Robinson and Rockell v Emprja Pty Ltd ATF the Darrouzet Property Trust T/A Abell Point Marina

[2020] FWC 6525

[2020] FWC 6525

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.394 – Application for unfair dismissal remedy

Robinson and Rockell
v
Emprja Pty Ltd ATF The Darrouzet Property Trust T/A Abell Point Marina
(U2020/1293; U2020/1296)

DEPUTY PRESIDENT LAKE BRISBANE, 3 DECEMBER 2020

Application for relief from unfair dismissal – multiple purported valid reasons – consideration of conduct discovered post-termination – consideration of post-employment conduct – no valid reason found – application for unfair dismissal successful – remedy to be determined separately.

[1] On 6 February 2020, Mr Benjamin Robinson and Ms Lucy Rockell (the Applicants) made applications to the Fair Work Commission (Commission) under s 394 of the Fair Work Act 2009 (Cth) (Act) for a remedy, alleging that they had been unfairly dismissed from their employment with Emprja Pty Ltd (the Respondent). The Director of the Respondent is Mr Paul Darrouzet.

[2] The Applicants are husband and wife and sought that the matters be joined. Given that both applications are highly analogous and deal with a “common substratum of facts” 1, I sought to hear and decide them contemporaneously, so as to best fulfil the Commission’s objective to be fair, just, and efficient.2 The relationship between the Applicants was considered when giving weight to the evidence provided, especially where it was corroborated by both Applicants to their benefit.

[3] The Applicants were dismissed on 28 January 2020. The Respondent put forward several reasons said to justify the dismissals; the substantive grounds which the Respondent seeks to rely upon were not known at the time of termination, but are alleged to amount to serious misconduct. The Applicants contend that the dismissal was unfair on the basis that there was no valid reason. The Applicants seek compensation.

[4] Both the Applicants and the Respondent sought to be represented. The Applicants by Ms Millar of Australian Dismissal Services and the Respondent by Ms Sowden of Barry Nilsson Lawyers. I exercised my discretion and granted permission pursuant to s.596(2), to both parties, as I was satisfied that the matter would be dealt with more efficiently and effectively, considering the complexity of the matter and the capabilities of the parties. As both parties were represented, it would not be unfair to allow representation.

Background

[5] The uncontested factual background to the matter is as follows.

[6] Mr Darrouzet owns a 27-meter Motor Launch named the MV Norseman (Norseman), which is berthed at the Coral Sea Marina (formerly Abell Point Marina). The marina complex and the attached hotel, the Coral Sea Hotel, are also owned by the Respondent.

[7] The Norseman is a large vessel and Mr Darrouzet requires a full time Captain to manage the vessel’s operation, maintenance and to provide skippering duties when underway. The Norseman is required, by Mr Darrouzet, to be maintained to an “excellent standard” 3 with all the requisite safety, navigational and engine systems being specialised for marine operation and requiring a high degree of maintenance. The Norseman was required to be able to depart with short notice for day trips or overnight passages.

[8] To allow proper utilisation of the Norseman, Mr Darrouzet, after an international search, employed Mr Robinson to be the Vessel Captain following the departure of the previous Captain. During the pre-employment process Mr Robinson sought to have his wife, Lucy Rockell, employed as a Stewardess on the vessel.

[9] Mr Robinson commenced on 19 January 2017 and shortly after, on 18 April 2017, Ms Rockell commenced on the Norseman.

[10] The hours of work were not specified; the Applicants were required potentially on short notice and would work whenever the vessel was needed – the Applicants had to ensure the Norseman’s readiness and availability.

[11] The Captain and Stewardess were full time roles and lived ashore when the boat was moored at its home berth in the Whitsundays. When the vessel was being utilised, they stayed in cabins provided. They were the permanent crew and on occasions extra crew would be sourced – generally if there was a day cruise with a larger number of passengers.

[12] The vessel was utilised mainly for Mr Darrouzet’s private and business use. This involved either day cruises or overnight or longer cruises thorough the Whitsundays. The vessel had 8 guest cabins and crew cabins.

[13] The responsibilities of the Applicants were to maintain the vessel to a high standard of presentation: this included the vessel machinery, hull, exterior topsides, the interior cabin and soft furnishings, including linens. This also included the mechanical maintenance of the powerplants, generator, air conditioning and electrical system, as well as the safety and navigational systems.

[14] It is worth noting at this early stage that the Applicants’ roles were distinct; one the Captain and the other a Stewardess. While their job descriptions and expertise differs, it is apparent they worked as a cohesive team and therefore, I find that it is acceptable to consider their duties together throughout the Decision.

