Reynolds v Harrier Group Pty Ltd

[2023] FedCFamC2G 930

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 2)

Reynolds v Harrier Group Pty Ltd [2023] FedCFamC2G 930

File number:

PEG 253 of 2020

Judgment of:

JUDGE LADHAMS

Date of judgment:

20 October 2023

Catchwords:

INDUSTRIAL LAW – adverse action – whether adverse action taken against applicant – whether adverse action taken because the applicant exercised, or proposed to exercise (or not exercise) a workplace right or to prevent the applicant from exercising a workplace right – whether undue influence or pressure exerted on applicant – whether respondents contravened National Employment Standards

CONTRACT LAW – whether summary termination of employment justified – whether applicant paid all entitlements under contract of employment

PRACTICE AND PROCEDURE – application to amend statement of claim after hearing commenced

PRACTICE AND PROCEDURE – whether some causes of action barred by previous settlement agreement between applicant and first respondent  

Legislation:

Corporations Act 2001 (Cth) ss 182,183

Fair Work Act 2009 (Cth) ss 12, 44, 62, 90, 117, 123, 324, 340, 341, 342, 343, 344, 351, 352, 360, 361, 545, 550, 789FC, 789FD

Federal Circuit and Family Court of Australia Act 2021 (Cth) ss 29, 134

Fair Work Regulations 2009 (Cth) reg 1.07

Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth) r 7.01

Long Service Leave Act 1958 (WA) s 8

Occupational Safety and Health Act 1984 (WA) s 19

Workers’ Compensation and Injury Management Act 1981 (WA) ss 18, 92

Cases cited:

Alam v National Australia Bank Limited (2021) 288 FCR 301; [2021] FCAFC 178

Bartolo v Doutta Galla Aged Services Ltd (No 2) [2015] FCCA 345

Concut Pty Ltd v Worrell (2000) 176 ALR 693; [2000] HCA 64

Construction, Forestry, Mining and Energy Union v Anglo Coal (Dawson Services) Pty Ltd (2015) 238 FCR 273; [2015] FCAFC 157

Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd (2015) 230 FCR 298; [2015] FCAFC 25

Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd (2014) 253 CLR 243; [2014] HCA 41

Construction, Forestry, Mining and Energy Union v Endeavour Coal Pty Ltd (2015) 231 FCR 150; [2015] FCAFC 76

Construction, Forestry, Mining and Energy Union v Hail Creek Coal Pty Ltd [2016] FCA 1032

John Holland Pty Ltd v Australian Manufacturing Workers’ Union (2009) 174 FCR 526; [2009] FCA 235

Lamont v University of Queensland(No 2) [2020] FCA 720

RailPro Services Pty Ltd v Flavel (2015) 242 FCR 424; [2015] FCA 504

Rankin v Marine Power International Pty Ltd (2001) 107 IR 117; [2001] VSC 150

Squires v Flight Stewards Association of Australia (1982) 2 IR 155 at 164

SZGTE v Minister for Immigration and Multicultural Affairs [2006] FCA 443

Tattsbet Ltd v Morrow (2015) 233 FCR 46; [2015] FCAFC 62

The Environmental Group Ltd v Bowd (2019) 288 IR 396; [2019] FCA 951

Division:

Division 2 General Federal Law

Number of paragraphs:

523

Date of last submission/s:

17 December 2021

Date of hearing:

15–19 November 2021, 26 November 2021, 30 November 2021, 1 December 2021, 3 December 2021 

Place:

Perth

Counsel for the Applicant:

Ms M Saraceni

Solicitor for the Applicant:

Brand Barristers & Solicitors

Counsel for the Respondents:

Ms H Millar

Solicitor for the Respondents:

Wotton & Kearney Lawyers

ORDERS

PEG 253 of 2020

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)

BETWEEN:

KELLY REYNOLDS

Applicant

AND:

HARRIER GROUP PTY LTD

First Respondent

DAVID SOURBUTTS

Second Respondent

PHIL DE SAINT JORRE

Third Respondent

ORDER MADE BY:	JUDGE LADHAMS
DATE OF ORDER:	20 OCTOBER 2023

THE COURT ORDERS THAT:

1.The applicant is granted leave to further amend the Amended Statement of Claim to incorporate the proposed amendments indicated in the oral application for leave to amend made on 30 November 2021.

2.The application is dismissed.

Note: The form of the order is subject to the entry in the Court’s records.

Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).

REASONS FOR JUDGMENT

INTRODUCTION	[1]
PROCEEDINGS BEFORE THE COURT	[6]
Pleadings	[6]
Evidence	[9]
Submissions	[13]
PRELIMINARY ISSUES	[14]
Are some of the claims barred by the workers’ compensation settlement?	[14]
Should Ms Reynolds be granted leave to further amend the Amended Statement of Claim?	[36]
MS REYNOLDS’ EMPLOYMENT WITH HARRIER GROUP AND MAIN EVENTS RELEVANT TO THIS PROCEEDING	[44]
Ms Reynolds’ employment with Harrier Group and position on the Board	[46]
Ms Reynolds’ shareholding in Harrier Group	[48]
Long-term incentive program	[50]
Request for financial injection and shareholder meeting on 31 July 2019	[54]
Potential sale of Harrier Group in 2019	[56]
Communications regarding reduction in pay in early 2020	[57]
January 2020 Board meeting and PowerPoint presentation	[67]
Board meeting of 19 March 2020, subsequent written warning to Ms Reynolds and requirement to obtain medical certificate	[69]
Ms Reynolds’ written grievance regarding the conduct of Board members	[79]
Investigation into misuse of credit card	[84]
Termination of Ms Reynolds’ employment	[87]
Relevant post-employment events	[89]
GENERAL PROTECTIONS CLAIMS: SUMMARY OF LAW RELEVANT TO ALLEGED CONTRAVENTIONS OF S 340 OF THE FAIR WORK ACT	[90]
Summary of relevant law	[90]
GENERAL PROTECTIONS CLAIMS: ASSERTED WORKPLACE RIGHTS	[98]
ALLEGED CONTRAVENTION OF S 340 OF THE FAIR WORK ACT: UNREASONABLE ADDITIONAL HOURS	[102]
Paragraph 140 of the Amended Statement of Claim	[106]
Paragraph 28A of the Amended Statement of Claim	[123]
ALLEGED CONTRAVENTION OF S 340 OF THE FAIR WORK ACT: FINAL WRITTEN WARNING	[135]
ALLEGED CONTRAVENTION OF S 340 OF THE FAIR WORK ACT: REQUIREMENT TO PROVIDE MEDICAL CERTIFICATE	[146]
ALLEGED CONTRAVENTION OF S 340 OF THE FAIR WORK ACT: REQUIREMENT TO PROVIDE WRITTEN INDEMNITY	[157]
ALLEGED CONTRAVENTION OF S 340 OF THE FAIR WORK ACT: BULLYING	[168]
Bullying Instance No 1	[172]
Bullying Instance No 2	[179]
Bullying Instance No 3	[184]
Bullying Instance No 4	[188]
Bullying Instance No 5	[191]
Bullying Instance No 6	[194]
Bullying Instance No 7	[201]
Bullying Instance No 8	[205]
Bullying Instance No 9	[210]
Bullying Instance No 10	[217]
Bullying Instance No 11	[222]
Bullying Instance No 12	[226]
Bullying Instance No 13	[231]
Bullying Instance No 14	[235]
Bullying Instance No 15	[239]
Bullying Instance No 16	[242]
Bullying Instance No 17	[247]
Bullying Instance No 18	[250]
Bullying Instance No 19	[258]
Bullying Instance No 20 and Bullying Instance No 21	[259]
Bullying Instance No 22	[269]
Bullying Instance No 23	[276]
Bullying Instance No 24	[279]
Bullying Instance No 25	[283]
Bullying Instance No 26	[289]
Bullying Instance No 27	[292]
Bullying Instance No 28	[296]
Bullying Instance No 29 and Bullying Instance No 30	[301]
Bullying Instance No 31	[307]
Bullying Instance No 32	[311]
Bullying Instance No 33	[316]
Additional claims of bullying	[319]
Cumulative consideration of alleged bullying instances found to amount to unreasonable behaviour	[325]
Alleged contraventions of s 340 of the Fair Work Act	[327]
ALLEGED CONTRAVENTION OF S 340 OF THE FAIR WORK ACT: FAILURE TO EFFECTIVELY DEAL WITH GRIEVANCE	[332]
Facts relevant to Ms Reynolds’ grievance and Harrier Group’s response	[334]
Did Harrier Group fail to effectively deal with Ms Reynolds’ written grievance?	[349]
Ms Reynolds’ failure to identify a proscribed reason	[359]
ALLEGED CONTRAVENTION OF S 340 OF THE FAIR WORK ACT: MISCONDUCT ALLEGATIONS	[361]
Relevant claims	[361]
Did Harrier Group take adverse action against Ms Reynolds?	[365]
Serious misconduct allegation	[366]
Suspension	[374]
Failure to conduct a meaningful investigation with little or no consideration of Ms Reynolds’ responses	[379]
What were the reasons for the adverse action?	[384]
Conclusion in relation to claims about the misconduct allegations, Ms Reynolds’ suspension and the failure to properly investigate the misconduct allegations	[389]
ALLEGED CONTRAVENTIONS OF S 340 OF THE FAIR WORK ACT: TERMINATION OF MS REYNOLDS’ EMPLOYMENT, INCLUDING TERMINATION ON A SUMMARY BASIS	[390]
What were the reasons that Harrier Group took this adverse action?	[393]
Information provided to the Board members	[396]
Termination letter	[398]
Evidence of Mr Sourbutts	[399]
Evidence of Mr Gavin Bunning	[403]
Evidence of Mr Robert Bunning	[407]
Evidence of Mr De Saint Jorre	[411]
Evidence of Mr Crawley	[414]
Findings in relation to reasons for dismissal	[418]
Conclusion in relation to general protections claims based on termination of employment	[427]
ALLEGED CONTRAVENTION OF S 340 OF THE FAIR WORK ACT: CANCELLATION OF CEO SHARES	[428]
OTHER ALLEGED CONTRAVENTIONS OF THE FAIR WORK ACT	[434]
Undue influence / pressure	[436]
Failure to make payment in lieu of notice	[443]
Requiring Ms Reynolds to work above and beyond reasonable additional hours	[449]
Withholding payment of accrued annual leave benefits	[455]
CONTRACT CLAIM	[459]
Court’s jurisdiction in relation to the contract claim	[459]
Issues related to the manner in which the contract claim is pleaded	[460]
Relevant terms of contract	[466]
Summary dismissal	[475]
Payment in lieu of notice and pro-rata long service leave	[489]
Short-term bonus	[496]
Long-term incentive	[497]
Share plan	[507]
Conclusion in relation to the breach of contract claim	[520]
CONCLUSION	[521]
ANNEXURE A: RESOLUTION OF OUTSTANDING OBJECTIONS TO EVIDENCE
ANNEXURE B

JUDGE LADHAMS:

INTRODUCTION

1. Ms Reynolds, the applicant in this matter, was employed as the Chief Executive Officer (CEO) of Harrier Group Pty Ltd (Harrier Group), the first respondent. At the time of the events relevant to this proceeding, Ms Reynolds was also a director of Harrier Group and its subsidiaries and a shareholder of those entities. Mr Sourbutts and Mr De Saint Jorre, the second and third named respondents, are both directors of Harrier Group, and Mr Sourbutts was at all material times the Chairman of Harrier Group. The Board of Harrier Group summarily terminated Ms Reynolds’ employment on 18 May 2020.

2. By this application, Ms Reynolds claims that Harrier Group contravened provisions of the Fair Work Act 2009 (Cth) (Fair Work Act) during her employment and in dismissing her. She claims that Mr Sourbutts and Mr De Saint Jorre were involved in those contraventions. These claims in relation to contraventions under the Fair Work Act include general protections claims under the provisions in Part 3-1 of the Fair Work Act. Ms Reynolds asserts that Harrier Group took a number of adverse actions against her because she exercised, or proposed to exercise, various workplace rights. I therefore need to determine whether:

   (a)Ms Reynolds exercised or proposed to exercise any workplace rights;

   (b)if so, whether Harrier Group or its directors took adverse action against her; and

   (c)if so, the reasons that adverse action was taken, including whether those reasons included a prohibited reason.

