Noel Downs v Wanaruah Local Aboriginal Land Council

[2021] FWC 2179

[2021] FWC 2179

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Noel Downs
v
Wanaruah Local Aboriginal Land Council
(U2020/15372)

DEPUTY PRESIDENT SAUNDERS NEWCASTLE, 20 APRIL 2021

Application for relief from unfair dismissal – small business employer – compliance with Small Business Fair Dismissal Code – application dismissed.

[1] This decision relates to an unfair dismissal application made by Mr Noel Downs pursuant to s 394 of the Fair Work Act 2009 (Cth) (Act) against his former employer, the Wanaruah Local Aboriginal Land Council (WLALC).

[2] Mr Downs was the Chief Executive Officer (CEO) of the WLALC. Following an earlier period of employment with the WLALC, Mr Downs re-commenced employment with the WLALC on 17 April 2008. He was summarily dismissed on 25 November 2020.

Determinative Conference

[3] After taking into account the views of the parties, I decided to deal with the matter by way of a determinative conference.

[4] The determinative conference took place on 2, 3 and 23 March 2021. Mr Downs gave evidence in support of his case. Mr Downs also obtained an order for two employees of the New South Wales Aboriginal Land Council (NSWALC) to give evidence in response to evidence given by one of WLALC’s witnesses during cross examination. Those two employees of the NSWALC were Mr Rowan Lisson, Operations Manager – Northern Zone, and Mr Wesley Fernando, Zone Director – Northern Zone. The WLALC adduced evidence from Ms Patricia Hands (known as Aunty Jean), Chairperson of the Board of the WLALC, Mr Bradley Casserly, Deputy Chairperson of the Board of the WLALC, Mr Cecil Miller, Board member of the WLALC, and Mr Tim Miller, Board member of the WLALC. The WLALC also tendered a witness statement made by Ms Georgia Pascoe, Administration Officer (and former Board member) of the WLALC. Ms Pascoe was not required for cross examination. The balance of the WLALC’s witnesses were cross examined by Mr Downs.

Initial matters to be considered

[5] Section 396 of the Act sets out four matters which I am required to decide before I consider the merits of Mr Downs’s application.

[6] There is no dispute between the parties and I am satisfied on the evidence that:

(a) Mr Downs’s application was made within the period required by s 394(2) of the Act;

(b) Mr Downs was a person protected from unfair dismissal;

(c) the WLALC was a “small business employer” as defined in s 23 of the Act at the relevant time, employing fewer than 15 employees. I am therefore required to decide as an initial matter whether the dismissal was consistent with the Small Business Fair Dismissal Code (Code), which I will consider below; and

(d) Mr Downs’s dismissal was not a case of genuine redundancy.

Small Business Fair Dismissal Code

[7] Section 388 of the Act provides:

“388 The Small Business Fair Dismissal Code

(1) The Minister may, by legislative instrument, declare a Small Business Fair Dismissal Code.

(2) A person’s dismissal was consistent with the Small Business Fair Dismissal Code if:

(a) immediately before the time of the dismissal or at the time the person was given notice of the dismissal (whichever happened first), the person’s employer was a small business employer; and

(b) the employer complied with the Small Business Fair Dismissal Code in relation to the dismissal.”

[8] The Code declared by the Minister pursuant to s 388(1) of the Act is in the following terms:

“Summary dismissal

It is fair for an employer to dismiss an employee without notice or warning when the employer believes on reasonable grounds that the employee’s conduct is sufficiently serious to justify immediate dismissal. Serious misconduct includes theft, fraud, violence and serious breaches of occupational health and safety procedures. For a dismissal to be deemed fair it is sufficient, though not essential, that an allegation of theft, fraud or violence be reported to the police. Of course, the employer must have reasonable grounds for making the report.

Other dismissal

In other cases, the small business employer must give the employee a reason why he or she is at risk of being dismissed. The reason must be a valid reason based on the employee’s conduct or capacity to do the job.

The employee must be warned verbally or preferably in writing, that he or she risks being dismissed if there is no improvement.

The small business employer must provide the employee with an opportunity to respond to the warning and give the employee a reasonable chance to rectify the problem, having regard to the employee’s response. Rectifying the problem might involve the employer providing additional training and ensuring the employee knows the employer’s job expectations.

Procedural matters

In discussions with an employee in circumstances where dismissal is possible, the employee can have another person present to assist. However, the other person cannot be a lawyer acting in a professional capacity.

A small business employer will be required to provide evidence of compliance with the Code if the employee makes a claim for unfair dismissal to Fair Work Australia, including evidence that a warning has been given (except in cases of summary dismissal). Evidence may include a completed checklist, copies of written warning(s), a statement of termination or signed witness statements.”

[9] In Pinawin v Domingo 1, the Full Bench considered whether, in the context of a summary dismissal under the Code, the Commission had to be satisfied that the serious misconduct which was the basis for the dismissal actually occurred:

“[29] … There are two steps in the process of determining whether this aspect of the Small Business Fair Dismissal Code is satisfied. First, there needs to be a consideration whether, at the time of dismissal, the employer held a belief that the employee’s conduct was sufficiently serious to justify immediate dismissal. Secondly it is necessary to consider whether that belief was based on reasonable grounds. The second element incorporates the concept that the employer has carried out a reasonable investigation into the matter. It is not necessary to determine whether the employer was correct in the belief that it held.

[30] Acting reasonably does not require a single course of action. Different employers may approach the matter differently and form different conclusions, perhaps giving more benefit of any doubt, but still be acting reasonably. The legislation requires a consideration of whether the particular employer, in determining its course of action in relation to the employee at the time of dismissal, carried out a reasonable investigation, and reached a reasonable conclusion in all the circumstances. The circumstances include the experience and resources of the small business employer concerned.