[15] Given the size of the vessel, maintenance was a continuing activity whether at sea or in the dock; the marine environment is a harsh one, with the boat being subject to the degrading effects of salt water and strong UV constantly. In order to keep the Norseman, an ageing vessel, in presentable condition, rolling cosmetic maintenance was required on the vessel’s exterior – this included tasks such as sanding and finishing the teak decking, regular polishing of the topsides and cleaning the windows. The electronics, power generation system, and propulsion engine required regular inspection and scheduled maintenance, which the Captain was responsible for overseeing or, otherwise contracting out specialist services.

[16] The Applicants undertook all the tasks associated with upkeeping the Norseman, apart from when scheduled periods of maintenance occurred, when specialised marine subcontractors would perform more technical jobs, such as engine maintenance. Occasionally the vessel would require significant maintenance, in which case the vessel would be taken to a marina with haul out facilities. These major works required the Norseman to be taken out of the water, having some scheduled work done and then having the vessel relaunched.

[17] The Applicants were dismissed on the 28 January 2020 and, after an overnight period on the vessel, they left the employment of Mr Darrouzet. On 6 February 2020, the Applicants lodged unfair dismissal applications pursuant to s 394 of the Act.

Witnesses

[18] The Applicants gave evidence on their own behalf.

[19] The following witnesses gave evidence on behalf of the Respondent:

•  Paul Darrouzet, Director of the Respondent and owner of the Norseman;

•  Laura Bishop, Human Resource Specialist of Coral Sea Marina Resort;

•  Kate Purdie, General Manager of Coral Sea Marina Resort; and

•  Kim Latimer, current Vessel Captain of the Norseman.

Initial matters

[20] Several preliminary matters are required to be considered prior to determining whether the Applicants were unfairly dismissed. The application was made within the time required in s 394(2) of the Act. It is not in dispute that the Applicants are persons protected from unfair dismissal consistent with s 382 of the Act; the Respondent is not a small business and the dismissal was not a case of a genuine redundancy.

[21] Further, there was no dispute that the Applicants’ employment was terminated at the initiative of the Respondent. I am therefore satisfied that the Applicants have been dismissed within the meaning of s 385 of the FW Act.

[22] Havingdisposed of any potential jurisdictional issues, I now turn to consider the merits of the Applicants’ applications.

Was the dismissal harsh, unjust or unreasonable?

[23] Section 387 of the Act provides that, in considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the Commission must take into account:

(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees); and

(b) whether the person was notified of that reason; and

(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and

(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and

(e) if the dismissal related to unsatisfactory performance by the person – whether the person had been warned about that unsatisfactory performance before the dismissal; and

(f) the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(h) any other matters that the FWC considers relevant.

[24] I am required to consider each of these criteria, to the extent they are relevant to the factual circumstances before me. 4

Was there a valid reason for the dismissal related to the Applicant’s capacity or conduct?

What constitutes a valid reason?

[25] In order to be a valid reason, the reason for the dismissal should be “sound, defensible or well founded” 5 and should not be “capricious, fanciful, spiteful or prejudiced.”6 However, the Commission will not stand in the shoes of the employer and determine what the Commission would do if it was in the position of the employer.7

[26] Where a dismissal relates to an employee’s conduct, the Commission must be satisfied that the conduct occurred and justified termination:⁸

The question of whether the alleged conduct took place and what it involved is to be determined by the Commission on the basis of the evidence in the proceedings before it. The test is not whether the employer believed, on reasonable grounds after sufficient enquiry, that the employee was guilty of the conduct which resulted in termination.

[27] In a recent decision of Deputy President Asbury, her Honour summarised the following: 9

[11] Where the reason for the dismissal is misconduct, the Commission must be objectively satisfied that the misconduct occurred. However, as Vice President Hatcher observed in Bista v Glad Group Pty Ltd, the case law does not establish that a minor failing on the part of an employee could constitute a valid reason for dismissal simply because it was proven to have occurred. Dismissal on such a basis could not be sound, defensible or well founded. His Honour also cited the majority judgement of Moore J in Edwards v Giudice where it was held that:

The reason would be valid because the conduct occurred and justified termination. The reason might not be valid because the conduct did not occur or it did occur but did not justify termination. An employee may concede in arbitration that the conduct took place because, for example, it involved a trivial misdemeanour. In those circumstances the employee may elect to contest the termination in the arbitration on the basis that the conduct took place but it did not provide a valid reason and perhaps by relying on the other grounds in [the section].

