Mr Arie Overduin v Aurecon Australia Pty Ltd
[2011] FWA 8825
•16 DECEMBER 2011
Note: An appeal pursuant to s.604 (C2012/2185) was lodged against this decision - refer to Full Bench decision dated 24 April 2012 [[2012] FWAFB 3209] for result of appeal.
[2011] FWA 8825 |
|
DECISION |
Fair Work Act 2009
s.394 - Application for unfair dismissal remedy
Mr Arie Overduin
v
Aurecon Australia Pty Ltd
(U2011/9672)
DEPUTY PRESIDENT BARTEL | ADELAIDE, 16 DECEMBER 2011 |
Section 394 application for an unfair dismissal remedy
Introduction and Background
[1] This decision concerns an application by Arie Overduin (the applicant) pursuant to s.394 of the Fair Work Act 2009 (the Act). The applicant is a Mechanical Engineer and was engaged by Aurecon Australia Pty Ltd (Aurecon or the respondent) in this capacity. He contends that he was unfairly dismissed when the respondent terminated his employment on 7 July 2011 after approximately 3 years of service.
[2] The respondent was represented by Mr Darams, barrister, having been granted leave pursuant to s.596(2) of the Act. The applicant did not object to legal representation and I formed the view that it would assist in the efficient conduct of the hearing. The applicant was self represented and the Tribunal provided assistance with court procedures as appropriate.
[3] The respondent provides engineering, management and specialist technical services within Australia and internationally. It has entered into a Professional Services agreement with SA Water Corporation (the client) to provide technical consultancy services and project management services in respect to the Adelaide Desalination Plant (ADP) project. The client also has a Design, Build, Operate and Maintain (DBOM) contract with Adelaide Aqua (the contractor).
[4] Between July 2009 and September 2010 the applicant worked in the Client Technical Support Team (“the Technical Team”) on the ADP project. The Technical Team includes staff of the respondent, the client and other project service providers. Its role includes reviewing the design, procurement and construction undertaken by the contractor for compliance with the technical requirements specified in the DBOM contract. The applicant’s primary responsibility within the Technical Team involved reviewing the design, fabrication and installation of glass reinforced plastic piping (GRP Piping). In the course of this work the applicant became concerned about the quality of this aspect of the project and the respondent’s approach to its contractual obligations to the client.
[5] Between September 2010 and his dismissal in July 2011, the applicant was involved in other projects undertaken by the respondent and had minimal involvement in the ADP project, although he continued to pursue issues with the GRP Piping. It was his pursuit of these issues that was the catalyst for his dismissal.
[6] The respondent cited “breakdown in the employment relationship” and “the loss of mutual trust and confidence” as the reasons for dismissal. 1 It is common ground that the relationship between the parties had become strained in the period from September 2010 up to the time of dismissal.
Evidence
[7] The Tribunal heard evidence from the applicant. He traversed the history of the issues between the parties and the areas where he felt that the respondent has treated him unfairly. A discussion of, and my findings in relation to the applicant’s case are set out later in the decision. It is appropriate to note that although I have concerns with the applicant’s approach to the issues that concerned him, I nonetheless found him to be genuine in the case he advanced and that he was a considered and truthful witness.
[8] The Tribunal heard evidence from two witnesses for the respondent. Ross Nugent is currently employed with the respondent as Industry Leader for Resources. Prior to March 2011, he was employed as the General Manager, Mining and Industrial - Asia Pacific. His evidence went to discussions he had with the applicant in March and April 2011 concerning issues raised by the applicant as well as an allegation by the applicant that Mr Nugent had intimidated and threatened him. 2
[9] Brett Nilsen, is the respondent’s Technical Director. His evidence concerned technical issues raised by the applicant that related to the GRP Piping; his view that the applicant pursued these matters inappropriately and that he misconceived his role and responsibilities; and the applicant’s misconception about the respondent’s role on the ADP project. 3
[10] In addition, statements of evidence from the following witnesses for the respondent were not challenged and were admitted by consent. Janelle Gavin is the respondent’s Human Capital Business Partner. She was involved in the process initiated by the respondent arising from its concerns as to the applicant’s attitude and approach to his employment contract, and which ultimately led to his employment being terminated. 4
[11] John Fairweather is currently engaged as the Adelaide Delivery Centre Manager, and prior to July 2011 he held the position of Region Leader, South Australia. The applicant fell within his responsibility in both of these positions. Mr Fairweather’s statement addressed his involvement in the process leading up to the applicant’s termination. 5
[12] There are limited areas of factual dispute between the parties. While the applicant placed some reliance on these disputes I consider them to be of little weight in the issues that fall for determination. The background facts are, for the most part, evident in the various exchanges and correspondences between the parties, which will be referred to where relevant. As such, credibility is not an issue in these proceedings but in any event I have no reason to doubt the genuineness of any of the evidence presented.