3. Ms Reynolds also asserts that Harrier Group placed undue pressure or influence on her to accept a pay reduction, thereby contravening s 344(e) of the Fair Work Act, and that Harrier Group failed to comply with a number of the National Employment Standards, in contravention of s 44 of the Fair Work Act.

4. Ms Reynolds also claims that Harrier Group breached its obligations under her contract of employment. Ms Reynolds alleges that there was no basis for her employment to be terminated summarily and that Harrier Group did not pay her entitlements under her contract of employment.

5. A preliminary issue also arose in this matter as to whether Ms Reynolds is precluded from bringing some of her claims as a consequence of a clause in a deed of settlement in relation to a separate workers’ compensation claim brought by Ms Reynolds against Harrier Group.

   PROCEEDINGS BEFORE THE COURT

   Pleadings

6. Ms Reynolds’ claims are set out in an amended statement of claim filed on 4 November 2021 (Amended Statement of Claim). The respondents rely on a further amended defence filed on 17 November 2021 (Further Amended Defence).

7. At the hearing, Ms Reynolds made an application to further amend the Amended Statement of Claim. This was opposed by the respondents. I heard submissions on that issue and indicated that I would make a ruling and give reasons in my written judgment.

8. Whether leave should be granted to further amend the Amended Statement of Claim is addressed below in the consideration of preliminary issues.

   Evidence

9. The evidence before the Court comprises:

   (a)the following affidavits filed by or on behalf of Ms Reynolds:

   (i)affidavit of Kelly Reynolds filed on 14 May 2021;

   (ii)affidavit of Kelly Reynolds filed on 3 September 2021;

   (iii)affidavit of Kelly Reynolds filed on 4 November 2021;

   (iv)affidavit of Daniel Vernon Brand filed on 17 November 2021;

   (b)the following affidavits filed by or on behalf of the respondents and the common exhibit HG-1:

   (i)affidavit of Gavin Law Bunning filed on 30 July 2021;

   (ii)affidavit of Robert Clarkson Bunning filed on 30 July 2021;

   (iii)affidavit of Philippe Paul De Saint Jorre filed on 30 July 2021;

   (iv)affidavit of Delwyn Anne Rayson filed on 30 July 2021;

   (v)affidavit of Scott Crawley filed on 30 July 2021; and

   (vi)affidavit of David Sourbutts filed on 2 August 2021;

   (c)the oral evidence of each of the witnesses who made the affidavits referred to above, given at the hearing which took place over nine days in the period from 15 November 2021 to 3 December 2021;

   (d)the oral evidence of Ms Angela Mary Cicanese and Ms Victoria Smith, who were subpoenaed to attend the hearing to give oral evidence by Ms Reynolds; and

   (e)a number of documents tendered at the hearing.

10. In relation to the witnesses who are not parties to the proceeding:

    (a)Mr Gavin Bunning, Mr Robert Bunning and Mr Crawley are all Board members of Harrier Group;[1]

    (b)Ms Rayson is an employee of Harrier Group and, at the relevant times for the purposes of this application, was the Senior Human Resources and Talent Partner;[2]

    (c)Ms Smith was the Chief Financial Officer (CFO) of Harrier Group at the time of the events relevant to this application;[3] and

    (d)Ms Cicanese had been employed by Harrier Group at various times since 2010, starting as a bookkeeper and most recently working as an accountant in the Finance Team.[4]

    [1] Affidavit of Mr Gavin Bunning filed on 30 July 2021 at [1] (Book of Documents (Court Book) (CB) 711); affidavit of Mr Robert Bunning filed on 30 July 2021 at [1] (CB 717); affidavit of Mr Crawley filed on 30 July 2021 at [1] (CB 750).

    [2] Affidavit of Ms Rayson filed on 30 July 2021 at [3]-[4] (CB 735).

    [3] Oral evidence of Ms Smith, transcript p 178-179.

    [4] Oral evidence of Ms Cicanese, transcript p 159.

11. There were many objections made to the affidavit evidence. Some changes were made to the affidavit evidence during the hearing, and I indicated to the parties that I would deal with the outstanding objections in my reasons for judgment. I have had regard to the updated lists of objections provided by the parties and I have included at the end of this judgment Annexure A, which sets out my resolution of the outstanding objections by indicating those parts of the affidavit evidence that I have found to be inadmissible. Where appropriate, I have considered comments made by the parties in making or responding to the objections in ascribing weight to those parts of the evidence that were objected to, but which I have found to be admissible.

12. I have had regard to all the evidence that I have found to be admissible, but only refer to the evidence in this judgment where it is particularly relevant to the resolution of the factual issues in dispute.

    Submissions

13. I have had regard to the opening submissions filed by the parties ahead of the hearing and the submissions advanced by Counsel for both parties at the hearing.

    PRELIMINARY ISSUES

    Are some of the claims barred by the workers’ compensation settlement?

14. On 2 June 2021 Ms Reynolds and Harrier Group entered into an agreement (Agreement) pursuant to s 92(F) of the Workers’ Compensation and Injury Management Act 1981 (WA) (Workers’ Compensation and Injury Management Act).[5]

    [5] Exhibit 17 (CB 1462-1467).

15. The respondents allege that there are terms in the Agreement that release Harrier Group from certain matters pleaded in the Amended Statement of Claim and allow the respondents to plead the Agreement as a bar to other proceedings.

16. The most relevant terms of the Agreement are cll 2 and 5 which provide:[6]

    [6] Exhibit 17 (CB 1464-1465).

    2.        By execution and delivery of this Agreement:

    2.1The Plaintiff shall be deemed to have accepted its terms in full and final satisfaction and discharge of all actions, suits, claims, demands and proceedings whatsoever which she may have or, but for the execution of this Agreement, might have had against the Defendant in respect of or arising out of the matters referred to in the Action;

    2.2The Defendant shall be deemed to have accepted the terms hereof in full and final satisfaction and discharge of all actions, suits, claims, demands and proceedings whatsoever which it may have or, but for the execution of this Agreement, might have had against the Plaintiff in respect of or arising out of the matters referred to in the Action.

    …

    5.The parties acknowledge that this Agreement may be pleaded in bar to any action suit, claim, demand or other proceedings whatsoever now or at any time hereafter instituted or made by the parties, or any one or more of them or any person claiming under or through the parties or any one or more of them against any one or more of the others of them in respect of any costs, losses, damages or other pecuniary harm alleged to have been incurred or suffered as a result of the Action.

17. It can be seen from these clauses that the extent to which they bar the present proceeding will turn on the meaning of the term ‘Action’. This term was defined in the Agreement in the following terms:[7]

    The Plaintiff by Writ of Summons commenced Action Number 1464 of 2021 in the District Court of Western Australia (District Court) against the Defendant for certain relief as set out in the Indorsement of Claim (Action).

    [7] Exhibit 17 (CB 1463).

18. The Indorsement of Claim in the Writ of Summons filed in the District Court of Western Australia on 3 May 2021 (Indorsement) relevantly reads:[8]

    The Plaintiff’s claim against the Defendant is for damages in respect of all injuries occurring in the course of her employment with the Defendant, which are inclusive of but not limited to any psychological and psychological illness sustained on or about or leading up to 12 December 2019, and in respect of all sequelae, secondary injuries/conditions, aggravations, accelerations, exacerbations and/or recurrences of whatsoever nature, which injury, sequelae, secondary injuries/conditions, aggravations, accelerations, exacerbations and/or recurrences were caused by the negligence and/or breach of statutory duty and/or breach of contract of the Defendant.

    [8] Affidavit of Mr Brand filed on 17 November 2021 at Annexure DVB-3.

1. In her Workers’ Compensation Claim Form signed on 8 June 2020, and which preceded the District Court Action and the Agreement, Ms Reynolds described the most serious injury caused as ‘Stress, Anxiety and Mental Health’.[9]

   [9] Exhibit 13 (CB 1416).

2. The issue that arose on the first day of the hearing was whether some parts of Ms Reynolds’ claims are barred by the Agreement. The respondents accept that Ms Reynolds’ claims insofar as they are based on the contract dispute and the termination of her employment survive as they are not covered by the Agreement, but assert that other claims are barred. The Further Amended Defence formalises the respondents’ position by pleading the Agreement as a bar to the various claims set out in the Amended Statement of Claim that arose based on events that occurred prior to the termination of Ms Reynolds’ employment.[10]

   [10] Further Amended Defence at [126].

3. There are two separate but related issues that are raised by the Further Amended Defence and the parties’ submissions. The first is the question directly raised by the Further Amended Defence, namely, whether the Agreement operates as a bar to some of Ms Reynolds’s claims. The second is whether, if the claim itself is not barred and is established, the Agreement impacts the assessment of damages.

4. Counsel for the respondents submitted that the medical evidence in relation to Ms Reynolds’ compensation claims suggests that the injuries she suffered were caused by substantially the same pre-termination events that are said to amount to adverse action in the present proceeding. In particular, Counsel for the respondents referred to a medical report which had been prepared at the request of Ms Reynolds’ solicitors for the purposes of her workers’ compensation claim[11] which identifies the issues that led to Ms Reynolds seeking workers’ compensation as including alleged workplace bullying, a reduction in her salary and a warning letter issued after a Board meeting on 19 March 2019, following which Ms Reynolds took sick leave. Counsel for the respondents submitted that the workers’ compensation claim covers everything up to termination and the matters raised in relation to the workers’ compensation claim overlap almost entirely with the matters raised in the general protections claim in this matter, save for the termination and shareholding dispute. While Counsel for the respondents acknowledged that the ‘injury’ in an employee’s employment for the purposes of s 342(1) of the Fair Work Act is a different concept from personal injury for the purposes of a workers’ compensation claim, Ms Reynolds pleads that the ‘injury’ in her employment led to the personal injury and therefore the bar should hold because it is directed to the same injury. If the Agreement does not operate as a bar it at least should operate as a set off.

   [11] Exhibit 11 (CB 1406).

5. Ms Reynolds submitted that the bar in the Agreement does not apply because the workers compensation legislation and the Fair Work Act are directed to different matters. The Workers Compensation and Injuries Management Act allows a person to make a claim for compensation if a person is injured in their employment, that is, if a physical or psychological injury arises in the course of their employment, whereas the Fair Work Act relates to the protection of workplace rights. Counsel for Ms Reynolds referred to the phrase ‘injures the employee in his or her employment’ in s 342(1) of the Fair Work Act and submitted that this is not the same ‘injury’ as is referred to for workers’ compensation purposes. The compensation that would be awarded under s 545 of the Fair Work Act is for loss that the person has suffered because of the contraventions of the Fair Work Act. Counsel for Ms Reynolds also submitted because the workers’ compensation settlement was a lump sum without a breakdown, the Court should ‘park’ the settlement and proceed on the basis that it has no value other than that, historically, there was a workers compensation settlement.

6. The parties referred me to cases including RailPro Services Pty Ltd v Flavel (2015) 242 FCR 424; [2015] FCA 504 and Construction, Forestry, Mining and Energy Union v Hail Creek Coal Pty Ltd [2016] FCA 1032 in relation to the distinction and interrelationship between compensation in a workers’ compensation claim and compensation under s 545 of the Fair Work Act. Those cases confirm that damages under workers’ compensation and damages in relation to a general protections claim serve different purposes, the former being to compensate someone for loss or damage suffered as a result of a physical or psychological injury and the latter being to compensate a person for loss suffered because of the contravention of the Fair Work Act: see Construction, Forestry, Mining and Energy Union v Hail Creek Coal Pty Ltd [2016] FCA 1032 at [53]; RailPro Services Pty Ltd v Flavel (2015) 242 FCR 424; [2015] FCA 504 at [168], [170]. Nevertheless, the Court must be careful to avoid double compensation when assessing damages: Construction, Forestry, Mining and Energy Union v Hail Creek Coal Pty Ltd [2016] FCA 1032 at [54]-[55]; RailPro Services Pty Ltd v Flavel (2015) 242 FCR 424; [2015] FCA 504 at [173]. Irrespective of whether the Agreement operates as a bar, if liability in the present case is established and I assess damages, I will need to take into account the settlement in the workers’ compensation matter.