[12] That judgement was relied on by Vice President Hatcher as authority for the proposition that, the consideration of whether there is a valid reason for dismissal requires, where the relevant conduct upon which the dismissal is proceeded is found to have occurred, an assessment of whether the conduct was of sufficient gravity or seriousness such as to justify dismissal as a sound, defensible or well-founded response to the conduct.

[13] The matters in s.387 go to both substantive and procedural fairness and it is necessary to weigh each of those matters in any given case, and decide whether on balance, a dismissal is harsh, unjust or unreasonable. A dismissal may be:

Harsh - because of its consequences for the personal and economic situation of the employee, or because it is disproportionate to the gravity of the misconduct;

Unjust - because the employee was not guilty of the misconduct on which the employer acted; and/or

Unreasonable - because it was decided on inferences that could not reasonably have been drawn from the material before the employer.

[28] While the three criteria above each have a unique ambit, they have the propensity to intersect in practice. Byrne v Australian Airlines elaborates on this overlap and distinguishes the three grounds stated above: 10

It may be that the termination is harsh but not unjust or unreasonable. unjust but not harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the concepts will overlap. Thus, the one termination of employment may be unjust because the employee was not guilty of the misconduct on which the employer acted, may be unreasonable because it was decided upon inferences which could not reasonably have been drawn from the material before the employer, and may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted.

Summary of the issues raised by the Respondent

[29] The Applicants submitted that there was no valid reason for the dismissal related to the Applicants’ capacity or conduct because the alleged conduct was not a valid reason for a termination.

[30] The Respondent, in their final submission, stated a plethora of factors in justifying the dismissal. However, the reasons provided by the Respondent, while they did not change or present any impropriety, did expand and grow throughout the litigation. The genesis of the claims against the Applicants are important to understand and it is beneficial to outline the germination of the claims laid against the Applicants.

[31] It is accepted that the Applicants were not provided with any warnings prior to the termination. 11 The first materialisation of any purported valid reason for dismissal was the content of the letter of termination, which relevantly stated:

On 28 January 2020 you met with Paul Darrouzet, Owner, to discuss issues in relation to not meeting the requirements and expectations in your position of Vessel Captain, Due to ongoing issues, the business has made a decision to terminate your employment with Coral Sea Marina Resort…

While we acknowledge that this has been a difficult decision to make, it is not a personal decision and has been made purely on the basis of your performance not being at the required level to meet the operational needs of the business.

[32] The letter of termination stated, rather simply, that the Applicants had been the subject of ongoing issues and had not met the required performance expectations. On the Form F3 response, at least in respect of Mr Robinson, the reasons relied upon by the Respondent to justify the dismissal appeared to proliferate to include several allegations of serious misconduct:

2. During his employment with the Respondent, the Applicant did not apply to access annual leave; no annual leave was processed in accordance with the Respondent’s guidelines.

3. However, the Respondent became aware that on various occasions throughout the Applicant’s employment, he was absent from work on holiday. These periods should have been claimed and processed as annual leave absences.

4. The Applicant utilised 30 days (228 hours) of ‘time off in lieu’ (TOIL) notwithstanding that he did not accumulate approved TOIL, did not use the appropriate forms for accruing TOIL and as such in those instances annual leave should have been sought.

5. During the course of the Applicant’s employment, some instances of the Applicant’s serious misconduct included failing and/or incorrectly performing the following:

a. the Applicant took the vessel to Gold Coast for two months for repair work at a cost of $200,000. At those times, the Applicant failed to adequately supervise the repair work. With respect to the repair work, the generators were overlooked and subsequently failed resulting in further additional work and additional expense;

b. the Applicant failed to seek the cheapest and best alternative for the required repair work resulting in $60,000 worth of fuel and a month of transport to the Gold Coast. All the repairs could have been done locally in the marina. With respect to the repair work undertaken on this occasion, the hydraulic hoses for the trim tabs failed due to poor workmanship;

c. the Applicant took unauthorised leave on various occasions during the Applicant’s employment. The Applicant was absent from work on holiday, during periods other than the seven days of annual leave from 21 January 2019 to 29 January 2019 that the Applicant sought and was subsequently approved; and

d. the Applicant failed to obtain authorisation on expenditures, incorrectly invoiced and charged the Respondent. The Applicant incurred significant expenses on unapproved items within his job description amounting to $4,373 from 13 November 2019 to 22 January 2020. The Applicant hired labourers in this regard to undertake his work without the Respondent’s approval.