The Relevant Facts
[13] While employed in the Technical Team the applicant was required to report any technical issues to the Lead Mechanical Engineer, Jonathon Blesing. It was Mr Blesing’s responsibility to address these issues with other members of the Technical Team, including staff members of the client and if necessary, the contractor. 6
[14] The applicant was given a “first and final formal warning” on 21 September 2010 in relation to an email he sent to the client’s Project Director of the ADP, Miland Kumar, on 17 September. His email appeared to be responding to the contents of an email exchange between Mr Kumar and Mr Nilsen that he had been copied in on. The applicant’s email expressed concerns about technical compliance with aspects of the GRP Piping. Apart from the fact that the applicant was intervening in an area that was already being addressed, the tone of the applicant’s email was intemperate and caused embarrassment to the respondent. The applicant was removed from the ADP project as a result. He did not sign the warning letter but took no steps to formally challenge it either.
[15] The fact of the first and final warning is not relied on by the respondent in the decision to dismiss and as such it is not necessary to detail the contents of the offending email. However, the relevance of this issue lies in the applicant’s concerns with the GRP Piping and the manner in which he continued to pursue this matter.
[16] In cross-examination, the applicant stated that he understood Aurecon’s reasons for issuing the warning but felt that the respondent was ‘obstructing’ him in fulfilling his obligations by its directive in the warning letter that he was not to discuss the matter with staff or external parties without the express prior approval of Aurecon. 7 The applicant stated that he felt limited in his ability and opportunities to pursue what he regarded as serious issues.8
[17] I interpose that the applicant stated on several occasions, and it is one of the grounds on which he challenges his dismissal, that he had an obligation to the community to ensure that the client delivered a quality desalination plant. This obligation was said to arise under the Engineers Australia Code of Ethics (“the Code of Ethics”), the preamble of which states:
“As engineering practitioners, we use our knowledge and skills for the benefit of the community to create engineering solutions for a sustainable future. In doing so we strive to serve the community ahead of other personal and sectional interests.” 9
The applicant’s concerns and the Aurecon’s response
[18] As noted earlier, the applicant raised a number of concerns and grievances with the respondent, all directly or indirectly related to his experience working on the ADP project.
[19] The parties agreed that the applicant should submit a report outlining his concerns on the technical aspects of the GPR Piping. The applicant provided a report, dated 21 October 2010, headed Adelaide Desalination Plant - Debriefing on GPR Calculation Findings (“the technical report”). 10
[20] The applicant also submitted a further report dated 7 December 2010 on the “professional and ethical behavior” of several Aurecon employees “…and how they are handling the shortfalls in design and installation of GRP Piping and equipment at the Adelaide Desalination Plant…” (“the non-technical report”). 11 The non-technical report makes a number of allegations to the effect that certain individuals were not taking appropriate steps to enforce the DBOM contract specifications with the contractor and that project deadlines had compromised quality. The applicant also alleged that the respondent was not advising the client on the full extent of its right to compensation from the contractor as a result of the contractor’s alleged non-compliance.
[21] Mr Nugent met with the applicant on 31 March in relation to the respondent’s review of the technical report and advised that an independent engineer found that: there was validity in the applicant’s concerns; that the concerns have been brought to the attention of the client and the contractor; and that the client is fully aware of the issues and is in correspondence with the contractor. Mr Nugent reported to the applicant that no issues were identified that put the respondent’s reputation at risk or were of concern in terms of the respondent’s contractual obligations to the client. 12
[22] Mr Nugent also addressed the non-technical report, stating that the review had not raised any ethical or code of conduct issues for individuals involved in the project and that the respondent did not intend to proceed with an investigation on these issues. The applicant stated that he remained concerned with Mr Blesing’s handling of non-compliance issues and it was agreed that the applicant’s concerns would be put to Mr Blesing. 13
[23] Rosemary Peavey, the respondent’s Senior Legal Counsel and Company Secretary, was subsequently authorized by the Chief Executive Asia Pacific to investigate certain issues raised by the applicant in the non-technical report. A meeting between Ms Peavey, Ms Gavin and the applicant was held on 15 April and a letter from Ms Peavey to the applicant dated 11 May 2011 recorded the outcome of the investigations.
[24] The letter states that Ms Peavey had met and interviewed various Aurecon staff and reviewed relevant confidential documentation. The letter sets out each of the applicant’s concerns and her findings in relation thereto. A summary of these concerns and findings is as follows:
Issue: The quality of GRP Piping was not in accordance with the standards set by the client, and Aurecon and the client were not taking appropriate action.
Response: This is a contractual issue. Aurecon employees and the client have been aware of this issue for some time and have been appropriately addressing the matter with the contractor. This matter was dealt with in the investigation on the applicant’s technical report.