7. In the present case, I find that the Agreement operates as a partial bar to:

   (a)some causes of action; and

   (b)the recovery of damages (if liability is established),

   but to a lesser extent than the respondents contend.

8. In reaching this finding, which is explained in greater detail below, I have paid particular attention to the words of the Agreement and the Indorsement. Clause 2 of the Agreement provides that the Agreement is accepted as full and final satisfaction of claims ‘in respect of or arising out of the matters referred to in the Action’. The bar in cl 5 allows the parties to plead the Agreement as a bar to any claim in respect of losses alleged to have been incurred or suffered ‘as a result of the Action’. The Indorsement, which informs the meaning of the term ‘Action’ as used in the Agreement, sets out that Ms Reynolds’ claim is for ‘damages in respect of all injuries occurring in the course of her employment’ with Harrier Group. The term ‘injuries’ in the Indorsement is clearly a reference to physical and psychological injuries. The injuries covered in the claim as articulated in the Indorsement include those caused by negligence, breach of statutory duty and breach of contract.

9. In the present application, Ms Reynolds alleges that the respondents contravened provisions of the Fair Work Act. This would amount to a ‘breach of statutory duty’ as referred to in the Indorsement. However, that the present application contains claims based on breaches of statutory duty, arises from a similar factual background and includes a claim for damages in relation to physical or psychological injury does not mean that the Agreement operates as a complete bar to the whole of those claims identified in the Further Amended Defence. To consider precisely what the Agreement bars, it is necessary to have regard to the meaning of ‘injury’ and the two different contexts in which that term is used, and the extent to which Ms Reynolds’ claims are based on her being ‘injured’ in her employment.

10. The term ‘injury’ in the phrase ‘injures the employee in his or her employment’ in item (b) of s 342(1) of the Fair Work Act includes financial injury, injury involving the deprivation of rights which the employee has under a contract of service, and circumstances where an employee in the course of his or her employment is treated substantially differently to the manner in which he or she is ordinarily treated and where that treatment can be seen to be injurious or prejudicial: Squires v Flight Stewards Association of Australia (1982) 2 IR 155 at 164. It is a different concept to the type of physical or psychological injury that is the subject of workers’ compensation claims.

11. Not all of Ms Reynolds’ claims based on contraventions of the Fair Work Act turn on Harrier Group having injured Ms Reynolds in her employment. The claims that do not turn on this include the claims that Harrier Group contravened the National Employment Standards, that it placed undue pressure or influence on Ms Reynolds to accept a pay cut, and the claims that it took adverse action against her for a proscribed reason where the ‘adverse action’ is pleaded as action falling within the definitions of paragraphs (a),[12] (c)[13] or (d)[14] of item 1 in s 342(1) of the Fair Work Act. These claims are not barred by the Agreement.

    [12] Under this paragraph, an employer takes adverse action against an employee if the employer dismisses the employee.

    [13] Under this paragraph, an employer takes adverse action against an employee if the employer alters the position of the employee to the employee’s prejudice.

    [14] Under this paragraph, an employer takes adverse action against an employee if the employer discriminates between the employee and other employees of the employer.

12. In some of Ms Reynolds’ claimed contraventions of s 340 of the Fair Work Act, she asserts that Harrier Group took adverse action against her by injuring her in her employment where the ‘injury’ as pleaded is an injury other than physical or psychological injury. These claims, to the extent that the asserted injury in the employment is not a physical or psychological injury, are likewise not barred by the Agreement.

13. However, in relation to some of Ms Reynolds’ claims that Harrier Group took adverse action against her for a proscribed reason, in contravention of s 340 of the Fair Work Act, Ms Reynolds has pleaded that Harrier Group injured her in her employment by causing her physical or psychological injury (or words to similar effect). To the extent that the ‘injury’ in the employment, for the purposes of paragraph (b) of item 1 in the definition of ‘adverse action’ in s 342(1) of the Fair Work Act, is properly seen as a physical or psychological injury, the claims are barred by the Agreement.

14. I then turn to the extent to which the Agreement operates as a bar to the recovery of damages in relation to the claims based on events that occurred during Ms Reynolds’ employment that I have found are not barred by the Agreement.

15. If Harrier Group took adverse action against Ms Reynolds, including by injuring her in her employment, and that adverse action was taken for a prohibited reason, Ms Reynolds may have suffered loss because of the contravention, and she may be entitled to compensation under s 545(2)(b) of the Fair Work Act. However, to the extent that any ‘loss’ she may have suffered is based on physical or psychological injury caused by the contravention, she is barred by the Agreement from recovering any damages or compensation in relation to the physical and psychological injury. This is clear from the terms of the Agreement.

16. In the present case, this finding will have a significant impact on the remedy to which Ms Reynolds may be entitled if I find that the respondents contravened the Fair Work Act in relation to some or all of the pre-termination events. It does not, however, dispose of the whole of the claims based on pre-termination events. It does not preclude the Court from awarding damages to Ms Reynolds in relation to loss suffered because of a contravention, where that loss does not relate to physical or psychological injuries. For example, in relation to some of the alleged contraventions, Ms Reynolds has claimed that she suffered ‘emotional harm’ or ‘harm, hurt and humiliation’ as a result of the alleged contravention. To the extent that Ms Reynolds experienced mental distress or injured feelings as a result of a contravention of the Fair Work Act (as distinct from any mental distress relating from the psychological injuries), she may in some circumstances be entitled to compensation: see, for example, RailPro Services Pty Ltd v Flavel (2015) 242 FCR 424; [2015] FCA 504 at [176].

17. Ms Reynolds also seeks pecuniary penalties for the claimed contraventions. The Agreement would not act as a bar to the Court imposing penalties on the respondents (if liability is established) or ordering that any penalties be paid to Ms Reynolds.  

    Should Ms Reynolds be granted leave to further amend the Amended Statement of Claim?

18. On the seventh day of the hearing, Ms Reynolds sought leave to further amend the Amended Statement of Claim. The amendments proposed were read out to the Court at the hearing and the clauses to which the proposed amendments relate are extracted in Annexure B to this judgment, with the proposed amendments indicated.

19. There were five amendments proposed to the Amended Statement of Claim. Three of these are relatively straightforward, and Counsel for Ms Reynolds explained that:

    (a)the proposed change to paragraph 16 is included to make clear how the Quirk Trust fits in;

    (b)the proposed change to paragraph 18 is included to make clear that the shareholding referred to in that paragraph includes both the shares given to Ms Reynolds ‘as a reward’ and those shares that she purchased herself; and

    (c)the proposed inclusion of paragraph 72(a), which pleads that Ms Reynolds sent an email in response to an email from Mr Sourbutts on 22 March 2020, is to correct an inadvertent omission, and the paragraph is needed for the Amended Statement of Claim to make sense.

20. The more controversial of the proposed amendments, which comprise the proposed amendments to paragraphs 15 and 157 of the Amended Statement of Claim, relate to pleading a share plan agreement as a variation or supplement to the contract of employment. This latter proposed amendment is significant to that part of the application based on breach of contract, because without this amendment, the pleading does not expressly assert that a document purporting to show an offer and acceptance of employee shares formed part of any contract that was said to have been breached.

21. The respondents strongly object to the Amended Statement of Claim being amended at such a late stage of the proceeding. They say that they are prejudiced by the proposed amendments because they would lead to the respondents being required to answer a fundamentally different case, which may have required different evidence being led. When Ms Reynolds first formally sought leave to further amend the Amended Statement of Claim, Counsel for the respondents also expressed concern that the proposed changes were different to what had been previously flagged and the proposed changes did not address issues raised in the context of submissions in relation to the pleadings and evidence earlier in the hearing. On the other hand, Ms Reynolds asserts that the proposed amendments are simply tidying up of the pleadings and it ought to always have been obvious that the share plan agreement formed part of her case.

22. Pursuant to r 7.01 of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth), the Court may permit Ms Reynolds to amend her statement of claim at any stage of the proceeding. The nature of the power conferred by r 7.01 is an extensive discretionary power: SZGTE v Minister for Immigration and Multicultural Affairs [2006] FCA 443 at [33]-[34].

23. While late material changes to pleadings are undesirable because of the potential impact on the other party, in the present case, I am prepared to allow the further amendments to the Amended Statement of Claim. Both parties have made late changes to the pleadings, with the Amended Statement of Claim filed only days before the commencement of the hearing and the Further Amended Defence, raising a whole new defence to part of the claim, filed on the third day of the hearing. The evidence relied on by Ms Reynolds in relation to the proposed amendments was filed several months ahead of the hearing (other than the Shareholders Agreement which was marked as exhibit 2) and the respondents were on notice that Ms Reynolds intended to rely on the documents evidencing the offer and acceptance of employee shares.

24. I do not accept that there is any material prejudice to the respondents because of the late amendments. Counsel for the respondents was able to competently address the pleading in her submissions, taking into account the proposed amendments and, while the possibility of further evidence being adduced was raised, the submissions about the possibility of further evidence were speculative, and no specific further evidence was identified, either in the form of specific documents or by category or general description.

25. In these circumstances, I am satisfied that the interests of justice are better served by allowing the amendments to the Amended Statement of Claim. Hereafter in this judgment, any references to the Amended Statement of Claim should be understood to incorporate the amendments identified in Annexure B.

    MS REYNOLDS’ EMPLOYMENT WITH HARRIER GROUP AND MAIN EVENTS RELEVANT TO THIS PROCEEDING

26. The following factual summary is a high-level overview of the events relevant to this proceeding. It is intended to provide context to the issues in dispute, each of which is discussed in greater detail in the discussion of the issues later in this judgment.

27. Harrier Group is the controlling company of a group of related entities generally known as the Harrier Group Company. Throughout this judgment, I will refer to the first respondent as Harrier Group and I will refer to Harrier Group together with its group of related entities collectively as Harrier Group Company. Harrier Group Company is in the business of recruitment process outsourcing, human resources consulting and executive search.

    Ms Reynolds’ employment with Harrier Group and position on the Board

28. Ms Reynolds commenced employment with Harrier Group, then known as Harrier Resourcing People Pty Ltd, on 16 January 2012.[15] She was initially engaged as a Management Consultant on an independent contractor basis. Ms Reynolds commenced full time permanent employment with Harrier Group as its CEO on 29 June 2012.[16] Her terms and conditions of employment were set out in a written contract of employment dated 29 June 2012. The most recent version of this employment contract, which is in evidence before the Court, is dated 25 October 2017.[17] Relevant clauses of the contract are set out below in relation to the consideration of the contract claim.

    [15] Affidavit of Ms Reynolds filed on 14 May 2021 at [7] (CB 97).

    [16] Affidavit of Ms Reynolds filed on 14 May 2021 at [11], [17] (CB 97-98).

    [17] Affidavit of Ms Reynolds filed on 14 May 2021 at [18], Annexure KR1 (CB 98, 139-163).

29. On 3 December 2012 Ms Reynolds was appointed to the role of Executive Director of Harrier Group.[18] This was additional to her role as CEO but did not entail any additional remuneration.[19] From the time she became Executive Director, Ms Reynolds had voting rights on the Board of Harrier Group.[20]

    [18] Affidavit of Ms Reynolds filed on 14 May 2021 at [19] (CB 98.)

    [19] Affidavit of Ms Reynolds filed on 14 May 2021 at [19] (CB 98).

    [20] Affidavit of Ms Reynolds filed on 14 May 2021 at [20] (CB 98).

