Oliver Reeve v PKF (Gold Coast) HR Services Pty Ltd
[2023] FWC 1565
•29 JUNE 2023
| [2023] FWC 1565 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.394—Unfair dismissal
Oliver Reeve
v
PKF (Gold Coast) HR Services Pty Ltd
(U2022/12234)
| COMMISSIONER SIMPSON | BRISBANE, 29 JUNE 2023 |
Application for Unfair Dismissal Remedy – Jurisdictional Objection that Applicant resigned – Jurisdictional Objection Upheld – Application dismissed.
On 23 December 2022, Mr Oliver Reeve (Mr Reeve/the Applicant) made an application to the Fair Work Commission (the Commission) under s.394 of the Fair Work Act 2009 (Cth) (the Act) for an unfair dismissal remedy against PKF (Gold Coast) HR Services Pty Ltd (the Respondent).
The matter was listed for hearing on 8 May 2023 and 9 May 2023 in person in Brisbane. The Applicant represented himself and the Respondent was granted permission to be represented by Mr Kyle Scott of Australian Business Lawyers & Advisors.
In its Form F3, the Respondent raised the jurisdictional objection that the application was out of time and the Applicant was not dismissed.
The Applicant’s extension of time was granted,[1] and the matter was allocated to me to determine the outstanding jurisdictional objection of the Applicant not being dismissed and the merits of the Application if required.
Prior to the hearing, I issued an order exercising power under section 594 that certain documents filed be confidential. On the Friday and over the weekend before the commencement of the hearing on Monday 8 May the Applicant filed a number of other documents for which a confidentiality order was also sought at the commencement of the hearing. A further confidentiality order was issued on a consent basis to deal with those further documents filed, in a similar way to the earlier order.
In the week before the hearing the Applicant sent email correspondence to my chambers raising objection to several prehearing interlocutory rulings and raising a concern about the Commissions impartiality as constituted. The Applicant was advised in writing by my chambers that if he wished to make an application for recusal he could so. At the commencement of the hearing on Monday 8 May I invited the parties to raise any issues. The Applicant did not make an application for recusal and the hearing proceeded.
Mr Reeve’s first statement filed on 27 March 2023,[2] and second statement filed on 6 April 2023,[3] were admitted into evidence. Mr Reeve agreed during cross examination that his two statements are virtually identical. Mr Reeve also filed written submissions on 27 March, and further material was filed at 9.48am on 5 May,[4] at 10.12am on 5 May,[5] 3.09pm on 6 May,[6] at 12.35pm on 7 May,[7] at 12.36pm on 7 May,[8] and 12.47pm on 7 May[9].
The statements of Ms Calinda Jo Ujdur[10] of 26 April 2023, and Matthew David Butler[11] filed on 26 April 2023 as part of the Respondent’s case were admitted into evidence. The Respondent also filed written submissions on 27 March 2023 and further submissions on 26 April 2023.
Mr Reeve confirmed in his oral evidence he did not seek reinstatement.
Background
The Respondent acts in the capacity of a services entity for a renowned accountancy and business advisory firm, which forms part of a large global brand.
The Applicant was employed by the Respondent in the senior role of Director Audit and Assurance from on or about 14 March 2022 until 25 November 2022. The Applicant’s title was later changed to Divisional Director.
The Applicant gave 4 weeks’ notice of his resignation via email on 31 October 2022. The Applicant’s resignation email provided:
“Hi both,
Please accept this as my formal letter of resignation. Thank you for the opportunity.
I believe my notice period is four weeks making my last day 26/11/22, I apologise if this is incorrect, and I will adjust accordingly.
Thanks,
Ollie”
JURISDICTION
Legislative Framework
For a person to be protected from unfair dismissal under the legislation, they must have been dismissed. Section 385 provides the basis for considering whether a person has been dismissed:
385 What is an unfair dismissal
A person has been unfairly dismissed if the FWC is satisfied that:
(a) the person has been dismissed; and
(b) the dismissal was harsh, unjust or unreasonable; and
(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and
(d) the dismissal was not a case of genuine redundancy.
Note: For the definition of consistent with the Small Business Fair Dismissal Code: see section 388.
On the meaning of ‘dismissed,’ s.386 of the Act further provides:
386 Meaning of dismissed
(1)A person has been dismissed if:
(a)the person’s employment with his or her employer has been terminated on the employer’s initiative; or
(b)the person has resigned from his or her employment, but was forced to do so because of conduct, or a course of conduct, engaged in by his or her employer.
(2)However, a person has not been dismissed if:
(a)the person was employed under a contract of employment for a specified period of time, for a specified task, or for the duration of a specified season, and the employment has terminated at the end of the period, on completion of the task, or at the end of the season; or
(b)the person was an employee:
(i)to whom a training arrangement applied; and
(ii) whose employment was for a specified period of time or was, for any reason, limited to the duration of the training arrangement; and the employment has terminated at the end of the training arrangement; or
(c)the person was demoted in employment but
(i)the demotion does not involve a significant reduction in his or her remuneration or duties; and
(ii) he or she remains employed with the employer that effected the demotion.
(3)Subsection (2) does not apply to a person employed under a contract of a kind referred to in paragraph (2)(a) if a substantial purpose of the employment of the person under a contract of that kind is, or was at the time of the person’s employment, to avoid the employer’s obligations under this Part.
Submissions and Evidence
The Respondent submitted that the Applicant voluntarily resigned from his employment on 31 October 2022 by giving notice of resignation and was not ‘dismissed’ from his employment within the meaning of section 386 of the Fair Work Act 2009 (Cth). Further the Respondent contended that the Applicant was not forced to resign because of conduct, or a course of conduct, engaged in by the Respondent. Accordingly, the Respondent submitted that the application must be dismissed and referred to the decision in Davidson v Qube Logistics (Vic) Pty Ltd [2018] FWCFB 6074 at [4].
The Respondent submitted that the proper legal principles for dealing with ‘forced resignation’ cases can be summarised as follows:
(a)A forced resignation is when an employee has ‘no effective or real choice but to resign’: Mohazab v Dick Smith Electronics Pty Ltd (No 2) (1995) 62 IR 200 at 206.
(b)The Applicant bears the onus of proving that they did not resign voluntarily. The Applicant must prove that the employer engaged in conduct or a course of conduct which forced the employee to resign: Australian Hearing v Peary [2009] AIRCFB 680 at [30].
(c)The Applicant must demonstrate that the employer took action with the intent to bring the relationship to an end or took action that has that probable result: O’Meara v Stanley Works Pty Ltd (PR973462, per Giudice J, Watson VP, Cribb C at [23], 11 August 2006).
(d)The test to be applied here is whether the employer engaged in the conduct with the intention of bringing the employment to an end or whether termination of the employment was the probable result of the employer’s conduct such that the employee had no effective or real choice but to resign: Bupa Aged Care Australia Pty Ltd v Shahin Tavassoli [2017] FWCFB 3941 at [47].
(e)In applying the statutory test under s.386(1)(b), the requisite employer conduct is the essential element: Bupa Aged Care Australia Pty Ltd v Shahin Tavassoli [2017] FWCFB 3941 at [47].
The Respondent submitted that the Applicant cites a litany of matters which he asserts culminated in him being forced to resign. These include allegations that:
(a)He was asked to perform audits in circumstances where there was a conflict of interest.
(b)He was asked to “rush through” an audit.
(c)The Respondent hired Mr Green to “replace” him or to “push the applicant out”.
(d)Mr Green made comments that had the effect of undermining him, and that he was bullied by Mr Green.
(e)Mr Butler did not address his complaint regarding the comments allegedly made by Mr Green.
(f)Mr Butler excluded him from the Audit & Assurance Division.
(g)He was assigned an “unfair and unreasonably stressful amount of work”.
(h)Mr Butler failed to address his complaint about “stressful working conditions”.
The Respondent continued providing services to the Walter Doyle group and continued turning a “blind eye” to impropriety.
(j)Mr Butler is “engaged in wrongdoing with a client” (Walter Doyle group).
(k)The Respondent’s conduct towards the Applicant “completely changed” after Mr Green commenced employment with the Respondent.
(l)Mr Butler “went back on his word” about how WIP should be treated.
The Respondent submitted that each of the above allegations are vaguely articulated, lacking in detail and wholly unsupported by any probative evidence.
The Respondent categorically denies each of the allegations advanced by the Applicant in support of his ‘forced resignation’ argument. The Respondent contended that the allegations are deliberately dishonest, vexatious and have been made for the collateral purpose of damaging the Respondent’s business.
Allegations relating to the Walter Doyle Group and Alleged requests / directions to perform “unethical audits”
Mr Reeve submitted that Mr Butler is engaged in wrongdoing with a client, running a multinational ponzi scheme whose fee is 50% of the Respondent’s annual revenue.
Mr Reeve submitted that during early July he became aware of negative press articles as well as review articles, chat room discussions and other evidence about Mr Walter Doyle. Mr Reeve claimed he emailed these findings to Mr Butler and Ms Ujdur as soon as they were discovered. Mr Reeve said he also recommended to Mr Butler that the Respondent should resign from its appointments with Mr Doyle as soon as possible.
Mr Reeve submitted that during the 2 weeks preceding these discussions, Mr Butler’s interactions with Mr Reeve became more abrupt, and Mr Reeve began noticing an unusual number of meetings being held between Mr Butler and Ms Ujdur.
Mr Reeve contended that to cover his wrongdoing Mr Butler hired a compromised replacement for Mr Reeve at three quarters of Mr Reeve’s salary. Mr Reeve said Mr Butler then ran a campaign of discrimination, exclusion and bullying with the help of Mr Green, the man hired to replace Mr Reeve, in order to push Mr Reeve out of the organisation to continue benefiting from the fraud scheme.
The Respondent submitted Mr Reeve has made serious allegations against a client of the Respondent’s practice, Walter Doyle, and companies in which he holds or has held an interest. Those allegations appear to include allegations of criminality such as fraud and/or financial impropriety.
The Respondent submitted Mr Reeve has alleged that Mr Butler is a conspirator in that criminality, even though Mr Butler has virtually no involvement with the client. Despite Mr Reeve holding such beliefs, the Respondent says there is no evidence of him having made any report or complaint through any proper channel (such as a complaint to the police or financial regulators). The Respondent submitted that it is unclear whether Mr Reeve holds a genuine belief about criminality, or whether he is making the allegations for the improper purpose of damaging the Respondent.
It was submitted by the Respondent that the Applicant was not required to undertake any audit-related work where a conflict of interest or independence issue existed. Rather, from about May 2022 Mr Reeve actively sought out and pursued audit-related engagements in relation to companies within the Walter Doyle group. It was submitted to the extent that the Applicant undertook any work on any engagements which gave rise to an independence concern, this occurred due to the Applicant’s failure to discharge his duties and make a proper assessment of the independence risk at the time of commencing or continuing the audit engagement in accordance with the Respondent’s policies and procedures.
The Respondent submitted that as Divisional Director and Head of the Corporate Audit team, it was incumbent on the Applicant to identify any independence concerns and raise them promptly in accordance with applicable policies and procedures. The Applicant failed to do this. The Respondent submitted that when Mr Reeve finally raised independence concerns in relation to certain engagements, the Respondent made immediate arrangements to have the work cease or referred to an external third party auditor.
