985 (Vic)
Occupational Health and Safety Act 2004 (Vic) s 21
Cases cited: Allman v Teletech International Pty Ltd [2008] FCA 1820; 178 IR 415
Amcor Limited v Construction, Forestry, Mining and Energy Union [2005] HCA 10; 222 CLR 241
Australian and International Pilots Association v Qantas Airways Ltd [2006] FCA 1441; 160 IR 1
Board of Bendigo Regional Institute of Technical and Further Education v Barclay (No 1) [2012] HCA 32; 248 CLR 500
Castlemaine Tooheys Ltd v South Australia [1990] HCA 1; 169 CLR 436
Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd [2014] HCA 41; 253 CLR 243
Construction, Forestry, Mining and Energy Union v BHP CoalPty Ltd [2015] FCAFC 25; 230 FCR 298
Construction, Forestry, Mining and Energy Union v Clarke [2007] FCAFC 87; 164 IR 299
Construction, Forestry, Mining and Energy Union v Endeavour Coal Pty Ltd [2015] FCAFC 76; 231 FCR 150
Construction, Forestry, Mining and Energy Union v McCorkell Constructions Pty Ltd (No 2) [2013] FCA 446
Dibb v Commissioner of Taxation [2004] FCAFC 126; 136 FCR 388
Ermel v Duluxgroup (Australia) Pty Ltd (No 2) [2015] FCA 17
FBIS International Protective Services (Aust) Pty Ltd v Maritime Union of Australia [2015] FCAFC 90; 232 FCR 1
General Motors Holden Pty Ltd v Bowling (1976) 12 ALR 605
Hill v Compass Ten Pty Ltd [2012] FCA 761; 205 FCR 94
Housden v Boral Australian Gypsum Ltd [2015] VSCA 162
IW v The City of Perth [1997] HCA 30; 191 CLR 1
Jones v Department of Energy and Minerals (1995) 60 IR 304
Kheirs Financial Services Pty Ltd v Aussie Home Loans Pty Ltd [2010] VSCA 355; 31 VR 46
Klein v Metropolitan Fire and Emergency Services Board [2012] FCA 1402; 208 FCR 178
Murrihy v Betezy.com.au Pty Ltd (No 2) [2013] FCA 1146; 221 FCR 118
National Tertiary Education Union v Royal Melbourne Institute of Technology [2013] FCA 451; 234 IR 139
Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia [1998] HCA 30; 195 CLR 1
Qantas Airways Ltd v Australian Licensed Aircraft Engineers Association [2012] FCAFC 63; 202 FCR 244
Quality Bakers of Australia Ltd v Goulding (1995) 60 IR 327
R v The Industrial Commission of South Australia; Ex Parte Adelaide Milk Supply Co-operative Limited (1977) 16 SASR 6
Ratnayake v Greenwood Manor Pty Ltd [2012] FMCA 350
Regulski v State of Victoria [2015] FCA 206
Rowland v Alfred Health [2014] FCA 2
Sayed v Construction, Forestry, Mining and Energy Union [2015] FCA 27
Shea v TRUenergy Services Pty Ltd (No 6) [2014] FCA 271; 314 ALR 346
Short v F W Hercus Pty Ltd [1993] FCA 72; 40 FCR 511
Termination, Change and Redundancy Case (1984) 8 IR 34
Termination, Change and Redundancy Case (1984) 9 IR 115
Walsh v Greater Metropolitan Cemeteries Trust (No 2) [2014] FCA 456; 243 IR 468
Waters v Public Transport Corporation [1991] HCA 49; 173 CLR 349
Yorke v Lucas [1985] HCA 65; 158 CLR 661
Date of hearing: 6 to 9 October 2015 Date of last submissions: 15 December 2015 Registry: Victoria Division: Fair Work Division National Practice Area: Employment and Industrial Relations Category: Catchwords Number of paragraphs: 313 Counsel for the Applicant: Ms G B Jardine Solicitor for the Applicant: Milardovic Legal Counsel for the Respondents: Mr T Donaghey Solicitor for the Respondents: Gary Rothville and Associates
Table of Corrections 8 September 2016 In paragraphs 59 and 60, “Jessup J” has been replaced with “Perram J”. ORDERS
VID 42 of 2015 BETWEEN: STEPHEN MILARDOVIC
Applicant
AND: VEMCO SERVICES PTY LTD ACN 83 377 173 (ADMINISTRATORS APPOINTED)
First Respondent
NIGEL BARRY
Second Respondent
JUDGE:
MORTIMER J
DATE OF ORDER:
29 JANUARY 2016
THE COURT DECLARES THAT:
1.The first respondent contravened s 44(1) of the Fair Work Act 2009 (Cth) by failing to pay the applicant redundancy pay under s 119(1) of the Act.
THE COURT ORDERS THAT:
2.On or before 4.00pm on 12 February 2016, the applicant and the first respondent are to file an agreed proposed order as to the redundancy pay to which the applicant is entitled under s 119(1) of the Fair Work Act 2009 (Cth).
3.Pursuant to s 547 of the Act, the first respondent pay the applicant interest on the amount payable to him under s 119(1) from 11 November 2014 until the date of judgment at a rate and in an amount to be fixed by the Court if not agreed between the parties by 12 February 2016.
4.The proceeding against the second respondent is dismissed.
5.The first respondent file and serve any submissions as to penalty and costs, limited to five pages, by 4.00pm on 12 February 2016.
6.The applicant file and serve any submissions as to penalty and costs, limited to five pages, by 4.00pm on 19 February 2016.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011 (Cth).
REASONS FOR JUDGMENT
MORTIMER J:
INTRODUCTION
The applicant, Mr Milardovic, was employed by the first respondent Vemco Services Pty Ltd (“Vemco”) as a bid manager from September 2012 until, as he contends, his position became redundant as a result of a company restructure on or around 12 May 2014. His employment was subsequently terminated on or around 11 November 2014. The applicant had first commenced employment with Vemtec Pty Ltd, a related company of the first respondent, on 8 September 2009. The second respondent, Mr Barry, was the director of sales and marketing at Vemco and the applicant’s direct supervisor at Vemco.
Based on claims of adverse action and failure to pay entitlements under the Fair Work Act2009 (Cth) and breach of contract, the applicant seeks relief from this Court in relation to his treatment during his employment with the first respondent and in relation to the termination of his employment. He claims the second respondent was involved in the first respondent’s adverse action against him.
For the reasons that follow, I find that the applicant has proven he was entitled to redundancy payments from the first respondent under the Fair Work Act, but otherwise I do not find his allegations to have been proven.
COURSE OF THE PROCEEDING
This proceeding was commenced on 6 February 2015 and was heard by me over four days from 6 to 9 October 2015. On the last day of hearing, I made orders requiring the parties to file final written submissions and the applicant duly provided his submissions on 23 October 2015.
On 4 November 2015 the Court was informed that on 27 October 2015 the first respondent as part of the HRL Ltd group of companies had been placed into voluntary administration under Pt 5.3A of the Corporations Act 2001 (Cth). Accordingly, by operation of s 440D(1) of that Act, the proceeding against the first respondent was stayed, unless the administrators gave written consent or the Court granted leave. The respondents’ solicitor indicated he was seeking authorisation from the administrators to finalise the respondents’ final submissions and undertook to keep the Court informed of his progress. When no authorisation was forthcoming after several weeks had passed, the matter was listed for directions on 3 December 2015.
When the matter was called on, counsel for the respondents as well as counsel for the administrators appeared. The applicant appeared in person, and advised the Court that he did so because neither his solicitor nor his counsel was available. Accordingly, I gave the applicant leave to make, within a short period and through his legal representatives, any written submissions in response to the matters raised in court and the material which had been filed by the respondents. His legal representatives were provided with a copy of the transcript of the directions hearing and the materials handed up in court to enable them to see what had been discussed.
Leave pursuant to s 440D(1) of the Corporations Act 2001 (Cth)
At the directions hearing, the Court had before it an affidavit by Ms Karli Cibich, a solicitor for the administrators, and an affidavit by Mr Gary Rothville, the solicitor for the respondents, expressed as being made on behalf of the second respondent. The respondents also filed written submissions shortly before the matter was called on for directions.
In her affidavit, Ms Cibich relevantly deposed:
I am informed by Mr Longley and believe that upon learning of this proceeding, the Administrators made inquiries with the Company’s insurer to see whether it had agreed to indemnify the Company for any legal fees it incurred in defending the proceeding, together with any adverse costs or damages orders. I am informed by Mr Longley and believe that he was informed by the insurer on 11 November 2015 that it had prima facie agreed to indemnify the Company for such liabilities.
…
On 1 December 2015 I was informed by the insurer that the Administrators could inform the applicant that the Company has an Employment Practices Liability policy pursuant to which indemnity has been prima facie confirmed and is responding to the claim subject to the proceeding. I was informed that the insurer did not authorise the Administrators to disclose the identity of the insurer or any further information about the terms of the insurance policy. …
On the basis the insurer had prima facie agreed to indemnify Vemco, counsel for the administrators proposed orders for leave on the following terms:
The Applicant have leave pursuant to section 440D(1)(b) of the Corporations Act 2001 to continue the proceeding against Vemco Services Pty Ltd (Administrators Appointed) (Company) on the following terms:
(a)In the event that liquidators are appointed to the Company, or it enters into a deed of company arrangement, the Applicant must not proceed with any further action against the Company without further leave of the Court;
(b)Liberty to the Administrators, any liquidators and any deed administrators to apply to revoke the grant of leave;
(c)Other than filing closing submissions, the Company is not required to take any additional steps in the Proceeding;
(d)The Applicant will not be permitted to enforce any judgment against the Company without further leave of the Court, unless the Company is covered by a policy of insurance.
In brief, Mr Rothville deposed in his affidavit that between the period of 12 October and 26 October 2015 he had worked on the respondents’ final submissions and had discussed that document with counsel. Mr Rothville deposed he was informed on 2 November 2015 that the first respondent had entered into administration. He stated that the document which was intended to become the final submissions remained in draft form and had been prepared as a joint document on behalf of both respondents. On that basis and consistent with the manner in which the proceeding had been conducted to date, counsel for the respondents submitted the respondents should be permitted to file their final submissions jointly once the matter of the stay under s 440D had been resolved.
Counsel for the administrators submitted that because there was an insurance policy in place and indemnity had prima facie been granted, any liability arising from the present proceeding could be dealt with by way of a call upon that insurance policy so that no party would be preferred to the first respondent’s general body of creditors. On that basis, the administrators did not oppose a grant of leave for the proceeding to continue against the first respondent.
The applicant’s legal representative subsequently informed the Court the applicant was amenable to the orders proposed by the administrators and did not seek to make further submissions, beyond drawing to the Court’s attention a number of asserted irregularities, none of which is material for present purposes.
Accordingly, orders in the terms I have set out at [9] above were made on 7 December 2015 granting leave under s 440D. I return at [313] below to the issue of the process for considering whether leave should be granted for the applicant to enforce this judgment against the first respondent.
The parties duly filed their final submissions. The respondents protested that the applicant’s reply submissions went beyond what was permitted in reply. They filed additional submissions, seeking leave in effect retrospectively to file such additional submissions. I did not grant leave to the respondents to rely on their additional submissions and I have not read those submissions. However, I considered the applicant’s reply bearing in mind the respondents’ protest.