    Ms Reynolds’ shareholding in Harrier Group

30. In August 2013 Harrier Group invited Ms Reynolds to apply for 352,618 fully paid ordinary shares in the Harrier Group, which were offered to her as CEO.[21] Ms Reynolds accepted the invitation to subscribe for the plan shares and she held the shares as trustee of the Quirk Trust.[22] The invitation indicated that a loan of $266,226.59 would be extended to Ms Reynolds to pay for the plan shares, which would be interest free if it was made to Ms Reynolds in her personal capacity or which would bear interest at a prescribed rate when paid to a trust.[23] Ms Reynolds’ decision to hold the shares as trustee of the Quirk Trust was made after seeking tax advice and because she considered it to be the most tax-efficient vehicle for her personally.[24]

    [21] Affidavit of Ms Reynolds filed on 14 May 2021 at [24] and Annexure KR3 (CB 100, 165-187).

    [22] Affidavit of Ms Reynolds filed on 14 May 2021 at [31], Annexure KR3 (CB 101, 187).

    [23] Affidavit of Ms Reynolds filed on 14 May 2021 at Annexure KR3 (CB 165-166).

    [24] Affidavit of Ms Reynolds filed on 14 May 2021 at [26] (CB 100); oral evidence of Ms Reynolds, transcript p 62.

1. Ms Reynolds also purchased an additional 433,519 ordinary fully paid shares in Harrier Group during the course of her employment, which are held by her in her capacity as trustee for the Quirk Trust.[25] At the time her employment was terminated, she held a total of 786,137 ordinary shares in Harrier Group, which represented approximately 20.4% of the equity in the company.[26]

   [25] Affidavit of Ms Reynolds filed on 8 November 2021 at [5] (CB 666).

   [26] Affidavit of Ms Reynolds filed on 14 May 2021 at [33]-[34] (CB 101).

   Long-term incentive program

2. Mr Sourbutts signed a document dated 11 December 2014 titled ‘CEO Remuneration’ which set out the basic principles for the CEO incentive program.[27]

   [27] Affidavit of Ms Reynolds filed on 14 May 2021 at Annexure KR4 (CB 188-190).

3. The purpose of the document was described in the following way in the opening paragraph of the document:

   The purpose of this document is to set the basic principles for the CEO Incentive program. It is the intention that upon agreement to these principles an appropriate legal, contractual, and tax effect arrangement will be produced by the Company to allow enacting of the program before 30 June 2015.

4. The proposed long-term incentive program envisaged a long-term incentive being paid to Ms Reynolds in the form of equity in Harrier Group and the equity was to vest on 1 July for each of the years 2016-2019 inclusive if Ms Reynolds met key performance targets that were to be mutually agreed.

5. No key performance targets were agreed for the purposes of the long-term incentive plan.[28] There is no evidence before the Court that any legal or contractual arrangement of the type foreshadowed in the opening paragraph of the ‘CEO Remuneration’ document was ever signed by Ms Reynolds or any representative of Harrier Group.

   [28] Affidavit of Ms Reynolds filed on 8 November 2021 at [6] (CB 666).

   Request for financial injection and shareholder meeting on 31 July 2019

6. A meeting was held on 31 July 2019. Ms Reynolds has referred to this meeting as a Board meeting[29] and other witnesses have referred to it as a shareholder meeting.[30] Given that five witnesses have referred to the meeting as a shareholder meeting and only Ms Reynolds has referred to it as a Board meeting, I accept that it was a shareholder meeting. However, the shareholders and Board members at this time were the same people and, in my view, the characterisation of the meeting as a Board meeting or a shareholder meeting does not impact the resolution of the issues raised in the application before the Court.

   [29] Affidavit of Ms Reynolds filed on 14 May 2021 at [73] (CB 109).

   [30] Affidavit of Mr Sourbutts filed on 2 August 2021 at [15] (CB 1293); affidavit of Mr Gavin Bunning filed on 30 July 2021 at [9] (CB 711); affidavit of Mr Robert Bunning filed on 30 July 2021 at [9] (CB 717); affidavit of Mr De Saint Jorre filed on 30 July 2021 at [20] (CB 727); affidavit of Mr Crawley filed on 30 July 2021 at [14] (CB 751).

7. Prior to the meeting, Mr Sourbutts had raised with the shareholders Harrier Group’s need for further capital.[31] It is unnecessary to address in detail all the matters raised at the meeting. For the purposes of the application to this Court, the meeting is relevant for three reasons:

   (a)at the meeting, Mr Gavin Bunning made comments in relation to Ms Reynolds which are the subject of bullying allegations by Ms Reynolds;

   (b)Ms Reynolds became emotional during the course of the meeting, although there is some dispute as to the extent of her emotional distress during the meeting; and

   (c)Ms Reynolds said that she had previously had suicidal thoughts and that she told Mr Sourbutts about this.[32]

   [31] Affidavit of Ms Reynolds filed on 14 May 2021 at [72] (CB 108); affidavit of Mr Crawley filed on 30 July 2021 at [16] (CB 751); affidavit of Mr Gavin Bunning filed on 30 July 2021 at [10] (CB 711); affidavit of Mr Robert Bunning filed on 30 July 2021 at [10] (CB 717).

   [32] See, affidavit of Ms Reynolds filed on 14 May 2021 at [74]-[78] (CB 109); affidavit of Mr Sourbutts filed on 2 August 2021 at [20], [23], [24] (CB 1293); affidavit of Mr Crawley filed on 30 July 2021 at [17]-[22] (CB 751); affidavit of Mr Gavin Bunning filed on 30 July 2021 at [11] (CB 711); affidavit of Mr Robert Bunning filed on 30 July 2021 at [13], [15], [17] (CB 718).

   Potential sale of Harrier Group in 2019

8. In the latter half of 2019, Ms Reynolds and Harrier Group explored options relating to the sale of the company. On 9 October 2019 a prospective buyer sent a letter to Harrier Group proposing terms in a letter of intent for the purchase of 100% of the ownership interests in Harrier Group. The proposal was based on certain assumptions regarding the financial position of Harrier Group and indicated that its interest was based on partnering with Ms Reynolds. The proposal was also contingent upon a due diligence process being undertaken.[33] However, the prospective buyer withdrew from negotiations in November 2019.[34]

   [33] Affidavit of Ms Reynolds filed on 14 May 2021 at [92] and Annexure KR14 (CB 111, 206-211).

   [34] Affidavit of Ms Reynolds filed on 14 May 2021 at [93] (CB 111).

   Communications regarding reduction in pay in early 2020

9. In January 2020 Ms Reynolds and the CFO, Ms Smith, proposed a 10% reduction in their salaries. This was proposed in response to cash flow difficulties that Harrier Group was facing at the time.

10. Ms Reynolds sent an email to Mr Sourbutts on 21 January 2020 proposing that she contribute to the business a 10% salary and superannuation deduction for a six-month period in exchange for equity.[35] Mr Sourbutts acknowledged this request and indicated that the matter would need to be considered by the Board.[36]

    [35] Exhibit HG-1 (CB 796).

    [36] Exhibit HG-1 (CB 1128).

11. The first 10% deduction was made in January 2020, with Ms Smith and Ms Reynolds having instructed the payroll staff to make this deduction before the matter had been considered by the Board. Further deductions of 10% were made in February 2020 and March 2020.

12. On 3 March 2020 Mr Sourbutts sent an email to Ms Reynolds and Ms Smith, which read in part:[37]

    [37] Affidavit of Ms Reynolds filed on 14 May 2021 at Annexure KR17 (CB 225).

    Following discussions with the board there is a willingness to consider providing “equity inlieu of executive pay reduction”.

    It is my current understanding that you have currently agreed to take a 10% pay reduction (starting in Jan 2020). …

    The period of pay reduction to be considered would be for the Jan 2020 to Jun 2020 period, and be assessed following the presentation of the end of June accounts.

    To qualify for receiving the “equity in lieu”, the following would need to be achieved:-

    1)        Delivery of the cost savings plan as outlined in Jan 2020 board meeting…

    2)Achieving the minimum EBITDA with cost savings as outlined in Jan 2020 board meeting…

    3)        No need for any future cash injections to support the business

    Assuming the qualification requirements are meet, the board is willing to provide Class B shares in lieu of this executive pay reduction.

    Could you please let me know if you have any comments or queries.

    Following your acceptance of the above, a resolution will be put to the Harrier board to ratify this arrangement.

13. Ms Reynolds responded to this email on 3 March 2020 indicating that the pay deduction was not conditional on future performance, and that she and Ms Smith were willing to maintain the offer they made ‘on the same basis as all other shareholders in line with the preference share arrangement executed two weeks ago’.[38]

    [38] Affidavit of Ms Reynolds filed on 14 May 2021 at Annexure KR17 (CB 224).

14. Ms Reynolds then sent an email to Ms Smith requesting that, with immediate effect, she would like her full pay reinstated until she directed otherwise.[39]

    [39] Affidavit of Ms Reynolds filed on 14 May 2021 at Annexure KR19 (CB 229).

15. On 18 March 2020 Mr Sourbutts sent a further email to Ms Reynolds indicating that he had discussed her request for equity in lieu with the Board, and the Board maintained its position as outlined in the email of 3 March 2020.[40]

    [40] Affidavit of Ms Reynolds filed on 14 May 2021 at Annexure KR20 (CB 232-233).

16. Ms Reynolds declined this offer on 23 March 2020, by email sent to Mr Sourbutts, and requested that she receive back pay in relation to the deductions made in January to March 2020.[41]

    [41] Affidavit of Ms Reynolds filed on 14 May 2021 at Annexure KR20 (CB 232).

17. On 15 April 2020 Mr Sourbutts sent an email to Ms Reynolds which said:[42]

    You have made the assertion that the voluntary pay reduction was never agreed to by yourself.

    However, the 10% salary reduction for January was discussed with the CFO on the 8 January 2020, including into draft cost savings plans for the business on 13 January 2020 and enacted in the Definitv payroll run on the 17 January 2020, under your instruction.

    This was done without consultation or discussion with the Board.

    The concept of the executive salary pay reduction was presented to the Board at the Board meeting of 23 January 2020 as part of an overall cost reduction strategy being presented by the executive team.

    Therefore we disagree that the payroll reduction was not volunteered and agreed to by yourself for the January payroll.

    In regard to the February/March 2020 payroll, we confirm that discussions were underway with the Board in regards to a request for “equity in lieu” of the pay reduction.

    We agree that you subsequently finally disagreed via email on 23 March 2020 with the offer from the Board, and as such are due to be receive a back pay adjustment for the February/March 2020 payroll run.

    Assuming your acceptance of the above, we will discuss with the CFO to have your February/March back pay issue resolved in the next payroll run.

    [42] Affidavit of Ms Reynolds filed on 14 May 2021 at Annexure KR25 (CB 239).

18. The amounts deducted from Ms Reynolds’ pay in February and March 2020 were paid to her on or about 28 April 2020.[43]

    [43] Affidavit of Ms Reynolds filed on 14 May 2021 at [138] (CB 118).

    January 2020 Board meeting and PowerPoint presentation

19. Ms Reynolds arranged and attended a meeting on 18 January 2020 with Mr Sourbutts and Mr Crawley to discuss her concerns about the financial position of Harrier Group. In the course of this meeting, Ms Reynolds showed Mr Sourbutts a copy of a PowerPoint presentation that she had prepared together with the CFO detailing the forecast cash flow and solvency issues that she and her team had identified and suggesting options for how best to move forward.[44]

    [44] Affidavit of Ms Reynolds filed on 14 May 2021 at [100], [103] (CB 112-113).

20. In an email sent to Ms Reynolds on 21 January 2020, Mr Sourbutts recommended that she remove two slides from the presentation.[45] Ms Reynolds presented the PowerPoint presentation to the Board at the 24 January 2020 Board meeting, including the information that Mr Sourbutts requested her to remove.[46]

    Board meeting of 19 March 2020, subsequent written warning to Ms Reynolds and requirement to obtain medical certificate

    [45] Exhibit HG-1 (CB 794).

    [46] Affidavit of Ms Reynolds filed on 14 May 2021 at [108]-[109] (CB 114).