…

[38] Normally in order to hold a belief on reasonable grounds it will be necessary to have a discussion with the employee about the perceived serious misconduct and pay regard to the explanations and views given by the employee. We are concerned in this case that no discussions took place about the implications of Mr Domingo’s conduct for his future employment. However this is a very unusual case. The employer was very small. The owners knew Mr Domingo well …”

[10] In Ryman v Thrash Pty Ltd 2a Full Bench of the Commission examined the summary dismissal part of the Code in detail and concluded as follows:

“[41] In summary, drawing on the conclusions stated above and the ratio in Pinawin, we consider that the “Summary dismissal” section of the Code operates the following way:

(1) If a small business employer has dismissed an employee without notice – that is, with immediate effect – on the ground that the employee has committed serious misconduct that falls within the definition in reg 1.07, then it is necessary for the Commission to consider whether the dismissal was consistent with the “Summary dismissal” section of the Code. All other types of dismissals by small business employers are to be considered under the “Other dismissal” section of the Code.

(2) In assessing whether the “Summary dismissal” section of the Code was complied with, it is necessary to determine first whether the employer genuinely held a belief that the employee’s conduct was sufficiently serious to justify immediate dismissal, and second whether the employer’s belief was, objectivity speaking, based on reasonable grounds. Whether the employer has carried out a reasonable investigation into the matter will be relevant to the second element.”

[11] Serious misconduct is defined for the purposes of the Act in the Fair Work Regulations 2009(Regulations)as follows:

“1.07 Meaning of serious misconduct

(1) For the definition of serious misconduct in section 12 of the Act, serious misconduct has its ordinary meaning.

(2) For sub regulation (1), conduct that is serious misconduct includes both of the following:

(a) wilful or deliberate behaviour by an employee that is inconsistent with the continuation of the contract of employment;

(b) conduct that causes serious and imminent risk to:

(i) the health or safety of a person; or

(ii) the reputation, viability or profitability of the employer’s business.

(3) For subregulation (1), conduct that is serious misconduct includes each of the following:

(a) the employee, in the course of the employee’s employment, engaging in:

(i) theft; or

(ii) fraud; or

(iii) assault;

(b) the employee being intoxicated at work;

(c) the employee refusing to carry out a lawful and reasonable instruction that is consistent with the employee’s contract of employment.

(4) Subregulation (3) does not apply if the employee is able to show that, in the circumstances, the conduct engaged in by the employee was not conduct that made employment in the period of notice unreasonable.”

Compliance with the Code

Was Mr Downs’s dismissal a summary dismissal under the Code?

[12] The first issue to be determined is whether the “summary dismissal” section of the Code applies to Mr Downs’s dismissal. The “summary dismissal” section of the Code will apply if the small business employer has dismissed the employee without notice – that is, with immediate effect – on the ground that the employee has committed serious misconduct that falls within the definition in reg 1.07 of the Regulations. It is not necessary for the Commission to be satisfied that the serious misconduct which is the basis for the dismissal actually occurred in order for the dismissal to be consistent with the Code and therefore not unfair. 3

[13] Mr Downs was notified of his dismissal in a telephone conversation with Mr Casserly on 25 November 2020 in which Mr Casserly told Mr Downs that he would be receiving a letter terminating his employment due to his substantiated serious misconduct. The termination letter (dated 24 November 2020) advised Mr Downs that the “outcome” of its process was that “the Board is satisfied that your substantiated instances of serious and wilful misconduct … provide sufficient grounds under clause 10.3 of the Agreement to terminate your employment with the Wanaruah LALC without notice or pay in lieu. Having regard to all the relevant circumstances and evidence, Wanaruah LALC has decided to terminate your employment, effective immediately, on the basis that you engaged in serious and wilful misconduct…”

[14] I am satisfied on the basis of the termination letter that the WLALC dismissed Mr Downs without notice – that is, with immediate effect – on the grounds that Mr Downs had engaged in serious misconduct. I will address below the issue of whether the misconduct alleged against Mr Downs falls within the definition of “serious misconduct” in regulation 1.07 of the Regulations.

[15] Accordingly, the “summary dismissal” section of the Code applies to Mr Downs’s dismissal, and the “other dismissal” part of the Code is not relevant to Mr Downs’s unfair dismissal application.

Did the WLALC believe that Mr Downs had engaged in conduct sufficiently serious to justify immediate dismissal?

[16] The second issue to be determined is whether at the time of the dismissal the small business employer held the subjective belief that (i) the conduct was by the employee; (ii) the conduct was serious; and (iii) the conduct justified immediate dismissal. 4 The determination is a question of fact5 to be based on the knowledge available to the employer at the time of the dismissal.6 Therefore when considering the “summary dismissal” section of the Code it is not necessary to consider any matters that may have come to the WLALC’s attention in relation to Mr Downs after 25 November 2020.

[17] There is no doubt on the evidence that the WLALC, through its Board members, held the subjective belief that (i) Mr Downs engaged in conduct on 29 and 30 October 2020 (which conduct is described below); (ii) the conduct was serious; and (iii) the conduct justified immediate dismissal. 7 I am therefore satisfied that the WLALC genuinely believed that Mr Downs’s conduct was sufficiently serious to justify his immediate dismissal.

Was the WLALC’s belief based on reasonable grounds?

[18] The third issue to be determined is whether the small business employer objectively had “reasonable grounds” for the relevant belief. 8 It is not necessary to determine whether the employer was correct in the belief that it held.9

Events leading to Mr Downs’s dismissal

[19] The relationship between Mr Downs, as the CEO of the WLALC, and the Board of the WLALC began to deteriorate when the parties were not able to agree on the quantum of a pay increase for Mr Downs. The WLALC was not contractually obliged to provide Mr Downs with a CPI pay increase, or any other increase, during his employment. Mr Downs was not provided with regular pay increases each year during his employment with the WLALC. He received some pay increases and some bonus payments. Mr Downs felt that he was underpaid compared to other CEO’s of Local Aboriginal Land Councils in the region. The WLALC was willing to provide some level of pay increase to Mr Downs but not the quantum being sought by him.