Resolution of objections to evidence
Objection was taken by the respondents to the whole evidence of three witnesses: the applicant’s treating psychiatrist Dr Fiona Wood, and two other Vemco employees Mr Jeff Filip and Mr Andrew Otimi. The respondents objected to Dr Wood’s expert report on the basis that there were some deficiencies as to form and compliance with the requirements of Pt 23 of the Federal Court Rules 2011 (Cth). I indicated to the parties I had no difficulty with the admission of Dr Wood’s report in the form that it took, on the basis some of those deficiencies would be remedied through oral evidence. The respondents also submitted that Dr Wood’s evidence was conclusionary, or not properly given within her expertise in that Dr Wood merely reported how the applicant self-described his feelings. I rejected those submissions.
There was no need to resolve the objection to the evidence of Mr Filip, who was not ultimately called to give evidence. The resolution of the objection to Mr Otimi’s evidence is set out below.
EVIDENCE BEFORE THE COURT
The applicant gave evidence himself, and adduced oral evidence from Dr Wood, who had also completed a report about the applicant’s mental health. Both were cross-examined. The applicant had foreshadowed an intention to call, pursuant to a subpoena, Mr Andrew Otimi, and Mr Otimi duly attended court to give evidence on the first day of trial. Leave had been granted to issue the subpoena to Mr Otimi on the basis he was offered and accepted the role of bid manager while the applicant was unable to perform his duties in that role. Objection was taken to his evidence on the grounds of fairness (in circumstances where the Court’s orders had provided for outlines of evidence to be exchanged, and no such outline of anticipated evidence had been provided in respect of Mr Otimi) and of relevance. I indicated to the parties that I was not positively satisfied Mr Otimi’s evidence was irrelevant, and was not disposed to exclude his evidence on that ground. However, I was concerned by the lack of notice to the respondents and proposed to address that by permitting the applicant to call Mr Otimi to give his evidence-in-chief, and then allowing the respondents to indicate, at the conclusion of his evidence-in-chief, when they anticipated being ready to cross-examine Mr Otimi, for example on the next day. As it turned out, in the face of those conditions the applicant no longer sought to call Mr Otimi and applied to have the subpoena set aside. That is what occurred.
The respondents adduced evidence from Mr Barry himself, and from Ms Michelle Finnigan who was the human resources manager at Vemco at the relevant time.
The parties also relied on some documentary evidence. Aside from the contractual documentation relating to Mr Milardovic’s employment and correspondence between the parties during and after the period Mr Milardovic’s position was restructured and divided into two, this event being the catalyst for some of the events of which Mr Milardovic complains in this proceeding, Mr Milardovic also tendered several documents concerning professional events and the bid processes on some of the jobs about which he made complaints in terms of how he was treated by the respondents. Some diary extracts from the diaries of Mr Milardovic and Ms Finnigan were also tendered.
I refer to the evidence as necessary in the findings I make below.
THE APPLICANT’S CLAIMS
The Fair Work Act claims
The applicant contended that the first respondent engaged in adverse action against him contrary to s 340 of the Fair Work Act because he exercised his workplace rights to complain about workplace bullying by the second respondent, and because he made and pursued a WorkCover claim for a stress-related illness resulting from that workplace bullying. He contended the second respondent was involved in those contraventions, and should be deemed to have contravened s 340, pursuant to s 550 of the Fair Work Act. The adverse action is said to be constituted by four acts:
(1)excluding the applicant from meetings, training and support;
(2)failing to provide revised KPIs and additional training after the performance review meeting of 12 March 2014;
(3)terminating the applicant’s employment;
(4)failure to pay redundancy or termination notice payments.
Each of the acts was said to have been taken because the applicant complained about workplace bullying (said to be the exercise of a workplace right within the meaning of s 341(1)(c)). In addition, the applicant also contended there was a further reason why his employment was terminated and why he was not paid redundancy or termination notice payments, which was that he had exercised his right to make and pursue a WorkCover claim, a workplace right within the meaning of s 341(1)(a).
Further or alternatively, the applicant also contended the first respondent failed to pay redundancy entitlements (ten weeks’ pay) and termination notice pay (four weeks’ pay) in breach of ss 119 and 117 of the Fair Work Act. Both those amounts correspond to the entitlements of an employee under 45 years of age who has served a continuous period of service of more than five years but less than six years at the time of termination or notice. Except insofar as these failures were themselves also said to be adverse action in breach of s 340, there was no allegation the second respondent was involved in the breaches of ss 117 and 119. This is, as the matter has turned out, significant. The applicant’s case under ss 117 and 119 is clearly pleaded only against the first respondent. There is no allegation that Mr Barry was “involved” in those contraventions within the terms of s 550 of the Act. Such a case could have been made, but was not. Therefore, the relief which I have decided should be granted extends only to the first respondent.
The applicant seeks relief in the form of declaratory relief, damages and penalties from this Court in relation to his treatment during his employment with the first respondent and in relation to the termination of his employment.
It is important at the outset to make several points about the nature and scope of the applicant’s cause of action. The alleged workplace bullying is not, as the respondents have correctly submitted, framed as a cause of action in itself. The alleged bullying, covered in great detail in the evidence, is said to be the reason for the complaints made by Mr Milardovic to (he says) the first respondent.
The complaints are said to have been made on two occasions: 18 February 2014, to Ms Finnigan, the human resources manager for the first respondent; and 12 March 2014, at a performance review meeting with the second respondent Mr Barry and Ms Finnigan. Those two sets of complaints are alleged to be the “workplace right” exercised, and the reason for the alleged adverse action against Mr Milardovic. The second, and separate workplace right relied on is the right to make, and the making, of a WorkCover claim. The exercise of that right by Mr Milardovic is also said to have been the reason for the adverse action he alleges occurred.
Therefore (and despite the way the matter was put in final written submissions on behalf of the applicant), whether or not the bullying about which Mr Milardovic says he complained in fact occurred or not is not, in my opinion, a matter about which the Court need make detailed findings of fact. What is relied on by Mr Milardovic is the fact of making a complaint about workplace bullying. What is germane, therefore, is whether he made the complaints he alleges he did, and if so, whether those complaints were the reason, or part of the reason, for the adverse action he alleges was subsequently taken against him. Separately of course, it will be necessary to determine whether the conduct Mr Milardovic relies on as adverse action is within the meaning of that phrase in the Fair Work Act.
At the hearing, the respondents put their primary case in three ways. First, they submitted the applicant had not in fact made some of the complaints said to be an operative reason for the alleged adverse action, and that those complaints or concerns which were raised were not complaints in the relevant sense within the meaning of a “workplace right” under s 341(1)(c) of the Fair Work Act. Second, the respondents characterised the alleged bullying and harassment experienced by the applicant as reasonable management steps, intersecting with resourcing decisions. It became apparent that this submission was effectively made in the alternative, the respondents’ primary position (which I accept) being that, for the reasons I set out, the Court need not make detailed findings about the alleged bullying and harassment which gave rise to the complaints Mr Milardovic claims to have made. Finally, while the respondents accepted that the termination of the applicant’s employment was adverse action, they contended the termination was not causally linked to any prohibited ground or workplace right.
The respondents have pleaded that the employment contract included terms requiring Mr Milardovic to return and deliver up to Vemco upon termination of employment documents and property in his possession. The respondents allege Mr Milardovic, in breach of those terms, copied and retained confidential documents belonging to Vemco.
The respondents however made no cross-claim about their allegation that Mr Milardovic retained documents belonging to the first respondent, in circumstances where he was not authorised to do so. As developed in submissions, they contended this is a matter that should be taken into account in determining the amount of compensation payable to the applicant, if he should otherwise succeed.
The respondents also submitted Mr Barry had no liability within the terms of s 550. As to relief, the respondents submitted the applicant’s extant WorkCover claim should be taken into account if any compensation were to be awarded, and in respect of penalty that this was the first prosecution for each respondent under the Fair Work Act.
The contract claim
Further or alternatively, the applicant also contended that the first respondent’s failure to pay redundancy pay and termination notice pay was in breach of the November 2012 employment agreement and sought damages in respect of that breach. The respondents contended Mr Milardovic’s position was never made redundant but that he failed to apply for positions made available to him. They contested the redundancy characterisation both under the Act and in the contract claim.
RELEVANT LEGISLATIVE PROVISIONS
Section 340(1) of the Fair Work Act provides:
A person must not take adverse action against another person:
(a) because the other person:
(i) has a workplace right; or
(ii) has, or has not, exercised a workplace right; or
(iii)proposes or proposes not to, or has at any time proposed or proposed not to, exercise a workplace right; or
(b) to prevent the exercise of a workplace right by the other person.
Note: This subsection is a civil remedy provision (see Part 4-1).
Relevantly to this proceeding, by s 341(1)(c), a person has a “workplace right” if the person:
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.
By s 341(1)(a), a person also has a “workplace right” if she or he:
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; …
A “workplace law” is relevantly defined under s 12 to include:
any other law of the Commonwealth, a State or a Territory that regulates the relationships between employers and employees (including by dealing with occupational health and safety matters).
In this proceeding, it was pleaded that the applicant enjoys, as the benefit of a workplace law, s 21 of the Occupational Health and Safety Act 2004 (Vic), which provides:
(1)An employer must, so far as is reasonably practicable, provide and maintain for employees of the employer a working environment that is safe and without risks to health.
Penalty: 1800 penalty units for a natural person;
9000 penalty units for a body corporate.(2) Without limiting subsection (1), an employer contravenes that subsection if the employer fails to do any of the following—
(a) provide or maintain plant or systems of work that are, so far as is reasonably practicable, safe and without risks to health;
(b) make arrangements for ensuring, so far as is reasonably practicable, safety and the absence of risks to health in connection with the use, handling, storage or transport of plant or substances;
(c) maintain, so far as is reasonably practicable, each workplace under the employer’s management and control in a condition that is safe and without risks to health;
(d) provide, so far as is reasonably practicable, adequate facilities for the welfare of employees at any workplace under the management and control of the employer;
(e) provide such information, instruction, training or supervision to employees of the employer as is necessary to enable those persons to perform their work in a way that is safe and without risks to health.
I return at [72] to [73] below to how the benefit of s 21 of the Occupational Health and Safety Act might interact with the causal requirement in a claim for adverse action.
“Adverse action” is defined in s 342 of the Fair Work Act. Under Item 1 of the table under s 342(1), an employer is deemed to have taken adverse action against an employee if the employer dismisses the employee or alters the position of the employee to the employee’s prejudice.
Sections 360 and 361 are relevant to determining the reason for taking an action. Section 360 provides:
For the purposes of this Part, a person takes action for a particular reason if the reasons for the action include that reason.
A presumption is raised as to the reason for taking adverse action under s 361(1), which provides:
If:
(a)in an application in relation to a contravention of this Part, it is alleged that a person took, or is taking, action for a particular reason or with a particular intent; and
(b)taking that action for that reason or with that intent would constitute a contravention of this Part;
it is presumed that the action was, or is being, taken for that reason or with that intent, unless the person proves otherwise.
Under s 550, a person “involved in” an adverse action is also deemed to have contravened s 340. Section 550 provides:
(1)A person who is involved in a contravention of a civil remedy provision is taken to have contravened that provision.
(2)A person is involved in a contravention of a civil remedy provision if, and only if, the person:
(a) has aided, abetted, counselled or procured the contravention; or
(b)has induced the contravention, whether by threats or promises or otherwise; or
(c)has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention; or
(d) has conspired with others to effect the contravention.
Section 340 is included as a civil remedy provision under Item 11 of the table in s 539(2) of the Fair Work Act. Under s 546, this Court may impose a pecuniary penalty for a contravention of a civil remedy provision. Section 546(2) provides:
The pecuniary penalty must not be more than:
(a)if the person is an individual—the maximum number of penalty units referred to in the relevant item in column 4 of the table in subsection 539(2); or
(b)if the person is a body corporate—5 times the maximum number of penalty units referred to in the relevant item in column 4 of the table in subsection 539(2).