Further, the Respondent contended that Mr Reeve was not requested to “rush through” an audit, and that the documentary evidence demonstrates that the audit had been referred to KS Black (an external audit firm), and the Applicant was given discretion as to what level of involvement he could have in the preparation of an ‘audit-pack’ to be sent to KS Black.
Ms Ujdur provided evidence for the Respondent that she was not aware of Mr Reeve having been directed or pressured to undertake any audit work that would have been unethical or inappropriate, such as where a conflict of interest existed. Mr Reeve maintained Ms Ujdur’s evidence was false. Mr Reeve referred to an email of Ms Bobbett attached to the statement Ms Ujdur[12] as evidence of the rushing through of work for Energy Storage.
Ms Ujdur said there is no evidence that would support a finding that Mr Butler “excluded” Mr Reeve from the Audit & Assurance Division. Mr Butler said that the Respondent has detailed protocols and policies to ensure independence in relation to audit engagements, and to manage and address conflict of interest situations.
Mr Butler said he has never requested any employee or colleague to perform audit services in circumstances where he was of the opinion that a conflict of interest existed. Mr Butler said he takes a very conservative approach to conflict of interest situations, and there is a formal documented process to be followed should a conflict of interest be identified by a PKF staff member. Mr Butler said conflicted audit work is routinely referred to external audit firms whenever independence issues are identified.
In particular, Mr Butler said he has never requested or directed Mr Reeve to perform an audit in circumstances where he believed a conflict of interest existed, and he did not at any time refer or allocate any new audit engagements at all to Mr Reeve (or the audit team) while he was employed with the Respondent. Mr Butler said he is not a qualified auditor, Mr Reeve did not report directly to him in relation to the conduct of audit assignments, and he was not closely involved with his day-to-day work. Mr Butler said Mr Reeve was aware of his strong stance on independence issues as demonstrated to Mr Reeve in early June 2022 in relation to the JR Richards/No Way Back audit proposal. Mr Butler said he is unaware of any unresolved conflict of interest matter being raised by Mr Reeve (or any other staff member) with the engagement partners in PKF Brisbane. Mr Butler said no such documentation was ever submitted to him identifying a conflict issue with any client that Mr Reeve worked with, and Mr Reeve did not raise any unresolved conflict of interest matter with him.
Mr Butler said when Mr Reeve undertook an audit engagement, the engagement was overseen by one of the Audit Engagement Partners in PKF Brisbane, who were the direct line of authority for Mr Reeve in relation to the conduct of those audit engagements. Any technical or independence issues arising during an audit would ordinarily be raised and discussed with the audit engagement partner in the first instance and only referred to Mr Butler if a final judgement call was required.
Mr Butler said Mr Reeve's knowledge and exposure to the Walter Doyle group is very limited because he was only employed with the Respondent for approximately 8.5 months. Mr Butler said he has reviewed the electronic files and time entries on certain audit engagement files to ascertain Mr Reeve's involvement in work for entities relating to Mr Doyle, and his enquiries have revealed that, to the best of his knowledge, Mr Reeve's involvement with the Walter Doyle group while employed with the Respondent was confined to:
(a)Working on an audit engagement for Hellyer Gold Mines Pty Ltd;
(b)Pursuing an audit-assist engagement for Energy Storage Pty Ltd and performing some limited work on that file between about 14-21 September 2022; and
(c)Having awareness of an audit-assist engagement that Mr Green was primarily involved in for InterGroup Mining Limited between August and October 2022, and having some cursory involvement in that engagement.
Documents relating to Energy Storage Pty Ltd
Mr Butler provided with his evidence documents that he said he had obtained from the Respondent’s computer system relating to the Energy Storage audit-assist engagement as follows:
(a)An email from Mr Reeve to Ms Bobbett dated 12 May 2022 in which he enquires about potential audit work for entities associated with Mr Doyle.
(b)An email from Mr Reeve to Mr Follett dated 2 June 2022 regarding a proposal for an audit of Energy Storage.
(c)An email from Mr Reeve to Ms Ujdur dated 2 June 2022 regarding the proposal for an audit of Energy Storage.
(d)An email from Mr Follett to Mr Reeve dated 2 June 2022 regarding a proposal for an audit of Energy Storage.
(e)An email chain between Mr Reeve to Ms Ujdur dated 2 June 2022 regarding the proposal for an audit of Energy Storage.
(f)An email from Mr Reeve to Steve White of dated 5 June 2022 providing him with a proposal for an audit of Energy Storage.
(g)An email from Mr Reeve to Ms Bobbett dated 21 June 2022 regarding the Energy Storage audit proposal
(h)An email from Ms Bobbett to Mr White dated 2 August 2022 following-up regarding the Energy Storage audit proposal.
An email from Ms Bobbett to Mr Doyle dated 14 September 2022 advising him that PKF Gold Coast was unable to undertake the audit of Energy Storage and seeking his approval to engage KS Black.
(j)An email from Ms Bobbett to Mr Green and Mr Reeve dated 14 September 2022 in which Ms Bobbett advised of the need to prepare a set of general purpose financial statements to enable KS Black to undertake the audit.
(k)An email chain between Ms Bobbett and Messrs Green and Reeve dated 15 September 2022 regarding information about Energy Storage.
(l)A further email chain between Ms Bobbett and Messrs Green and Reeve dated 19-20 September 2022 regarding information about Energy Storage.
(m)An email chain involving Roberto De Almeida, Ms Bobbett, Mr Green and Mr Reeve dated 21 September 2022 regarding timelines for PKF Gold Coast to provide an audit pack to KS Black for them to undertake the audit.
(n)A screenshot of messages between Ms Bobbett and Mr Reeve between 14- 23 September 2023 relating to this work.
(o)An email from Ms Bobbett to Stuart Cameron at KS Black dated 23 September 2022 advising that we will not be able to provide an audit-assist pack.
In relation to the way in which this engagement came to be opened, based on his review of this file, Mr Butler said it appears that:
(a)Mr Reeve took steps to have a conflict check undertaken in early July 2022. Mr Butler provided with his evidence a conflict check email sent by Maddy Knight to PKF Australia on 6 July 2022.
(b)A ‘New Engagement Acceptance Checklist’ form was completed by Ms Knight under the direction of Mr Reeve on 6 July 2022.
(c)An ‘Audit and Review Engagements: Firm and Network Firm Independence’ form was completed by Ms Knight under the direction of Mr Reeve on 6 July 2022.
(d)A ‘New Client Form’ was completed by Ms Knight under the direction of Mr Reeve although Mr Butler was not sure of the date on which this form was completed.
Mr Butler said he has also become aware that Mr Reeve sought to have an invoice sent to this client in the amount of $15,000 in respect of this engagement in around 12 September 2022, despite the work not having yet been undertaken. Mr Butler provided with his statement an email exchange dated 12 September 2022 regarding this. Mr Butler said this is highly inconsistent with usual practices.
Mr Reeve said he did say that the Respondent could do work for Energy Storage but a lot of information and data had been withheld from him until September. Mr Reeve said Ms Bobbett deals with all the billings for any Walter Doyle company and pays PKF directly and has access to Walter Doyle bank accounts.
Documents relating to InterGroup Mining Limited
Mr Butler said his enquiries relating to this engagement indicate that:
(a)The engagement was initiated in April 2022 with the preparation of an engagement pack (including an engagement letter), which Mr Reeve was involved in.
(b)Ms Bobbett contacted Mr Reeve on 18 August 2022 seeking Mr Reeve's help with certain tasks, but Mr Reeve forwarded the query on to Mr Green.
(c)On 30 August 2022, Mr Green emailed Mr Reeve about utilising a team member to assist with the InterGroup audit assist work.
(d)On 14 October 2022, Mr Butler said he received an email from Ms Bobbett advising that Mr Green and Mr Reeve had raised independence issues with the engagement, and that accordingly their involvement would be confined to “financial reporting/technical review rather than provision of an audit assist file (with sample testing etc)”.
(e)On 25 October 2022, Mr Green advised Mr Reeve that KS Black had been engaged to do the audit but enquired whether he could assist with certain financial reporting work.
(f)On 26 October 2022, Ms Bobbett emailed Mr Reeve noting that Mr Green had raised independence issues relating to the audit assist engagement.
(g)Between 26-28 October 2022, Mr Reeve assisted Ms Bobbett to undertake a IFRS 9 calculation on convertible notes.
Mr Reeve said in relation to (g) above a blank template was sent and Ms Bobbett said that was not the one she needed. Mr Reeve said he did not assist with any work.
Additional Allegations and Green Fraud Article
Mr Reeve was asked about his originating Form F2 application which stated that in or about August 2022, he was asked to perform audits for Walter Doyle Group, and in response he told Mr Butler that it was unable to complete an audit for the Walter Doyle Group as there would be a lack of independence and it would be unethical for the Applicant to undertake an audit for the Walter Doyle Group.
Mr Reeve said in his oral evidence that he didn’t understand what was written in this part of the application and this is one of the issues he had with his representatives at the time. Mr Reeve said he suffers very badly from ADHD and stress related anxiety and depression, and it stops him from operating effectively and he must not have reviewed the document properly.
Mr Reeve claimed he was asked to perform audits for two Walter Doyle group entities Energy Storage and the Intergroup, and he said it was Mr Green and Ms Bobbett who continued to push for him to complete work for Energy Storage and Intergroup and these were the unethical audits he referred to. Mr Reeve claimed from 23 September he refused to do this work anymore, and after that Mr Green and Ms Bobbett did try to get him to so this work.
Mr Reeve claimed such work was unethical because you are essentially marking your own work, and his other issue was that he discovered a ponzi scheme. Mr Reeve said while he had heard rumours, he became fairly sure of the existence of the ponzi scheme on 23 September. Mr Reeve said he found the articles relating to the Walter Doyle group probably when he was setting up a file for Energy Storage.
Mr Reeve was referred to an email he sent to Ms Bobbett on 12 May 2022 where he asks Ms Bobbett if Wishbone Gold Pty Ltd is one of Walters clients and if they wanted an audit. Mr Reeve was also referred to an email he sent on 2 June 2022 to Tim Follett asking if he was okay to take on Energy Storage, and a subsequent email to Ms Ujdur of 2 June 2022 where Mr Reeve was pursing audit work for entities within the Walter Doyle group. Mr Reeve accepted he did that. Mr Reeve agreed he sent a power point proposal on 5 June to a person within the Walter Doyle group. He agreed that on 21 June he sent an email to Ms Bobbett seeking confirmation as to whether the client had agreed to the proposed engagement.
Mr Reeve was also referred to an email of 6 July 2022 from Maddy Knight to all staff enquiring whether there was any conflict in the Respondent providing audit services to Energy Storage. Mr Reeve agreed he instructed Ms Knight to send that email. The email included several questions, and advising staff must notify any potential conflict.