Issue: Not enough was being done to ensure the contractor complied with the specifications for the supports installed for the piping.
Response: This issue has been addressed by Aurecon and the client since 2009.
Issue: The need for the contractor to document and submit deviations from the contract requirements to the independent verifier and the client.
Response: This matter has been addressed directly by the client on an ongoing basis.
Issue: A sub-consultant engaged by Aurecon on behalf of the client has a conflict of interest.
Response: The client is aware of the sub-consultant’s other role and has processes in place to ensure that the design of the project is not compromised.
Issue: Not pursued/resolved
Issue: The client is not aware of the levels of compensation available to it arising from the contractors non-compliance with the GRP Piping specifications
Response: Aurecon and the client are aware of the financial implications of non-compliance and have been tracking the impacts for some time. This is an ongoing issue being pursued by the client.
Issue: A supervisor within the technical Team ‘could be’ withholding information from the client. (This is relevant to the previous issue.)
Response: No evidence was found to substantiate this allegation.
Issue: Certain personnel have not supported the applicant since he communicated his concerns regarding the GRP Piping to the contractor and the client.
Response: No evidence was found to support this assertion, and to the contrary these personnel have proactively advocated to the client that the contractor is to comply with the specifications.
Issue: Management have not acted on the applicant’s concerns and have obstructed him from establishing the full extent of the implications for the client.
Response: In light of the findings referred to above, Aurecon’s role and the nature of the DBOM contract, this claim was not substantiated. Other personnel are responsible for the management of the project and the applicant’s role in relation to the ADP project has ceased.
[25] Ms Peavey’s letter concluded that “… I have determined that the Non-Technical issues raised by you have been appropriately addressed by Aurecon. I hope the above summary provides you with enough information in order to bring closure to these issues.” 14
[26] The applicant also lodged a series of six grievances with Damien Berglas Human Capital Business Partner, Asia Pacific. The grievances lodged and Mr Berglas’ response to them, dated 11 May, are set out below:
Grievance no. 1 (4 April 2011): This grievance related to an alleged “indirect threat” on 31 March 2011 by another employee, Roy Fullard, about the applicant’s future employment if he pursued Aurecon regarding the ADP project. The applicant also referred to a similar allegation involving Mr Nugent.
Response: Mr Berglas stated that after having conducted an investigation and met with Mr Fullard on two occasions, he concluded that Mr Fuller had “demonstrated a poor choice of words” but that there was no malice or improper intent.
Grievance no. 2: (7 April 2011): This grievance related to an alleged “direct act of intimidation” by Mr Nugent on 4 April 2011, when he raised his voice against the applicant and demanded that he withdraw the earlier allegation that Mr Nugent had threatened the applicant.
Response: Mr Berglas concluded that there was no intimidation by Mr Nugent although Mr Nugent had acknowledged that he had raised his voice to the applicant. Mr Nugent would apologize for this but also sought an apology from the applicant in relation to the allegations against him.
Grievance no. 3: (11 April 2011): This grievance related to a “possible” discrimination that took place on 18 September 2010 when, according to the applicant, he may have been singled out when he was asked by Mr Blesing whether he had spoken to the media about the ADP project. The applicant requested that Mr Berglas investigate whether it was Aurecon or SA Water that requested Mr Blesing to pose the question to the applicant.
Response: Mr Berglas concluded that the grievance could not have involved a significant issue since it was raised 7 months after occurring. Further he concluded that Mr Blesing had done nothing wrong in making the enquiry of the applicant.
Grievance no. 4: (12 April 2011): This grievance arose from the applicant’s registration of interest to present a submission to the SA Parliament Select Committee on the ADP project (“the Select Committee”). The applicant stated that Mr Fairweather had become aware, at or before 1 March 2011, that someone from Aurecon had registered an interest to present a submission. The applicant requested that Mr Berglas investigate how this information, which was to be confidential, came to Mr Fairweather’s attention.
Response: Mr Berglas concluded that it was not appropriate for the respondent to investigate the operation of the Select Committee in relation to the alleged breach of confidentiality complained of by the applicant.
Grievance no. 5: (12 April 2011): This grievance also related to the applicant’s proposed submission to the Select Committee. 15 Mr Fairweather had provided copies of the applicant’s confidentiality agreements with the respondent and the client and his employment contract to a lawyer, without the applicant’s prior consent. The applicant requested that Mr Berglas investigate the basis on which this information was disclosed to a third party.
Response: Mr Berglas stated that the respondent was within its rights to provide employment documentation to a third party because it was provided in order to enable the applicant to access free legal advice about his submission to the Select Committee.