21. Ms Reynolds called an extraordinary Board meeting, which was held on 19 March 2020.[47] The stated purpose of the meeting is discussed in greater detail below, but broadly speaking, it was to address business continuity issues in the context of the government’s response to the COVID-19 pandemic. At the commencement of the meeting, Ms Reynolds raised issues that were personal to her, including the 10% reduction in her salary and her concerns about the manner in which the Board or Board members treated her.[48] In the course of this discussion, Mr Sourbutts made a comment to the effect that Ms Reynolds was sulking because she did not get what she wanted in relation to the salary deduction.[49] Ms Reynolds left the meeting before it concluded.

    [47] Exhibit HG-1 (CB 870-871); affidavit of Ms Reynolds filed on 14 May 2021 at [142] (CB 118).

    [48] In her evidence-in-chief, Ms Reynolds deposed that the issue she raised in relation to the way she was treated was persistent bullying by Mr Sourbutts (see affidavit of Ms Reynolds filed on 14 May 2021 at [142] (CB 118)). However, as I have explained below in considering whether Harrier Group breached s 340 in issuing a written warning to Ms Reynolds, considering all the evidence before me, I find that the concerns she raised regarded her perceived treatment by the Board more generally.

    [49] Affidavit of Ms Reynolds filed on 14 May 2021 at [143] (CB 118); affidavit of Mr Sourbutts filed on 2 August 2021 at [73] (CB 1298).

22. On 22 March 2020 the Harrier Group Board members, other than Ms Reynolds held a meeting at which they discussed Ms Reynolds’ conduct at the 19 March 2020 Board meeting. On the basis of decisions made at that meeting, Mr Sourbutts sent emails to Ms Reynolds, including:

    (a)an email sent at 1.52pm issuing her with a final written warning in relation to her conduct at the 19 March 2020 Board meeting;[50] and

    (b)an email sent at 1.55pm inviting her to provide more specific information about the concerns she had regarding her relationship with Board, so that the issues could be resolved.[51]

    [50] Affidavit of Ms Reynolds filed on 14 May 2021 at Annexure KR26 (CB 241).

    [51] Affidavit of Ms Reynolds filed on 14 May 2021 at Annexure KR27 (CB 243).

23. Later on 22 March 2020 Ms Reynolds and Mr Sourbutts exchanged a number of emails. By way of summary, the most relevant information in those emails is that:

    (a)Ms Reynolds rejected the contents of the email issuing the final written warning as factually incorrect and stated that she did not accept the warning. She referred to previous concerns that she claimed to have expressed to Mr Sourbutts regarding the ‘mental health, stress and at one point in time suicidal thoughts’ that she had ‘as a consequence of the threatening and bullying way’ she had been treated by the Board. She requested that Mr Sourbutts meet with her in person to try to find a mutual way forward and avoid conflict.[52]

    (b)Given the concerns raised by Ms Reynolds regarding her mental health, Mr Sourbutts informed Ms Reynolds that she was required to obtain a medical certificate to show that she was fit for work and directed her not to attend work until she had a certificate. Mr Sourbutts indicated that the medical certificate would need to show that the medical practitioner had been fully informed of Ms Reynolds’ email to the Board setting out her mental health concerns and the Board’s final written warning to Ms Reynolds. Mr Sourbutts expressed that it would be inappropriate to have any meeting until Ms Reynolds had been cleared for work.[53]

    (c)Ms Reynolds responded that she would ‘not be following this course of action’.[54]

    (d)Mr Sourbutts indicated that in circumstances where Ms Reynolds refused to accept the directions that are in her best interests, he would have security present to ensure that she did not attend the office the next day.[55]

    (e)Mr Sourbutts confirmed that Ms Reynolds was stood down until she obtained the requested medical certificate.[56] 

    [52] Affidavit of Ms Reynolds filed on 14 May 2021 at Annexure KR28 (CB 244).

    [53] Affidavit of Ms Reynolds filed on 14 May 2021 at Annexure KR29 (CB 248).

    [54] Affidavit of Ms Reynolds filed on 14 May 2021 at Annexure KR29 (CB 247).

    [55] Affidavit of Ms Reynolds filed on 14 May 2021 at Annexure KR30 (CB 254).

    [56] Affidavit of Ms Reynolds filed on 14 May 2021 at Annexure KR30 (CB 252).

24. Ms Reynolds provided a medical certificate on 23 March 2020 which simply certified that she was ‘physically and mentally fit to work’.[57]

    [57] Affidavit of Ms Reynolds filed on 14 May 2021 at Annexure KR32 (CB 260).

25. Following receipt of the medical certificate, Mr Sourbutts again advised Ms Reynolds that the medical certificate would need to demonstrate that the medical practitioner was aware of the email she had sent to the Board regarding her mental health issues and the issues she raised with the Board that she claims have not been addressed.[58]

    [58] Exhibit HG-1 (CB 899).

26. On 24 March 2020 Ms Reynolds produced a medical certificate that read:[59]

    Mrs Kelly Reynolds has been examined today and is experiencing high levels of anxiety and stress as a result of discord with her company’s investor group.

    I would advise her to be proactive to reduce these levels of stress and use strategies such as meeting the group in question or their appointed legal advisor to remediate this discord.

    [59] Affidavit of Ms Reynolds filed on 14 May 2021 at Annexure KR35 (CB 263).

27. Ms Reynolds produced a further medical certificate dated 31 March 2020, which read:

    I can confirm the Certificate issued on Tuesday 17/3/2020 was as a direct result of the stress and anxiety caused by David Sourbutts acting as Chairman of the Board in emailing Kelly Reynolds as a CEO on Sunday 22/3/2020 with a final warning. Kelly advised me that in her view he had not followed any HR process and had given Kelly unreasonable and unlawful directions in the time of the COVID-19 crisis.

    Mrs Kelly Reynolds has been examined today and is fully mentally and physically fit to continue working in her capacity as a Managing Director provided she does not have any direct operational instructions from David Sourbutts as Chairman of the Board until the impasse between them in the employment relationship is resolved. From a medical perspective Kelly can however continue to work and participate as a Board Member with all other Board Members or their nominated representative, which could be Scott Crawley.

    I recommend that Kelly Reynolds returns back to work by no later than Monday 6/4/2020.

    I can certify that Kelly Reynolds is and has always been fully mentally and physically fit to continue her duties as a Board Director and fully participate in meetings and decision making at a Board level.

    This and the previous Certificate does not reflect on her Board level capability to fulfil her duties as a Director.

28. Ms Reynolds provided this medical certificate to Harrier Group via email sent to Ms Rayson on 31 March 2020.[60]

    [60] Affidavit of Ms Reynolds filed on 14 May 2021 at Annexure KR38 (CB 268).

29. Ms Rayson sent an email to Ms Reynolds on 3 April 2020 advising that because of the conditions and other matters raised in the certificate, a formal return-to-work process would be required. Ms Rayson indicated that she would contact Ms Reynolds the next week with the details and until that time, Ms Reynolds was to remain on personal leave.[61]

    [61] Affidavit of Ms Reynolds filed on 14 May 2021 at Annexure KR38 (CB 268).

30. The Board did not change its reporting structure so that Ms Reynolds would not need to take direct operational instructions from Mr Sourbutts to address the limitation in the medical certificate dated 31 March 2020 and Mr Sourbutts directed Ms Reynolds not to return to work or perform any duties until the issues she raised had been reviewed and addressed by Harrier Group.[62]

    [62] Affidavit of Ms Reynolds filed on 14 May 2021 at Annexure KR40 (CB 273).

    Ms Reynolds’ written grievance regarding the conduct of Board members

31. On 5 April 2020 Ms Reynolds made a formal written grievance regarding her concerns about her treatment by the Board members, in particular Mr Sourbutts.[63]

    [63] Affidavit of Ms Reynolds filed on 14 May 2021 at [183] and Annexure KR41 (CB 125, 275-290).

32. Harrier Group arranged for Mr De Saint Jorre to conduct a preliminary review or investigation in relation to the matters raised in Ms Reynolds’ written grievance.[64]

    [64] Affidavit of Ms Reynolds filed on 14 May 2020 at Annexure KR43 (CB298); Affidavit of Mr De Saint Jorre at [32] (CB 728).

33. Ms Rayson and Mr De Saint Jorre made a number of requests for further details in relation to the matters raised in her grievance, including on 6 April 2020, 9 April 2020, 15 April 2020, 16 April 2020 and 22 April 2020.[65]

    [65] Affidavit of Ms Reynolds filed on 14 May 2021 at Annexure KR42, KR43, KR46, KR51, KR52 (CB292-293, 298, 314, 337, 344-348).

1. In response, Ms Reynolds provided further information on 6 April 2020, 14 April 2020 and 29 April 2020.[66]

   [66] Affidavit of Ms Reynolds filed on 14 May 2021 at Annexure KR42, KR46, KR53 (CB 291-292; 315-318; 349-360).

2. On 6 May 2020 Mr De Saint Jorre finalised his preliminary review and concluded that an external investigation was not warranted.[67]

   [67] Affidavit of Mr De Saint Jorre filed on 30 July 2021 at [41] (CB 729); Exhibit HG-1 (CB 1283-1289).

   Investigation into misuse of credit card

3. On 4 May 2020 Mr Sourbutts sent an email to Ms Reynolds informing her that an issue had come to his attention regarding her use of the corporate credit card and that Harrier Group would investigate the matter and provide an update as the matter progresses.[68]

   [68] Affidavit of Ms Reynolds filed on 14 May 2021 at Annexure KR59 (CB 504).

4. On 12 May 2020 Mr Sourbutts sent an email to Ms Reynolds providing information in relation to the allegations against her and inviting her provide a response to those allegations and to address a number of questions put to her.[69]

   [69] Affidavit of Ms Reynolds filed on 14 May 2021 at Annexure KR61 (CB 507-521).

5. On 18 May 2020 at 8.20am Ms Reynolds provided a response to the allegations.[70]

   [70] Affidavit of Ms Reynolds filed on 14 May 2021 at Annexure KR63 (CB 527-552).

   Termination of Ms Reynolds’ employment

6. Ms Reynolds’ employment was terminated on 18 May 2020 on a summary basis.[71] The termination letter and the reasons for dismissal are discussed further below.

   [71] Affidavit of Ms Reynolds filed on 14 May 2021 at Annexure KR64 (CB 552-553).

7. On 19 May 2020 Ms Reynolds resigned as director of all Harrier Group Company entities.[72]

   [72] Affidavit of Ms Reynolds filed on 14 May 2021 at [21] and Annexure KR2 (CB 98, 164).

   Relevant post-employment events

8. On 29 May 2020 Mr Sourbutts sent a letter to Ms Reynolds indicating that, following the termination of her employment, the cessation valuation process in relation to her employee share plans was enacted. This indicated that the value of the shares was less than their original base value and therefore 100% of the 352,618 ordinary shares were liable for disposal.[73] A further letter also dated 29 May 2020 from Mr Sourbutts to Ms Reynolds indicated that there were outstanding interest payments on the share plan loan to the Quirk Trust and required Ms Reynolds to pay $85,143.31 in outstanding interest within seven days.[74] A follow-up letter requesting payment of this amount was sent on 12 June 2020.[75]

   GENERAL PROTECTIONS CLAIMS: SUMMARY OF LAW RELEVANT TO ALLEGED CONTRAVENTIONS OF S 340 OF THE FAIR WORK ACT

   [73] Affidavit of Ms Reynolds filed on 14 May 2021 at Annexure KR5 (CB 191).

   [74] Affidavit of Ms Reynolds filed on 14 May 2021 at Annexure KR6 (CB 192).

   [75] Affidavit of Ms Reynolds filed on 14 May 2021 at Annexure KR7 (CB 193).

   Summary of relevant law

9. Section 340(1) of the Fair Work Act provides:

   A person must not take adverse action against another person:

   (a)       because the other person:

   (i)has a workplace right; or

   (ii)has, or has not, exercised a workplace right; or

   (iii)proposes or proposes not to, or has at any time proposed or proposed not to, exercise a workplace right; or

   (b)      to prevent the exercise of a workplace right by the other person.