It was put to Mr Reeve that he had said in his evidence that after 2 to 3 months he began hearing rumours about the Walter Doyle group of companies, and he agreed in his oral evidence these rumours started in June. Mr Reeve was asked if he had concerns about doing work for Walter Doyle as of 6 July and he said not at that point.
Mr Reeve was referred to an email from Maddy Knight to himself dated 12 September 2022 concerning two separate billing proposals for Energy Storage of $35,000 and TORC for $14,000. Mr Reeve agreed he sent an email in response on the same day approving the bills being issued and advising her to bill Energy Storage for both. Mr Reeve said he approved the bills but claimed it did not necessarily mean he was involved in the work.
Mr Reeve was referred to an email of 14 September 2022 from Ms Bobbett to Mr Green and himself advising of the need to prepare a set of general-purpose financial statements for Energy Storge to be audited by KS Black. Mr Reeve claimed he raised concerns about this audit in early September 2022, and did not agree that this is why the audit was referred to KS Black.
It was put to Mr Reeve that on 5 June he sent a proposal to Energy Storage for an audit, and yet he claimed KS Black was going to do the audit. Mr Reeve said he believed it would have been okay to do the Energy Storage audit as of 5 June, and he accepted he did not think there was a conflict concern by 6 July, and by 14 September he had raised concerns about the Respondent doing the audit, and Ms Bobbett then was referring it to KS Black.
It was put to Mr Reeve that it was incumbent on him as at 6 July to ascertain for himself if there was any conflict. He said he did general checks. Mr Reeve was asked what independence concerns he raised at around 14 September, and he said it was that you can’t mark your own work. He claimed he did not know the extent of work that the Respondent did for the Walter Doyle group. It was put to Mr Reeve had he properly undertaken a conflict check in June or July and he would have known he could not do audit work for Energy Storage. Mr Reeve claimed he did check. It was put to Mr Reeve that as he was the head of audit, it was not appropriate for him to rely on others. It was also put to Mr Reeve that Ms Bobbett’s email advised Mr Green and Mr Reeve that it was left up to them what level of involvement they would have. Mr Reeve agreed he was not forced to do this work.
Mr Reeve was asked about his claim that work was pushed on him to do work for Intergroup, and whether he did any work for that file. Mr Reeve replied probably some planning, but he could not remember. Mr Reeve was referred to an email from Ms Bobbett dated 18 August 2022 with the subject IGM, advising her team would take ownership of the GPFR. Mr Reeve forwarded the email to Mr Green about one hour later, and Mr Green advised the next day he had picked up the file. Mr Reeve said there was no concern with this work as it was general purpose financial statement work.
Mr Reeve was referred to an email from Ms Bobbett to Mr Butler and Ms Ujdur regarding Intergroup Mining Limited dated 14 October 2022 saying Chris/Ollie had advised the same independence issues arise with IGM that did with Energy Storage and therefore there involvement with the 2022 accounts will be limited to financial reporting/technical review rather than the provision of an audit assist file (with sample testing etc) meaning they will not provide an audit file for KS Black. Mr Reeve accepted the emails he forwarded to Mr Green in August in relation to this was general purpose accounting and not audit related work. Mr Reeve agreed he was not forced to do audit work for Intergroup. Mr Reeve initially agreed that the remaining work for Intergroup was general purpose financial accounting work, however he later said financial reporting work on the convertible notes was both general purpose work and audit work.
Mr Reeve was referred to paragraph 7 of his further submissions where it said from early July Mr Reeve became aware of negative press articles and other evidence concerning Walter Doyle. Mr Reeve said during his oral evidence this was not correct and his evidence appeared to change such that he now said he became aware of this information between August and September. Mr Reeve maintained he heard rumours by 6 July but not enough to worry him.
Paragraph 7 of his statement made a claim that he emailed ‘findings’ to Mr Butler and Ms Ujdur as soon as they were discovered. His statements read as if this material was sent in July 2022 however Mr Reeve’s oral evidence was he had emailed an article referred to throughout proceedings as the ‘Green Fraud’ article to Mr Green on 22 September.
It was put to Mr Reeve he did not send the Green Fraud article to Ms Ujdur until 18 October. Mr Reeve maintained he had sent it to Ms Ujdur and Mr Butler earlier and said he didn’t know why he sent it again. It was put to Mr Reeve he had sent it to Mr Butler on 20 October, after he had sent it to Ms Ujdur. Mr Reeve claimed the article was discussed with Mr Butler and Mr Green at the meeting on 23 September. It was put to Mr Reeve that is not true and he rejected that.
Mr Reeve was referred to the email he sent to Mr Butler on 21 October with no subject line and he accepted that it was an email forwarding the email he had sent to Mr Green and Ms Ujdur which attached a copy of the Green Fraud article. It was put to Mr Reeve that was the first time he had sent the Green Fraud article to Mr Butler and he replied he did not believe that to be true however he did not have the emails to show he had sent it before.
Mr Reeve also was referred to an email from 24 October from himself to Mr Butler which says as follows:
“Hi Matt, I’m not sure the author was involved at all, it seems he has obtained most of his information from the investors forum….”
It was put to Mr Reeve that Mr Butler says he received the Green Fraud article for the first time on 21 October, and he had a conversation with Mr Reeve about it on 24 October and this email is responsive to that conversation where Mr Butler was speculating about who the author was.
It was put to Mr Reeve that it was Mr Green who had forwarded the Green Fraud article to Mr Reeve on 22 September, and at that point in his oral evidence Mr Reeve accepted that was the first time he had seen the Green Fraud article himself.
It was put to Mr Reeve that it is not true that he raised the Green Fraud article at the meeting the following day on 23 September with Mr Green and Mr Butler. Mr Reeve was referred to another chain of emails where Mr Green emailed Mr Reeve a copy of the Green Fraud article at 1.23pm on 22 September, and sent him another email at 1.32pm, and Mr Reeve responded to Mr Green at 4.01pm on 22 September saying as follows:
“Wow, if that’s true…Any chance we can keep this to ourselves this evening and lets put everything we have together and work out next steps? I want to be really sure before any avoidable damage is done.
You should have been a detective.”
It was put to Mr Reeve there was no mention of the Green Fraud article during the meeting of 23 September, however he maintained there was. Mr Reeve was asked if he did raise the Green Fraud article at the meeting on 23 September as he claimed, why did he send it to Mr Butler on 21 October. Mr Reeve responded that Mr Butler was probably asking about it. Mr Reeve was asked why on 24 October they were sharing their theories about why the article was written and he said he hadn’t been asked any questions about it.
It was put to Mr Reeve that the totality of the evidence before the Commission about the alleged significant fraud operation referred to by Mr Reeve was a bunch of chat forum posts attached to his second statement. Mr Reeve responded that was the evidence he had ‘at the moment,’ and Mr Butler was monitoring his computer. It was put to Mr Reeve that Mr Butler did not monitor his computer until 16 November, and that Mr Reeve’s evidence was he had an ‘inkling’ from 1 November that he was.
It was put to Mr Reeve that material he provided with his material regarding an entity called ‘Intrgroup’ including in the chat group discussion referring to a scam company, was a different entity to Intergroup. He accepted that. He described it as a cursory internet search.
It was put to Mr Reeve that if he had seen documents that he thought supported evidence for any criminal activity he should take that matter to the police, or he could make a complaint to ASIC. Mr Reeve responded he doesn’t have to. Mr Reeve accepted he had not made such a complaint. He accepted he did not complain to the Police, or to ASIC or make a whistle blower complaint or a complaint to the Chair of PKF Australia at that point. It was again put to Mr Reeve that he did not take his concern to Mr Butler at that point in time either, however he maintained he did. Mr Reeve said that between 23 September and 31 October was when he started to get very ill.
Mr Reeve accepted during his oral evidence that while it was his original belief that Mr Green was employed because Mr Reeve had blown the whistle on a client, he no longer believed that Mr Green was employed directly to replace him.
Mr Reeve said he was not at the meeting on 11 October where Mr Butler said in his evidence that he publicly praised Mr Reeve for his work.
Ms Ujdur said in her evidence that the Respondent has provided accounting services and back-office accounting outsourcing/company secretarial services for Mr Doyle and some of his associates. Ms Ujdur said with one exception of assisting with the audit of the Hellyer Gold Mines Pty Ltd audit, the Respondent has not undertaken audits of any entity in which Mr Doyle holds or has held a directorship or interest. Mr Reeve claimed the Respondent had signed off on the audit of Hellyer, and also provided ‘audit assist’ to Energy Storage.
Mr Reeve claimed Mr Butler tried to rush through an audit of Energy Storage because of legal action from an investor in the United Kingdom. Ms Ujdur said that the Respondent did not undertake an audit for Energy Storage and that it was referred to KS Black. Mr Reeve said he believed the Respondent did the testing work and KS Black literally sent an audit in to sign.
Ms Ujdur gave evidence the email attached to her evidence from Ms Bobbett did not involve any request for someone to rush through an audit, rather Ms Bobbett was seeking assistance with the preparation of general-purpose financial statements to enable KS Black to undertake the audit. Ms Ujdur said this was audit readiness work which is distinct from audit work. Ms Ujdur said at no time did Mr Reeve ever make any complaint or raise any issue or concern with her about Walter Doyle or any companies related to him.
Ms Ujdur said on 18 October 2022, Mr Reeve sent her an email which included a link to a ‘Green Fraud’ article which referenced Mr Doyle and a company in which he formally held an interest, NQ Minerals PLC. Ms Ujdur attached a copy of the email to her statement.[13] Ms Ujdur said to the best of her knowledge and belief, this was the only email she received from Mr Reeve concerning any potential concern he may have with the Walter Doyle group. Ms Ujdur said she did not take this email as amounting to a complaint about the Respondent providing services to the Walter Doyle group. Ms Ujdur said to the best of her knowledge and belief Mr Reeve did not speak to her about the contents of the article and certainly did not raise any concern with her about any alleged criminality.
Ms Ujdur said she did not read the ‘Green Fraud’ article in any detail at the time it was sent to her and she forwarded it to Ms Bobbett and Mr McMurtrie on the same date.
Mr Butler said over the course of the Respondent’s relationship with the Walter Doyle group, the client relationship has been overseen by at least 7 separate Engagement Partners/Directors, and the client relationship is now overseen by Ms Ujdur, who is the current Engagement Partner for the Walter Doyle group.
Mr Butler said he is aware that Ms Bobbett (Divisional Director of Corporate Services & Advisory) has most of the day-to-day contact with Mr Doyle and the other contact persons within companies relating to him. Mr Butler said he is not and have never been an Engagement Partner for Walter Doyle or any of his associated entities and have had very little involvement in the services provided by the Respondent to Mr Doyle and/or the Walter Doyle group.
Mr Butler said he has never met Mr Doyle, and to the best of his knowledge and recollection, he can only recall one occasion where he spoke to Mr Doyle on the phone, which occurred when another employee, Joan Sim, asked him to join her on an urgent call because Mr McMurtrie, Ms Ujdur and Ms Bobbett were all on leave on that day.