Grievance no. 6: (28 April 2011): This grievance concerned “… the manner in which Aurecon’s management is handling [the applicant’s] ongoing appeal to address the shortfalls in Aurecon’s delivery of services to SA Water in regard to the checking of the design and the monitoring of the installation of GRP Piping on site for the Adelaide Desalination Plant project.” In this grievance the applicant alleges that the respondent was putting its own interests before that of the client and the wider community and was a contributor to the shortfalls in the design and installation of the GRP Piping.
The applicant set out a range of specific concerns regarding compliance and design and suggested that the provision of documentation from the contractor, where there is deviation from the prescribed standards, was not being enforced. The applicant stated that he was disappointed that Aurecon hadn’t informed SA Water of its (ie. Aurecon’s) own contributions to the shortfalls in the GRP design and installation. He stated that he would persist in considering it his duty to look after the interests of SA Water and the wider community and to strive to ensure that the design and installation of the GRP Piping met the DBOM contract requirements. The applicant expressed his frustration that the respondent was obstructing him in his “duty of care” toward the client and the SA Government and that it was trying to stop him from adhering to its own code of conduct which in turn referred to the Code of Ethics. He concluded that:
“Because of all of the above I believe that I could well be entitled to some form of compensation by Aurecon, because Aurecon has been seriously obstructing me in performing my duties as a member of the Institution of Engineers Australia.”
Response: Mr Berglas referred to the investigations undertaken by the respondent and the advice previously given to the applicant in relation to his technical and non-technical report. He stated that there was no reasonable basis on which the applicant could question the findings or continue to raise concerns about the technical and non-technical issues.
[27] The letter of 11 May concluded that each of the applicant’s six grievances were closed and that it was expected that the applicant would set these issues aside and respect Aurecon’s determinations.
[28] I interpose that when questioned in cross-examination about the contents of his sixth grievance, the applicant acknowledged that it had a direct relationship to the technical and non-technical reports he had earlier submitted to the respondent. (TR [251]) It was put to him that he knew that the technical concerns had been validated by the respondent in its review of his technical report and that the issues were being addressed by Aurecon and the client. The applicant repeatedly stated that he did not regard the respondent’s assurances as sufficient because he had no confirmatory documentation and because addressing some of the issues would be ‘difficult’ for the respondent because of its role in the technical breaches. 16
The events leading to dismissal
[29] On 15 June 2011 the applicant sent an email to Mr Berglas and Ms Peavey stating that he did not accept that the respondent’s investigations had thoroughly addressed his grievances with respect to the Code of Ethics. He stated that he would respect Aurecon’s determinations to the extent that they did not conflict with the interests of the client and the wider community but that as at this time he was closing out any further discussions with the respondent as they have been unproductive and unsuccessful. The applicant also stated that he regarded the process instituted by the respondent to address his grievances as obstructing his compliance with the Code of Ethics and an attempt to “harm and compromise my personal professional and ethical standards.” 17
[30] A file notation from Janelle Gavin dated 17 June recorded that she had spoken to the applicant on that day advising him that the respondent regarded it as evident from his email of 15 June that there has been a breakdown in trust and confidence which is likely impacting on the employment relationship and that this was a serious matter. A meeting was arranged for 24 June and the applicant was invited to bring a support person.
[31] Present at this meeting were the applicant, Ms Gavin, Liam Hayes, Manager Human Capital - Asia Pacific and David Hepenstall, the applicant’s support person. 18 Mr Hayes expressed the view that there appeared to be a breakdown in the employment relationship. It was stated that the applicant’s email of 15 June indicated a “persistent unwillingness” to accept the manner and means by which the respondent fulfils its contractual obligations in the ADP project and “projects serious and unfounded allegations against Aurecon of wrongful conduct.” It was advised to the applicant that it would be best for both parties to “discuss a transition arrangement from Aurecon on amicable and commercial grounds.”
[32] The applicant refused to respond to or discuss any of the matters raised and indicated that he would respond at a later date. He declined the opportunity to adjourn the meeting until later that day and to seek advice in the interim period. The meeting concluded when Mr Hayes advised the applicant that the respondent expected a response by COB 28 June and that its preference was to meet to discuss the issues no later than 12pm on 29 June 2011. This advice was conveyed to the applicant by email the same day.
[33] The applicant responded by email dated 28 June. 19 In this communication he indicated:
● That his email of 15 June was clear and there was nothing further to discuss. As such he requested that the respondent respect his decision to close out any further internal discussion;
● That he sought confirmation from the respondent acknowledging his right to adhere to the Code of Ethics and a written statement advising that the respondent “regrets the fact that warnings in regard to a possible termination of employment have been received as threats and that Aurecon will no longer provide me with warnings of any kind in this regard”; and
● That he was available for discussions with the respondent in the morning of 29 June.