Under Item 11 of the table in s 539(2), the maximum number of penalty units set out for a contravention of s 340 is 60 penalty units. Further, the maximum penalty to be imposed on a body corporate pursuant to s 546(2)(b) of the Fair Work Act is five times the maximum number of penalty units referred to in the table in s 539(2).
Section 4AA of the Crimes Act 1914 (Cth) determines the rate of a penalty unit. The rate is currently fixed at $180, having been adjusted from $170 with effect from 31 July 2015. In fixing a penalty, I do not propose to take the 31 July 2015 rate change into account, since the conduct constituting the contraventions alleged in this proceeding was complete before 31 July 2015: Murrihy v Betezy.com.au Pty Ltd (No 2) [2013] FCA 1146; 221 FCR 118 at [6]-[28]. The relevant maximum penalty that may be imposed for a contravention of s 340 is therefore $51,000 in respect of the first respondent (60 penalty units x 5 x $170) and $10,200 in respect of the second respondent (60 penalty units x $170).
Section 119(1) sets out the circumstances in which an employee is entitled to redundancy pay:
An employee is entitled to be paid redundancy pay by the employer if the employee’s employment is terminated:
(a)at the employer’s initiative because the employer no longer requires the job done by the employee to be done by anyone, except where this is due to the ordinary and customary turnover of labour; or
(b) because of the insolvency or bankruptcy of the employer.
Note:Sections 121, 122 and 123 describe situations in which the employee does not have this entitlement.
Under s 119(2), the amount of redundancy pay for an employee who has been employed for a period of continuous service of at least five years but less than six years is set at ten weeks’ pay.
Under s 117(2), an employer before terminating an employee’s employment must either give an employee a requisite period of written notice or provide payment in lieu of that notice:
The employer must not terminate the employee’s employment unless:
(a)the time between giving the notice and the day of the termination is at least the period (the minimum period of notice) worked out under subsection (3); or
(b)the employer has paid to the employee (or to another person on the employee’s behalf) payment in lieu of notice of at least the amount the employer would have been liable to pay to the employee (or to another person on the employee’s behalf) at the full rate of pay for the hours the employee would have worked had the employment continued until the end of the minimum period of notice.
A formula for determining the minimum notice period is then set out in s 117(3). In respect of an employee under the age of 45 years whose period of continuous service with the employer at the end of the day that notice is given is more than five years, the minimum period of notice is four weeks.
The applicant’s submissions did not develop how the redundancy pay and termination notice pay he claimed to be entitled to should be calculated. However, it appears that although Mr Milardovic was only employed with the first respondent from 2012, his period of continuous service may be taken to be a period of more than five years by virtue of ss 22(5) and (7), which provide:
When service with one employer counts as service with another employer
(5)If there is a transfer of employment (see subsection (7)) in relation to a national system employee:
(a) any period of service of the employee with the first employer counts as service of the employee with the second employer; and
(b) the period between the termination of the employment with the first employer and the start of the employment with the second employer does not break the employee’s continuous service with the second employer (taking account of the effect of paragraph (a)), but does not count towards the length of the employee’s continuous service with the second employer.
Note:This subsection does not apply to a transfer of employment between non‑associated entities, for the purpose of Division 6 of Part 2‑2 (which deals with annual leave) or Subdivision B of Division 11 of Part 2‑2 (which deals with redundancy pay), if the second employer decides not to recognise the employee’s service with the first employer for the purpose of that Division or Subdivision (see subsections 91(1) and 122(1)).
…
Meaning of transfer of employment etc.
(7) There is a transfer of employment of a national system employee from one national system employer (the first employer) to another national system employer (the second employer) if:
(a) the following conditions are satisfied:
(i) the employee becomes employed by the second employer not more than 3 months after the termination of the employee’s employment with the first employer;
(ii) the first employer and the second employer are associated entities when the employee becomes employed by the second employer; or
(b) the following conditions are satisfied:
(i) the employee is a transferring employee in relation to a transfer of business from the first employer to the second employer;
(ii) the first employer and the second employer are not associated entities when the employee becomes employed by the second employer.
Note: Paragraph (a) applies whether or not there is a transfer of business from the first employer to the second employer.
Accordingly, Mr Milardovic’s period of continuous service with the first respondent may be calculated from the time he was first employed with Vemtec Pty Ltd, a related company of Vemco, on 8 September 2009. On the evidence, it appears he moved directly from Vemtec to Vemco. Since this was not a matter directly addressed by the parties, they will be given an opportunity to file a form of agreed order as to the amount of compensation payable after consideration of these reasons for judgment.
Sections 117 and 119 form part of the National Employment Standards set out in Pt 2-2 of the Act, which are minimum standards applying to employment which cannot be displaced: s 61(1). Under s 44(1), an employer must not contravene a provision of the National Employment Standards.
Section 44(1) is included as a civil remedy provision under Item 1 of the table in s 539(2) of the Act. Under Item 1, the maximum number of penalty units set out for a contravention of s 44(1) is also 60 penalty units. The maximum applicable penalty for a breach of s 44(1) is therefore the same as the maximum penalty for a breach of s 340: relevantly, $51,000 in respect of the first respondent.
APPLICABLE PRINCIPLES
Adverse action
Item 1(c) of s 342(1) is construed as a broad category of adverse action, extending beyond legal injury. It includes any adverse effect on the advantages and benefits enjoyed by an employee in her or his employment before the conduct in question, or any deterioration in such advantages and benefits: Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia [1998] HCA 30; 195 CLR 1 at 18; Klein v Metropolitan Fire and Emergency Services Board [2012] FCA 1402; 208 FCR 178 at [84]; Australian and International Pilots Association v Qantas Airways Ltd [2006] FCA 1441; 160 IR 1 at [15]-[17] and the cases there cited. A prejudicial alteration for the purposes of Item 1(c) may occur even though the employee suffers no loss or infringement of a legal right, and will occur where the alteration is real and substantial rather than merely possible or hypothetical: Klein at [84]; Australian and International Pilots Association at [17]; Qantas Airways Ltd v Australian Licensed Aircraft Engineers Association [2012] FCAFC 63; 202 FCR 244 at [32].
There must be more than a temporal connection between the protected attribute or activity and the taking of adverse action: see Board of Bendigo Regional Institute of Technical and Further Education v Barclay (No 1) [2012] HCA 32; 248 CLR 500 at [60]; Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd [2014] HCA 41; 253 CLR 243 at [19]. In both these cases, the High Court considered the causal requirement under the similarly phrased prohibition under s 346 on taking adverse action because a person is an officer or member of an industrial association, or engages or proposes to engage in protected industrial activities. Applying that observation to the present case, there must be more than a temporal connection between the fact Mr Milardovic had complained about Mr Barry’s bullying and harassment (or had commenced a WorkCover claim) and the treatment he alleges constituted adverse action. As French CJ and Kiefel J noted in BHP Coal [2014] HCA 41; 253 CLR 243 at [19], the inquiry “requires a determination of fact as to the reasons which motivated the person who took the adverse action.” The proscribed reason need not be the sole or dominant reason, but must comprise a substantial and operative reason, or reasons including the reason, for the adverse action: Barclay at [104].
In examining evidence relied on to rebut the presumption erected by the terms of s 361, the evidence must negate the alleged reason for the taking of adverse action: Construction, Forestry, Mining and Energy Union v BHP CoalPty Ltd [2015] FCAFC 25; 230 FCR 298 at [191], citing Gray J in National Tertiary Education Union v Royal Melbourne Institute of Technology [2013] FCA 451; 234 IR 139 at [20].
As I noted in Sayed v Construction, Forestry, Mining and Energy Union [2015] FCA 27 at [179]-[180], the High Court in Barclay emphasised that the statutory presumption in s 361, combined with the nature of the inquiry being one as to the “particular reason” of the decision-maker and involving an assessment of the state of mind of the decision-maker (rather than a wholly objective inquiry), meant that the presumption would rarely be effectively rebutted without direct testimony from the decision-maker: at [42]-[45] per French CJ and Crennan J; at [101], [127] per Gummow and Hayne JJ; at [146] per Heydon J. As French CJ and Crennan J observed at [50] (see also Gummow and Hayne JJ at [86] and Heydon J at [149]), citing General Motors Holden Pty Ltd v Bowling (1976) 12 ALR 605 at 617 per Mason J, the rationale for the presumption (and the correlative reverse onus) is that the burden should fall on the person whose own knowledge might best explain the reason for her or his conduct or decision.
However, evidence from the decision-maker, if given, may not be conclusive. As Hayne J (in dissent) observed in BHP Coal [2014] HCA 41; 253 CLR 243 at [38]:
Bendigo did not decide that accepting the decision-maker’s evidence of why adverse action was taken necessarily concluded the issue in a case where the employee was engaged in industrial activity. As counsel for the Minister, intervening, rightly submitted in Bendigo, “[i]t is an error to reduce the question to a binary choice between believing or rejecting the evidence” of the relevant decision-maker.
Recently in Construction, Forestry, Mining and Energy Union v Endeavour Coal Pty Ltd [2015] FCAFC 76; 231 FCR 150, the Full Court had cause to examine the content of s 340(1) and the manner in which it should be applied. At [91] Perram J made what I consider, with respect, to be critical distinction in the application of s 340: that is, between facts or matters that an employer may be aware of (and indeed may consider), and facts or matters which are the reason for the decision, in the sense of being determinative, and therefore material to the outcome of the employer’s reasoning process:
This is because there is a factual distinction between factoring something into one’s consideration of a matter and making a decision about the matter itself. To give an example: in reaching the conclusions I have reached on this appeal I have taken the CFMEU’s submissions into account and they have formed an important element in my decision-making processes. However, as will be apparent, the fact that I have had regard to them does not entail that they may therefore be described as constituting a part of my subjective reasons for decision. Of course, if by reason one means “cause” then one gets a different result. On that view of things, Mr McDermott’s prior record was causally connected to the decision to transfer him to a different shift. That approach to the identification of the reason in question is prevented, however, by CFMEU v BHP. The inquiry thrown up by s 340 is not one concerned with causation but, rather, the subjective reasons for action of the decision-maker. Once that is appreciated, it is possible to accept that Mr Peace’s evidence about what he was aware of in relation to Mr McDermott’s prior attendance record is not inconsistent with a finding that it was not that record which he, himself, regarded as determinative.
I respectfully agree with his Honour’s observations. An application for special leave to appeal from the Full Court’s decision was dismissed: Construction, Forestry, Mining and Energy Union v Endeavour Coal Pty Ltd [2015] HCATrans 331. In the anti-discrimination context, McHugh J made a similar point in Waters v Public Transport Corporation [1991] HCA 49; 173 CLR 349 at 400-401, where his Honour described the task as determining whether the act of the alleged discriminator was “actuated” by a protected attribute. Like Perram J’s description in Endeavour Coal, this kind of language emphasises this is not an exercise in characterisation: rather, it is a decision about the internal reasoning process of an alleged discriminator. In my respectful opinion this is the same approach as that taken by French CJ and Kiefel J in BHP Coal [2014] HCA 41; 253 CLR 243 at [19], where their Honours said:
Section 346 does not direct a court to enquire whether the adverse action can be characterised as connected with the industrial activities which are protected by the Act. It requires a determination of fact as to the reasons which motivated the person who took the adverse action.