10. The term ‘workplace right’ is defined in s 341(1), which provides:

    A person has a workplace right if the person:

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

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

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

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

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

11. Pursuant to s 342(1), an employer takes ‘adverse action’ against an employee if the employer:

    (a)dismisses the employee; or

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

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

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

12. In determining whether Harrier Group took adverse action against Ms Reynolds because of one or more of the reasons proscribed by s 340(1) of the Fair Work Act, it is necessary to have regard to ss 360 and 361 of the Fair Work Act.

13. Section 360 provides:

    For the purposes of this Part, a person takes action for a particular reason if the reasons for the action include that reason.

14. Section 361 puts the onus of proof on the employer to establish that an action was not taken for a reason that contravenes a provision in Part 3-1 of the Fair Work Act. Subsection 361(1) provides:

    If:

    (a)in an application in relation to a contravention of this Part, it is alleged that a person took, or is taking, action for a particular reason or with a particular intent; and

    (b)taking that action for that reason or with that intent would constitute a contravention of this Part;

    it is presumed that the action was, or is being, taken for that reason or with that intent, unless the person proves otherwise.

15. The principles that inform the Court's approach to its task under ss 360 and 361 are well-established. They are conveniently summarised in Alam v National Australia Bank Limited (2021) 288 FCR 301; [2021] FCAFC 178 at [14]:

    Several matters bearing upon the application of s 361 in relation to s 340 are settled:

    (a)in order to attract the application of s 361, an applicant should allege with sufficient particularity both the action said to constitute “adverse action” and the particular reason or particular intent with which it is said the action was taken: Short v Ambulance Victoria (2015) 249 IR 217 (Dowsett, Bromberg and Murphy JJ) at [55];

    (b)the party making the allegation that adverse action was taken “because” of a particular circumstance must establish the existence of that circumstance as an objective fact: Tattsbet Ltd v Morrow (2015) 233 FCR 46 at [119]. That is, it is for the applicant to establish all the elements of the alleged contravention other than the reasons of the respondent for taking the adverse action: Australian Building and Construction Commissioner v Hall (2018) 261 FCR 347 (ABCC v Hall) at [100];

    (c)an employer takes adverse action in contravention of s 340 if a proscribed reason is a “substantial and operative” reason for the action or if the reasons for the action include the proscribed reason: [Board of Bendigo Regional Institute of Technical and Further Education v Barclay (2012) 248 CLR 500; [2012] HCA 32 (Bendigo v Barclay)] at [104] (Gummow and Hayne JJ);

    (d)the discharge of the s 361 onus requires proof on the balance of probabilities and usually requires decision-makers to give direct evidence of their reasons for taking the adverse action: Bendigo v Barclay at [43]-[44];

    (e)the determination of why an employer took adverse action against an employee requires an inquiry into the actual reason or reasons of the employer and is to be made in the light of all the circumstances established in the proceeding: Bendigo v Barclay at [41], [45] (French CJ and Crennan J); at [101] (Gummow and Hayne JJ); Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd (2014) 253 CLR 243 (CFMEU v BHP Coal) at [7] (French CJ and Kiefel J); Construction, Forestry, Mining and Energy Union v Anglo Coal (Dawson Services) Pty Ltd (2015) 238 FCR 273 (CFMEU v Anglo Coal) at [27]; ABCC v Hall at [19];

    (f)while the evidence of the decision-maker as to the reasons for the taking of the adverse action may, if accepted by the Court, satisfy the s 361 onus, such evidence is not a necessary pre-condition: CFMEU v BHP Coal at [192]; Australian Red Cross Society v Queensland Nurses’ Union of Employees (2019) 273 FCR 332 at [72];

    (g)the Court’s rejection of the evidence of the decision-maker as to the reasons for the adverse action will ordinarily be “a weighty consideration and often a determinative consideration” in the determination of whether the reason alleged by the applicant was a substantial and operative reason for the action (Cummins South Pacific Pty Ltd v Keenan (2020) 281 FCR 421 at [116]), but such a rejection does not relieve the Court from considering all the evidence probative of whether the reason asserted by the applicant has been negated: ibid; CFMEU v Anglo Coal at [27]; Australian Licenced Aircraft Engineers Association v International Aviation Service Assistance Pty Ltd (2011) 193 FCR 526 at [272]. When there is evidence of a broad range of facts and circumstances, which are not dependent on acceptance of the decision-maker’s evidence about his or her asserted reason for the dismissal, such evidence must be taken into account in assessing whether the reasons asserted by an applicant were a substantial and operative reason for the action; ibid at [113]; TechnologyOne Ltd v Roohizadegan (2021) 309 IR 262 at [105]-[106];

    (h)even if the reasons advanced by a respondent as the actual reasons for the decision are accepted, the absence of evidence that there were no additional reasons or that the actual reasons did not include the alleged proscribed reasons, may result in a failure to rebut the presumption: National Tertiary Education Union v Royal Melbourne Institute of Technology (2013) 234 IR 139 at [20]; PIA Mortgage Services Pty Ltd v King (2020) 274 FCR 225 at [154] (Snaden J);

    (i)the decision-maker’s knowledge of the circumstance asserted by an applicant to be the reason for the adverse action, and even its consideration, does not require a finding that the action was taken because of that circumstance: Bendigo v Barclay at [62]; Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd (No 3) (2012) 228 IR 195 at [80] (Jessup J); Shea v TRUenergy Services Pty Ltd (No 6) (2014) 242 IR 1 at [777]. Nor does the fact that the adverse action has some association with a matter supporting a proscribed reason: CFMEU v BHP Coal at [20], [87]-[88]; Construction, Forestry, Mining and Energy Union v Endeavour Coal Pty Ltd (2015) 231 FCR 150 at [32], [47]-[48] (Jessup J); and

    (j)adverse action taken against a person because of conduct resulting from the exercise of workplace rights may not offend the s 340(1) prohibition: CFMEU v BHP Coal; Endeavour Coal at [52] (Perram J). 

16. Ms Reynolds asserts that Mr Sourbutts and Mr De Saint Jorre were involved in the contraventions by Harrier Group, pursuant to s 550 of the Fair Work Act, which provides:

    (1)A person who is involved in a contravention of a civil remedy provision is taken to have contravened that provision.

    (2)A person is involved in a contravention of a civil remedy provision if, and only if, the person:

    (a)has aided, abetted, counselled or procured the contravention; or

    (b)has induced the contravention, whether by threats or promises or otherwise; or

    (c)has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention; or

    (d)has conspired with others to effect the contravention.

    GENERAL PROTECTIONS CLAIMS: ASSERTED WORKPLACE RIGHTS

17. Ms Reynolds pleaded that she has 17 workplace rights. The respondents accept that 15 of the rights asserted are ‘workplace rights’ for the purposes of s 341 of the Fair Work Act. Those 15 rights are:

    (a)a right to a working environment in which she is not, insofar as is reasonably practicable, exposed to hazards in accordance with s 19 of the Occupational Safety and Health Act 1984 (WA) (Occupational Safety and Health Act) (Safety Workplace Right);

    (b)a right to make a claim to the Fair Work Commission for orders to stop bullying at work in accordance with s 789FC of the Fair Work Act (No Bullying Workplace Right);

    (c)a right to make a worker’s compensation claim if injured in the course of her employment in accordance with s 18 of the Workers’ Compensation and Injury Management Act(Workers Compensation Workplace Right);

    (d)a right not to be unlawfully discriminated against on the ground of her gender and not to be victimised in accordance with the Equal Opportunity Act 1984 (WA) and the Sex Discrimination Act 1984 (Cth) (Equal Opportunity Workplace Right);

    (e)a right not to be unlawfully discriminated against because of her sex in accordance with s 351 of the Fair Work Act (Unlawful Discrimination Workplace Right);

    (f)a right not to be dismissed from her employment because she is temporarily absent from work in accordance with s 352 of the Fair Work Act (Temporary Absence Workplace Right);

    (g)a right to only have authorised deductions made from her remuneration being deductions she has approved and authorised in writing to be deducted in accordance with s 324 of the Fair Work Act (Permitted Deduction Workplace Right);

    (h)a right to be given written notice of the day of the termination of her employment and receive payment in lieu of notice in accordance with s 117 of the Fair Work Act (Paid Notice Workplace Right);

    (i)a right not to work as a full-time employee more than the statutory maximum of 38 hours per week plus any reasonable additional hours in accordance with s 62 of the Fair Work Act (Maximum Hours Workplace Right);

    (j)a right to be paid accrued but unused annual leave on termination of employment in accordance with s 90(2) of the Fair Work Act (Paid Annual Leave Workplace Right);

    (k)a right for freedom of choice not to be coerced with intent to prevent her from exercising her workplace rights, proposing to exercise her workplace rights or not exercising those workplace rights in accordance with s 343 of the Fair Work Act (No Coercion Workplace Right);

    (l)a right not to have exerted on her any undue influence or undue pressure in relation to a decision by her to agree or not agree to a deduction from amounts payable to her in the performance of her work in accordance with s 344(e) of the Fair Work Act (No Undue Influence Workplace Right));

    (m)a workplace right to payment of pro rata long service leave in accordance with the Long Service Leave Act 1958 (WA) (Long Service Leave Act) (Long Service Leave Workplace Right);

    (n)a right to make a complaint or inquiry in relation to her employment in accordance with s 341(1)(c) of the Fair Work Act (Complaint Workplace Right);

    (o)a right to make a claim and seek redress for any adverse action taken against her because of her having, exercising (or not) and proposing to exercise (or not) her workplace rights in accordance with Part 3-1 Division 3 of the Fair Work Act (General Protections Workplace Right).

18. I accept that Ms Reynolds had these 15 workplace rights.

19. The other two asserted rights are:

    (a)rights commensurate with her being in a position to comply with the duties and obligations imposed on her both as an employee and a working director of the Harrier Group in accordance with Division 1 of Part 2D.1 of the Corporations Act 2001 (Cth) (Corporations Act); and

    (b)a right to protection when making a whistleblower disclosure pursuant to Part 9.4AAA of the Corporations Act.

20. The respondents deny that these are workplace rights because they arise under the Corporations Act, which is not a ‘workplace law’ within the meaning of the Fair Work Act. I accept this submission. ‘Workplace law’ is defined in s 12 of the Fair Work Act to mean the Fair Work Act, the Fair Work (Registered Organisations) Act 2009 (Cth), the Independent Contractors Act 2006 (Cth) or ‘any other law of the Commonwealth, a State or a Territory that regulates the relationships between employers and employees (including by dealing with occupational health and safety matters)’. In The Environmental Group Ltd v Bowd (2019) 288 IR 396; [2019] FCA 951, after noting that any other ‘law’ of the Commonwealth, or a State or Territory, as used in the definition of ‘workplace law’ means ‘rule’, Steward J found that the provisions of Part 9.4AAA of the Corporations Act were not workplace laws: see [134], [138], [140]. In relation to ss 182 and 183 of the Corporations Act, which both fall within Division 1 of Part 2D.1 of the Corporations Act, his Honour also expressed the view that they were directed to the regulation of corporate behaviour, and not to the regulation of relationships between employers and employees, and therefore were not workplace laws: at [140]. The same observations are apposite to the other provisions in Division 1 of Part 2D.1 of the Corporations Act.

    ALLEGED CONTRAVENTION OF S 340 OF THE FAIR WORK ACT: UNREASONABLE ADDITIONAL HOURS

21. Ms Reynolds claims that she consistently worked above the statutory maximum ordinary hours of full-time work and beyond any additional hours, contrary to her right under s 62 of the Fair Work Act. In particular, she claims that:

    (a)from early 2014, she was expected to work excessive hours, return early from holidays and return from sick leave so that she could perform her duties;

    (b)from 2018 onwards, she was consistently working not less than 70 hours per week;

    (c)in the first nine months of 2018, she had to undertake 63 national flights and spend 103 nights in hotels away from her home, family and friends; and

    (d)she had extra responsibilities and greater impost on her time from mid to late 2019 until her termination.