[34] On receipt of this email the respondent decided not to proceed with a meeting but Ms Gavin emailed the applicant expressing a provisional view that the sentiments in the applicant’s email of 15 June were inconsistent with the necessary trust and confidence to continue the employment relationship. The email continued that, as the applicant considered there was nothing unclear in the email, the respondent had concluded that he accepts its provisional view of a breakdown in the relationship. The applicant was invited to make a submission as to why his employment should not be terminated, and Ms Gavin offered to assist him in this regard. Ms Gavin stated that Aurecon had reached the provisional view about the breakdown in the employment relationship on the basis that the applicant:
● Asserts that the respondent has conducted itself improperly
● Claims that the respondent has behaved in an unacceptable fashion;
● Indicated that he will put his ‘perceived duties’ to others ahead of his obligations to act in Aurecon’s interests; and
● Indicated that he will not comply with the respondent’s directives because he wishes to adhere to the Code of Ethics as he thinks fit. 20
[35] The applicant provided a submission dated 30 June 2011. 21 He stated that he “…still had trust and confidence in Aurecon to continue an employment relationship. I still believe Aurecon is able to make changes in the direction that I have tried to point out in a period of around nine months from 20 September 2010 … until 15 June 2011.” The applicant acknowledged that to continue the employment relationship would be difficult given their respective views, but not impossible. He expanded on the two points in his email of 15 June concerning Aurecon obstructing his compliance with the Code of Ethics and attempting to harm and compromise his personal, professional and ethical standards. He stated that the allegation of obstruction was a reiteration of his sixth grievance and related to Aurecon’s directive in the first and final warning that he was not to discuss the disciplinary matters with anyone without Aurecon’s prior approval. The second allegation was said to relate to the fact that there was a disagreement between himself and Aurecon and that accepting Aurecon’s view would result in him compromising his personal, professional and ethical standards.
[36] The applicant’s email continued, “My view on how Aurecon has handled my concerns is that Aurecon has put itself in a difficult position because of a number of serious mistakes … in regard to addressing my grievances and that it is now coming to a point where it is getting embarrassing for Aurecon.” He then outlined his concerns with Aurecon’s actions in relation to the GRP piping; the risk that Aurecon is liable to a claim for compensation by the client; the less acceptable outcomes for the community as a result of Aurecon’s approach to technical compliance on the ADP project; and his view that Aurecon’s interests are ‘sectional’ interests under the Code of Ethics which should not take priority over the interests of the community. The applicant stated that the respondent’s own Code of Conduct and Ethics states that employees must comply with, inter alia, applicable Professional Codes of Ethics and he sought advice from Aurecon as to what he was doing wrong.
[37] He asked Aurecon to note that all his actions and work regarding the ADP project were undertaken in the best interests of the community, the client and Aurecon. The applicant then outlined various claims for compensation from Aurecon totaling $2.5m for discrimination, intimidation and various other actions it had allegedly taken against him. The applicant expressed the view that he had a claim against the client for allegedly passing on private and confidential information to Aurecon about his involvement with the Select Committee. He offered the respondent the opportunity to settle with him in order to prevent him from making a claim on the client and thus preserving the respondent’s relationship with the client.
[38] By letter date 4 July 2011 the respondent conveyed its decision that, having considered the applicant’s submissions of 30 June, it had concluded that the employment relationship must be brought to an end. The applicant was offered two options: a mutual separation with an ex gratia payment and completion of a deed of release; or termination by dismissal with one month’s pay in lieu of notice and payment of unused annual leave. The applicant chose the latter option.
The evidence of Mr Nilsen
[39] For the sake of completeness it is appropriate to refer to the evidence of Mr Nilsen, who was cross-examined by the applicant on Aurecon’s contractual obligations to the client regarding technical compliance by the contractor, specifically with the GRP Piping.
[40] The effect of Mr Nilsen’s evidence 22 was that the client has contracted with the contractor to deliver the project at agreed milestones, and the contractor’s responsibility is to develop a program, manage their activities and to complete the works on those agreed milestones to the client’s quality requirements. He stated that:
“We undertook calculations on certain aspects where we felt there was a particular risk or interest, but it is not Aurecon’s role to verify, certify, warrant that the designers on the project have met the technical requirements. They self-certify. The independent verifier …verifies that and then packages that to SA Water. SA Water can then revert to Aurecon to provide some advice on that. So please don’t misinterpret that Aurecon is back at the beginning designing and checking every mitre bend or designing and ensuring that every part of this project meets the requirements of the contract.”
[41] Mr Nilsen stated that day to day inspections of the contractor’s work is undertaken by the Technical Team as a result of the open access they enjoy on the ADP project, but it is not the respondent’s contractual role to issue instructions to rectify defects and direct where and what work is undertaken other than at the agreed milestones. This open access on the ADP project was said to be an additional layer of quality assurance which enables the contractor to rectify any issues along the way rather than the potentially more costly and time consuming exercise of addressing issues when the project is more advanced.