The exercise in which a court must engage when there is a provision such as s 340(1) may be a different exercise from that required to determine whether a law operates in a discriminatory way. In the latter circumstance, the court examines, objectively, the outcome and operation of the law in a substantive and practical sense and is not concerned with the aims or intentions of the legislators: see Castlemaine Tooheys Ltd v South Australia [1990] HCA 1; 169 CLR 436 at 478-479, Gaudron and McHugh JJ. Similarly, where statutory language requires a court to determine whether a person acted “on the ground of” a protected attribute, the exercise may be more objective. It may require the court to characterise, objectively, the alleged discriminatory “ground” or basis, for the way the discriminator treated another person. Subjective intention may be relevant but not decisive: see for example IW v The City of Perth [1997] HCA 30; 191 CLR 1 at 59, Kirby J. As his Honour pointed out, discrimination often occurs unconsciously or thoughtlessly, but that does not alter the fact that the way a person was treated was on the ground of a protected attribute. That is why many discrimination authorities, IW being one of them, repeatedly emphasise that a search by a court to identify a motive or intention to discriminate on the basis of a protected attribute is not the correct task.
How those differences may evolve in the application and operation of s 351 of the Act, which is concerned with discrimination as that term is used in the federal and state anti-discrimination legislation, is a matter for another day.
Workplace rights under s 341
The meaning of a “complaint” in relation to a person’s employment as a workplace right under s 341(1)(c)(ii) was considered by Dodds-Streeton J in Shea v TRUenergy Services Pty Ltd (No 6) [2014] FCA 271; 314 ALR 346. At [29], her Honour summarised her principal findings as follows:
… in the context of s 341(1)(c)(ii) of the Act:
(a) a complaint is a communication which, whether expressly or implicitly, as a matter of substance, irrespective of the words used, conveys a grievance, a finding of fault or accusation;
(b) the grievance, finding of fault or accusation must be genuinely held or considered valid by the complainant;
(c) the grievance, finding of fault or accusation need not be substantiated, proved or ultimately established, but the exercise of the workplace right constituted by the making of the complaint must be in good faith and for a proper purpose;
(d) the proper purpose of making a complaint is giving notification of the grievance, accusation or finding of fault so that it may be, at least, received and, where appropriate, investigated or redressed. If a grievance or accusation is communicated in order to achieve some extraneous purpose unrelated to its notification, investigation or redress, it is not a complaint made in good faith for a proper purpose and is not within the ambit of s 341(1)(c)(ii);
(e) a complaint may be made not only to an external authority or party with the power to enforce or require compliance or redress, but may be made to persons including an employer, or to an investigator appointed by the employer;
(f) a complaint that an employee is able to make in relation to his or her employment is not at large, but must be founded on a source of entitlement, whether instrumental or otherwise; and
(g) a complaint is limited to a grievance, finding of fault or accusation that satisfies the criteria in s 341(1)(c)(ii) and does not extend to other grievances merely because they are communicated contemporaneously or in association with the complaint. Nor does a complaint comprehend contemporaneous or associated conduct which is beyond what is reasonable for the communication of the grievance or accusation.
Her Honour considered that several of the complaints relied upon by the applicant were not properly within the scope of s 341(1)(c)(ii), including because one alleged complaint viewed properly in context was a mere observation or assertion, and because in respect of another complaint her Honour was not satisfied the applicant genuinely held the stated grievances or in all the circumstances communicated them in good faith for a proper purpose: at [30]-[31]. At [582], her Honour endorsed the finding of Riley FM in Ratnayake v Greenwood Manor Pty Ltd [2012] FMCA 350 at [117] that “an implicit but clear complaint is sufficient for the purposes of s 341(1)(c)(ii) of the Act”. There, Riley FM had found the applicant relevantly made an implicit but clear complaint under s 341(1)(c)(ii) when he called his manager a racist and a liar when informed his working hours would be reduced, and again when he accepted the reduced hours in writing “under strong protest”.
Dodds-Streeton J further held (at [618]-[620]):
In my view, as was common ground, there is no requirement that, in order to constitute a complaint that a person is able to make, a grievance must be justified or an accusation of fault must be true, or capable of ultimate proof or substantiation.
The relevant object of the provision is to protect employees from retribution in the form of adverse action because they have exercised a workplace right by making a complaint in relation to their employment, rather than to protect employees who have proved, or are able to prove, that the grievance or accusation is justified or meritorious. Were it otherwise, the protection afforded by the provision would be largely illusory, as persons would be vulnerable to retribution for making a complaint unless, and perhaps until, their case could subsequently, by some unspecified means, be proved or found valid.
It does not follow, however, that the making of false, baseless, unreasonable or contrived accusations of grave misconduct against fellow employees constitutes the making of a complaint that an employee is able to make in relation to his or her employment, and thus invokes the statutory prohibition on adverse action.
An appeal from her Honour’s decision was dismissed: Shea v EnergyAustralia Services Pty Ltd [2014] FCAFC 167; 242 IR 159. The point made by Dodds-Streeton J is relevant in the current proceeding because her Honour made clear a determination of adverse action under s 340(1) by reference to s 341(1)(c)(ii) does not depend on the truth or substantiation of the subject matter of the complaint, but rather on the fact that it was made. That was not the approach taken by Mr Milardovic in evidence and submissions in the present case, which resulted in a number of legally irrelevant factual controversies occupying some time during the trial.
In Hill v Compass Ten Pty Ltd [2012] FCA 761; 205 FCR 94, Cowdroy J held at [48]:
A complaint must state a particular grievance or finding of fault. A complaint should be distinguished from a mere request for assistance: see Zhang v Royal Australian Chemical Institute Inc (2005) 144 FCR 347 at [36]-[37]. Although Mr Hill in these emails makes oblique reference to tension between his perceived responsibilities to residents and responsibilities to the director, he fails to mention any particular issue with which he has a grievance.
A complaint to the employer under s 341(1)(c)(ii) must relate to a person’s employment. In Rowland v Alfred Health [2014] FCA 2, Marshall ACJ found at [37]-[38] that an applicant’s complaint about the competence of a colleague and the reassignment of patients by that colleague away from the applicant was not relevantly a complaint within the meaning of s 341(1)(c)(ii), on the basis the complaint was essentially about the colleague and not how the colleague related to the applicant in his employment. Some doubt has been expressed about that finding. In Walsh v Greater Metropolitan Cemeteries Trust (No 2) [2014] FCA 456; 243 IR 468, Bromberg J stated at [41]-[44]:
The words “in relation to” are words of wide import. The use of that phrase in s 341(1)(c)(ii) identifies that a relationship between the subject matter of the complaint and the complainant’s employment is required. The nature of that relationship need not be direct and may be indirect: Construction, Forestry, Mining and Energy Union v Pilbara Iron Co (Services) Pty Ltd (No 3) [2012] FCA 697 at [61]-[64] (Katzmann J); Shea v TRUenergy Services Pty Ltd (No 6) (2014) 242 IR 1 at [631] (Dodds-Streeton J). I respectfully agree with Katzmann J’s observation in Pilbara at [64] that if some limit on the broad language utilised in the phrase “in relation to his or her employment” is to be imposed, it needs to be “found in the nature and purpose of the legislation, which includes the protection of workplace rights”.
Where the subject matter of the complaint raises an issue with potential implications for the complainant’s employment, it is likely that the requisite nexus will be satisfied: Pilbara at [69].
In this case, Ms Walsh raised a probity issue in relation to a contract with a supplier who supplied services including to an operation which Ms Walsh managed in the course of her employment. Whether or not Ms Walsh was under a contractual duty to report the possible misdeed of others (see the discussion in Irving, The Contract of Employment (LexisNexis Butterworths, 2012) at [7.21]), her failure to report suspected wrong-doing had the potential to reflect badly upon her and cause prejudice to her in her employment. By reason of either of those two factors, the Alsco contract complaint made by Ms Walsh raised an issue with potential implications for Ms Walsh’s employment and was “in relation to … her employment” within the meaning of s [341(1)(c)(ii)] of the FW Act.
In determining the construction issue raised here, I have considered but have not been persuaded by GMCT’s reliance upon Rowland v Alfred Health [2014] FCA 2. In that case, Marshall ACJ determined that a complaint made by a doctor about the competency of another doctor with whom he worked was not a complaint in relation to the complainant’s employment. Whether the clinical competence of the doctor complained about had potential implications for the employment of the complainant is not a matter that appears to have been raised before or addressed by Marshall ACJ. His Honour does not appear to have been referred to Pilbara and did not have the benefit of Shea. A contention that an indirect nexus would be sufficient does not appear to have been relied upon by the applicant in that case. Further, his Honour’s conclusion seems to turn on a factual dispute as to whether the relevant complaint related to the complainant’s employment because it also included a complaint that the doctor concerned had taken a patient from the complainant: see Rowland at [29]-[38].
I respectfully agree with Bromberg J’s observations, although in the present case there is no real dispute by the respondents that Mr Milardovic’s grievances were “in relation to” his own employment.
In addition to the making of complaints under s 341(1)(c)(ii), at some points in his pleading and submissions the applicant appears also to rely on both s 21 of the Occupational Health and Safety Act and on the Accident Compensation Act 1985 (Vic) as giving him the benefit of a “workplace law” under s 341(1)(a). As Jessup J noted in Regulski v State of Victoria [2015] FCA 206 at [198], referring there to the Accident Compensation Act, a “law” in this context may be a single provision of an act, a group of provisions, or an act as a whole. Referring there to provisions of the Accident Compensation Act (as it was in 2011) which dealt with the return to work process, his Honour held at [198] and [200]:
It may be (although I do not hold) that, at the high level, the AC Act did not have the purpose of regulating the relationships between employers and employees. But the question is whether, in pursuit of the objects referred to in paras (b) and (c) of s 3 –
(b) to make provision for the effective occupational rehabilitation of injured workers and their early return to work; [and]
(c) to increase the provision of suitable employment to workers who are injured to enable their early return to work;
– the AC Act operated in a way which effected such a regulation.
…
These provisions required employers to act in certain ways, and in that sense were regulatory. The field in which they were required to act was that of the relationships which they had with their relevant employees. Most relevantly to the present case, they were required to plan the return to work of injured employees, and to consult with them. The result presumptively achieved by obedience to these provisions was that employees would perform work, in the service of their employers, which they would, or at least might, not otherwise have performed. In my view, ss 195 and 196 of the AC Act were workplace laws within the meaning of the FW Act.
I respectfully agree with Jessup J. For the same reasons, the exercise of a right to make a WorkCover claim under the Accident Compensation Act is the exercise of a workplace right for the purposes of ss 340 and 341 of the Fair Work Act, and the respondents did not appear to contend otherwise in submissions.
Section 21 of the Occupational Health and Safety Act has been recognised as conferring a workplace right for the purposes of s 341(1)(a) of the Fair Work Act: see Ermel v Duluxgroup (Australia) Pty Ltd (No 2) [2015] FCA 17. In Ermel, there was no dispute between the parties that a letter sent by Mr Ermel’s solicitors constituted a complaint within the terms of s 341(1)(c)(ii): see [58]. However, Bromberg J drew a distinction between the benefit under s 21 to enjoy a safe working environment, and the making of a complaint about the denial of a safe working environment. At [52]-[56], his Honour held:
For reasons I will shortly explain, I do not accept Dulux’s contention that s 21 of the OH&S Act did not confer upon Ermel a workplace right. Nevertheless, this aspect of Ermel’s claim failed to raise a plausible basis upon which he could succeed.