[20] In addition to the pay issue, there was ongoing tension between the parties in relation to Mr Downs’s use of a work vehicle. Mr Downs had the right under his contract to drive the work utility vehicle between his home and work, which was about 80km away, each day. Mr Downs did not have the right to use the work vehicle for private use, other than driving to and from work. Mr Downs accepts that he did not keep the vehicle clean on a regular basis. He used it to transport hay to his property and did not clean the vehicle after so using it. The vehicle was also damaged in a number of different areas as a result of a number of different incidents. Members of the Board of the WLALC were frustrated at Mr Downs’s continual refusal to clean and look after the work vehicle, particularly given the vehicle had WLALC signage on it and was seen by members of the community as a representation of the WLALC. These issues resulted in the WLALC amending its motor vehicle policy. Mr Downs believed that he was unable to comply with the amended policy.

[21] Principally because Mr Downs felt undervalued and underappreciated by the WLALC, he decided that he would stop going over and above what he considered were his duties as the CEO and instead comply with the letter of his contract of employment. By way of example, Mr Downs’s contract stated that his hours of work were from 8:30am until 5pm including one hour for lunch. Most meetings of the Board and the WLALC were held after 5pm because Board members were generally not available before 5pm. The position of a Board member of the WLALC is a voluntary position, save for the payment of a small allowance. Mr Downs decided in about mid 2020 that, for a period of time, he would stop attending meetings held after 5pm. This caused further tension between Mr Downs and the Board because he ordinarily gave presentations at meetings and was present to answer questions from members of the WLALC. Mr Downs’s absence from meetings of the WLALC resulted in members of the Board feeling embarrassed because they were not able to answer questions from members of the WLALC at particular meetings.

[22] On 9 October 2020 Mr Downs made a complaint to the Registrar appointed pursuant to the Aboriginal Land Rights Act 1983 (NSW) (ALR Act) about the Board of the WLALC. Members of the Board were copied in to the complaint. Part of the complaint related to allegations on Mr Downs’s part that Board members were making unfounded allegations about his conduct. Other parts of the complaint related to disciplinary action being taken by the Board against members of the WLALC for breach of confidentiality in circumstances where Mr Downs believed that the members had not been afforded procedural fairness.

[23] At a meeting of the Board on 14 October 2020 the following decisions were made by the Board:

(a) ratification for a show cause letter containing allegations to be sent to Mr Downs;

(b) ratification to stand down Mr Downs on full pay until the disciplinary action has been resolved; and

(c) motion to retain all Board meeting minutes and future Board meetings by the Board until after the dispute has been resolved.

[24] In connection with the decision to retain all Board minutes, Aunty Jean gave evidence that the WLALC received advice from the NSWALC to the effect that the WLALC was not obliged to provide copies of minutes of Board meetings to the CEO of the WLALC. Aunty Jean thought the advice was provided by either Mr Fernando or Mr Lisson of the NSWALC. Both Mr Fernando and Mr Lisson gave evidence to the effect that they could not recall providing advice to the WLALC on this specific issue. Mr Lisson gave evidence that his understanding was that generally Board minutes should be provided to the CEO of a Local Aboriginal Land Council. Mr Fernando said he would need to look at the issue, but any ruling on the point would come from the Registrar appointed pursuant to the ALR Act.

[25] I find, on the balance of probabilities, that Aunty Jean obtained advice from either the NSWALC or the Registrar appointed pursuant to the ALR Act to the effect that the WLALC was not obliged to provide copies of minutes of Board meetings to the CEO of the WLALC. First, that advice is consistent with my conclusion as to the proper interpretation of the relevant legislation and regulations, as set out in paragraphs [50] to [59] below. Secondly, Aunty Jean was firm in her evidence about such advice being obtained. Aunty Jean sought advice concerning other issues relating to Mr Downs, such as his conduct at the meeting on 29 October 2020. 10 Thirdly, although Mr Lisson and Mr Fernando could not recall providing such advice to the WLALC, the advice could have been obtained from another person within the NSWALC or, more likely, the Registrar appointed pursuant to the ALR Act.

[26] The WLALC engaged external lawyers to assist it to prepare a letter of allegations to be provided to Mr Downs. The letter of allegations dated 29 October 2020 was prepared and signed by Aunty Jean, Chairperson, and Mr Casserly, Deputy Chairperson. The letter set out 11 separate allegations in relation to a range of matters. It invited Mr Downs to respond to the allegations within seven days. The letter also contained the following paragraphs relating to “special paid leave” and “strict confidentiality”:

“Special paid leave

40. To help you focus on preparing a response to the Allegations, you are directed to take special paid leave starting immediately and until further notice. The special paid leave is in addition to your normal statutory entitlements to leave. You will continue to receive your full pay and other benefits during the period of special paid leave. During that time, unless instructed otherwise in writing by the Board, you must refer any work-related matters to me and you are not to:

(a) perform any duties as CEO of WLALC;

(b) attend WLALC premises;

(c) contact WLALC staff, contractors or suppliers about work-related matters; or

(d) discuss work-related matters with WLALC staff, contractors or suppliers or otherwise communicate with them about such matters.

Strict confidentiality

41. You are directed to treat this letter and its contents strictly confidential. You are not to discuss it or its contents with anyone other than me or Brad Casserly or your legal or other professional advisers. If you have any questions about this letter or its contents, please contact me or Brad Casserly.

42. We remind you off [sic] your continuing legal obligations to WLALC, including but not limited to your obligations of good faith and confidentiality. Any breach of those obligations, including any disparaging remarks made by you about WLALC or any Board member, or divulging of any information contained within this letter, will be grounds for further disciplinary action against you up to and including termination of employment.”

[27] At about 3pm on the afternoon of 29 October 2020, Mr Casserly and Mr Tim Miller attended the WLALC’s office in Muswellbrook to hand-deliver the letter of allegations to Mr Downs. Mr Casserly entered Mr Downs’s office and Mr Tim Miller waited in the hallway. Mr Casserly said words to the following effect to Mr Downs:

“I have a statement to read out to you, could you please listen.