[42] Mr Nilsen stated that it was within this context that the applicant’s complaints needed to be viewed. A failure by the contractor to notify deviations from the contract specifications was the subject of the applicant’s complaints in his technical report. Mr Nilsen stated that this report had resulted in those matters being followed up with the contractor and were brought to the client’s attention. 23 He stated that Aurecon’s conduct in relation to these matters was independently reviewed and confirmed as appropriate and he was satisfied that the respondent had appropriate expertise, accountability and processes in relation to the GRP Piping.
Consideration
[43] Section 396 of the Act requires that certain matters are to be considered before the merits of the case:
“FWA must decide the following matters relating to an application for an order under Division 4 before considering the merits of the application:
(a) whether the application was made within the period required in subsection 394(2);
(b) whether the person was protected from unfair dismissal;
(c) whether the dismissal was consistent with the Small Business Fair Dismissal Code;
(d) whether the dismissal was a case of genuine redundancy.”
[44] There is no dispute that the application was filed within the 14 day period specified in s.394(2) of the Act; that the applicant is a person protected from unfair dismissal and that the dismissal was not a case of genuine redundancy. The respondent is a large employer and the Small Business Fair Dismissal Code does not apply.
[45] Section 387 of the Act sets out the criteria to be applied in considering whether a dismissal is harsh, unjust or unreasonable as follows:
“387 In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, FWA must take into account:
(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees); and
(b) whether the person was notified of that reason; and
(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and
(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and
(e) if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal; and
(f) the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and
(h) any other matters that FWA considers relevant.”
[46] For the most part the applicant’s submissions restated the various concerns about the manner in which he was treated and the alleged failings of the respondent in meeting its contractual obligations to the client in relation to the GRP Piping. The respondent addressed the various criteria for considering harshness as set out in s.387 of the Act and it is convenient to set out the competing positions and my conclusions under these headings.
Was there a valid reason for dismissal?
[47] The Tribunal is required to be satisfied on an objective analysis of the facts whether the termination was for a valid reason. 24
[48] The reason cited for dismissal was the breakdown in the employment relationship due to the respondent’s loss of trust and confidence in the applicant’s ability to comply with the express and implied obligations of the employment contract. It is common ground that the relationship between the parties was strained and that there were fundamental differences between them as to the respondent’s role in relation to aspects of the ADP project. I am required to determine whether the respondent’s conclusion that it had lost trust and confidence in the applicant was well-founded. 25
[49] The concept of trust and confidence has been considered in other decisions, which relevantly include the following passages:
“Trust and confidence is a necessary ingredient in any employment relationship. That is why the law imports into employment contracts an implied promise by the employer not to damage or destroy the relationship of trust and confidence between the parties, without reasonable cause: see Burazin v Blacktown City Guardian Pty Limited (Wilcox CJ, von Doussa and Marshall JJ, 13 December 1996, not yet reported). The implication is not confined to employers, it extends to employees.” (foot notes deleted.) Perkins v Grace Worldwide (Aust) Pty Ltd. 26
And
“Conduct which in respect of important matters is incompatible with the fulfilment of an employee's duty, or involves an opposition, or conflict between his interest and his duty to his employer, or impedes the faithful performance of his obligations, or is destructive of the necessary confidence between employer and employee, is a ground of dismissal.” (foot notes deleted). Blyth Chemicals Ltd v Bushell. 27
[50] The applicant believed that his obligations to the client, on behalf of the broader community interest, outweighed his obligations to the respondent where, in his view, the two interests came into conflict. He stated as much in his grievance dated 28 April and in his correspondence of 15 June 2011.
[51] I consider that his reliance on the Code of Ethics as justification for his actions was misplaced on several grounds. Instead of applying the Code of Ethics within the responsibilities of his own position description, he relied on the Code of Ethics to assume responsibility for the respondent’s conduct under its contract with the client. He also considered that Aurecon’s interests were a ‘sectional interest’ which was subjugated to his view of the broader community interest, and he elevated the Code of Ethics to the status of a legal obligation..
[52] The applicant had lost confidence in the respondent. He continued to press issues in relation to the ADP project notwithstanding that Aurecon had acted on the technical issues he had raised. Put simply, he was not persuaded by the respondent’s assurances that the matters he had raised in his technical report were being dealt with appropriately, but at the same time the applicant was unable to point to any matters which gave a reasonable foundation for this mistrust. In his final submissions the following exchange took place: 28
“MR OVERDUIN: … As I mentioned this morning as an engineer and a former employee working for a company and then a client, there are different levels of interest. So I acknowledge I have to accept Aurecon's interests but I think Aurecon then needs to acknowledge that I also have interests to take into account for Aurecon's clients. I also have to take into account interests of the community and I have taken all of those interests into account and at some point in time came to a conclusion. I felt that I couldn’t fully adhere to Aurecon's directives as they were presented to me because in my opinion it resulted in a conflict of interests.