[33] The final submissions of the Respondent largely adhere to the content of the Form F3, but there are further allegations:

18. Further, the Applicants were well aware of the proper procedures in place for the accrual of TOIL and accessing it. Despite this they took advantage of the fact that Mr Darrouzet to whom they reported did not have access to the Wageloch system and that the deficiencies of the system allowed processing of TOIL leave despite the Applicants not having any accrued leave.

19. During the course of their employment, it also became apparent that the Applicants were engaging in serious misconduct when they:

a. failed to accurately diagnose maintenance issues which on several occasions resulted in the cancelation of events;

b. failed to seek the cheapest and best alternative for ‘required’ repair work resulting in $60,000 worth of fuel and a month of transport to the Gold Coast, when all of the work could have all been done the local boatyard in the marina;

c. failed to adequately supervise the repair work when the vessel was on the hardstand for two months at GCCM where a $200,000 refit took place;

d. were absent without seeking approval for leave in November 2019; and

e. hired someone else to clean the boat on numerous occasions at a cost to the Respondent without authorisation.

[34] When comparing the Form F3 and the final submissions it is notable that further issues are raised and that some issues change in detail, if not in substance. Using the paragraph references of the Form F3, the TOIL issue at paragraph 4 and both 5(a) and 5(b) remain comparable to the final submissions. The dates surrounding the question of unauthorised leave change between January 2019 in the Form F3 and November 2019 in the final submissions. The issues of failing to diagnose maintenance issues correctly and the unauthorised subcontracting of works are added in the final submissions.

[35] The Respondent proceeded to largely restate these issues under their consideration of what justified a valid reason for dismissal. While somewhat repetitious of the above, the allegations are, again, framed somewhat differently and so it is beneficial to extract them:

The conduct of the Applicants was sufficiently serious to result in a valid reason for termination. That conduct was namely:

a. not appropriately managing the maintenance of the Norseman,

b. incurring additional expenses in repairing the Norseman;

c. engaging in non-transparent attempts to accrue TOIL and access TOIL which was not approved;

d. not using the Respondents TOIL policy;

e. being absent without notice;

f. engaging third parties at the Respondent’s expense to undertake work on Norseman which was within the responsibility of the Applicants to perform.

[36] In giving his oral evidence, Mr Darrouzet raised further allegations regarding the conduct of the Applicants. Most significantly, there were four further allegations raised:

•  First, that the failure to maintain the boat by the Applicants was intentional and could be considered “sabotage” – it was either “a catastrophic failure of supervision, either that or it’s a deliberate act of malfeasance” 12; and

•  Second, while on a bout of unauthorised leave, that the Applicants purchased flights to Noosa, hired a rental car and paid for accommodation all on their corporate subsidiary credit card; 13

•  Third, that the Applicants, without authorisation, charged dinner at the Southport Yacht Club to their corporate subsidiary credit card; and

•  Fourth, that the accrual of TOIL was not only outside the company mandated policy, but that the Applicants capitalised on a gap in supervision and did not even work the overtime they claimed. 14

[37] During cross examination, the Respondent’s representative, Ms Sowden, raised a further allegation that the Applicants had breached the confidentiality clause of their employment contract. 15 The material related to servicing of the Norseman. This appears to be the first mention of this issue, which was also addressed in closing submissions.16

[38] For clarity, it is useful to list all the issues that the Respondent has raised in a single list, which I will then address sequentially:

•  Issues regarding TOIL:

•  Failure to adhere to the correct TOIL accrual policy;

•  Deliberate abuse of the lack of oversight by Mr Darrouzet in having any TOIL approved; and

•  Improper accumulation of TOIL through fraudulent reporting.

•  Poor performance within the role, including a failure to:

•  Properly diagnose maintenance issues;

•  Seek the best alternative for required works, resulting in excessive expenditure on fuel transporting the Norseman;

•  Adequately supervise maintenance while at the Gold Coast; and

•  Perform works themselves on the Norseman, instead hiring labourers without authorisation at an additional cost.

•  Taking unauthorised annual leave.

•  That the Applicants’ failure to maintain the boat was at best a catastrophic failure of supervision, or a worst deliberate act of malfeasance.

•  That the company credit card was used improperly and for personal expenses while:

•  On a trip to Noosa, involving a rental car, accommodation and flights; and

•  While at the Gold Coast to purchase food at the Southport Yacht Club.

•  That the Applicants gained access to, and retained copies of, confidential information relating to the Norseman post-employment in breach of their contract of employment.