The first difficulty which Ermel confronts is that his pleading on this aspect of his claim was misconceived. The Statement of Claim pleaded that by the sending of the solicitors’ letter, Ermel exercised his workplace right to a safe working environment. The solicitors’ letter included a complaint that Ermel had been bullied. Accepting that the letter raised and made a complaint that Ermel was denied a safe workplace, the making of a complaint about a safety issue is not the exercise of the benefit provided by s 21 of the OH&S Act, namely the capacity of Ermel to enjoy a “working environment that is safe and without risk to health”.
The capacity to enjoy a safe working environment is the nature of the benefit provided by s 21 of the OH&S Act. It is the enjoyment of that benefit, not the making of a complaint about its denial, which Ermel needed to allege was an operative reason for his dismissal. No such claim was either pleaded or pressed. Nor, if such a claim had been made, is there any evidence which would suggest, even as a plausible possibility, that Ermel was dismissed because or including because he enjoyed or had the right to enjoy a safe working environment.
The terms of s 21 of the OH&S Act impose an obligation on employers to provide and maintain for their employees (so far as is reasonably practicable) a working environment that is safe and without risk to health. The corollary of that obligation is that employees are given the benefit of an entitlement to enjoy a safe working environment. Contrary to the submissions of Dulux, such a benefit is a workplace right. The meaning of “workplace right” given by s 341(1) of the FW provides that a person has a workplace right “if the person…is entitled to the benefit of…a workplace law”. The definition of “workplace law” given by s 12 of the FW Act specifically refers to “any other law of…a State…that regulates the relationships between employers and employees (including by dealing with occupational health and safety matters)”.
For those reasons, although I disagree with Dulux’s contention that Ermel did not have a workplace right, this aspect of Ermel’s claim must also be rejected.
Likewise, here, Mr Milardovic did not plead that he had been subjected to adverse action by the respondents because he enjoyed, or had, the benefit of a “working environment that is safe and without risks to health”, to use the language of s 21 of the Occupational Health and Safety Act. Such an argument only needs to be set out for it to be clear how tenuous and unlikely any such argument might be. He pleaded that the adverse action was either because of the complaints about bullying he had made, or his WorkCover claim, or both. That is, in the operative part of his statement of claim (paragraphs [33] and [34]), he relies on s 341(1)(c). That being so, the contested events which occurred prior to the making of his first complaint need not be the subject of detailed findings by the Court. The bullying Mr Milardovic alleges occurred prior to his first complaint on 18 February 2014 is the subject matter of the complaint, but itself need not be proven, nor the complaint proven to be “justified” as Dodds-Streeton J observed in Shea. Nor are these events relied on as any independent cause of action under s 341(1)(a), including the distinction made by Bromberg J in Ermel. In his final submissions in reply, the applicant made no submission, in response to the respondents’ contention that the examples of bullying were not relevant to the determination of his adverse action claim, that they formed part of the exercise of a workplace right to a safe working environment.
Accessorial liability under s 550
The Full Court considered the nature of accessorial liability under the similar terms of the predecessor Workplace Relations Act 1996 (Cth) in Construction, Forestry, Mining and Energy Union v Clarke [2007] FCAFC 87; 164 IR 299. At [26], Tamberlin, Gyles and Gilmour JJ stated:
Regardless of the precise words of the accessorial provision, such liability depends upon the accessory associating himself or herself with the contravening conduct – the accessory should be linked in purpose with the perpetrators (per Gibbs CJ in Giorgianni v The Queen (1985) 156 CLR 473 at 479-480; see also Mason J at 493 and Wilson, Deane and Dawson JJ at 500). The words “party to, or concerned in” reflect that concept. The accessory must be implicated or involved in the contravention (Ashbury v Reid [1961] WAR 49 at 51; R v Tannous (1987) 10 NSWLR 303 per Lee J at 307E-308D (agreed with by Street CJ at 304 and Finlay J at 310)) or, as put by Kenny J in Emwest Products Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (2002) 117 FCR 588; 112 IR 388 at [34], must participate in, or assent to, the contravention.
The terms of s 550(2) of the Fair Work Act are identical to those found in s 75B of the then Trade Practices Act 1974 (Cth), considered by the High Court in Yorke v Lucas [1985] HCA 65; 158 CLR 661. Mason ACJ, Wilson, Deane and Dawson JJ held at 669 that notwithstanding that s 75B operated as an adjunct to the imposition of civil liability, it had its derivation in the criminal law and there was nothing to support the view the concepts it introduced should be given a new or special meaning (see also Brennan J at 673). Accessorial liability thus requires intent or knowledge of the essential elements of the contravention to be established: at 670.
Bromberg J considered accessorial liability in the context of an adverse action claim in Construction, Forestry, Mining and Energy Union v McCorkell Constructions Pty Ltd (No 2) [2013] FCA 446. His Honour stated (at [289]-[290]):
For instance, a person who assisted in the dismissal of an employee carried out by a contravener because of the employee’s race, could not be an accessory to the discriminatory conduct in the absence of having assisted knowing that the contravener’s conduct was motivated by race. Without that knowledge, it could not be said that the alleged accessory is “linked in purpose with the perpetrators”.
An accessory will often know the principal perpetrator’s motive because the perpetrator will have revealed it. Alternatively, an accessory may know the perpetrator’s motive because their conduct is so intertwined, that the motive of one will be the obvious motive of the other.
In the present case, Mr Barry was the principal actor in the conduct which formed the basis of Mr Milardovic’s claims. His reasons for the impugned conduct were, in a substantive sense, the first respondent’s reasons. If I had been satisfied Mr Milardovic had made out any of his claims of adverse action, I would have had no difficulty in concluding Mr Barry was “involved” in that conduct within the terms of s 550. Similarly, if there had been any allegation that Mr Barry was “involved” in the contravention of s 44(1), this allegation might well have been capable of being proven, although there was little evidence led about precisely who was involved in the decision not to pay Mr Milardovic his redundancy entitlements.
WITNESSES
I set out below my findings about the reliability of the evidence given by the witnesses called in this proceeding.
Mr Stephen Milardovic
The litigation process has obviously been very hard for Mr Milardovic, and it is clear he sees it as a continuation of the damage he feels he suffered during his last two years at Vemco. In giving evidence, he exhibited signs of extreme fragility, but also of outrage, of rather fixed perspectives and some combativeness. An example of his fragility was that he broke down when taking the oath at the commencement of his evidence, and needed a short adjournment to compose himself. In the witness box, it was my impression that he struggled initially to recall events, and sequences of events, but he then settled into a narrative and his recollection became clearer.
My impression was that Mr Milardovic is an intense and precise kind of person. From his descriptions of events during his evidence, and the way he expressed his perspective on them, it is my impression that he is sensitive to any kind of confrontation, and tends to take what others say to him, or about him, in a negative rather than a positive light.
Based on my impression of his oral evidence, and my reading of the content and form of expression of his diary notes as tendered, I find he is capable of taking offence at remarks or events others would either take less seriously, or perhaps not even pay attention to. He appears to internalise, and indeed agonise, over personal interactions in the workplace. His diary in particular has a persecutory sense to it. However, in my opinion his perspective did not, so far as the evidence before me was concerned, have as much objective foundation as his allegations suggested.
The events about which Mr Milardovic gave evidence, if each were considered separately, might seem unimportant to some. However, they are not properly viewed in isolation but rather as an ongoing series. Viewed in that light, Mr Milardovic’s frustration and annoyance at what he saw as exclusionary and harassing behaviour by Mr Barry is more understandable. As I find below, it is clear from the evidence before me that at an interpersonal level Mr Barry and Mr Milardovic had little if anything in common and their personal styles and behaviours were quite opposed. To recognise that is not the same as making a finding of contravention of the Fair Work Act but I make these observations lest my conclusions adverse to Mr Milardovic be taken as an indication that I rejected his entire narrative. That is not the case. What I do reject is the accuracy of his perspective on why Mr Barry acted as he did.
It is appropriate to set out my views about Mr Milardovic’s diary notes, which formed a substantial part of the evidence on which he relied. At the start of the diary entries, Mr Milardovic records the reason he is keeping the diary (referring, I infer, to his solicitor in this proceeding Mr Micky Milardovic):
Micky advised me to keep a diary of work events in the event that I need to go to court. He gave me this diary yesterday.
At some points, the entries seem assiduous in their detail. Yet there are significant gaps – for example, the events around May 2014 are not recorded at all, or if they were the corresponding diary entries were not tendered in evidence. Any unevenness in Mr Milardovic’s use of his diary was not explained in evidence. At times, the entries appear to have something of a therapeutic purpose, as personal diaries might often be said to do. At others, it appears clear Mr Milardovic is recording material he considers favourable to his complaints and adverse to the respondents, and is doing so with a conscious eye to litigation. What can be said is that the diary notes were contemporaneous entries and to that extent may assist in ascertaining an accurate chronology. I did not find the entries particularly reliable in terms of determining what was said by particular people, since the entries are so avowedly from Mr Milardovic’s perspective, and appear to be a mix of what occurred and what he was thinking, or the interpretation he put on what occurred. Because of this feature, the entries are revealing of Mr Milardovic’s perspective on events, and they illustrate the high levels of anxiety and self-absorption which were features of Mr Milardovic’s presentation at work during these events. On some occasions (such as the entries about Mr Barry’s “kick like a dog” comment), they certainly do reveal the considerable hurt occasioned by Mr Barry’s thoughtless remarks.
There were occasions in Mr Milardovic’s cross-examination which revealed that Mr Milardovic’s focus on his own travails may have obscured the fact that others at Vemco were also under pressure. His inability in cross-examination to answer questions about the workload of other employees or to concede they might have also been under pressure suggests a disproportionate focus on his own difficulties, which although understandable at one level, does make less reliable his evidence about his own excessive workload being peculiar to him.
For these reasons, I am unable to say I found Mr Milardovic’s evidence as a whole reliable. Aspects of it certainly were, and as I have noted above, some of his diary entries were also reliable on a number of factual issues. But both sources of information were coloured by Mr Milardovic’s somewhat extreme perspective of those he interacted with at Vemco, and their motives in dealing with him.
Dr Fiona Wood
Dr Wood is Mr Milardovic’s treating psychiatrist and has seen him on 18 occasions from June 2014. She holds full fellowship in the Royal Australian and New Zealand College of Psychiatrists and completed a Masters of Psychiatry at the University of Melbourne in 2005, as well as holding a general medical degree. Dr Wood has worked exclusively in psychiatry since 1989 and works as a general adult psychiatrist.
Dr Wood’s admission to full fellowship in the Royal Australian and New Zealand College of Psychiatrists is relatively recent (2013), although she has been working in psychiatry for longer than this. In my opinion there was some force in the respondents’ cross-examination to the effect that she may be relatively inexperienced at predictive exercises about future work capacity. I found her opinions on Mr Milardovic’s capacity to return to work to lack any comparative aspects, not to be informed by a close understanding of his qualifications and what he had been doing at Vemco and to be affected by her obvious sympathy towards him. She gave no evidence about any attempts she was making to assist him to build improved mental health capacity and to take steps towards return to work. Her evidence that the only kind of work he could possibly do would be menial and far below his qualifications seemed to reflect an unduly negative approach to assisting him, and so far as I could ascertain it has no objective basis.
Although Dr Wood’s qualifications can be accepted, she appeared to be disorganised and quite unaware of what she needed to provide as the basis for her expert report. For example, she could neither locate nor provide the letter of instruction to her from Mr Milardovic’s solicitor, although Mr Milardovic’s solicitor ultimately located the letter. I am not confident she understood how her perspective as Mr Milardovic’s treating practitioner might affect her opinion.