22. Although the parties did not address the claim this way in their submissions, as I read the Amended Statement of Claim, Ms Reynolds appears to make two separate claims of unlawful adverse action in relation to her working hours. The first is that set out at paragraph 140 of the Amended Statement of Claim, under the heading ‘Breaches by the First Respondent’, in which Ms Reynolds alleges that Harrier Group contravened s 340 of the Fair Work Act based on the following conduct:

    By requiring the Applicant to work excessive hours without any or any sufficient regard to her Maximum Hours Workplace Right, despite her protestations and her attempts to have her workplace rights recognised and respected, the First Respondent injured the Applicant in her employment by causing her physical; psychological and emotional harm and injury requiring the intervention of medical personnel; requirement to take prescription medication; requirement to seek psychological counselling and subsequent absences from work.

23. When the statement of claim was amended, Ms Reynolds added a paragraph asserting that the complaints she made to the Board amounted to an exercise of her workplace right in s 341(1)(c)(ii) of the Fair Work Act to make a complaint or inquiry in relation to her employment. She also added a new paragraph 28A asserting:

    As a direct result of her Complaints about her Unreasonably Excessive Hours, the First Respondent and/or the Second Respondent injured the Applicant in her employment by continuing to place unrealistic demands on her; by criticising her at Board meetings and calling into question her commitment to her work; by risking the security of her employment if she did not deliver better financial outcomes for the business and altering her position to her prejudice by risking her entitlement to short term and long term incentives and risking the value of her CEO Shareholding which was part of her remuneration package.

24. I address in turn the two separate assertions that I understand Ms Reynolds to be making.

    Paragraph 140 of the Amended Statement of Claim

25. It is, with respect, difficult to understand the pleading at paragraph 140 and there is nothing in the submissions advanced on behalf of Ms Reynolds which sheds light on it.

1. In any event, even if I were to overlook the failure to plead the breach of contract in this regard, I would not be satisfied that Ms Reynolds has established that her contract was breached as a result of Harrier Group’s failure to pay her three months’ wages in lieu of notice of her dismissal or pro-rata long service leave. This is because, for the reasons explained in the following paragraphs, Ms Reynolds was not entitled to these payments given her summary dismissal, which I have found was justified. 

2. Pursuant to cl 21.2, in circumstances where Ms Reynolds’ employment was terminated without notice for serious misconduct, she has no contractual right to any period of notice or payment in lieu of notice. That part of the contract claim must therefore fail.

3. As set out above, Ms Reynolds was, pursuant to cl 26 of the employment contract, entitled to long service leave in accordance with applicable State legislation.

4. The applicable State legislation is the Long Service Leave Act. Section 8(3) of that Act provides that where an employee has completed more than seven years, but less than 10 years of continuous employment and the employment is terminated by the employee’s death or for any reason other than serious misconduct, the employee is entitled to pro-rata long service leave.

5. In the present case, as Ms Reynolds’ employment was terminated for serious misconduct, she does not have a right to pro-rata long service leave under the applicable State law. In circumstances where her contractual right to pro-rata long service leave is in accordance with State legislation, it follows that she has not established a contractual entitlement to pro-rata long service leave. 

   Short-term bonus

6. The possibility of Ms Reynolds being paid a short-term bonus is set out at cl 13.1 of the employment contract. However, it is clear from the terms of cl 13.1 that Ms Reynolds did not have any entitlement to receive a short-term bonus. Rather, the payment of a short-term bonus was at the ‘absolute discretion’ of Harrier Group. I accept the submission advanced by Counsel for Harrier Group that the language used in the contract is lacking in promissory intent and is not the language of an entitlement that can amount to a breach of contract if is it not paid. In this matter, Harrier Group did not exercise its discretion to pay Ms Reynolds a short term bonus, and the failure to pay a bonus does not amount to a breach of the employment contract.

   Long-term incentive

7. The possibility of Ms Reynolds participating in any long-term incentive arrangement is referred to in cl 13.2 of the employment contract. There are two features of cl 13.2 that are immediately apparent, and which are relevant to the resolution of this aspect of the contract claim:[325]

   (a)First, there is a lack of promissory language in the clause. Rather, the clause indicates that Ms Reynolds ‘may also be eligible’ to participate in incentive arrangements. Accordingly, there was no obligation on the part of Harrier Group to offer Ms Reynolds the opportunity to participate in any short-term or long-term incentive arrangement.

   (b)Second, the clause makes clear that the details of any arrangements are separate to and do not form part of the employment contract. This is important in circumstances where Ms Reynolds has not relevantly pleaded any breach of contract relating to the long-term incentive, other than the employment contract itself. The employment contract itself has not been breached.

   [325] Exhibit HG-1 (CB 148)

8. In any event, even when I consider the separate documents that Ms Reynolds appears to rely on in relation to the breach of contract, notwithstanding that they are not relevantly pleaded as amounting to contracts that were breached, I do not accept that there has been any breach of contract in relation to any long-term incentive arrangements.

9. Ms Reynolds relied on a document signed by Mr Sourbutts and dated 11 December 2014 titled ‘CEO Remuneration’ which set out the basic principles for the CEO incentive program (CEO Remuneration document).[326]

   [326] Affidavit of Ms Reynolds filed on 14 May 2021 at Annexure KR4 (CB 188-190).

10. The purpose of the CEO Remuneration document was described in the following way in the opening paragraph of the document:

    The purpose of this document is to set the basic principles for the CEO Incentive program. It is the intention that upon agreement to these principles an appropriate legal, contractual, and tax effect arrangement will be produced by the Company to allow enacting of the program before 30 June 2015.

11. The proposed incentive was described in the following way:

    The Board has determined that the establishment of a [Long-Term Incentive Plan (LTIP)] is appropriate to ensure outstanding performance and engagement by the CEO.

    The LTI will take the form of “equity” with Harrier.

    The CEO will be entitled to additional “equity” vesting at particular times, based upon meeting certain Key Performance requirements.

    The proposed timetable and maximum “equity” obtainable for the LTIP is shown in the table below.

DATE	Maximum “Equity”	Comments
1 July 2015	N/A	Commencement Date of LTIP
1 July 2016	5%
1 July 2017	2.5%
1 July 2018	2.5%
1 July 2019	2.5%
1 July 2020	2.5%

The proposed Key Performance requirements for each of the periods are as follows-

Key Performance Targets for FY17/18, 18/19 and 19/20 to be mutually agreed and reviewed at least 2 years in advance. (ie. Target for FY17/18 to be agreed by end June 2016, so there is 2 years until vesting date of July 2018).

Should all Key Performance Targets be met by the vesting date, then maximum “equity” would be released.

Should “some” but not all of the Key Performance Targets be met by the vesting date, then a pro rata amount of “equity” would be released. Remaining “equity” would be available in the next vesting period.

The “equity” would have a final expiry date of June 2021, and any “equity” not granted would lapse.

1. No key performance targets for the purposes of the long-term incentive plan were ever agreed between the Board and Ms Reynolds. There are some differences in the evidence between Ms Reynolds and Mr Sourbutts in relation to discussions about the key performance requirements. For example, Mr Sourbutts recalls discussing this with Ms Reynolds in June 2015 when this arrangement was no longer going to proceed given the circumstances of the business.[327] However, he does not agree with Ms Reynolds that her inquiries about whether Harrier Group would honour the long-term incentive plan intensified in 2019, seeing those discussions as instead relating to a short-term incentive.[328] Ultimately, nothing turns on these different recollections for the purposes of the resolution of this aspect of the contract claim.

   [327] Oral evidence of Mr Sourbutts, transcript p 497-498.

   [328] Oral evidence of Mr Sourbutts, transcript p 498. 

2. Counsel for Harrier Group described this document as an ‘agreement to agree’. This description is not inaccurate, although given that it is not signed by Ms Reynolds, it may be more accurate to suggest that the document reflects the intentions of Harrier Group at that date. However the document may be described, it is clear from the opening paragraph of the document that the intention was that a separate legal, contractual and tax effective arrangement would be agreed upon to give effect to the document. That never happened. In my view the terms of the CEO Remuneration document do not themselves create any contractual rights between Harrier Group and Ms Reynolds.

3. Even if I am wrong in that finding, and it was the intention of Harrier Group and Ms Reynolds that the CEO Remuneration document itself created contractual rights, the entitlement to the long-term incentive was conditional on key performance targets that had to be mutually agreed. Given that no such targets were ever agreed, even if the CEO Remuneration document did create contractual rights between the parties, a condition precedent to the payment of a long-term incentive in the form of equity in Harrier Group was not fulfilled.

4. Ms Reynolds gave evidence, based on her experience, of the types of matters that are usually relevant key performance targets for long-term incentive plans, and why she believes she met these targets and has earned a long-term incentive bonus.[329] This evidence does not, in my view, establish any contractual right to a long-term incentive bonus. The CEO Remuneration document requires mutual agreement of key performance targets. There is no alternative mechanism to determine key performance targets in the event that there is no mutual agreement, whether by reference to Ms Reynolds’ experience or any other factor.

   [329] Affidavit of Ms Reynolds filed on 8 November 2021 at [6] (CB 666).

5. Ms Reynolds has not established that she is entitled to any equity in Harrier Group by reason of the alleged contractual entitlement to a long-term incentive program.

   Share plan

6. Ms Reynolds alleges that Harrier Group breached its contractual obligations to her in relation to ‘plan shares in Harrier Group under its Share Plan as a variation and/or supplement to the contract’. As indicated above, I allowed an amendment to the Amended Statement of Claim in relation to how this breach was pleaded, over the objection of the respondents.

7. Although I allowed the amendments to the pleading, the pleading and the claim are not without difficulties, for reasons explained below.

8. I do not accept that any agreement in relation to the share plan forms part of the employment contract or any variation to that contract. Nothing in the employment contract addresses shares in the company. The document before the Court that appears to create contractual rights in relation to the share plan is the ‘Harrier Share Plan - Invitation Letter’ dated 26 August 2013 and signed by Ms Reynolds on 2 September 2013 (share plan agreement).[330]

   [330] The document appears in the evidence in the affidavit of Ms Reynolds filed on 14 May 2021 at Annexure KR3 (CB 165-187).

9. The share plan agreement does not by its terms purport to vary the employment contract in any way and I do not accept that it varies the employment contract. I have considered whether it might be seen as a supplement to the employment contract, noting that cl 40.3.1 of the employment contract allows for a supplement to the employment contract to be made by a document in writing signed by the company and Ms Reynolds. However, I do not consider in the circumstances of the present case that the share plan agreement is a supplement to the employment contract. For one thing, there is nothing on the face of the document to suggest that it was intended to be a supplement to the employment contract. Further, and importantly, the share plan agreement predates the most recent version of the employment contract. If the share plan agreement was intended to form part of the employment contract, this would have been set out in what is a clearly a comprehensive contract. I do not accept that the share plan agreement that predates the most recent version of the employment contract by approximately five years can vary or supplement that contract. 

10. In my view, the share plan agreement and the terms agreed by Ms Reynolds and Harrier Group signing that document, comprise a separate agreement. Ms Reynolds has not pleaded a breach of this agreement insofar as it is separate to the employment contract.

11. Even considering the share plan as a separate agreement, I do not find that it has been breached in the present case. The Amended Statement of Claim does not indicate the manner in which it is alleged that the share plan agreement has been breached. As I understand Ms Reynolds’ case, it appears that she is asserting that had her employment not been summarily terminated, she would still be employed and therefore would still be entitled to the shares. This understanding of her case is consistent with the only relief that Ms Reynolds seeks in relation to this aspect of her contract claim, namely, that Harrier Group reinstate her shareholding or pay her the monetary equivalent.

12. The difficulty with Ms Reynolds’ submission and claimed relief is that the share plan agreement specified what would happen to Ms Reynolds’ shares upon her employment as CEO of Harrier Group ceasing for any reason. Pursuant to the contract, Harrier Group could terminate Ms Reynolds’s employment for any reason (and, as can be seen above, the only difference for the purpose of the contract claim between summary termination and non-summary termination is Ms Reynolds’ entitlement to a notice period or payment in lieu of notice, and the payment of pro-rata long service leave).