THE DEPUTY PRESIDENT: Can you point specifically to the directive and the specific conflict?
MR OVERDUIN: The conflict I am talking about is that in my opinion community interests were suffering from Aurecon's directives and decisions.
THE DEPUTY PRESIDENT: But which ones?
MR OVERDUIN: I think it's a community interests that the Adelaide desalination plant is built to the best possible standards meeting the contract requirements and I think not meeting those contract requirements between Aurecon's client SA Water and the contractor does not provide the best possible outcome for the community.
THE DEPUTY PRESIDENT: But isn't that the fundamental issue is that you say that Aurecon aren't ensuring compliance with the contract and Aurecon says it is, you have raised issues, we have investigated them, we have taken them up with [the contractor], we've done everything and basically there's still a sign off process to be undertaken.
MR OVERDUIN: That's correct, at this moment in time we don't know what the outcomes of those actions is going to be.
THE DEPUTY PRESIDENT: How do you then say, if we don't know what the outcome in relation to those matters is, how can you assert that the community's interests are somehow compromised?
MR OVERDUIN: That is the concern that I have seen from what I have experienced when working on the Adelaide desalination plant and working with my colleagues with Aurecon at that time.”
[53] It was stated in Blyth Chemicals, supra, that “… the conduct of the employee must itself involve the incompatibility, conflict, or impediment, or be destructive of confidence. An actual repugnance between his acts and his relationship must be found. It is not enough that ground for uneasiness as to its future conduct arises.” 29
[54] The conduct relied upon by the employer in reaching its conclusion that there was a breakdown in the relationship was (i) the applicant’s assertions that Aurecon had conducted itself improperly; (ii) the applicant’s assertion that Aurecon was trying to force the applicant to act inappropriately; (iii) that he would put his ‘perceived duties’ to others ahead of his obligation to act in Aurecon’s best interests; and (iv) that he will not comply with Aurecon’s directives where they conflict with his perceived obligations under the Code of Ethics.
[55] These allegations have been substantiated. The applicant firmly believes that his conduct has been appropriate and does not accept that the respondent’s instructions to him are reasonable and/or lawful directives of the employer. Most importantly, the applicant has not substantiated or provided reasonable grounds for his belief that the respondent’s directions were unlawful or improper or that it was acting inappropriately toward him.
[56] I conclude that there was a valid reason for dismissal.
Was the applicant notified of the reason for dismissal?
[57] It is agreed that the applicant was notified.
Was the applicant given an opportunity to respond to any reason related to his capacity or conduct?
[58] The evidence shows that the applicant was advised of the respondent’s provisional view about the breakdown in the employment relationship, and was given an opportunity to respond. The applicant submitted however that the process undertaken by the respondent gave the impression of procedural fairness but that the decision to terminate had already been taken in an earlier meeting of management on 16 June 2011. This meeting was detailed in the witness statement of Ms Gavin. 30 I conclude that the respondent had reached a provisional view on 16 June that the applicant’s employment should be terminated and decided that the applicant would be given the opportunity to persuade management that the employment should continue. I consider that this approach was appropriate and not a denial of procedural fairness.
.
[59] The applicant also complained that the respondent at no stage advised him what was required in order to maintain his employment. He did acknowledge that the respondent had told him on a number of occasions that he should forget the ADP project and ‘move on’, but he stated that this was the one thing he couldn’t do under the Code of Ethics. 31
[60] The applicant also submitted that he had been denied procedural fairness in the handling of grievances 3, 4 and 5. I am satisfied that the respondent followed its own policy and the process set out in the applicant’s contract of employment in relation to the handling of grievances but that options that may have been open to the applicant beyond the respondent’s internal procedures were not discussed. 32 I consider that the respondent was unwise to not advise the applicant of possible external avenues and this may have compounded his feelings that he was not being given fair process. However, I conclude that the respondent did properly investigate the applicant’s complaints and that the applicant’s pursuit of further processes in relation to the grievances would have made no material difference to the outcome.
[61] None of the criteria in s.387(d), (e), (f) or (g) are relevant to this case.
Other relevant matters
[62] The respondent’s action, or inaction, when confronted with the applicant’s interpretation of his responsibilities under the Code of Ethics is a matter that warrants some further discussion. The applicant stated on numerous occasions whilst in employment, that he had an obligation to SA Water, as agent for the broader community interest, under the Code of Ethics; and that the respondent’s Code of Conduct policy identified a requirement for him to comply with the Code of Ethics. He also specifically asked the respondent to explain ‘where he had gone wrong’ in light of this. It is somewhat surprising then that the respondent made no attempt to disavow the applicant of his incorrect interpretation of the Code of Ethics or to answer the question he had posed.