Her evidence was difficult to follow, and somewhat disjointed.
I consider Dr Wood’s opinion that Mr Milardovic may not be able to work again was exaggerated. Mr Milardovic is a relatively young man with postgraduate qualifications who clearly has been a high functioning individual. Accepting his level of despair and demoralisation is currently significant, Dr Wood gave no evidence either on a comparative basis, or from any applicable research or study, to justify her opinion that he was unlikely to work again. The fact that Mr Milardovic has persisted with this litigation (and managed to appear in person on one occasion in December 2015 when his counsel and solicitor were unavailable) despite having obvious levels of anxiety and sadness might suggest that he has some capacity to overcome personal adversity. Dr Wood however gave no evidence about her treatment recommendations nor what support or assistance she had considered might be beneficial to Mr Milardovic in returning to paid employment. She did observe that once this litigation resolves and Mr Milardovic has a sense of finality, his mental state might improve, but that opinion was expressed at such a level of generality as not to be particularly useful in determining when Mr Milardovic should reasonably be expected to return to paid employment.
Overall, I found her evidence of little assistance, other than to confirm what was obvious from Mr Milardovic’s own demeanour – namely that he is currently highly anxious and upset.
Mr Nigel Barry
Mr Barry is the director of sales and marketing with the Vemco Group and from about early September 2012 he was the direct supervisor of Mr Milardovic’s work.
Mr Barry’s evidence was given in what I might describe as a minimalist way. He was certainly not an expansive witness. My impression was that he sought to present a particularly controlled picture of himself, when in fact his temperament is less so.
That said, I found his evidence to be reasonably reliable. He gave credible evidence about his purpose in making certain decisions, and was honest about being unable to recollect the detail of conversations, while still giving persuasive evidence about what he intended to achieve. He put some of Mr Milardovic’s evidence about the bid management process in the context of a larger workforce, functioning under considerable deadline pressure, from which it was obvious he was not exempted. On some occasions in my opinion he sought to minimise, unjustifiably, either his role in certain events or the harshness of some of his comments or decisions. I deal with those as necessary below in my findings on the applicant’s allegations.
Ms Michelle Finnigan
Ms Finnigan has been employed by Vemco since October 2003 and is the human resources manager for the Vemco Group.
Ms Finnigan’s evidence was somewhat stilted and she was not especially forthcoming on many issues. However, on some key issues her evidence was persuasive. For example, in relation to the 18 February 2014 meeting with Mr Milardovic, her account of that meeting was convincing, including her rejection that the applicant complained about “bullying” because it would have “raised a red flag” with her. Her recollection of the details of meetings was sketchy, but she gave straightforward evidence about the limits of her role in some of the decision-making, and her position as making recommendations to Mr Barry, or implementing his decisions.
Towards the end of her cross-examination, the questioning became somewhat confusing and imprecise. Some of Ms Finnigan’s answers reflected that confusion. I do not take all of her answers literally. Ms Finnigan was unable to answer quite a few questions and I consider that was either because she did not understand the question, or because in fact she had simply done what Mr Barry told her to do, without necessarily inquiring about the reason, or having much independent understanding of why a particular course of action was to occur. In some of her answers there was a tendency for her to use phrases about “focusing on returning Stephen to work” which, in my opinion, did not seem particularly genuine but rather what Ms Finnigan felt she ought to say. In my opinion, like Mr Barry, Ms Finnigan found Mr Milardovic a difficult person to get on with, and was not troubled by the fact that he might leave Vemco.
NON-CONTENTIOUS FINDINGS
I find the following matters, which I do not understand to be the subject of any real dispute between the parties.
Mr Milardovic’s association with the Vemco Group began with his employment with Vemtec Pty Ltd, a related company to the first respondent. He was employed on 8 September 2009. He told the Court he ended up describing himself as a “Projects Bid Manager”, because the work he was doing was project-oriented.
Mr Milardovic has a bachelor of science in physics and mathematics and a bachelor of engineering, in electrical engineering, from Monash University. After leaving university he worked for a company called Rockwell Automation as a systems engineer for five years. Then he took a job with Mitsubishi Electric in Japan as a systems engineer initially. He described that position as eventually changing into “a sort of a marketing and sales role”. He held that position for five years and then started with Vemtec. He described Vemtec’s business as design work for underground and overhead power lines, subsequently branching out into the construction of power lines. Once Vemtec began branching out into construction from design, Mr Milardovic’s evidence (which I accept) was that he began bid managing the construction tenders, which were, as he put it, “of a very high dollar value”. He came to meet Mr Barry in review and mentoring meetings and the like.
I accept Mr Milardovic’s evidence that he was told about an opening for a bid manager in the Vemco Group by Mr Barry, and had a discussion with Mr Barry about that position in approximately June 2012. He was not keen to change roles. The bid manager position was advertised and Mr Milardovic did not apply. Subsequently Mr Barry approached him again. Mr Milardovic told Mr Barry he was happy with his “purely engineering” focused role, but Mr Barry encouraged him to consider taking on the position of bid manager. Mr Milardovic described his decision to do so in the following terms, which I accept reflected his attitude at the time:
I said “You know, I’m very happy with where I am. I’m in a purely engineering – which is my calling, an engineering role, and I’m quite enjoying it. I’m immersing myself in it, so I’m quite content”. And he said something like “We would like you to take this role”. And I – to be honest, I didn’t want the role, but I just felt like – he’s an owner of the company, and, you know, to say no, I felt, wouldn’t be doing my career justice, so I took the role.
Mr Barry characterised the move as one from Mr Milardovic working on smaller bids (under $100,000) with Vemtec to one where he was working on larger bids with Vemco. Mr Milardovic’s evidence was that he started working in the new role in approximately August 2012. That evidence cannot be reconciled with other evidence and in particular the contract itself which puts the effective date of commencement at 3 September 2012. I find that is the date at which Mr Milardovic commenced employment with Vemco.
Mr Milardovic signed an employment agreement with Vemco on 15 November 2012. His remuneration was agreed to be $125,000 per annum plus statutory superannuation. Attached to the contract was a position description for the role of “Bid Manager/Senior Estimator”.
The overview of the position described Mr Milardovic’s role:
This role will be responsible for overseeing the Vemco Group’s estimating and bidding processes. You will need to draw on your end to end and complex experience to process from start to finish.
The “key accountabilities” were set out as:
Responsibility for estimation, processes and pricing across all Vemco Group divisions, encompassing, vegetation works; civil construction (minor work packages); design and construction of electrical networks and infrastructure as well as speciality fleet/equipment manufacture.
Oversee all pricing and estimation processes to ensure the incorporation of all relevant risks and details so as to enable review and approval prior to submission.Assist operational teams in analysing and applying recommendations in relation to costing methodologies
Undertake the sourcing and selection of suitable subcontractors – build and maintain a ‘working relationship with a library of subcontractors
Liaise with clients, suppliers and internal stakeholders to obtain information and calculate costs
Review tenders, contracts, proposals and bid documentation and provide advice in relation to project risk and complexity
Calculation and preparation of quantities and work planning procedures
Preparation and management of multiple bid packages
Participate in pre award negotiations
Data interpretation from a variety of sources including client specifications, drawings, aerial mapping and survey data
Develop templates to streamline quotation preparation, accuracy and to improve submission quality
Liaise with all stakeholders to ensure subcontractors and suppliers comply with contract requirements
Assume a proactive role in the transfer of all price estimation data and package disciplines at project commencement
Manage the bid process including Tender writing and submissions
Mr Milardovic relied in particular on the fourth criterion as an indicator that it was intended he have significant customer contact. This became relevant to some of his complaints about how he was treated.
The “key selection criteria” were said to be:
ŸProven experience and demonstrated understanding of ‘first principals’ [sic] in estimating
ŸMinimum 5 years’ experience in a similar role desirable
ŸExcellent written and verbal communication skills
ŸProven experience in presenting to peers and senior management
ŸHighly motivated and team orientated
ŸResults focussed and commercially astute
ŸProven knowledge and understanding of contract laws
ŸProven ability to meet deadlines as a result of accurate forecasting and team member engagement
ŸExperienced in resourcing multidisciplinary civil and infrastructure projects
ŸAdvanced computer skills including – MS Office, MS Project and software estimating tools such as Expert Estimation or similar
In Amcor, the High Court held that there had been no redundancy where the employer terminated the employment of all employees in its paper business, which business had been sold to a wholly owned subsidiary of the company, and at the same time the subsidiary made a written offer of employment to each of those employees offering employment on the same terms and conditions and with all benefits to be preserved. At [14], Gleeson CJ and McHugh J held:
Redundancy of position is not a legal or industrial term of art, although there are many cases which examine the concept of redundancy, usually for the purpose of distinguishing it from other causes of retrenchment. In the present case, Amcor was originally the parent company of a group that carried on two kinds of business. The group was split up so that each business would in future be conducted separately. The businesses continued and the employees continued to do the same work, on the same terms and conditions, as before, and with their accrued entitlements preserved. Their new employer was the company that had owned and operated the particular business in which they worked before the split. In the circumstances, the positions did not become redundant.
(Citations omitted.)
See also Short v F W Hercus Pty Ltd [1993] FCA 72; 40 FCR 511 at 520-522; Jones v Department of Energy and Minerals (1995) 60 IR 304 at 308-309 and Quality Bakers of Australia Ltd v Goulding (1995) 60 IR 327 at 332-333, each of which was considered by the Full Court of this Court in Dibb v Commissioner of Taxation [2004] FCAFC 126; 136 FCR 388 at [33]-[42].The Full Court observed at [41]-[42]:
In Jones Ryan J observed that a job involves “a collection of functions, duties and responsibilities entrusted, as part of the scheme of the employer’s organisation, to a particular employee”. We accept that view. Ryan J then observed that where such duties are reassigned, the question is whether any function or duty remains to be performed by the employee. We do not understand his Honour to have meant that if any aspect of the employee’s duties is still to be performed by somebody, he or she cannot be redundant. His Honour’s meaning appears clearly from the following paragraphs at 308-9:
In this case, the respondent led evidence of the major changes which were made to the Department between September 1993 and late 1994. According to Mr Downie, the applicant’s former position as Director, Mining Inspectorate, was abolished and the duties attached to it were combined with those of the previous Director, Environmental Management. In addition to a number of other, newly-created functions, those pre-existing duties were to be performed by a newly created General Manager, Mineral Operations. Thus, it is clear that although some of the tasks previously assigned to Mr Jones still had to be carried out, the employer’s rearrangement of its operational structure had the consequence that they be combined with other functions and performed by the holder of a new, more generally-oriented position.
On this basis, it appears that Mr Jones’ former position was rendered “generally redundant”. When it became apparent that he could not be redeployed, Mr Jones was found to be surplus to the respondent’s personnel needs. This amounted to a reason for dismissal which was clearly based on his employer’s operational requirements.
As Beazley J observed in Quality Bakers:
A redundancy will arise where an employer has labour in excess of the requirements of the business; where the employer no longer wishes to have a particular job performed; or where the employer wishes to amalgamate jobs ...
The respondents in this proceeding do not dispute Mr Milardovic’s position was split in two, but contend that no redundancy arose on the facts because Mr Milardovic did not apply for either of the positions which replaced his position and were available to him. They contend no redundancy arose given that options were made available to Mr Milardovic to take redeployment.