13. Ms Reynolds has not established that Harrier Group treated her shares in any way that is inconsistent with the terms of the share plan agreement. On the face of the share plan agreement, upon Ms Reynolds ceasing to be employed by Harrier Group, her shares were to be disposed of using the formula set out in the agreement. This is set out at cl 6 of the share plan agreement, which provides:[331]

    [331] Affidavit of Ms Reynolds filed on 14 May 2021 at Annexure KR3 (CB 166-168).

    Additional terms

    In addition to the other terms of this letter and the Plan Rules, the Plan Shares are being offered to you in your capacity as Chief Executive Officer (CEO) of the Company. You agree and acknowledge that should you cease to hold that role, the Company would need appoint an alternate and is likely to have to offer such person shares in the Company as an incentive (and for the other reasons set out in paragraph 1 of this letter).

    Accordingly, the Plan Shares the subject of this invitation are issued on and subject to the condition that, unless the Company otherwise agrees, where your employment as CEO ceases for any reason (including termination by the Company or resignation by you), then the following shall apply:

    (a)For the purposes of this invitation, the Company is deemed to have a value of $1.32 million (the Base Value) as at 1 July 2013.

    (b)On the date that your employment as CEO ceases (the Cessation Date) the Company will, as soon as reasonably practicable, undertake a valuation to determine the sum of:

    (i)the value of the Company as at the Cessation Date (and for these purposes the Company will be valued in accordance with the company valuation model set out in Annexure B of the Shareholders Agreement); and

    (ii)the aggregate of all dividends that have been paid by the Company to its shareholders between 1 July 2013 and the Cessation Date (ignoring the extent to which any such dividends may or may not have been franked),

    (together the Cessation Date Value).

    (c)If the Cessation Date Value is less than $2.64 million (being twice the Base Value) then some or all of your Plan Shares will be liable to be disposed of by you in accordance with the following formula and terms:

    Where:

    TV (or Target Value) means $2.64 million;

    CDV means the Cessation Date Value determined in accordance with the above;

    BV means the Base Value (of $1.32 million); and

    D means the percentage of the Plan Shares that are liable to be disposed of by you.

    (d)For the purposes of clarity, where the application of the above formula results in:

    (i)D being 0% or less (including a negative number) then no Plan Shares are liable to be disposed of for these purposes and all of them may be retained by you (subject to other terms of this invitation and the Plan Rules including, without limitation, the repayment of the Loan);

    (ii)D being 100% or more then all of your Plan Shares will be liable to be disposed of by you; and

    (iii)D being between 0% and 100% then such percentage of your Plan Shares will be liable to be disposed of by you and the balance may be retained (subject to other terms of this invitation and the Plan Rules including, without limitation, the repayment of the Loan). By way of illustration, if the Cessation Date Value is $1.848 million, then the application of the above formula means that D equals 60%, such that 60% of your Plan Shares are liable to disposal and the balance of 40% may be retained.

    (e)If, pursuant to the application of the formula and these terms, some of Your Plan Shares are liable to be disposed of (the Disposal Shares), then (whether or not the Loam Term has expired or whether any part of the Loan remains outstanding):

    (i)you will be deemed to have irrevocably given the Company a notice that you wish to offer the Disposal Shares for sale pursuant to clause 11 of the Shareholders Agreement at a value per share equal to the value of the Company on the Cessation Date (valued in accordance with the company valuation model set out in Annexure B of the Shareholders Agreement) divided by the total number of shares then on issue;

    (ii)Rule 6.3 of the Plan Rules will be taken to apply to such deemed notice (as if the notice had been given by you in accordance with Rule 6.3(a)(ii) of the Plan Rules); and

    (iii)the Company hereby states that, where possible, it is the Company’s intention that the Disposal Shares will be bought back by the Company (and you are hereby irrevocably deemed to have given your consent for the Company to do so, for the purposes of Rule 6.3(b)(i) of the Plan Rules and for all other purposes and you hereby irrevocably appoint the secretary of the Company as your attorney to do in your name and on your behalf (including voting) such acts and things as may be necessary or convenient to approve or implement any buy-back of the Disposal Shares, or to otherwise effect their disposal by you).

14. The letter sent by Harrier Group to Ms Reynolds on 29 May 2020 states:[332]

    [332] Affidavit of Ms Reynolds filed on 14 May 2021 at Annexure KR5 (CB 191).

    Share Plan Assessment

    Following the termination of your employment as CEO of Harrier on 18 May 2020, the Cessation Valuation process of your Share Plan is enacted.

    In accordance with requirements of the Share Plan terms, the Company has determined the Cessation Date Value (CDV) as per Annexure B of the Shareholders Agreement.

    The CDV has been assessed according to the EBIT model as being less than zero.

    The CDV has then been assessed according to the Net Equity Position clause and has been assessed as $584,120.

    As the CDV is less than the Original Base Value of $1.32 Million, then 100% of the Share Plan shares are liable for disposal. For clarity this is 352,618 ordinary shares.

    The Company will therefore be enacting the disposal process outlined within the Share Plan document and will advise you if there are any surplus funds resulting from this process.

15. The suggestion in the letter that a cessation date value of less than the original base value means that 100% of the shares will be liable for disposal is consistent with the formula set out at cl 6(c) and 6(d)(ii) of the share plan agreement. There is no evidence before the Court which would allow me to find that the cessation date values set out in the letter, which purports to be calculated in accordance with Annexure B of the Shareholders Agreement[333] are not accurate. While evidence was given about the share values at various points in time, including evidence that the share price may have been over $3 per share at the time of the proposed sale in 2019, there is no direct evidence to suggest that the share value was higher than that indicated in the letter at the date on which Ms Reynolds’ employment ceased.

    [333] Exhibit 2, p 44.

16. Ms Reynolds has not established that the formula set out in cl 6 of the share plan agreement was not followed or that Harrier Group proceeded in any way that was not in accordance with the share plan agreement. At best, Ms Reynolds’ submission amounts to an assertion that the formula is complex and it is not possible to know whether it was complied with. That form of speculative submission is insufficient to establish a breach of contract.

1. As Ms Reynolds received the shares in the Quirk Trust, rather than in her own name, interest was payable on the loan used for the purchase of the shares, as per cl 3 of the share plan agreement. The outstanding interest on the outstanding loan was calculated as at the date of the termination of Ms Reynolds’ employment and interest was payable for the period from 1 April 2015 onwards. Interest for the period 1 April 2013 to 31 March 2015 had been waived by a Board resolution.[334] Ms Reynolds gave evidence that in her view the shares were a gift and the loan was not required to be repaid.[335] Ms Reynolds’ view is not consistent with the clear terms of cl 3 of the share plan agreement which was accepted by Ms Reynolds after she had the opportunity to seek advice. In any event, it is not necessary to address this further in circumstances where:

   (a)Ms Reynolds did not plead as part of her contract claim that the request for the repayment of outstanding interest amounts to a breach of contract, and rather the claim focuses on whether Harrier Group breached a contract by disposing of the shares;

   (b)Ms Reynolds did not seek any relief in relation to the request for outstanding interest to be repaid; and

   (c)there is no cross-claim by Harrier Group in this proceeding for Ms Reynolds to pay the outstanding interest.

   [334] Affidavit of Ms Reynolds filed on 14 May 2021 at Annexure KR6 (CB 192).

   [335] Oral evidence of Ms Reynolds, transcript p 63.

2. Ms Reynolds has not established any contractual entitlement to relief arising out of the employee share plan agreement.

   Conclusion in relation to the breach of contract claim

3. Ms Reynolds has not established that there has been any breach of contract in this matter and her contract claim therefore fails.

   CONCLUSION

4. I have found that Harrier Group has not contravened any provision of the Fair Work Act, as alleged by Ms Reynolds. It follows that Mr Sourbutts and Mr De Saint Jorre were not ‘involved’, within the meaning of s 550 of the Fair Work Act, in any contravention.

5. Ms Reynolds has not established that Harrier Group breached its contractual obligations to her and therefore her claim based on breach of contract fails.

6. The application to this Court is therefore dismissed. 

I certify that the preceding five hundred and twenty-three (523) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Ladhams.

Associate:

Dated:       20 October 2023

ANNEXURE A: RESOLUTION OF OUTSTANDING OBJECTIONS TO EVIDENCE

Parts of evidence found to be inadmissible

Paragraph	Basis of inadmissibility
Affidavit of Kelly Reynolds filed 14 May 2021
211-214	Hearsay.
231-240	Irrelevant.
242	Irrelevant and opinion.
243-246	Irrelevant.
248-249	Irrelevant.
250-261	Irrelevant.
277 (final sentence)	Opinion.
Affidavit of Kelly Reynolds filed 3 September 2021
66-67	Hearsay.
95	Irrelevant.
97	Hearsay.
133	Irrelevant.
162	Hearsay.
210	Irrelevant.
240-243	Irrelevant.
Affidavit of Delwyn Rayson filed 30 July 2021
17 (final sentence)	Opinion.
19 (second sentence)	Opinion.
28 (final sentence: ‘I understand when the Board had differing views to Kelly’)	Speculation.
55 (first sentence after ‘Kelly’ and second sentence)	Opinion.
Affidavit of Scott Crawley filed 30 July 2021
23	Irrelevant.
Affidavit of Gavin Bunning filed 29 July 2021
11 (first sentence: ‘…and I believed from other discussions that the other shareholders felt the same’)	Irrelevant.
12 (from ‘and misinterpreted…’ to the end of the sentence)	Irrelevant.
Affidavit of David Sourbutts filed 2 August 2021
40, second sentence.	Vague and irrelevant.
Affidavit of Philippe Paul de Saint Jorre filed 30 July 2021
13	Opinion.
17 (‘Her assertion that she was forced to work excessive hours is preposterous, as…’)	Opinion.
28 (‘…and with everything else going on in the business at the time.’)	Vague
44 (third sentence).	Opinion.

Notes
In considering the objections, I have been mindful of the possible purposes in leading the evidence. For example:

(a)I disallowed some of the hearsay objections where there might also be a non-hearsay purpose, but have only treated the evidence as probative for a non-hearing purpose; and

(b)

I disallowed some of the opinion/conclusory objections but, where appropriate, have treated the evidence as relevant only to state of mind.

ANNEXURE B

15. On or about 2^nd September 26 August 2013, by way of a variation and/or supplement to her contract of employment, the First Respondent offered the Applicant (in her capacity as an Eligible Employee), the benefit of participating either personally or by way of an Eligible Trust, in its share plan and offering her the benefit of 352,618 fully paid ordinary shares in the Harrier Group Company as part of her CEO remuneration package, as previously promised for her joining the organisation (CEO Shareholding).
16. The Applicant accepted the CEO Shareholding, which she held in the name of Quirk Trust. The Quirk Trust was an approved trust and/or an Eligible Trust for the purposes of the First Respondent’s Share Plan Rules.
…
18. At its highest, the Applicant’s CEO Shareholding and purchased shares totalled just over 22 % of the total shareholding in the Harrier Group Company (Applicant’s Shareholding).
…
72. The Second Respondent refused the Applicant’s request for a meeting and in an email to the Applicant at about 6pm said that due to her mental health issues, the Second Respondent had decided to place security guards on the door to the First Respondent’s office premises in Perth the following day to prohibit her physical access to the workplace, remove her access to emails, servers, payroll and expense systems with immediate effect. (Bullying Instance No13).
Particulars
Email Second Respondent to the Applicant dated 22 March 2020 and transmitted at about 6pm.
72(a) The Applicant replied in writing to the Second Respondent under cover of an email dated 22 March 2020 and transmitted at 10.28pm.
…
157. Relevantly, the Contract provides that the Applicant is entitled to:
(i) 3 months of notice of termination or payment in lieu
(ii) Pro-rata long service leave
(iii) short term bonus
(iv) long term incentive
(v) plan shares in the First Respondent under its Share Plan as a variation and/or supplement to that Contract.