The Board has some serious concerns about your conduct. These concerns have been set out in a letter containing allegations against you, which I will hand you shortly. The Board is considering taking disciplinary action against you as a result of the alleged conduct, and requires your response to its concerns and allegations before it makes a decision about your ongoing employment. I invite you to provide a response to the letter in writing, as outlined in the letter.

To help you focus on preparing a response to the allegations outlined in the letter, you are directed to take special paid leave starting immediately and until further notice. The special paid leave is in addition to your normal entitlements to leave. You will continue to receive your full pay and other benefits during the period of special paid leave. During that time, unless instructed otherwise in writing by the Board, you must refer any work-related matters to me. Until further notice, you are not to perform any duties as CEO of Council, attend Council premises, contact Council staff, contractors or suppliers about work-related matters, or discuss work-related matters with Council staff, contractors or suppliers or otherwise communicate with them about such matters.”

[28] Mr Casserly then handed Mr Downs the letter of allegations dated 29 October 2020. Mr Downs asked to see copies of the Board minutes authorising the direction for him to take special paid leave. I accept Mr Casserly’s evidence that he was not authorised to provide the minutes to Mr Downs because the Board has passed a resolution to retain all Board minutes until after the dispute with Mr Downs had been resolved. I reject Mr Downs’s contention that Mr Casserly told him that he would supply a copy of the Board minutes. Had Mr Casserly provided a copy of the Board minutes to Mr Downs, he would have acted in contravention of the Board resolution passed on 14 October 2020 to retain Board meeting minutes until the resolution of the dispute with Mr Downs. Further, Mr Downs gave oral evidence to the effect that Mr Casserly told him that he did not have to provide the Board minutes when Mr Downs asked to see them. At no time were the minutes from the Board meeting on 14 October 2020 provided to Mr Downs.

[29] I accept Mr Casserly’s evidence that he repeated to Mr Downs that the Board had unanimously approved the provision of the letter of allegations containing the direction that he take special paid leave effective immediately, and reiterated that it was a lawful and reasonable direction that he, as an employee of the WLALC, must comply with. Mr Downs refused to leave the WLALC’s premises.

[30] Mr Tim Miller called the police because Mr Downs was refusing to leave the premises. Mr Tim Miller and Mr Casserly then walked out the front door to wait for the police. I accept the evidence of Mr Tim Miller and Mr Casserly that Mr Downs slammed the door shut and the door was then locked. I do not accept Mr Downs’s evidence that he did not slam the glass door shut. It is clear on the evidence that Mr Downs was upset at being given the letter of allegations and directed to take special paid leave with immediate effect. This supports the likelihood that Mr Downs slammed the glass door shut behind Mr Casserly and Mr Tim Miller.

[31] The police arrived a short time later and Mr Casserly and Mr Tim Miller told them what had happened. Mr Downs then walked out the front door of the premises and walked towards his company vehicle. The police approached Mr Downs. The police and Mr Downs then re-entered the WLALC building and had a discussion. Mr Downs continued to refuse to leave the premises. Mr Downs held the belief that he had a right to continue working as the CEO of the WLALC until he was provided with a copy of the Board minutes proving that the Board had passed a resolution to place him on paid special leave. Mr Downs held this belief even though he accepted “there was every possibility he [Mr Casserly] did have the Authority” 11 to provide the letter of allegations to him and place him on paid special leave.

[32] At about 5:30pm Mr Casserly and Mr Tim Miller left the WLALC’s premises to attend an extraordinary general meeting of the WLALC at Muswellbrook RSL. Mr Downs was still at the WLALC’s premises when Mr Casserly and Mr Tim Miller departed to attend the meeting.

[33] At about 6pm the Board members of the WLALC attended the extraordinary general meeting. To their surprise, Mr Downs walked into the meeting. Mr Downs was not a member of the WLALC and had been directed to take special paid leave. Mr Downs’ purpose in attending the extraordinary general meeting was to appear as a witness for four members of the WLALC against whom the Board had proposed to take disciplinary action. Mr Downs did not provide the Board with prior notice that he would be attending the extraordinary general meeting in his capacity as a witness for the members in question.

[34] Mr Tim Miller, Mr Casserly, Aunty Jean, and Mr Cecil Miller each gave evidence, which I accept, that Mr Downs yelled across the room in which the meeting was to be held words to the effect “I’ve been stood down”. Mr Downs gave evidence that he said “I think I have been suspended”. I do not accept that evidence. It is inconsistent with the evidence given by each of Mr Tim Miller, Mr Casserly, Aunty Jean, and Mr Cecil Miller. Further, Mr Downs is an assertive person and he accepts he was being assertive on 29 October 2020. It does not ring true that an assertive person such as Mr Downs who had been provided with a letter clearly directing him to take special paid leave with immediate effect would state that he thought he had been suspended.

[35] Aunty Jean then left the meeting room to seek advice from the Registrar appointed pursuant to the ALR Act in relation to Mr Downs’s presence at the meeting and the hostile environment he was creating. The Registrar advised Aunty Jean to cancel the meeting. Aunty Jean returned to the meeting room and told everyone that the meeting had been cancelled on the advice of the Registrar.

[36] In light of Mr Downs’s conduct on the afternoon and evening of 29 October 2020, Aunty Jean arranged for a security guard to attend the WLALC’s offices that evening. At about 8pm, the security guard informed Aunty Jean that Mr Downs was in the WLALC’s offices and he had asked Mr Downs to leave the premises. There is no dispute that Mr Downs returned to the WLALC’s premises after the extraordinary general meeting was cancelled on 29 October 2020 and did not leave when he was asked to do so by the security guard. While at the WLALC’s premises on the evening of 29 October 2020, Mr Downs undertook duties as CEO of the WLALC and collated documents he believed he would need to respond to the allegations made against him.