Mr Butler said to the best of his knowledge and recollection, he has also never met, spoken to, or exchanged correspondence with an officeholder or employee of the Walter Doyle group. Mr Butler said he is not involved in any company in the Walter Doyle group and is not involved in the management or decision making of any of the entities that make up the Walter Doyle group, nor does he have any involvement in the fund raising, promotion or commercial activities of Mr Doyle's business interests.
Mr Butler said that contrary to the assertion of Mr Reeve, the revenue generated by the Respondent from the Walter Doyle group as a client (or clients) is significantly lower than as claimed by Mr Reeve.
Mr Butler vehemently denied each of the allegations made by Mr Reeve’s against him, or that he has engaged in any “wrongdoing” relating to the Walter Doyle group. Mr Butler said the allegation is preposterous and offensive.
Mr Butler said he is not aware of any financial impropriety or criminal conduct involving any entity or person within the Walter Doyle group, however given his minimal involvement with or knowledge of the commercial affairs of those companies, he does not consider that he is in a position to make any informed assessment in that regard. Mr Butler said however, if he had a reasonable suspicion that a client of the Respondent had engaged in any criminal or fraudulent conduct, he would report the matter to the relevant authorities, and he would give the same advice to anyone within the Respondent who had such a belief.
Mr Butler provided with his statement[14] a copy of an email exchange dated 21-22 September 2022 between Mr Green and Mr Reeve, which Mr Butler said he only became aware of after Mr Reeve commenced these proceedings. In that email exchange, Mr Green sent Mr Reeve information taken from the internet about NQ Minerals PLC, a UK company formerly related to Mr Doyle.
Mr Butler said he is aware that Mr Doyle was recently involved in a UK company, NQ Minerals PLC, which held valuable mining rights in Australia. That company was then put into administration on 9 August 2021 and subsequently sold by the administrator to a third party. This chain of events resulted in investors losing money. Mr Butler said an attachment to Mr Reeve’s second statement[15] appears to consist of screenshots from a website ‘London South East’ (lse.co.uk) which provides share price information and has a ‘share chat’ service. The screenshots appear to contain dialogue between investors who lost money because of the company being put into administration.
Mr Butler said the email exchange between Mr Green and Mr Reeve dated 21-22 September 2022 contains information relating to NQ Minerals PLC, including a link to an article titled ‘Green Fraud’ which appears to no longer be available online.
Mr Butler said on Friday morning, 23 September 2022 (the following day after the abovementioned email exchange), Mr Reeve and Mr Green asked to have a meeting with him. Mr Butler said at the commencement of that meeting, they informed him that they were undertaking audit work for companies within the Walter Doyle group including Energy Storage and Direct Energy. Mr Butler said this was the first time he had been informed of any such work being performed. Mr Butler said during this meeting, the following exchange took place with words to the following effect:
Mr Green: “We are doing audit work for two of Walter Doyle's companies, Energy Storage and InterGroup”.
Mr Butler: “Why are we doing audit work for Walter Doyle's companies? I can't see how we don't have a conflict. Absolutely under no circumstances should we be doing audits for those companies. We have to refer that work out”.
Mr Green: “It's not really audit work. It's more audit assist work”.
Mr Butler: “What does that involve?”
Mr Green: “The work includes undertaking substantive testing procedures to assist the external auditor”.
Mr Butler: “Does it involve actual audit testing procedures that will be relied on by the external auditor who will be signing off”.
Mr Green: “Yes it does”.
Mr Butler: “That's beyond my comfort level as well. I don't want us doing any testing or assurance type work at all due to my conflict of interest concerns”.
Mr Green: “The other type of work we could do is audit readiness work. It doesn't involve any testing, but just making sure the accounts are in order, preparing financial statements, etc.”
Mr Butler: “Okay, I'm comfortable with that. I'm perfectly fine with us preparing financial statements and things like that, but not work that involves testing or offering any opinion or anything like that”.
Mr Butler said at the conclusion of the meeting, it was agreed by all that it was fine for staff of the Respondent to undertake ‘audit readiness’ work, as it did not involve any testing or assurance work but instead was more in the nature of general accounting services that are undertaken to get the company’s accounts in a state so that an audit could be undertaken. However, Mr Butler said they agreed that no ‘audit assist’ work was to be done, and absolutely no auditing due to the clear conflict of interest that such work would present.
Mr Reeve claimed Mr Butler’s version is not a true and accurate representation of the meeting. Mr Reeve claimed the discussions were based around his refusing to do the work. Mr Reeve claimed he said he was not prepared to work on any Walter Doyle work.
Mr Butler’s evidence was that he informed Mr Green and Mr Reeve that “I will go and speak to Ms Bobbett to make this clear to ensure we aren't doing any audits or audit-assist work for any clients associated with the Walter Doyle group”, and the meeting ended on that basis.
Mr Butler said in that meeting, the Green Fraud article was not mentioned by Mr Green or Mr Reeve, and no issues or concerns were raised about the business activities of the Walter Doyle group. Mr Butler said the discussion related solely to independence issues arising from auditrelated work being undertaken by Mr Green and Mr Reeve.
Mr Butler said prior to this meeting with Mr Green and Mr Reeve, he was not aware that they had been undertaking auditing work or 'audit-assist' work for any companies within the Walter Doyle group. Immediately following that meeting with Mr Green and Mr Reeve, Mr Butler said he went and spoke with Ms Bobbett to confirm the outcome of that discussion. During his discussion with Ms Bobbett, Mr Butler’s evidence was he said words to the following effect:
Mr Butler: “I've just spoken with Ollie and Chris who informed me they were doing audit work for some of Walter Doyle's companies which I am not at all comfortable with for conflict of interest reasons.”
Ms Bobbett: “Oh that's fine, we're not doing it anyway. We have already referred that out to KS Black. All we are doing is audit-assist”.
Mr Butler: “I've instructed them and they agree that it's fine for them to help with audit readiness work, but they're not to do any audit assist or auditing work for potential conflict reasons. Whenever we are doing that type of work, just run it by those guys first [Mr Reeve and Mr Green] to make sure it doesn't fall into an audit or audit assist category.”
Mr Butler said after his discussion with Ms Bobbett, he considered the issue resolved and he believed there was a mutual understanding and agreement in relation to his position on the matter between himself and Mr Reeve, Mr Green and Ms Bobbett. Mr Reeve said it was Mr Green who agreed to do ‘the audit’ and not Mr Reeve. He said Mr Butler’s recollection of the conversation is false.
Mr Butler said that contrary to Mr Reeve’s assertions, he did not email Mr Butler any “findings” relating to the Walter Doyle group “as soon as they were discovered”. Mr Butler said for example, Mr Reeve never sent him a link to the Green Fraud article at any time, or any other email outlining any concerns he might have held about the Walter Doyle group.
Mr Reeve disputed this saying it was false, and that they had a meeting about Mr Doyle’s ethical issues and independence on 23 September 2022. Mr Reeve claimed that the meeting on 23 September was the first meeting where he became aware of Mr Butler’s involvement, and the first meeting where he had access to data for Energy Storage, and the meeting was called because of irregularities found in the intercompany accounts by Mr Green. Mr Reeve said in his oral evidence the meeting on 23 September became heated, and it was the first time he voiced concern because of red flags, and he flat out refused to work on any of the Doyle entities and that aggravated Mr Butler.
Mr Reeve claimed he asked Mr Butler a direct question to the effect of, do you believe Walter Doyle is on the up and up, or do you think he is kosher, and Mr Butler just shrugged. Mr Reeve claimed he asked what was wrong with the audit assist work and giving it to KS Black, and Mr Butler thought they could do that work.
Mr Reeve put to Mr Butler that the sole reason for the meeting on 23 September was to discuss the allegations in the Green Fraud article, and that they went through the allegations in the article and Mr Green matched them to the intercompany transactions from Energy Storage to prove them out. Mr Butler said that is entirely false and did not occur.
Mr Butler said Mr Reeve called him into the meeting which included Mr Green, and Mr Reeve raised an issue of undertaking audit work for Walter Doyle entities, and Mr Butler said he immediately said why are they doing that, and from that point in time Mr Green explained the work that was being done. Mr Butler said he was initially of the understanding that it was audit work, and when he left the meeting he believed there was some audit work being done which he was unhappy with, however Mr Green went on to explain there was audit assist work, and Mr Butler said not only was he unhappy with audit work, but also audit assist work which involved testing which is in the nature of audit work.
Mr Butler said he was quite disappointed that the obvious conflict issues had not been identified, and immediately on becoming aware of it he shut it down. Mr Butler said the meeting discussed the nature of work that was, and was not acceptable, and audit assist work was unacceptable, and they talked about audit readiness work which is in the nature of traditional accounting work and they all agreed that was fine. Mr Butler said immediately after the meeting he went and spoke to Ms Bobbett and explained there was to be no audit work, no audit assist work, but audit readiness work was okay.
Mr Reeve maintained they were very concerned about cash flow being taken out. Mr Butler said such a discussion did not occur. Mr Reeve also put to Mr Butler that he refused to work for Walter Doyle entities. Mr Butler said they both knew that never happened.
Mr Butler continued to maintain the first time he had seen the Green Fraud article was on 20 October when it was sent to him from Ms Bobbett. Mr Butler said Mr Reeve subsequently sent it to him on 24 October.
Mr Butler said Mr Reeve sent a link to the Green Fraud article to Ms Ujdur on 18 October 2022, and Mr Butler provided a copy of that email.[16] Mr Butler said Ms Ujdur subsequently forwarded the email to Ms Bobbett on the same date, and he first became aware of the existence of the Green Fraud article on 20 October 2022 when Ms Bobbett included a link to it in an email she sent him on that day. Mr Butler said Ms Bobbett did not make it known to him how she had come to be aware of the article or who had sent it to her. Mr Butler also provided a copy of the email sent to him by Ms Bobbett.[17] Mr Reeve maintained Mr Butler’s version was not true as Mr Butler was aware of the article in September.
Mr Butler said he first read the Green Fraud article either on 20 October, or during the morning of 21 October 2022, and said he met with Mr Reeve around midday on 21 October 2022 in relation to the status of the Hellyer audit engagement and during that conversation he mentioned that he had received the Green Fraud article from Ms Bobbett.
Mr Butler said Mr Reeve seemed surprised that he had seen the article and asked if Ms Ujdur had sent it to him. Mr Butler said he replied that, “no she hadn't” and then he proceeded to share with Mr Reeve his initial thoughts that the author was most likely connected to a shareholder group who were unsuccessful in its attempt to purchase Hellyer from the Administrator of NQ Minerals.
Mr Butler said Mr Reeve nodded in acknowledgement of his thoughts, and they then continued with their discussion about the Hellyer engagement. Mr Butler said that was the first and only time he discussed the Green Fraud article with Mr Reeve. Mr Butler said following on from their meeting, Mr Reeve forwarded to him the untitled email he had sent to Ms Ujdur and Mr Green on 18 October 2022 containing a link to the Green Fraud article. Mr Butler provided a copy of this email. Mr Butler said he arranged to meet with Mr Reeve again on the morning of Monday 24 October 2022 in further discussion of the Hellyer engagement. Mr Butler said they did a full ‘walk through’ of the status of this job and then proceeded to join a Teams meeting with Cameron Bradley from PKF Brisbane and Jessica Martland of PKF Gold Coast. Mr Butler said the Green Fraud article was not raised during either of these meetings on the morning of 24 October 2022. Mr Butler said that day, Mr Reeve sent him an email containing his own thoughts on the Green Fraud article which he attached to his statement.[18] Mr Butler said he did not respond to that email and the matter was never raised or discussed between them again.