[63] In closing submissions Mr Daram stated that the Code of Ethics was “a bit of a red herring”. He stated that, had the applicant sought clarification on the Code of Ethics from Engineers Australia prior to the termination of his employment, “… we may not have been here today”. Mr Daram also submitted that the applicant’s misunderstanding of the operation of the Code of Ethics was a situation created by himself and not the respondent. 33
[64] I accept these submissions, but there are two issues that arise from it. Firstly, what was the extent of the respondent’s responsibility to set the applicant ‘straight’ in relation to the operation of the Code of Ethics and, secondly, if it had such a responsibility, what was the impact of its failure in this regard on the continued employment of the applicant.
[65] In relation to the first point, I think it is clear that the respondent should have addressed the issue with the applicant. The applicant’s statement of his responsibility to the client and the broader community ahead of his responsibility to the respondent, was one of the factors relied upon by the respondent in taking the decision to dismiss. The respondent knew that the applicant justified his attitude by reference to his perceived duties under the Code of Ethics. Given the significance of this matter the respondent did have an obligation, as a matter of procedural fairness and/or good faith toward the applicant, to explain where he was mistaken.
[66] The second matter is more complex. In considering the impact of the respondent’s failure in this regard I have taken into account the following matters.
[67] Firstly, the applicant, as a professional and experienced employee, should have sought clarification on the operation of the Code of Ethics rather than proceeding on his own interpretation.
[68] Secondly, I find that the applicant’s reliance on the Code of Ethics is misplaced in any event, because he was unable to substantiate his concerns that the respondent was breaching its contractual obligations, nor did he substantiate that the respondent’s investigations of the applicant’s concerns in this regard were inadequate.
[69] Thirdly, the applicant no longer had any responsibility for the ADP project and had been repeatedly told to ‘move on’.
[70] The applicant’s conduct, even taking into account his genuine but misguided belief about his responsibilities under the Code of Ethics, evinced an attitude that was incompatible with a sustainable employment relationship - his claims for compensation and the basis on which they were advanced being one example.
[71] Taking all matters into account, I am of the view that the respondent’s failure to discuss the Code of Ethics with the applicant more likely than not exacerbated the deteriorating relationship between the parties, but was not the sole cause of the breakdown in the employment relationship. The applicant failed to address Aurecon’s concerns, and this is symptomatic of the broader problem evident in his employment from September 2010, that he was unwilling and/or unable to accept a point of view different from his own.
Conclusion
[72] The applicant’s case was presented on the basis that it concerned his right to pursue his view of appropriate corporate conduct. He holds strong beliefs regarding his responsibility to work ethically in the broader interests of the community and adopted an interpretation of the Code of Ethics that enabled him to pursue his concept of ethical behavior. However in doing so he failed to substantiate his concerns with the respondent’s conduct or address the respondent’s concerns with his conduct. In short, he paid insufficient regard to the consequences of his actions on the employment relationship.
[73] Since dismissal the applicant has set up his own business around renewable energy. The applicant will be free to pursue matters according to his own social conscience and priorities and I wish him well in this endeavor.
DEPUTY PRESIDENT
Appearances:
Applicant in person
J Darams of counsel for Aurecon Australia Pty Ltd
Hearing details:
2011
Adelaide
15 November
1 Letter from the Respondent to the Applicant dated 4 July 2011, Respondent’s Book of Documents (RBD), Tab 32
2 Witness statement Ex R3
3 Witness statement Ex R4
4 Ex R5
5 Ex R6
6 Ex R4 para 12
7 RBD Tab 3
8 TR [283]
9 Attachment to Ex A3
10 RBD Tab 5
11 RBD Tab 6
12 Ex R3 para 15
13 Ibid
14 RBD Tab 20, p2
15 The submission was provided to the Select Committee on 2 May 2011, RBD Tab 16
16 TR [264] - [281]
17 RBD Tab 21
18 Mr Hayes’ notes of the meeting were admitted as RDB Tab 25
19 RBD Tab 27
20 RBD Tab 29
21 RDB Tab 30
22 TR [520], [522], [533], [538]
23 In the meeting with Mr Nugent on 31 March 2011
24 Rode v Burwood Mitsubishi, Print R4471 at PN 19
25 Selvachandran v Peteron Plastics Pty Ltd, (1995) 62 IR 371 at 373
26 (1997) 72 IR 186 at 191
27 (1933) 49 CLR 66 at 81-2
28 TR [668] - [676]
29 Supra
30 Ex R5 at para 25
31 TR [684]
32 Such as the dispute settling procedure of the relevant modern award, in this case the Professional Employees Award 2010.
33 TR [649] - [650]
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