I do not accept the respondents’ contentions. I accept the applicant’s submission that the evidence discloses neither Mr Barry nor Ms Finnigan offered the applicant any redeployment. To the contrary, their evidence was clear that what they offered him was the opportunity to apply for one (or perhaps both) of the two new positions of Senior Estimator and Bid Manager in a competitive and open appointment process. They also admitted that the position as they explained it to Mr Milardovic was that if he was unsuccessful, his employment would be terminated on the basis of redundancy. There is no analogy of the kind on which the respondents rely with the circumstances in Amcor Limited. When and if the two new positions were filled by successful applicants then it was no longer the case the applicant could continue to do the same work, on the same terms and conditions as before, and with his accrued benefits preserved: see Amcor at [14] per Gleeson CJ and McHugh J.
In cross-examination, when challenged that there was no position for Mr Milardovic at Vemco after successful applicants had been appointed in July and August 2014, Mr Barry said:
There is always options for redeployment. He had skills which would have been still valuable in the business.
As an explanation of why Mr Milardovic’s position was not redundant, I do not accept that evidence. I find that is a reconstruction by Mr Barry.
Mr Barry, on behalf of the first respondent and in his own mind, I find, did not intend that the applicant would continue in employment with Vemco in another position if he did not succeed in a competitive process to obtain one of the two newly created positions. There was no proposal or intention to redeploy the applicant: either he would apply for and be successful in securing one of the two new positions, or his employment would be terminated on the basis of redundancy. That is precisely the explanation given to the applicant in May 2014 by Mr Barry and Ms Finnigan and I find that was in fact the situation. The timing of Mr Milardovic’s termination was delayed after he made a WorkCover claim but the uncertainty which existed about his employment status between July and November 2014 was due to the somewhat confused handling of that WorkCover claim. The factual situation remained that Mr Milardovic could not return to Vemco to do the same work, on the same terms and conditions, with accrued benefits preserved, as he had been doing prior to 13 May 2014.
In this proceeding, the respondents did not suggest that redundancy pay should be reduced because Vemco had obtained “other acceptable employment” for Mr Milardovic, in the sense of s 120(1)(b)(i) of the Act: see FBIS and Allman v Teletech International Pty Ltd [2008] FCA 1820; 178 IR 415. In any event, the proper forum in which to seek to rely upon s 120 is through an application to the Fair Work Commission, which may determine that the amount of redundancy pay be reduced, including to nil: s 120(2). In Allman, Marshall J considered similar severance pay provisions in certain Australian Workplace Agreements which on their terms did not apply where the employer was “able to arrange alternative employment with another employer that is comparable in wages, terms and conditions of current employment”. As Marshall J observed at [9], rather than providing that an employer must approach an industrial tribunal to be exempted from paying severance pay, the relevant AWAs had “inbuilt exemptions to the severance pay clause”. Considering the test “able to arrange alternative employment”, Marshall J held at [18]:
Teletech facilitated its staff applying for jobs with Telstra in circumstances where they competed on their merits with existing Telstra employees and fellow Teletech employees for the available positions. The encouragement and facilitation of a process is not the same as doing everything possible to ensure a result. Arranging alternative employment means bringing about that employment should the employee choose to accept it. Anything short of that, such as competing with competitor applicants (albeit limited to two categories of applicant: existing Telstra and Teletech employees) does not meet the test provided by the relevant sub-clause in the AWAs.
Although expressed in a different context, I consider Marshall J’s reasoning confirms my conclusion that there is no basis for finding Mr Milardovic’s position had not been made redundant merely because Vemco invited him to apply for one of two new positions opened up to a competitive process.
Therefore, the situation as I find it to have been is:
·At some time during April and May 2014, the applicant’s full-time position of Bid Manager/Senior Estimator ceased to exist and was replaced with two newly created full-time positions of Senior Estimator and Bid Manager. This was a conscious restructuring decision made within Vemco, and Mr Barry was one of the lead decision-makers, but not the only decision-maker. The announcement of the new structure was made on 12 May 2014.
·Those two new positions were advertised internally and externally.
·The applicant was invited to apply for either, or both, of the positions. Ms Finnigan gave him a deadline for any such application of 30 May 2014.
·Ms Finnigan’s invitation by letter dated 26 May 2014 (that is, after the applicant went on sick leave but before Ms Finnigan was aware the applicant had made a WorkCover claim) stated that if Mr Milardovic did not wish to take up one of the roles:
then you will be made redundant from the Vemco Group. Alternatively you can view other suitable roles within the Group on our website …
·He did not apply for either position, however it appears Ms Finnigan continued to encourage him to consider doing so even after 30 May 2014 (suggesting an extension until mid-June 2014 on the basis Mr Milardovic said he had not previously received the position descriptions).
·I find Mr Milardovic did not have any confidence that if he applied for one of the jobs he would be successful. In that sense, in my opinion, he resisted applying for the new positions, and instead chose to hold out for what he considered he was entitled to under his WorkCover claim. He correctly understood that the position he held at Vemco prior to 13 May 2014 no longer existed.
·Appointments were made to both positions in July and August 2014.
·Subsequently, one of the appointees left, but the position (the Bid Manager role) was filled by a person engaged as a contractor rather than as an employee.
The generality of, and gaps in, the evidence does not enable me to make findings which are any more precise than this, in terms of dates on which events occurred. The parties’ submissions were also often pitched at a high level of generality in terms of the facts.
It is unclear from the evidence what the explanation is for the respondents not following through on the sequence of events they had foreshadowed to Mr Milardovic. That is, when he did not apply for either of the positions, and appointments were made in July and August 2014, there was no evidence led to explain why his employment was not terminated on the grounds of redundancy at that point, as the respondents had said would occur.
It seems, as I have noted, that the hiatus had something to do with the progress of the WorkCover claim but this was not clearly explained in the evidence. No submissions were made by the respondents to the effect that the first respondent was obliged not to terminate the applicant’s employment during the currency of the WorkCover claim, and indeed of course the first respondent did eventually do just that, in November 2014.
On the first respondent’s own statements (by Ms Finnigan) to Mr Milardovic, his employment should have been terminated by reason of redundancy on and from shortly after 30 May 2014, or at the end of the week of 8 June 2014, when he did not apply for either of the two positions. Inexplicably, from this point on the respondents appear to have treated Mr Milardovic as if he was an employee who had a position to return to, when he did not. This is despite Ms Finnigan admitting in cross-examination that Mr Milardovic would never again perform all of the duties he had been performing in his role as Bid Manager/Senior Estimator, and that his duties now existed in the two new roles.
Inexplicably, in a letter dated 31 October 2014, shortly before Mr Milardovic’s employment was terminated, Ms Finnigan said:
As noted on numerous occasions we have been committed to your safe and successful return to work for your normal working hours in the role of Bid Manager/Senior Estimator.
The role Ms Finnigan referred to did not exist, and on the evidence before me, it appears to be the case that at 31 October 2014 two other individuals were performing (one perhaps on contract, although the timing of this is unclear on the evidence) the two new roles announced in May 2014.
Equally inexplicably, in the letter of termination on 11 November 2014, Ms Finnigan states:
… this letter is to inform you that unfortunately we can no longer hold your position open.
Again, there was no position for the first respondent to “hold” for Mr Milardovic. When, later in the letter, Ms Finnigan referred to the first respondent having “considered whether any alternative role might be available”, it is difficult to understand to what this was intended to refer, given the restructure several months previously. In her evidence, Ms Finnigan could not explain any of these inconsistencies, and appeared to accept her letter of 31 October 2014 was incorrect.
In my opinion, the real reason for the termination of the applicant’s employment was that his position with Vemco was redundant, and given he had not applied for either of the two new roles and others had been appointed, Mr Barry, acting on behalf of Vemco, simply had no employment for him, did not attempt to appoint him to any other position, and was not troubled by the prospect of Mr Milardovic not returning to work at Vemco.
That being the case, Mr Milardovic’s dismissal on 11 November 2014 is in my opinion properly to be characterised as a redundancy, which was known by the first respondent to be such from approximately July and August 2014 when the appointments to the new positions were made. The applicant is entitled to payments in accordance with s 119 of the Fair Work Act. Having so found, it is unnecessary to determine Mr Milardovic’s alternative claim in contract against Vemco for failing to pay his redundancy entitlements.
As with the notice of termination issue, I do not see how a failure to make an applicable redundancy payment falls within s 342(1), Item 1(c) as adverse action, since it occurs after the termination of employment. I find it is a separate contravention under s 119.
THE APPLICANT’S DAMAGES CLAIMS
I have found that no adverse action was taken against the applicant save for the termination of his employment and the failure to provide KPIs and performance review. I have found that even if any or all of the other conduct relied on by the applicant were properly characterised as adverse action, none of it was for the prohibited reasons identified by the applicant, being the complaints he alleges he made in February and March 2014 or the making of a WorkCover claim.
I have found the applicant’s employment was terminated because his role was redundant and he had not applied for either of the two new roles created out of his original role. I have therefore found the applicant is entitled to be paid his redundancy entitlements under s 119 of the Fair Work Act.
In those circumstances, the applicant is not entitled to any compensation for unlawful adverse action under the Fair Work Act. It is unnecessary therefore to determine whether Mr Milardovic’s extant WorkCover claim against his employer ought affect the amount of compensation he might have received.
Where findings have been made in a trial so that other issues no longer fall for decision, it is a matter for the trial judge to decide whether she or he should go on and determine those other issues. It is important that the trial judge turn her or his mind to whether such issues should be decided: see statements to this effect by members of the Victorian Court of Appeal in Kheirs Financial Services Pty Ltd v Aussie Home Loans Pty Ltd [2010] VSCA 355; 31 VR 46 at [103] (Maxwell P, Tate JA and Habersberger AJA). It may be that the findings of fact that have been made may dispose of the case in a way that makes further factual inquiry or legal examination as to particular points meaningless or artificial: see McLeish JA in Housden v Boral Australian Gypsum Ltd [2015] VSCA 162 at [154]-[155].
In my opinion, and having carefully considered the matter, the findings I have made that the respondents have no liability for unlawful adverse action in respect of the applicant renders artificial any determination of the nature and amount of compensation Mr Milardovic might have received if I had found the respondents liable for a contravention of s 340. It would, in that sense, be no different to proceeding to fix penalties in circumstances where no contravention had been proven.
Further, with four very broadly framed kinds of adverse action alleged and two different sets of complaints articulated as the reasons for that action, there are various permutations and combinations in which Mr Milardovic’s claims might have succeeded if a different view of the facts was taken. So too any entitlement to compensation would need to be assessed against whatever permutation or combination was arrived at by the Court. Issues of causation may have arisen, in respect of the loss of employment by Mr Milardovic. His ongoing capacity to work, and the nature and extent of the damage to his mental health (and the causes of that damage) were not explored in any detail in the evidence, save from the assertions of Dr Wood, which I have found unsatisfactory and not probative in any meaningful sense.
In my opinion, on the circumstances of this case, it would have been artificial and impracticable to attempt to determine how much compensation might have been payable to Mr Milardovic if, contrary to my findings of fact, the respondents had engaged in adverse action against him in one, or more, of the ways he alleged.
ALLEGED RETENTION OF DOCUMENTS BY MR MILARDOVIC
Mr Milardovic’s employment contract and the confidentiality deed signed by Mr Milardovic and appended to that contract respectively included terms that:
·“Upon termination, you must return all equipment, reports, computer software, plans, manuals, uniforms and other documents or property belonging to “the Company” which are in your possession” (cl 11(j)); and
·“The Employee shall upon the termination of employment with “the Company”, howsoever occurring, deliver up to “the Company” all documents, drawings, tables, notes, correspondence and other matter whether written, printed, photographed or stored in electronic media and all copies thereof belonging to “the Company” that are in his or her possession or under his or her control” (cl 3).