Mr Reeve’s evidence was to the effect that after 6 July he heard rumours about fee dependency however his evidence appeared to be he only became concerned from 23 September.
It was put to Mr Reeve if he had a genuine concern about fee dependency, he would have pursued the matter under the APES 110 Code of Ethics for Accountants to ASIC. Mr Reeve said he didn’t need to. Mr Reeve was referred to clause 4.5.11 of the Respondent’s Quality Control Manual. Mr Reeve was asked if the requirement that no member firm shall have an unduly large proportion of its total fees from an Assurance Engagement client had been breached and he said in his opinion yes, however he did not know by how much.
Mr Reeve was asked whether the Work In Progress (WIP) spreadsheet he had filed was what he was relying on and he said no. It was put to Mr Reeve that he had not reported a concern about fee dependency as required by clause 4.5.11 and he claimed he had. He was asked why he didn’t make a report under the APES 110 and he said it is a very stressful process and didn’t want to go through it.
It was put to Mr Reeve he had a range of options short of resigning to escalate the matter either within PKF HR or within PKF Australia and he agreed, and accepted he did not do this until after he had resigned. Mr Reeve then said he didn’t want to work there. It was put to him that he chose not to work for the Respondent, and he agreed, but then said he didn’t really have a choice. He said he didn’t think it would have fixed his problem to escalate to the Chair of PKF, and it was not a ‘viable opportunity.’
Ultimately Mr Reeve’s claim was that his awareness of the alleged significant fraud operation crystallised for him in the meeting on 23 September 2022. It was put to Mr Reeve that the totality of the evidence that Mr Reeve filed that shows that Mr Butler is involved with Walter Doyle is found in the email of Friday 5 May at 9.48am. Mr Reeve accepted that Mr Butler is not the engagement partner for this client, and Ms Ujdur is. It was put to Mr Reeve that the first two entries referred to in the report attached to the 5 May email may not involve actual work. Mr Reeve accepted that. It was put to Mr Reeve that the third one is a discussion with Ms Bobbett of between 18 and 24 minutes duration. Mr Reeve appeared to accept that.
Mr Reeve agreed he did not know whether Mr Butler had ever met Mr Doyle, that Ms Ujdur is the partner with contact with this client, and Ms Bobbett has most day-to-day contact with this client and he agreed that he did not accuse Ms Ujdur or Ms Bobbett of being involved in a ponzi scheme with this client.
During his oral evidence Mr Reeve withdrew an allegation contained in his written evidence making in relation to Mr Butler being referred to in articles concerning the Doyle group. Mr Reeve said it was an error that he mentioned Mr Butler.
It was put to Mr Reeve that in his evidence filed for the jurisdictional hearing on 10 February he said he came to PKF and had an excellent 6 months, and everything was going well. Mr Reeve replied that it was the end of August, September period that problems started. Mr Reeve was then referred to paragraph 5 of his statement where he said he began to hear rumours after 2 to 3 months about the Walter Doyle group being in potential breach of the Respondent’s ethical standards concerning fee dependency. Mr Reeve said he had heard the rumours from just about everybody. It was put to Mr Reeve that would mean he was hearing the rumours from about June, and he responded that was why he put in the extra effort for approval from Mr Lindemann to do the Energy Storage audit work.
Mr Reeve was asked if he checked if he had any independence concerns when he opened the Energy Storage file relating to Mr Doyle. Mr Reeve said he couldn’t remember. It was put to Mr Reeve that he sought approval from Mr Lindeman to do the JR Richards audit, and Mr Reeve said he might be getting confused.
Mr Butler rejected Reeve’s evidence that the Respondent is fee dependent on the Walter Doyle group. He said the total combined fees across all entities within the Walter Doyle group have reached a maximum value of approximately 15% of the overall revenue of the Respondent in any prior year. The total fees to that group in the current 2023 year are likely to be significantly less than this figure. Mr Butler said it is important to note that the concept of fee dependence is a commercial consideration for engagements that do not require independence. All clients are charged fees for professional services performed in accordance with the Respondent’s standard hourly rates. The volume of work, which varies continuously, is determined by the client in accordance with their particular needs and is beyond the control of the Respondent.
Mr Butler said the first time Mr Reeve raised any independence concerns with him about work relating to the Walter Doyle group was their discussion on 23 September 2022. Mr Butler said the Respondent is not involved in any “fraud scheme” relating to Energy Storage or InterGroup as stated by Mr Reeve.
Mr Butler denied that Mr Reeve ever “recommended” to him that they should “resign from our appointments with Mr Doyle as soon as possible” or that he ever agreed to do so. Mr Butler said they continue to undertake non-audit work for these clients to this date. He said no bookkeeping was moved to another firm, and Mr Reeve's assertions are completely fictitious.
Mr Butler said in relation to paragraphs [17]-[19] of the Second Reeve Submission, he was not involved in “designing” any business collapse, and he had no involvement whatsoever in the conduct of the 2020 Hellyer audit file. He said this file was overseen by Cameron Bradley of PKF Brisbane. He said he has no knowledge of any of the alleged transactions referred in those paragraphs and nothing of that nature was ever been brought my attention.
Ms Ujdur said in her oral evidence that she pulled a report of fees from 1 July 2022 to the weekend before the FWC hearing and the fees for Walter Doyle and his associated entities were $300,000 and the total invoices for the Respondent were $5.38 million, making the Walter Doyle fees about 6% on invoices.
Mr Ujdur was asked by Mr Reeve what the income was from the NQ Minerals Group, and Ms Ujdur said it would have been about $300,000. Ms Ujdur was asked about how much money the Respondent would get from the entire Walter Doyle group including NQ Minerals. Ms Ujdur said she would need to check but it would be definitely less than the figure of $1.3 million dollars claimed by Mr Reeve.
Allegations relating to working environment
Mr Reeve initially submitted that during his employment, he was subjected to bullying, as well as an unreasonably stressful work environment, arising in connection with unethical and objectionable conduct which PKF was engaging in and directing Mr Reeve to engage in.
The Respondent submitted Mr Reeve has also made a variety of allegations relating to his working environment, workloads, and treatment whilst at work, however they are vague, unsupported by any probative evidence, and do not have any basis in fact.
The Respondent said that the allegation that the Respondent hired Mr Green to “replace” him or to “push the applicant out” is untrue, and there is no probative evidence to support any suggestion that Mr Reeve was bullied by Mr Green or Ms Bobbett. Further there is also no credible evidence to support the assertion that Mr Green made comments that had the effect of undermining Mr Reeve.
The Respondent contended that there is no evidence to support the contention that the Respondent’s conduct towards Mr Reeve “completely changed” after Mr Green’s commencement in August 2022, and there is no evidence that would support a finding that Mr Butler “excluded” Mr Reeve from the Audit & Assurance Division.
Mr Butler said after he had discussions with Mr Reeve about concerns he raised about Mr Green on 31 October, he planned to meet with Mr Green upon his return to the office later in that week, however Mr Reeve resigned before he had the opportunity to investigate the issues he raised.
Mr Butler said notwithstanding that Mr Reeve had given notice of his resignation, Mr Butler looked into the concerns Mr Reeve had raised with him, which included reviewing email correspondence between the parties. Mr Butler said he did not find anything in the email communications between Mr Reeve, Mr Green and Ms Bobbett that he considered amounted to unacceptable behaviour by Mr Green or Ms Bobbett. Rather, Mr Butler said he formed the view (having regard to the tone and content of the correspondence) that all correspondence received by Mr Reeve from his colleagues was reasonable or professional and courteous.
Mr Butler said Mr Chris Green commenced employment with PKF Gold Coast on or around 8 August 2022 in the position of Director of Corporate Services and Assurance.
Mr Butler said the background to Mr Green's recruitment was that the Respondent had a staff member who had been placed with a client on a secondment-type basis. Mr Butler said this employee then resigned on 5 July 2022. Mr Butler said he had discussions with representatives of the client regarding options for replacing the employee who had resigned. He said he then placed a job advertisement for the position on or around 12 July 2022 and Mr Green applied. Mr Butler provided a copy of the job advertisement.
Mr Butler said he subsequently interviewed Mr Green on or around 25 July 2022 and reported back to the client that he believed he would be a good fit for the job; however, the client was unsure of their plans. Mr Butler said he informed the client that “If you want to pass on him, I think we might have potential for him in our firm anyway, either internally or to place with other clients”.
Mr Butler said he then liaised with the leadership team within the Respondent including Mr Reeve.
Mr Butler said the leadership team met with Mr Green on 28 July 2022 and the feedback from the group after that meeting was positive. Mr Butler said, Mr Reeve was enthusiastic and said words to the effect of “I think he will make a great addition to the firm”. Mr Butler said he then met with Mr Green again on 2 August 2022 and offered him the role of Director of Corporate Services and Assurance and he accepted that role.
Mr Butler said Mr Green's role consisted of providing corporate advisory services to a range of clients. Although Mr Green was a Registered Company Auditor, he was not employed as an auditor and the purpose of his role was not to do any work on any audit files. However, in about late August 2022, Ms Phillips informed Mr Butler that she was having issues with getting Mr Murphy to sign-off on audits in a timely manner which was having an adverse impact on client service. Following that discussion, Mr Butler said he asked Mr Green whether he would be happy to sign-off on audits for Ms Phillips, and he indicated that he was. Mr Green then commenced undertaking this responsibility in about late August or early September 2022.
Mr Butler said in his opinion, this was a logical and sensible solution to the issues Ms Phillips raised with him. He said he was not able to ask Mr Reeve to fulfil this responsibility as he was not a Registered Company Auditor.
Mr Reeve claimed Mr Green did very little work in corporate and advisory services and he also said that he as advertised as the divisional director audit shortly after Mr Reeve was pushed out.
Mr Butler said Mr Reeve has made a number of assertions regarding Mr Green, including that:
(a)PKF Gold Coast had hired Mr Green to “replace” Mr Reeve or to “push the applicant out”;
(b)Mr Green made comments that had the effect of undermining Mr Reeve;
(c)Mr Reeve was bullied by Mr Green;
(d)Complaint/s made by Mr Reeve about Mr Green were not addressed;
(e)The Respondent’s conduct towards Mr Reeve “completely changed” after Mr Green commenced employment with the Respondent.
Mr Butler said in relation to point (a) above, he denies that Mr Green was hired to “replace” Mr Reeve or to push him out of the firm. Mr Butler said Mr Reeve was involved in discussions relating to the potential recruitment of Mr Green and was supportive of offering him a role. There was no conspiracy to use Mr Green to “push” Mr Reeve out of the firm.
Mr Butler said in relation to point (b) above, he is not aware what comments or alleged comments Mr Reeve is referring to. Mr Butler said Mr Reeve did not advise him that he had concerns about Mr Green until the morning of 31 October 2022, but he did not provide any specific examples of any comments he had taken objection to.