[37] At approximately 8:30am on the morning of 30 October 2020, Mr Downs again attended the WLALC’s office. Ms Georgia Pascoe, who was a Board member and employee of the WLALC at the time, was present to meet with a locksmith who had been arranged to attend the premises to have the door locks changed. I accept Ms Pascoe’s unchallenged evidence that she had a conversation with Mr Downs in words to the following effect when he arrived at the premises:

Ms Pascoe: “Why are you at the Land Council?”

Mr Downs: “I’m here for work.”

Ms Pascoe: “You know you shouldn’t be here. You should go home.”

Mr Downs: “I’m at work.”

[38] Mr Downs then proceeded to enter the front door of the WLALC’s premises.

[39] Ms Pascoe called the police and notified them of the situation. At about 9:20am the police arrived. They entered the premises and spoke to Mr Downs.

[40] At about 9:30am the locksmith arrived and changed the locks. The locksmith left about 20 to 30 minutes later. The police then informed Ms Pascoe that Mr Downs requested to make a phone call. The police also asked whether Mr Downs could take the work vehicle home. Ms Pascoe agreed to allow Mr Downs to drive the work vehicle home. Mr Downs then left the WLALC’s premises. Before doing so, Mr Downs sent an email (at 9:36am) to Board members of the WLALC in his capacity as the CEO of the WLALC. 12

[41] The Board considered that Mr Downs’s conduct on 29 and 30 October 2020 had undermined and embarrassed the Board, damaged the reputation of the Board and the WLALC in front of members, and constituted a significant breach of the lawful and reasonable directions for Mr Downs to take special paid leave, not attend the WLALC’s premises, not perform any duties as the CEO of the WLALC, and keep the letter of allegations dated 29 October 2020 and its contents strictly confidential.

[42] On 5 November 2020 Mr Downs responded to the letter of allegations dated 29 October 2020. The first paragraph of Mr Downs’s response was in the following terms:

“The show cause letter is addressed to me. It is my personal property I will share, discuss the contents of, and seek advice with ANYONE I CHOOSE…”

[43] The Board met on 12 November 2020. The Board decided that, putting aside the allegations in the letter dated 29 October 2020 and Mr Downs’s response to those allegations, a second show cause letter should be sent to Mr Downs asking him to show cause why his employment should not be terminated based on his conduct on 29 and 30 October 2020. 13

[44] The minutes of the Board meeting of 12 November 2020 make reference to a “CEO Termination letter” but also state that the “letter is on hold until we receive the response from Noel”. Having regard to the reference in the minutes to the letter being on hold until a response was received from Mr Downs and the consistent evidence given by Aunty Jean, Mr Tim Miller, Mr Casserly and Mr Cecil Miller that the decision to terminate Mr Downs’s employment was made on 24 November 2020, I reject Mr Downs’s contention that the decision to terminate his employment was made at an earlier time.

[45] By correspondence dated 13 November 2020, Mr Downs was provided with a detailed letter of allegations in relation to his conduct on 29 and 30 October 2020.

[46] On 20 November 2020, Mr Downs responded in the following terms to the letter of allegations dated 13 November 2020:

“Dear Aunty Jean and Brad,

This letter is further evidence of the ongoing bullying and adverse action being conducted (by one or more Board Members) against me. The allegations like the previous allegations are unfounded [sic] would appear to be an attempt to find fault for me exercising my rights under law and fulfilling my duties as CEO of the LALC.

Board Members (and their advisors) should be well aware that any letter addressed to me personally, regarding me personally, including any allegations or actions against me, is MY PERSONAL PROPERTY. What I choose to do and my personal property is up to me. The Board do not under any Act or Legislation have the authority or ability to prevent me discussing and seeking advice about MY PERSONAL BUSINESS with anyone I choose. To try and suggest otherwise is continuing evidence of attempted misinformation being spread by one or more Board Members. The Board are bound by Board confidentiality, as I would be about “other” LALC business, however my personal business is as confidential as I choose to make it. My goodwill towards the LALC is unquestionable, I have always been and continue to be honest and truthful.

I found this entire process VERY frustrating, the ongoing bullying and adverse actions being portrayed as legitimate “Board Activity”, the disrespect given to me by it, even though it is acknowledged I go over and above at all times, so I apologise if my attitude and frustration appears disrespectful, it is a reflection of the poor treatment I have been subjected to the hands of the Board for doing my job to the best of my ability.

As Board Members (and their advisors) should also be aware, the CEO is charged by the ALRA with the day-to-day management and control of the LALC assets. They should also be aware that outside a board meeting individual Board Members have no authority not implicitly granted by motion of the Board, and that the CEO, employees and members are well within their rights to request evidence of authority when a Board Member attempts to exercise any authority they say they have been granted, that is not theirs under the ALRA.

It would have been a dereliction of my duties and responsibilities to not ask for evidence of the alleged authority the Deputy Chair tried to assert in the current environment where I am able to demonstrate, one or more Board Members have deliberately made untrue statements (regarding actions they attribute to both myself and others) to other Board Members and third parties, the lack of transparency in recent Board processes, and what I believe is a failure to comply with the ALRA.

Instead of supplying the evidence I have requested (information as CEO the Board are obliged to supply under the NSW ALRA Regulations, schedule 1 rule 11), which would have led to a more orderly transition, Board Members chose to disrespect my rights, choosing to inflame an already unpleasant situation by calling the police and security.

The responsibility does not fall to me to demonstrate the Deputy Chair did not have the authority he claimed to have, responsibility is his to demonstrate the Board had granted him this authority when challenged.

There are many witnesses, including the police officers who attended who will be able to confirm that I stated on more than one occasion that if it was demonstrated the minutes reflected the authority the Deputy Chair was asserting I would comply with the directions.

I pushed the door shut, I did not slam it shut, this is a glass door and it is already cracked, to slam it shut would likely break it.

Even though I have been suspended, I am told (as the rest of the community has been) that I am on leave. As such there is no requirement to hand back any equipment in my charge. If assistance, equipment or information was needed people only need ask. As can be confirmed by Board Member Tanya Riley. I returned the Motor Vehicle after 5 days so as not to wilfully breach the motor vehicle policy, but I do not believe I should have had to, because I was suspended, not on personal leave.