Other provisions of the confidentiality deed provided that Mr Milardovic must not at any time either during or after termination make use of any confidential information acquired during employment. “Confidential information” is defined in the recitals to the confidentiality deed to include “all process data, systems, sketches, drawings, notebooks, reports, customer lists, designs or technical drawings, proofs and prints, computer programs, data bases, know-how, diagrams, tables, marketing and sales procedures, pricing, accounting techniques, literary, artistic and personnel information, and client customer data that is not in the public domain”.
In correspondence between Mr Milardovic and Ms Finnigan on behalf of Vemco over August and September 2014 (that is while Mr Milardovic was on leave but before his employment was terminated), a request was made that Mr Milardovic return certain materials to Vemco. Ms Finnigan’s letter dated 19 August 2014 records:
In the meantime, as previously requested through your lawyer, Peter Mihailidis by email on 13 June, 2014; we now require that you return the company phone XXX XXX XXX, so that any business calls can be received effectively by the Company and that you advise us as to where the company files relating to tenders/estimates/client and company correspondence that were contained on your work computer are to be found, so that we may conduct our business on those files.
Mr Milardovic responded on 27 August 2014:
Nigel Barry is well aware that the iPhone that I was using for work belongs to me – primarily as he refused to pay for an upgrade to a smart-phone. Only the number / nano-SIM card belongs to Vemco. Nigel Barry also contacted me directly on 14 May 2014 regarding the whereabouts of work files. I responded by email with their location on 14 May 2014. Why do you persist with spurious claims of this nature?
(Emphasis in original.)
On 1 September 2014, Ms Finnigan wrote:
In relation to the mobile phone, I was not aware that the handset was yours. The phone service has now been disconnected so the matter is resolved. In relation to the company files, as per your email you did advise us of your login/password but there are no emails, files etc. contained on your computer or in your inbox. We need to know the whereabouts of these files so we can continue to service our clients and so that we may conduct our business on those files. Please provide that information as soon as possible.
Mr Milardovic responded on 12 September 2014:
In relation to your repeated, mistaken demands for return of my personal phone, is it that simply swept away? You simply were “not aware” that the phone belonged to me? How could you not have been? I presume Nigel Barry has contributed to, or at the very least read, your letters. Why did he not mention it? What else are you not aware of? And then you abruptly declare that the matter is resolved without even the slightest apology.
With regard to “the files”, once again, you deliberately conflate and distort and falsify. I sent my work PC’s password of my own accord; not in response to any request, as you incorrectly claim. Nigel then enquired regarding the whereabouts of the computer files. I responded on the 14 May with the location. If you require further assistance on how to use the Explorer function of a Windows PC, I am available to assist provided I am paid for my time (as currently I am not receiving salary).
Mr Milardovic was cross-examined about the above correspondence. He categorically denied the suggestion put to him by counsel that he had deleted files from the Vemco laptop that he used. He gave the following evidence:
… those documents weren’t on the computer that you returned to Vemco?---They are. I’m sorry. They are.
And, in fact, other correspondence to which I will take you soon complains that the documents that were expected to be there, including client files and tenders, were missing when you returned the laptop computer?---It’s not true. The – they were there.
I understand that. Mr Barry will give evidence that he attempted to find those documents and was unable to find them. I suggest to you that you removed documents from that computer before returning it to the applicant?---All tender files are even backed up on the server.
Can I – can I ask you to answer the question, please?---Sorry. Yes.
You removed files from the laptop computer before you returned it to Vemco. That’s the proposition I’m putting to you?---I did not remove any files.
…
When conducting discovery in this case, emails relating to tenders that you had retained came out in discovery, didn’t they?---Yes.
And those include, on page 34, document number 21, emails relating to Endeavour Energy tender. Do you see that document?---Yes.
And they include emails relating to TransGrid tender. Agree with that?---Yes.
And emails relating to Queensland Rail mapping tender, which is at document 29,
about a third of the way down the page?---Yes.So I’m suggesting to you that you deleted documents from the laptop that you returned, and you’ve disagreed with that in your evidence. That’s still your evidence, is it?---That I deleted documents?
I put to you earlier that you had returned a laptop having deleted documents from it, and you said that wasn’t the case?---Yes, that is not the case.
Yes. But you’ve copied those - - -?---I didn’t return the laptop. The laptop never left the premises. I didn’t take it away with me and then bring it back.
But you did leave it behind when you - - -?---Yes.
- - - when you left?---Yes.
And you didn’t return to work on any date after 13 May 2014, did you?---That’s .....
And at some stage you’ve copied documents to another storage device, whether it be a computer, or emailed them home to yourself, or something of that nature, haven’t you?---I – I had to work on certain documents, yes, so I used to do that during the course of my work a lot, yes.
…
Mr Milardovic, I suggest to you that you had an obligation under para 11(j) of your contract not to retain documents. You agree with that?---I do not agree with that.
And I suggest to you that you retained documents anyway. Do you agree with that?---I retained documents for the purposes of use in litigation.
Sorry. You said a moment ago that you retained documents for the use in work. You’re now saying that you retained them for the purpose of litigation?---No, I said that they were – you asked me have I ever had the need to move certain work documents to another computer, and I said, “Yes, I’ve had to do that before for work.” That – that was my statement.
Yes. You’re aware from the correspondence with Ms Finnigan that she required to know where those documents were, because she couldn’t find them. You’re aware of that?---Yes, but I didn’t – if I – if I moved documents I – I didn’t remove them. They would still be left. It’s not like taking a document means you delete it from where it is, and I think - - -
Well, I’m – I’m sorry. Go on?--- - - - nothing was deleted.
…
I’m suggesting to you that you deleted documents from the laptop that you left behind at Vemco when you left on 13 May - - -?---No, that’s not true. I didn’t.
Okay. And you’re aware, at all times from September 2014, that Ms Finnigan wanted to know the whereabouts of documents?---But the day after I – I left Nigel himself asked me where documents were and I informed him. And he – he wrote back “thank you”. He said, “Where are the Powerlink documents?” And he said “thank you” so I assumed he found them, so they are there.
…
… In answers previously you gave evidence about moving documents between computers. What kind of moving did you do?---I don’t know if you’ve – I did a lot of work at home and at the office – a lot of overtime work. And I – and I had to work on documents from home so I would move documents from my work PC – sometimes I would take my laptop home and work directly off it and on occasion when I didn’t – I couldn’t be bothered packing up my laptop, grabbing the mouse, I would take files with me and – and use them on my own PC.
How did you take files with you?---My USB stick.
Contrary to what counsel for the respondents foreshadowed when cross-examining Mr Milardovic, no evidence was led from Mr Barry about the alleged deletion and retention of Vemco documents. Ms Finnigan gave evidence that she had had a discussion with the respondents’ solicitor generally about retention of documents. The respondents’ solicitor corresponded with the applicant’s solicitor on 17 April 2015 and on 22 July 2015, raising issues about the apparent retention of confidential documents which had been discovered by the applicant in the course of this proceeding. In cross-examination, Ms Finnigan accepted she had no evidence to suggest the applicant had been using any documents retained by him outside this proceeding.
Neither party took the Court specifically to the termination letter in the context of the document retention issue. However, I note that, especially when read against the earlier correspondence from August and September 2014, Ms Finnigan’s 11 November 2014 letter appeared to retreat somewhat from the earlier suggestion that documents and files had been retained, stating only, with less precision:
Would you please return any company property which you may still have in your possession immediately. You may contact me to make the necessary arrangements for the return of any such property and at the same time, make any arrangements which may be necessary if you have personal property which remains with the company, to be returned to you.
As I have noted above, the allegations about document retention in breach of the employment contract are not pleaded as a cross-claim and no relief is sought in respect of these alleged breaches. It was not suggested, for example, that Mr Milardovic’s employment was terminated because he had breached his employment contract by using confidential information for non-work related purposes. Rather, in submissions the respondents urged that the alleged document retention be taken into consideration in setting any quantum of compensation ordered. Beyond that bare submission, there was no explanation as to how or why such a breach might be said to affect the relief claimed by Mr Milardovic.
The evidence before the Court is far from sufficient to establish any breach of the employment contract of a kind which would warrant a variation of the relief to which Mr Milardovic might otherwise be entitled. Mr Milardovic was clear and emphatic in his evidence that he had never deleted from Vemco’s computers documents and files on which he had worked. Given his other evidence, not disputed by the respondents, about the kinds of hours he was working, there is nothing surprising about the fact that he may have copied certain documents to a USB drive in order to take them home to work on using his home computer. There was nothing in the evidence to suggest he had misused any confidential documents or the information contained in them, and once this proceeding had been commenced it was not only unsurprising but indeed necessary that he discover responsive documents upon orders for discovery being made by the Court. In the absence of any cross-claim by the respondents, whether or not these documents were not returned or delivered up after termination in breach of the employment contract need not be the subject of findings by this Court.
Further, I am not satisfied that Mr Milardovic has proven any of his claims except for his entitlement to redundancy pay. Even if I were to find that Mr Milardovic breached his employment contract by retaining Vemco documents after termination (which I do not), I do not see any basis for reducing his redundancy pay, which is calculated by reference to a statutory formula and not affected by any alleged misconduct on Mr Milardovic’s part (and for the same reasons, is not affected by his outstanding WorkCover application). The respondents have in any event made no attempt to articulate a figure by which Mr Milardovic’s relief should be reduced by reference to the alleged breach of the document retention terms of his employment contract.
PENALTIES
The applicant’s originating process also sought penalties under the Fair Work Act. The applicant’s counsel opened his case on the basis that penalties were sought. However, the applicant’s submissions did not deal with the issue of penalties at all. For that reason, I have not considered the question of penalties in these reasons for judgment and have not made any orders in respect of that claim. However s 44 is a civil remedy provision and therefore penalties are available in respect of the first respondent’s contravention of that provision.
At the time this proceeding was heard, the decision of the Full Court in Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCAFC 59 precluded me from receiving any submissions as to a proposed penalty range. That decision was overturned: see Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46. Shortly after the High Court handed down that decision, the parties in this proceeding were advised the Court would grant a further opportunity to make submissions on the appropriate penalty range if the Court found that civil penalties should be imposed.
The parties will be given an opportunity to consider these reasons for judgment and make submissions on the question of penalties in respect of the first respondent’s contravention of s 44.
OTHER MATTERS
The respondents also sought to be heard on the question of costs, and orders will be made providing for submissions on costs. Given the respondents sought that opportunity, my orders provide for the respondents to make submissions on penalty and costs before the applicant.
The first respondent is under administration and the orders I made on 7 December 2015 (reproduced at [9] above) granted the applicant leave to proceed against the first respondent on the condition the applicant not be permitted to enforce judgment without further leave of the Court. The administrators of the first respondent sought the inclusion of that condition on the basis the insurer had agreed to indemnify the first respondent in respect of this proceeding on a prima facie basis, subject to the Court’s findings. Once the Court’s determination on the questions of penalty and costs have been made, the first respondent, its administrators and insurer will be in a position to confirm, or deny, the prima facie position that has been put to the Court and the applicant. Directions will be made (if necessary) at the time of the Court’s determination on the question of penalties and costs, to facilitate the notification of the confirmed position of the first respondent’s insurer. Of course, the parties are at liberty to resolve these matters between them through proposed consent orders.
I certify that the preceding three hundred and thirteen (313) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mortimer. Associate:
Dated: 29 January 2016
31
42
3