Mr Butler said in relation to point (c) above, the first time Mr Reeve notified him of any concern about his working relationship with Mr Green was the morning of 31 October 2022, and Mr Butler said he gave him a commitment to look into the issue, however, he was not aware at that time of any allegation of ‘bullying’. Mr Butler said Mr Reeve certainly did not use that word during their meeting on 31 October 2022.
Mr Butler said in relation to point (d) above, he restates that the first time Mr Reeve notified him of any concern regarding his working relationship with Mr Green was the morning of 31 October 2022, and he gave him a commitment to look into that issue. Mr Reeve resigned later that day.
Mr Butler said in relation to point (e) above, he is unclear of the basis upon which Mr Reeve asserts that the Respondent’s conduct towards him “completely changed” after Mr Green commenced employment. He said in any event, he strenuously denies that this occurred, and he was happy with Mr Reeve’s performance in his role and was unaware of any tension between him and Mr Green, until the morning of 31 October 2022.
Mr Reeve said Mr Butler’s evidence in relation to this matter was false and he was aware of a number of meetings between Mr Butler, Ms Bobbett and Mr Green.
Mr Butler responded to Mr Reeve’s assertion in his statement that Mr Butler excluded him from the Audit & Assurance Division, by saying it was not clear to him how Mr Reeve believes he excluded him from the Audit & Assurance Division, however, he denied that he engaged in any such conduct.
Mr Butler said he also disputed the allegation that Mr Reeve was assigned an unfair or unreasonable workload while employed with the Respondent. Mr Butler said during 2022, the total audit fees for the Audit & Assurance Division of the Respondent equated to approximately $1.5 million per annum, however Mr Reeve was only involved in, or had supervision for, approximately 50-60% of that work. Mr Butler said for example, Mr Reeve had little or no involvement in:
(a)the non-corporate audit division which is overseen by Marietta Phillips, which accounts for approximately $500,000; and
(b)the audit work for clients in the film industry, which accounts for approximately $250,000.
Mr Butler said once the abovementioned work is excised, he would estimate that Mr Reeve was overseeing a corporate audit client portfolio of approximately $800,000 per annum, and based on his experience in the industry, this represents approximately half the portfolio that a senior auditor would usually be expected to manage in a private practice auditing firm.
Mr Butler said he did not accept that Mr Reeve was overworked or assigned an unfair or unreasonable workload. He said to the contrary, Mr Reeve was under-utilised and had spare capacity at various times throughout his short tenure with the Respondent. Mr Butler referred to the following examples so support this statement:
(a)An email exchange dated 13-14 October 2022 between Mr Reeve and Tim Follett (Partner at PKF Brisbane), in which Mr Reeve indicated that “Everything is slowing down more than normal at the moment, so the guys are getting a bit of a rest”; and
(b)An email exchange dated 18 October 2022 between Mr Reeve and Mr Follett, in which Mr Reeve referred to his workflow for that month.
Mr Butler said at no time did Mr Reeve raise any concern or complaint to him about unfair workloads or being overworked, and to the contrary, on various occasions during their informal weekly catchups Mr Reeve advised him that he would need to get new work to keep himself and the team busy.
Mr Reeve said during his oral evidence that the point was not that he was under an unreasonable workload, but that Mr Green had no work, and he was supposed to be doing corporates services work and there was no such work. Mr Reeve also said he had supervision of more like 75% of the Audit & Assurance Division. Mr Reeve said he also did the audit support work for clients in the film industry.
Mr Reeve said in his statement that he was demoted to the same level as Mr Green and Ms Bobbett. Mr Butler said in response that Mr Reeve was not demoted, and six staff members had their title changed as part of an organisational change.
Mr Reeve claimed said that Mr Butler was actively monitoring his computer from the day he quit. Mr Butler said in response that he did not take steps to gain IT access to Mr Reeve’s work computer until 17 November 2022. Mr Butler said he took this step after being informed by another person that Mr Reeve had sent them an email on 16 November 2022 alleging he had been forced to resign.
Mr Butler denied Mr Reeve’s evidence that Mr Butler was warned not to hire Mr Green due to any kind of behavioural issue. Mr Reeve said he sat with Mr Butler when Mr Murphy of PKF Office had confirmed that he had warned Mr Butler, and he said he also had a conversation with Ms Ujdur who told him she had also overheard another conversation between Mr Butler and Mr Murphy about it.
Mr Reeve said that Mr Butler had come into his office, on a date he couldn’t remember however it was after he resigned, and asked him what was wrong, and Mr Reeve said Mr Butler knew what was wrong. Mr Reeve said he said they were talking about Mr Green, and he let Mr Butler know that he had been told by Mr Murphy and Mr Follett that Mr Butler had been warned about hiring Mr Green. Mr Reeve claimed Mr Butler accused him of talking rubbish, and Mr Butler offered to call Mr Murphy, and in the course of the phone call Mr Reeve interrupted and asked Mr Murphy the question of whether Mr Murphy and warned Mr Butler about Mr Green and Mr Murphy replied yes, and Mr Reeve said at that point he left the room.
Mr Butler said in oral evidence in chief that he had never had a discussion with Mr Murphy about Mr Green, however he did have a discussion with Mr Mulligan the CEO on 24 October 2022 when he raised some issues in relation to Mr Green. Mr Butler agreed he did phone Mr Murphy in the presence of Mr Reeve, and he made it clear that he was not made aware of deficiencies or inconsistencies in Mr Green’s curriculum vitae before he hired Mr Green. Mr Butler said when Mr Reeve suggested he had spoken to Mr Murphy and Mr Murphy had said he had warned Mr Butler about hiring Mr Green, Mr Butler said he told Mr Reeve he was happy to call Mr Murphy right now.
Mr Butler said he rang Mr Murphy and said he needed Mr Murphy to correct the record and Mr Reeve said, ‘see I told you’ and walked out of the room. Mr Butler said he told Mr Murphy he needed to clarify the issue because Mr Reeve was under the impression that PKF Brisbane had communicated to Mr Butler prior to Mr Green’s recruitment which was false. Mr Butler said the first time he was aware of the issue was 24 October with Mr Mulligan. Mr Butler said he believed the conversation with Mr Murphy was later in the week after Mr Reeve had resigned. Mr Butler said it was possible Mr Murphy may have said something like that to Mr Reeve but that was not correct, and Mr Murphy needs to correct the record if he hasn’t. Mr Butler said he had put this is writing to Mr Murphy and has not had a response.
Mr Butler said in his oral evidence that he had checked, and the conversation occurred on Friday 11 November. Mr Butler said it had no bearing on Mr Reeve’s decision to resign eleven days earlier, and further Mr Murphy should not have divulged this private information concerning an ongoing employee.
Mr Reeve asked Ms Ujdur about a meeting they had on 24 November when they went out for coffee. Mr Reeve put to Ms Ujdur that one of the items discussed was that she overheard the conversation where Mr Butler was warned not to hire Mr Green. Ms Ujdur said she did not overhear the conversation. Ms Ujdur said she heard it from Mr Reeve. Ms Ujdur agreed that after Mr Reeve had resigned, they had called Mr Murphy about what had upset Mr Reeve and Mr Murphy didn’t say the dates he said he spoke to Mr Butler but she didn’t know to what extent.
The timing of the Applicant raising his concerns with the Respondent
The Respondent submitted the vast majority of Mr Reeve’s concerns were either not raised with the Respondent at all prior to him giving notice of resignation, or were only raised for the first time on the morning of 31 October 2022.
The Respondent said it acted promptly to cease audit related work immediately upon becoming aware of concerns in relation to that issue. The Respondent says any other complaints were not made until the morning of 31 October 2022. The Respondent said Mr Reeve gave it less than 8 hours to deal with such concerns before he elected to resign.
Ms Ujdur said the first time Mr Reeve raised any concerns with her was when she met Mr Reeve for coffee on 24 November 2022. Ms Ujdur said during that meeting Mr Reeve stated that he would stay with the Respondent if Chris Green left and raised issues about Mr Green’s resume. Ms Ujdur said other than the concern regarding Mr Green raised on 24 November 2022, Mr Reeve did not at any time raise any concern or complaint with her about:
(a)His working relationship with Ms Bobbett;
(b)The hiring of Mr Green;
(c)Any unaddressed complaints or grievances he may have made; or
(d)Any other matter.
Mr Reeve said in oral evidence[19] that Ms Ujdur noted in her earlier witness statement that they had discussed Mr Green’s CV.
Mr Butler said in his evidence that throughout the first six months of Mr Reeve’s employment, he had no issues with Mr Reeve’s performance. Mr Butler said to the contrary he met with Mr Reeve on a regular basis for informal catch ups on approximately a weekly basis and Mr Butler said he provided Mr Reeve with positive verbal feedback during those catch ups.
Mr Reeve said in his written material that on or around the 20th of October he approached Mr Butler to inform him that Mr Green was behaving in a disrespectful manner and was holding client meetings as well as with potential clients, and this was directly against what was agreed with Mr Butler. Mr Reeve requested that Mr Butler address the issue and ensure his inclusion in anything related to the audit department. Mr Reeve said Mr Butler agreed to speak with Mr Green again about the issue.
Mr Reeve said on 26 October he approached Mr Butler over the difficulties he was having with Mr Green and that the poor behaviour had continued. Mr Reeve said there was also an issue over some WIP for J.R. Richards. Mr Reeve said that Mr Butler agreed that he would speak to Mr Green yet again and the WIP should remain where it was and be billed against revenue. Mr Reeve said this is something Mr Butler later denied as he sided with Mr Green over the irrelevant matter. Mr Reeve said this action demonstrated that no action would be taken by the firm over his grievance.
Mr Butler said in response in his witness statement that he denied that Mr Reeve raised any issues with him on 20 October or 26 October 2022, either verbally or in writing. Mr Butler said he is certain that no such conversations occurred on those dates, however he did recall a conversation on 27 October. Mr Butler said this was one of his impromptu catch-ups with Mr Reeve during which Mr Reeve asked Mr Butler questions about Mr Green and his role. Mr Butler said Mr Reeve did not raise any complaint about Mr Green during this discussion, nor at any time prior to this discussion, nor at any time prior to the discussion. Mr Butler said rather, he asked questions about roles, responsibilities, and how their two respective roles were intended to co-exist. At the time of that conversation, he recalled thinking that the discussion was unusual, however he responded to Mr Reeve’s questions by reiterating that he believed their roles were complementary and would coexist together effectively. Mr Butler said he stated that “Chris’s primary focus is to build our Corporate Services offerings but due to his qualifications and experience, he was also available to assist the audit teams if they required.” Mr Reeve described this evidence as false.
Mr Butler said on reflection, the discussion with Mr Reeve on 27 October 2022 was the first time he became aware of any potential issue or tension between Ms Reeve and Mr Green. Mr Reeve described this evidence as false, saying he probably first raised the issue around the start of October or late September, however he said he didn’t really know. Butler then said that Mr Reeve was not in the office on Friday 28 October 2022.