I have not addressed the alleged breaches, as I have again demonstrated the allegations are unfounded.”

[47] The Board considered Mr Downs’s response in its meeting on 24 November 2020. The Board members were satisfied that Mr Downs had engaged in serious misconduct on 29 and 30 October 2020 and that such conduct had completely broken the relationship he had with the Board, with the result that it was not possible for his employment to continue. The Board decided that it would terminate Mr Downs’s employment on the basis of his serious misconduct. 14

[48] On 25 November 2020 Mr Casserly called Mr Downs to inform him that he would be receiving a letter by registered post terminating his employment due to his substantiated serious misconduct. The letter of termination is dated 24 November 2020.

[49] I reject Mr Downs’s contention that he was dismissed because he made a complaint about the Board to the Registrar appointed pursuant to the ALR Act or because he exercised what he believed was a right to be provided with the minutes of meetings of the Board at which decisions were made concerning the letter of allegations dated 29 October 2020, including the direction to place him on special paid leave with immediate effect. Four members of the Board gave persuasive evidence that it was Mr Downs’s conduct on 29 and 30 October 2020 which motivated them to make the decision to terminate his employment. I accept their evidence in that regard. They plainly believed it was untenable, in light of Mr Downs’s conduct on 29 and 30 October 2020, to continue to work with him as CEO of the WLALC.

Serious misconduct

[50] A relevant consideration to the question of whether the employer’s belief was based on reasonable grounds is whether the alleged conduct on which the employer relied to dismiss the employee meets the definition of serious misconduct in reg 1.07 of the Regulations.

[51] An important aspect of Mr Downs’s defence to the allegation that he refused to comply with lawful and reasonable directions from the WLALC is his contention that he had a right to be provided with minutes of the meeting of the Board at which the decision was made to place him on special paid leave with immediate effect. The source of the right alleged by Mr Downs is the model rules for Local Aboriginal Land Councils under schedule 1 of the Aboriginal Land Rights Regulation 2020 (ALR Regulation). Section 52F(2) of the ALR Act provides that the rules prescribed by the ALR Regulations as model rules are the rules for a Local Aboriginal Land Council unless a Council prepares its own rules and has them approved by the Registrar. There is no dispute that the WLALC did not prepare its own rules, with the result that the model rules in schedule 1 of the ALR Regulation applied to the WLALC at the relevant time. A copy of the model rules is set out in Annexure A to this decision.

[52] Model rule 11 provides as follows:

“11 Minutes

(1) A Board member elected as minutes secretary for the meeting by the members present must take full and accurate minutes of the proceedings of a meeting of the Council.

(2) The minutes must include—

(a) all motions put to the meeting, and

(b) amendments to the motions, and

(c) the names of the movers and seconders of those motions and amendments, and

(d) the resolutions passed by the meeting.

(3) The minutes secretary for a meeting must provide a copy of the minutes of the proceedings of the meeting to the chief executive officer.

(4) The Chairperson of the Board must sign the minutes when they have been accepted at the next meeting.”

[53] Mr Downs contends that the requirement in subrule 11(3) of the model rules to provide “a copy of the minutes of the proceedings of the meeting to the chief executive officer” applies to both meetings of the Council and the Board of the Local Aboriginal Land Council. I reject that contention.

[54] First, the model rules clearly distinguish between meetings of the Council, which is defined as “the Local Aboriginal Land Council to which these Rules apply”, and the Board of a Council. 15 Subrule 11(1) of the model rules requires the Board member elected as minutes secretary for the meeting to “take full and accurate minutes of the proceedings of a meeting of the Council.” It is clear by its terms that subrule 11(1) only applies to a meeting of the Council, not a meeting of the Board. Subrule 11(2) sets out what the minutes must include. Read in context, the minutes to which reference is made in subrule 11(2) are the minutes taken by the minute secretary of a meeting of the Council in accordance with subrule 11(1). Subrule 11(3) imposes an obligation on the minutes secretary for a meeting to provide a copy of the “minutes … of the meeting to the chief executive officer”. Again, reading subrule 11(3) in context with the balance of rule 11, it is clear that the minutes to which reference is made in subrule 11(3) are the minutes taken by the minute secretary of a meeting of the Council in accordance with subrule 11(1).

[55] Secondly, rule 11 of the model rules must be construed in context. Part of the relevant context includes the other rules within the model rules. Rules 6 to 13 of the model rules govern the calling of ordinary meetings and extraordinary meetings of the Council, the meeting place for any meeting of the Council, how voting at a Council meeting is determined, the taking of minutes of a meeting of the Council, and retention of a list of members who attend each Council meeting. The focus of each of these rules on meetings of the Council, not a Board, supports the notion that the requirement in subrule 11(3) to provide “a copy of the minutes … of the meeting to the chief executive officer” applies to meetings of the Council.

[56] Thirdly, the requirement under subrule 11(3) to provide a copy of the minutes of a meeting to the chief executive office is connected to the obligation on the chief executive officer under rule 20(b) of the model rules to “maintain an official minute book of the Council containing the minutes taken by the minute secretary under rule 11 in respect of each meeting”. The express reference in rule 20(b) to the “official minute book of the Council” and the cross reference back to rule 11 supports a construction of rule 11(3) which is limited to minutes of a Council meeting.

[57] Fourthly, in many instances it will be appropriate for the minutes of a Board meeting to be provided to the CEO so the CEO is aware of decisions made by the Board and can take steps to implement those decisions. However, there are obvious instances where it would be inappropriate for the minutes of a Board meeting of a Local Aboriginal Land Council to be provided to the CEO. For example, a Board meeting at which the Board discussed (a) putting serious allegations to the CEO or taking disciplinary action against the CEO or (b) authorising a Board member to enter into negotiations with the CEO for a pay increase within a particular range. Such matters are confidential to the Board and it would undermine the duties and responsibilities of the Board were there an obligation under subrule 11(3) of the model rules to provide minutes of all Board meetings to the CEO. It is most unlikely that such an outcome was intended by the drafter of the model rules.