Mr Butler said his impression from his discussions and interactions with Mr Reeve prior to 31 October 2022 was that things were going well and that he enjoyed the job. He said he was therefore very surprised when Mr Reeve came into his office and met with him on the morning of 31 October 2022 and informed him that he intended to resign due to a break-down in his relationship with Mr Green and Ms Bobbett. In his oral evidence Mr Reeve denied making the statement as claimed by Mr Butler, and said he said didn’t resign for the reason given by Mr Butler that he never had an issue with Ms Bobbett.
Mr Reeve claimed that what he said to Mr Butler was ‘I am upset I have given you these issues including the bullying and Walter Doyle issues and you are not doing anything about them.’
Mr Butler said that on that on the morning of 31 October Mr Reeve approached him and they a conversation which lasted approximately 30 minutes. Mr Butler said during that conversation:
(a)Mr Reeve stated that he was experiencing difficulties in his working relationship with Mr Green and Ms Bobbett and that he was intending to resign from his employment with the Respondent due to those difficulties. Mr Reeve said this was false.
(b)Mr Butler asked Mr Reeve how long he had been experiencing difficulties in his relationship with Mr Green in particular, and Mr Reeve replied with words to the effect of “in the last week or so”.
(c)Mr Butler said he responded by stating words to the effect of “I thought you and Chris had a strong working relationship and were getting along well”. Mr Butler said Mr Reeve responded by stating he felt the relationship was one-sided because he was making all of the effort and Mr Green was not reciprocating. Mr Reeve said that he was the person who initiated their various coffee catchups and that Mr Green had recently postponed one of their planned lunches.
(d)Mr Butler said that Mr Reeve expressed a desire for Mr Green to be available as a resource for his audit team and that he wanted to be able to delegate work to Mr Green. Mr Reeve said in his oral evidence this was what the original agreement was when Mr Green was hired, and that was expressed by Mr Butler to Mr Reeves team.
(e)Mr Butler said Mr Reeve stated that he did not want any audit WIP to be written off, but did not provide any further detail. Mr Butler said he was confused by that comment and did not become aware of what Mr Reeve was referring to until later in the day of 31 October 2022. Mr Butler said he made a note of his comment but did not ask him for any further details of this issue during the discussion. Mr Reeve said this is false and a non issue and he had saved the Respondent over $500,000 in WIP.
(a)A forced resignation is when an employee has ‘no effective or real choice but to resign’.[23]
(b)The Applicant bears the onus of proving that they did not resign voluntarily. The Applicant must prove that the employer engaged in conduct or a course of conduct which forced the employee to resign.[24]
(c)The Applicant must demonstrate that the employer took action with the intent to bring the relationship to an end or took action that has that probable result.[25]
(d)The test to be applied here is whether the employer engaged in the conduct with the intention of bringing the employment to an end or whether termination of the employment was the probable result of the employer’s conduct such that the employee had no effective or real choice but to resign. [Respondent emphasis added].[26]
(e)In applying the statutory test under s.386(1)(b), the requisite employer conduct is the essential element.[27]
In the present matter, the Respondent submitted that the Applicant had a range of options available to him to raise his concerns and have them addressed. Without being exhaustive, the Applicant could have:
(a)If he believed there was potential criminality involving a client of the Respondent, reported the matter either internally within the PKF network or externally to an appropriate regulatory or enforcement body.
(b)If he believed there were conflict of interest or independence concerns relating to certain audit engagements, reported those matters to any number of people, including the audit engagement partners at PKF Brisbane, Mr Butler (prior to 23 September 2022), internally via PKF’s reporting channels, via a Whistleblower complaint, or externally to a professional or regulatory body.
(c)In relation to his apparent concerns around workloads, the work environment or potential bullying behaviour, he could have made a grievance internally pursuant to the Employee Manual, a bullying application to the Fair Work Commission, a complaint to the relevant work health and safety regulator, etc.
The Respondent contended that if the Applicant did have real and genuine concerns regarding any aspect of his employment with the Respondent, there were clear avenues available for him to raise those matters. He could have availed himself of those avenues and then given the Respondent a reasonable opportunity to engage with him regarding those concerns.
Ultimately, the Respondent submitted that the Applicant chose not to utilise those avenues. Instead, he raised many of his concerns with the Respondent for the first time on the morning of 31 October 2022, and then resigned later that afternoon.
The Respondent submitted that the Applicant voluntarily resigned from his employment and, as there was no dismissal, the Commission is without jurisdiction to determine an unfair dismissal application. The Application must be dismissed.
CONSIDERATION
When considering whether an employee has been dismissed, the general approach is set out in the Decision of a Full Bench of the former Australian Industrial Relations Commission in O’Meara v Stanley Works Pty Ltd[28]:
“[21] In this Commission the concepts have been addressed on numerous occasions and by a number of Full Benches. In Pawel v Advanced Precast Pty Ltd (Pawel) a Full Bench said:
‘[13] It is plain that the Full Court in Mohazab considered that an important feature in the question of whether termination is at the initiative of the employer is whether the act of an employer results directly or consequentially in the termination of the employment and that the employment relationship is not voluntarily left by the employee. However, it is to be noted that the Full Court described it as an important feature. It plainly cannot be the only feature. An example will serve to illustrate this point. Suppose an employee wants a pay rise and makes such a request of his or her employer. If the employer declines and the employee, feeling dissatisfied resigns, can the resignation be said to be a termination at the initiative of the employer? We do not think it can and yet it can be said that the act of the employer i.e. refusing the pay rise, has at least consequentially resulted in the termination of the employment. This situation may be contrasted with the position where an employee is told to resign or he or she will be terminated. We think that all of the circumstances and not only the act of the employer must be examined. These in our view, will include the circumstances giving rise to the termination, the seriousness of the issues involved and the respective conduct of the employer and the employee. In the instant case the uncontested factual findings are that the applicant had for almost the whole of his employment performed welding duties; that there was no objective threat to his health and safety involved in the requirement that he undertake welding duties so long as it was not on a continuous basis and that the welding he was required to do was not continuous.’ “
The Full Bench in O’Meara cited an earlier Decision of a Full Bench in ABB Engineering Construction Pty Ltd v Doumit[29]:
“Often it will only be a narrow line that distinguishes conduct that leaves an employee no real choice but to resign employment, from conduct that cannot be held to cause a resultant resignation to be a termination at the initiative of the employer. But narrow though it be, it is important that that line be closely drawn and rigorously observed. Otherwise, the remedy against unfair termination of employment at the initiative of the employer may be too readily invoked in circumstances where it is the discretion of a resigning employee, rather than that of the employer, that gives rise to the termination. The remedies provided in the Act are directed to the provision of remedies against unlawful termination of employment. Where it is the immediate action of the employee that causes the employment relationship to cease, it is necessary to ensure that the employer’s conduct, said to have been the principal contributing factor in the resultant termination of employment, is weighed objectively. The employer’s conduct may be shown to be a sufficiently operative factor in the resignation for it to be tantamount to a reason for dismissal. In such circumstances, a resignation may fairly readily be conceived to be a termination at the initiative of the employer. The validity of any associated reason for the termination by resignation is tested. Where the conduct of the employer is ambiguous, and the bearing it has on the decision to resign is based largely on the perceptions and subjective response of the employee made unilaterally, considerable caution should be exercised in treating the resignation as other than voluntary.”
The Full Bench in O’Meara went on to observe:
“In our view the full statement of reasons in Mohazab which we have set out together with the further explanation by Moore J in Rheinberger and the decisions of Full Benches of this Commission in Pawel and ABB Engineering require that there to be some action on the part of the employer which is either intended to bring the employment to an end or has the probable result of bringing the employment relationship to an end. It is not simply a question of whether “the act of the employer [resulted] directly or consequentially in the termination of the employment.” Decisions which adopt the shorter formulation of the reasons for decision should be treated with some caution as they may not give full weight to the decision in Mohazab. In determining whether a termination was at the initiative of the employer an objective analysis of the employer’s conduct is required to determine whether it was of such a nature that resignation was the probable result or that the appellant had no effective or real choice but to resign.” (footnotes omitted)
In Bupa Aged Care Australia Pty Ltd t/a Bupa Aged Care Mosman v Tavassoli[30] a Full Bench of the Commission noted:
“[33] Notwithstanding that it was clearly established, prior to the enactment of the FW Act, that a “forced” resignation could constitute a termination of employment at the initiative of the employer, the legislature in s.386(1) chose to define dismissal in a way that retained the “termination at the initiative of the employer” formulation but separately provided for forced resignation. This was discussed in the Explanatory Memorandum for the Fair Work Bill as follows:
‘1528. This clause sets out the circumstances in which a person is taken to be dismissed. A person is dismissed if the person’s employment with his or her employer was terminated on the employer’s initiative. This is intended to capture case law relating to the meaning of ‘termination at the initiative of the employer’ (see, e.g., Mohazab v Dick Smith Electronics Pty Ltd (1995) 62 IR 200).
1529. Paragraph 386(1)(b) provides that a person has been dismissed if they resigned from their employment but were forced to do so because of conduct, or a course of conduct, engaged in by their employer. Conduct includes both an act and a failure to act (see the definition in clause 12).
1530. Paragraph 386(1)(b) is intended to reflect the common law concept of constructive dismissal, and allow for a finding that an employee was dismissed in the following situations:
• where the employee is effectively instructed to resign by the employer in the face of a threatened or impending dismissal; or
• where the employee quits their job in response to conduct by the employer which gives them no reasonable choice but to resign.’
[34] It is apparent, as was observed in the decision of the Federal Circuit Court (Whelan J) in Wilkie v National Storage Operations Pty Ltd, that “The wording of s.386(1)(b) of the Act appears to reflect in statutory form the test developed by the Full Court of the then Industrial Relations Court of Australia in Mohazab v Dick Smith Electronics Pty Ltd (No. 1) and summarised by the Full Bench of the Australian Industrial Relations Commission in O’Meara v Stanley Works Pty Ltd” (footnotes omitted). The body of pre-FW Act decisions concerning “forced” resignations, including the decisions to which we have earlier referred, has been applied to s.386(1)(b): Bruce v Fingal Glen Pty Ltd (in liq); Ryan v ISS Integrated Facility Services Pty Ltd; Parsons v Pope Nitschke Pty Ltd ATF Pope Nitschke Unit Trust.” (footnotes omitted)
Commission Hampton in Sathananthan v BT Financial Group Pty Limited[31] distilled the general legal principles into the following, having considered the above cases:
· The question as to whether the resignation was forced within the meaning of the FW Act is a jurisdictional fact that must be established by the applicant;
· A termination at the initiative of the employer involves the conduct (or course of conduct) engaged in by the employer as the principal constituting factor leading to the termination;
· The employer must have engaged in some conduct that intended to bring the employment relationship to an end or had that probable result;
· Conduct includes an omission;[32]
· Considerable caution should be exercised in treating a resignation as other than voluntary where the conduct of the employer is ambiguous and it is necessary to determine whether the employer’s conduct was of such a nature that resignation was the probable result such that the employee had no effective or real choice but to resign; and
· In determining the question of whether the termination was at the initiative of the employer, an objective analysis of the employer’s conduct is required.