[58] Fifthly, schedule 3 to the ALR Act deals with (in part 1) the procedure of Local Aboriginal Land Councils and (in part 2) the procedure of Boards of Local Aboriginal Land Councils. Both parts 1 and 2 of schedule 3 require minutes of meetings to be kept of meetings of the Council and Board respectively. But they do not say anything about the person(s) to whom such minutes must be provided. Clause 7 of schedule 3 to the ALR Act addresses the question of documents requiring authentication by the Board. There is no dispute in this case that the letter of allegations dated 29 October 2020 was an authentic document. The issue raised by Mr Downs was whether the Board had authorised the letter and the decision to place him on special paid leave with immediate effect. For these reasons, schedule 3 to the ALR Act is neutral in my determination of the proper construction of subrule 11(3) of the model rules.

[59] Sixthly, Mr Downs relied on s 78A(2) of the ALR Act to support his argument that he had a right to be provided with copies of minutes from meetings of the Board. Section 78A(2) provides that the CEO of a Local Aboriginal Land Council has, as one of his or her particular functions, “the day-to-day management of the Council’s affairs”. Mr Downs also relies on the following parts of the Compulsory NSWALC Board Member training package:

“The CEO is responsible for the strategic management of the LALC’s assets which include purchasing, maintaining and controlling the LALC’s assets. The CEO is to ensure that all assets are adequately safeguarded from theft, any external environmental impact and adequately insured for all risk…

Staff should have access to Board resolutions/actions and be aware of the legal responsibilities of the Board.”

[60] Mr Downs contends that in light of his statutory function to look after “the day-to-day management of the Council’s affairs” and his responsibility “for the strategic management of the LALC’s assets”, he was not going to depart from the WLALC’s premises and cease undertaking his role as CEO without adequate proof that the Board had made a decision to have him placed on special paid leave. This argument is not persuasive. The requirement to take responsibility for “the day-to-day management of the Council’s affairs” and manage the WLALC’s assets has little to do with whether or not Mr Downs had a right to be provided with the minutes from meetings of the Board. Taking special paid leave is akin to taking annual leave. During such periods of time other staff can be delegated appropriate tasks to ensure the assets of the WLALC are protected and its affairs are managed. In addition, the Board of the WLALC has the power to “direct and control the affairs of the Council” and to exercise “any of the functions of the Council on behalf of the Council” (subject to various exceptions), 16 which powers the Board could use to ensure the assets of the WLALC were protected and its affairs were managed during Mr Downs’s relatively short absence from work on special paid leave. As to the statement in the Board training pack that staff “should have access to Board resolutions”, that is fine as a general proposition but is unworkable in all circumstances for the reasons explained above.

[61] I am satisfied that Mr Downs’s conduct on 29 and 30 October 2020, as described above, falls within the definition of serious misconduct in reg 1.07, in that:

(a) Mr Downs repeatedly refused to comply with the directions from his employer to commence a period of special paid leave while he responded to detailed allegations communicated to him, not attend the WLALC’s premises, not perform any duties as CEO of the WLALC, and keep confidential the letter of allegations and its contents. The directions given to Mr Downs were lawful and reasonable instructions that were consistent with his contract of employment, which required him to generally do all things within his competence to ensure that the good reputation of the WLALC was maintained, and to conduct himself in a manner becoming of a person in his position. 17 Mr Downs also owed the WLALC a contractual obligation to show the utmost good faith to the business of the WLALC, use his best endeavours to promote the interest and welfare of the WLALC, and “in all respects diligently obey and observe all lawful directions of the Council and of its Board members”.18 Mr Downs’s conduct in refusing to comply with the directions was wilful or deliberate behaviour by an employee that was inconsistent with the continuation of the contract of employment. The wilfulness of Mr Downs’s conduct is clearly evidenced by his refusal to leave the WLALC’s premises even after the police and a security guard were called, returning to the premises on the evening of 29 October 2020 and again on the morning of 30 October 2020, continuing to carry out his duties as CEO of the WLALC, repeatedly stating that the letter of allegations was his personal property and he would disclose its contents to anyone he chose, and yelling at the extraordinary meeting on 29 October 2020 that he had been “stood down”. The letter of allegations dated 29 October 2020 was signed by the Chairperson and Deputy Chairperson of the WLALC. It was hand delivered to Mr Downs by the Deputy Chairperson and another Board member was also present in the building at the time of delivery. Mr Downs had no right to be provided with a copy of the minutes of the Board meeting of 14 October 2020. Mr Downs believed there was “every possibility” that Mr Casserly had the authority of the Board to provide him with the letter of allegations dated 29 October 2020.19 If Mr Downs truly believed there was some legitimate question as to whether the Board had approved the letter of allegations and made the decision to place him on special paid leave, he could have raised those points in his response to the letter of allegations, just as he raised multiple other issues. Instead, Mr Downs elected to ignore the directions given to him and acted unreasonably in direct defiance to the Board’s instructions. Such conduct by the most senior employee of the WLALC made his employment in any period of potential notice of termination unreasonable; and

(b) Mr Downs’s conduct in repeatedly refusing to comply with the directions from his employer to commence a period of special paid leave, not attend the WLALC’s premises, not perform any duties as CEO of the WLALC, as well as attending the extraordinary general meeting and yelling out that he had been “stood down”, caused serious and imminent risk to the reputation of the WLALC’s business. The fact that the WLALC had to call the police on two separate occasions to attempt to remove its most senior employee from its premises is indicative of the likely damage which Mr Downs’s conduct caused to the reputation of the WLALC. In addition, Mr Downs’s conduct in yelling out that he had been “stood down” at the extraordinary general meeting resulted in Aunty Jean cancelling the meeting. Those events and Mr Downs’s part in them undoubtedly damaged the reputation of the WLALC.