Mr Reeve said in his closing oral submissions that the meeting on 23 September was highly unlikely to be about anything other than the fraud. Mr Reeve said there was a lot of push back in the meeting and he said he would refuse to do any work on Walter Doyle entities and after that, things got worse and he was continually pushed by Mr Green. Mr Reeve said if Mr Butler was not prepared to act then he had no choice but to resign.
The Respondent submitted in closing oral submission that the onus lies with Mr Reeve to make the case that he was forced to resign. The Respondent referred to paragraph 30 its further submissions to support its position that there were a range of options available to Mr Reeve to raise his concerns and have them addressed.
CONCLUSION
On the evidence before the Commission, I am prepared to make the following findings. There is no basis to support the allegation made by Mr Reeve that Mr Butler was involved in a ponzi scheme with a client of the Respondent. The evidence does not support a conclusion that a ponzi scheme exists, but even if there was, there is no evidence to support any involvement between Mr Butler and Mr Doyle in any ponzi scheme. I accept Mr Butler’s evidence that as far he as can recall he has never met Mr Doyle, and that he has spoken to him on one occasion.
In any event, I agree with the submission of the Respondent that if Mr Reeve had a concern about the conduct of a client of the Respondent, he could have reported those concerns to relevant authorities which he said during his evidence that he has not done.
Mr Reeve’s very serious allegations were never particularised in any detail. I accept the Respondent’s submissions that there is no evidence that it attempted to hide any audit finding. It would appear from the evidence that Mr Reeve has taken a particular view about the conduct of Mr Butler and expounded serious allegations about Mr Butler without a reasonable basis for doing so.
The allegation of Mr Reeve that he was forced or pressured to perform audits for Energy Storage and Intergroup, changed in the course of the hearing to having been asked to perform these audits. However, the evidence shows it was Mr Reeve who pursued the work in relation to Energy Storage, and when issues were raised about this work, Ms Bobbett, under instruction from Mr Butler took immediate steps for it to be referred to KS Black. Mr Reeve was given discretion as to whether he wanted to be involved in audit readiness work. There was no evidence that Mr Reeve was asked to undertake unethical audit work in relation to Intergroup either. In any event, as the Respondent emphasised during the hearing, Mr Reeve was himself the head of audit, and had a duty to identify concerns himself and escalate them if identified.
The evidence does not support a conclusion that Mr Reeve was asked to rush through an audit. The email that is relevant to this allegation related to general accounting work, and the audit itself had been referred by the Respondent to KS Black to conduct.
The evidence does not support a conclusion that the Respondent is fee dependent on the Walter Doyle group. It is notable that Mr Reeve did not raise any concerns about this alleged fee dependency at a time when he was pursuing work with Energy Storage that overlapped with a time that he claimed to have been hearing rumours about this issue.
I am satisfied on the basis of the evidence that the Green Fraud article was not raised with Mr Butler during the meeting of 23 September. Text messages in evidence[33] between Mr Reeve and Ms Bobbett between 14 September and 23 September, and specifically a message from Ms Bobbett to Mr Reeve at 9.37am on 23 September, tends to support the version of events as given by Mr Butler, and his version has been consistent throughout his evidence. Mr Reeve sending the Green Fraud article to Mr Butler on 21 October, and Ms Bobbett and Ms Ujdur on 18 October, also tends to support Mr Butler’s version. While Mr Reeve claimed the sending of these messages by him on 18 October and 21 October were a ‘resend’, there was no evidence to support this claim, and it seem less plausible.
This interpretation of the evidence is also consistent with Mr Butler’s evidence that he had a discussion with Mr Reeve about the article on 24 October, and the existence of the email sent by Mr Reeve to Mr Butler on 24 October discussing who may have written the article. Overall, the evidence supports the conclusion that Mr Butler’s claim that he was unaware of the existence of the article until 20 October is far more likely to be true.
I also accept on the balance of probability that it was Mr Butler who raised concerns about independence issues in the course of the meeting on 23 September when he became aware of the suggestion of audit work being performed for Energy Storage, and not Mr Reeve. It is my impression that Mr Reeve was generally confused throughout the course of his evidence about the sequence of events.
It is also the case that Mr Reeve retreated from his earlier claim that Mr Green was employed by the Respondent to force Mr Reeve out of employment with the Respondent. There is also no cogent evidence to support Mr Reeve’s claim that Mr Green undermined or bullied him. I am inclined to accept Mr Butler’s evidence that concerns or complaints about Mr Green were not raised by Mr Reeve until the meeting with Mr Butler on the morning of 31 October 2022. The contemporaneous file note of the meeting provided by Mr Butler is the best evidence of what was discussed at that meeting. It is notable that the file note is consistent with Mr Butler’s evidence of how the discussion proceeded.
It is apparent from the evidence Mr Reeve was not demoted as he claimed, and his title change was merely the outcome of an organisational change that did not have any real impact on his conditions of employment or authority. I accept that at the discussion of 27 October between Mr Reeve and Mr Butler the issues raised by Mr Reeve were general in nature about how his role and Mr Green’s role were to relate to each other, and 31 October was the first occasion that more specific grievances were raised, and Mr Butler indicated at that meeting that he would speak to Mr Green about the issues raised by Mr Reeve.
Later that day there was an email exchange between Mr Reeve and Mr Green about the WIP issue in relation to JR Richards and Mr Reeve tendered his notice of resignation to the Respondent shortly after this email exchange. The evidence also supports the conclusion that Mr Reeve had no proper basis to complain about Mr Butler’s decision in relation to the WIP issue concerning the JR Richards client. I accept the evidence of Mr Butler that he did not approve the $17,000 WIP being included in the JR Richards audit readiness file as had been claimed by Mr Reeve.
I am inclined to accept the submission of the Respondent that Mr Reeve misinterpreted a conversation between Mr Butler and Mr Reeve on the morning of 27 October concerning this issue, as described by Mr Butler in his evidence.[34] I accept the Respondent’s submission that business development time would not ordinarily be billed to a client, and Mr Butler supporting Mr Green’s view that this work should not be billed to the client was reasonable, and it was ultimately Mr Butler’s prerogative to make this decision.
During the hearing, Mr Reeve retreated from an earlier claim in his written submissions that he had an unfair workload, and his concern according to his oral evidence was more in relation to the nature of the distribution of work between himself and Mr Green.
The evidence also does not support Mr Reeve’s claim that he was being excluded from the Audit and Assurance Division. There was evidence that Mr Butler made positive comments about Mr Reeve’s performance during a meeting on 11 October 2022 which tells against the claims of Mr Reeve in this regard.
Mr Reeve strongly disputed Mr Butler’s evidence that he was not warned about hiring Mr Green before Mr Green was employed by the Respondent. This issue first arose after Mr Reeve had tendered notice of his resignation so it appears that it has little bearing on the jurisdictional question before the Commission, but to the extent that it may have any relevance, for example as to the credit of the witnesses, I am inclined to accept Mr Butler’s evidence concerning the dispute. Mr Reeve’s view that Mr Butler was warned about hiring Mr Green arises from a conversation he had with Mr Murphy of PKF Brisbane. Mr Butler was adamant on this issue in both his written and oral evidence, and the Respondent has offered a plausible explanation that Mr Murphy was simply mistaken in his belief that he had raised the issue with Mr Butler. More generally through the proceedings I found Mr Reeve’s evidence to change on a number of issues, whereas Mr Butler’s was more consistent. This leads me to prefer Mr Butler’s evidence to that of Mr Reeve where they are in conflict.
Having considered all of the evidence in relation to the concerns Mr Reeve says he held at the time of his resignation; I am satisfied Mr Reeve had available to him at the time of his resignation a range of options he could have pursed as an alternative to resigning from his employment if those concerns were genuinely held. In addition, I would add that Mr Reeve has made serious allegations against Mr Butler during these proceedings, and yet he has failed to provide evidence to support these serious allegations made, including allegations of fraud, and to the extent that there is evidence before the Commission, it indicates that the allegations against Mr Butler are simply without any foundation.
Based on the evidence, I am satisfied Mr Reeve’s resignation was voluntary, there was no dismissal within the meaning of s.386(1), and therefore there is no jurisdiction to deal with Mr Reeve’s application and the application is therefore dismissed.
The Respondent has pressed in closing submissions that the serious allegations made by Mr Reeve have been made in public and have according to the Respondent appeared in a newspaper article. The Commission was not provided with a copy of the article during the hearing. The Respondent pressed the Commission to make adverse credit findings against Mr Reeve in the circumstances.
I am unable to reach a clear determination about why Mr Reeve has made the serious allegations he has made when he has produced no proper evidentiary basis to support his allegations. It was my impression that he appears to genuinely hold to the views he has expressed, despite my conclusions above that the allegations appear to be simply without any foundation. Mr Reeve referred himself on a number of occasions throughout his evidence to having been diagnosed with several mental health conditions, and this was supported by medical reports he relied upon for the purposes of his extension of time application. Mr Reeve also gave evidence that the state of his mental health was compromised during the time from 23 September to 31 October 2022 and beyond. It appears to me that Mr Reeve’s judgement may have been significantly impaired during this period, and may provide some explanation for why he continues to hold to views related to that period of time that appear detached from the reality of the situation.
COMMISSIONER
Appearances:
Mr Oliver Reeve on his own behalf.
Mr Kyle Scott of Australian Business Lawyers & Advisors for the Respondent.
Hearing details:
2023
Brisbane
8 and 9 May
[1] [2023] FWC 488.
[2] Exhibit 1.
[3] Exhibit 2.
[4] Exhibit 3.
[5] Exhibit 4.
[6] Exhibit 5.
[7] Exhibit 6.
[8] Exhibit 7.
[9] Exhibit 8.
[10] Exhibit 10.
[11] Exhibit 11.
[12] Attachment CU 2.
[13] Attachment CU 3.
[14] Attachment MB 13.
[15] Attachment OR 6.
[16] Attachment MB 16.
[17] Attachment MB 17.
[18] Attachment MB 18.
[19] Attachment CU 4.
[20] Attachment MB 12.
[21] Attachment MB 13.
[22] Attachment MB 15.
[23] Mohazab v Dick Smith Electronics Pty Ltd (No 2) (1995) 62 IR 200 at 206.
[24] Australian Hearing v Peary [2009] AIRCFB 680 at [30].
[25] O’Meara v Stanley Works Pty Ltd (PR973462, per Giudice J, Watson VP, Cribb C at [23], 11 August 2006).
[26] Bupa Aged Care Australia Pty Ltd v Shahin Tavassoli[2017] FWCFB 3941 at [47].
[27] Bupa Aged Care Australia Pty Ltd v Shahin Tavassoli[2017] FWCFB 3941 at [47].
[28] [2006] AIRC 496 (PR973462).
[29] Print N6999 (AIRCFB, Munro J, Duncan DP, Merriman C, 9 December 1996).
[30] [2017] FWCFB 3491.
[31] [2019] FWC 5583.
[32] Fair Work Act 2009 s. 12.
[33] Attachment MB 32.
[34] Exhibit 11 para 131.
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