Reasonable investigation

[62] A further relevant consideration to the question of whether the employer’s belief was based on reasonable grounds is whether the employer carried out a reasonable investigation, and reached a reasonable conclusion in all the circumstances. 20 When considering whether a reasonable investigation has been carried out, it is also relevant to consider the experience and resources of the small business employer.21

[63] Although the WLALC is a small business without any in-house human resources expertise, it obtained legal advice to assist in the preparation of the letters of allegation sent to Mr Downs. As a result, the allegations against Mr Downs were clearly communicated to him in writing.

[64] Mr Downs was given an opportunity to respond to each of the letters of allegation sent to him. He took up those opportunities and responded in writing to the allegations. I am satisfied on the evidence that the WLALC considered Mr Downs’s response to the allegations before making its decision to dismiss him.

[65] In all the circumstances, I am satisfied that the WLALC carried out a reasonable investigation before deciding to terminate Mr Downs’s employment.

Conclusion on reasonable grounds

[66] Mr Downs’s conduct on 29 and 30 October 2020 was the basis for his summary dismissal. There is no doubt that Mr Downs’s conduct on those days, as alleged by the WLALC, actually occurred. In particular, on 29 and 30 October 2020 Mr Downs repeatedly refused to comply with lawful and reasonable directions from his employer to commence a period of special paid leave while he responded to detailed allegations communicated to him, not attend the WLALC’s premises, and not perform any duties as CEO of the WLALC. Further, by attending the extraordinary general meeting on 29 October 2020 and yelling out that he had been “stood down”, Mr Downs breached his obligation to keep confidential the contents of the letter dated 29 October 2020 and damaged the reputation of the Board and the WLALC in the presence of members of the WLALC. There was no need for Mr Downs to yell out that he had been “stood down”. He could have simply pointed out that he was attending the meeting in his capacity as a witness for members who were facing disciplinary action. No valid complaint could have been made about Mr Downs’s attendance at the meeting in that capacity.

[67] For the reasons given above, Mr Downs’s conduct on 29 and 30 October 2020 met the definition of serious misconduct in reg 1.07 of the Regulations. In all the circumstances, the WLALC carried out a reasonable investigation and reached a reasonable conclusion.

Conclusions

[68] For the reasons set out above, I am satisfied that:

(a) immediately before the time of Mr Downs’s dismissal, the WLALC was a small business employer within the meaning of the Act;

(b) on 25 November 2020, the WLALC dismissed Mr Downs without notice – that is, with immediate effect – on the ground that Mr Downs had committed serious misconduct;

(c) the WLALC dismissed Mr Downs on the basis of conduct which meets the definition of “serious misconduct” within the meaning of reg 1.07 of the Regulations;

(d) the WLALC genuinely believed that Mr Downs had engaged in conduct sufficiently serious to justify immediate dismissal;

(e) the WLALC undertook a reasonable investigation and reached a reasonable conclusion in all the circumstances; and

(f) the WLALC’s belief that Mr Downs had engaged in conduct sufficiently serious to justify immediate dismissal was based on reasonable grounds.

[69] I am therefore satisfied Mr Downs’s dismissal was consistent with the Code and his unfair dismissal application must be dismissed.

[70] In view of my conclusion that Mr Downs’s dismissal was consistent with the Code, I have not addressed the earlier allegations set out in the letter dated 29 October 2020. Those matters are not relevant to an assessment of whether there has been compliance with the “summary dismissal” section of the Code, because the WLALC relied on Mr Downs’s conduct on 29 and 30 October 2020, after he received the 29 October 2020 letter, in making its decision to summarily dismiss Mr Downs. Had it been necessary to address those earlier allegations, it is clear that Mr Downs had a good defence to many of them, including allegations that (a) Mr Downs contravened a code of conduct which did not apply to him because he was not an “officer” of the WLALC, (b) Mr Downs contravened parts of the code of behaviour which did not apply to him as an employee, as opposed to a member or Board member, of the WLALC, and (c) Mr Downs failed to seek approval of the Board before causing an advertisement to be placed in a local newspaper that published the names of WLALC members being considered for disciplinary action in circumstances where the Chairperson requested Mr Downs to place the advertisement and all Mr Downs did was to correct the spelling of the names of the four members.

DEPUTY PRESIDENT

Appearances:

Mr N Downs, on behalf of himself
Ms E Dalrymple of counsel, with Ms I Hewitt, solicitor, for the Respondent

Hearing details:

2021.
Newcastle:
2, 3 and 23 March.

Printed by authority of the Commonwealth Government Printer

<PR728810>

Annexure A

 1   [2012] FWAFB 1359

 2   [2015] FWCFB 5264

 3   Ryman v Thrash Pty Ltd at [39]

 4   Harley v Rosecrest Asset Pty Ltd T/A Can Do International [2011] FWA 3922 at [8]

 5   Ruman v Thrash at [43]

 6   Pinawin v Domingo at [27]; Narong Khammaneechan v Nanakhon Pty Ltd ATF Nanakhon Trading Trust T/A Banana Tree Cafe[2010] FWA 7891 at [60]

 7   Ex R2 at [53]-[80]; Ex R4 [33]-[56]; Ex R5 at [36]-[62]; Ex R3 at [79]-[94]

 8   Ryan v Thrash at [40]

 9   Pinawin v Domingo at [29]

 10   See paragraph [35] below

 11   Ex A1 – response to allegation 16

 12   Ex R3 at CM-17

 13   Ex R5 at [55]

 14   Ex R2 at [78]-[79]; Ex R5 at [60]-[61]

 15   See subrules 20(d) and (f) of the model rules

 16 s 62 of the ALR Act

 17   Ex R3 at CM-1, clauses 2.2 and 2.3

 18   Ibid at clause 5

 19   Ex A1 – response to allegation 16

 20   Ryman v Thrash at [41]; Pinawin v Domingo at [30]

 21   Pinawin v Domingo at [30]