Consideration of reasons discovered after termination

[39] The Respondent in their final submissions pointed to case law in support of the premise that facts which justify a dismissal, which existed at the time of the dismissal, should be considered, even if the employer was unaware of those facts and failed to rely upon them during the dismissal process. The Respondent relied on Shepherd v Felt & Textiles of Australia Ltd, which relevantly states: 17

The fact that the appellant’s misconduct was unknown to the respondent at the time of the termination of the agreement is quite immaterial. If there were, in fact, any circumstances in existence at the time of the termination of the agreement which could have justified the respondent in so terminating it, then it may justify the termination by subsequent proof of those circumstances.

…

When the respondent terminated his agency it was not aware of the contents of the telegrams and the letter which he had sent to its customer’s buyer, and it acted upon other grounds. It is well established, however, that a servant’s dismissal may be justified upon grounds on which his master did not act and of which he was unaware when he discharged him.

It is true that the agreement between the appellant and the respondent does not amount to a contract of service. But the rule is of general application in the discharge of contract by breach, and enabled party to any simple contract who fails or refuses further to observe its stipulations to rely upon a breach of conditions, committed before he so failed or so refused, by the opposite party to the contract as operating to absolve him from the contract as from the time of such breach of condition whether he was aware of it or not when he himself failed or refused to perform the stipulations of the contract. “It is a long established rule of law that a contracting party, who, after he has become entitled to refuse performance of his contractual obligations, gives a wrong reason for his refusal, does not thereby deprive himself of a justification which in fact existed, whether he was aware of it or not.” [citations omitted, emphasis added]

[40] In Byrne, the High Court elaborated on this premise, considering the circumstances surrounding the respondent’s state of ignorance: 18 (emphasis added)

In Lane v Arrowcrest Group Pry Ltd, von Doussa J considered the example of the dismissal of an accountant who held a position of trust where it was discovered after the dismissal that the accountant had been systematically embezzling money from the employer. His Honour said it would be astonishing if the employer could not resist an allegation that the dismissal was harsh, unjust or unreasonable, within the meaning of the relevant award. by pointing to those facts discovered after the dismissal, so long as they concerned circumstances in existence when the decision was made. His Honour concluded:

Whether the decision can be so justified will depend on all the circumstances. A circumstance likely to favour the decision to dismiss, would be that fraud or dishonesty of the employee had caused or contributed to the employer’s state of ignorance. A circumstance likely to weigh against the decision would be that the employer had failed to make reasonable inquiries which would have brought existing facts to its knowledge before the dismissal occurred.

[41] It is apparent that several of the issues that were raised after the dismissal were capable of discovery before the Applicants had been terminated. Indeed, the steps taken by the Respondent would have been no different had the parties remained employed and stood down pending a proper investigation. However, it is not advisable, in light of the broad scope of Shepherd, to simply not consider these issues. It is more appropriate to take these factors into account under s 387(b) and (c), as stated by the Full Bench in APS Group (Placements) Pty Ltd v Stephen O’Loughlin: 19

[51]Section 387(a) of the FW Act requires FWA to consider “whether there was a valid reason for the dismissal”. This language directs attention to whatever reason or reasons for dismissal emerge from the evidence and are relied upon by the employer. The tribunal is not confined to a consideration only of the reason or reasons given by the employer at the time of the dismissal. An employer is entitled at the hearing of an application for an unfair dismissal remedy to rely upon whatever reason(s) the employer wishes to rely upon at that time, albeit that in relation to any reason not relied upon at the time of dismissal the employer will have to contend with the consequences of not giving the employee an opportunity to respond to such reason (see s.387(b) and (c) of the FW Act).

[42] I will now sequentially consider each of the allegations listed above at [38].

Failure to Adhere to the Correct TOIL Accrual Policy

TOIL system

[43] In mid 2018, the Respondent introduced a TOIL Policy and a time and attendance software called “Wageloch” (Wageloch), which was rolled out across the Coral Sea Marina staff. Marina staff were entitled to accrue TOIL where they worked additional hours and to be eligible they needed to get approval prior to working the proposed hours. This approval took the form of a “TOIL Accrual Form” which the employee would fill out and have signed off by their manager. Any accrued TOIL could then be accessed by submitting a “TOIL Approval Form” through the Wageloch system, effectively notifying the administration that the staff member was requesting TOIL – this would need to be approved for the employee to have their leave registered. In the case of the Applicants, the approvals went through Ms Purdie, as Mr Darrouzet did not have access to the Wageloch system. The Applicants lodged several TOIL Approval forms during their employment, all of which were approved by Ms Purdie. None of this is contentious.

[44] The Applicants were notified of the introduction of the system around 2 August 2018, in an email from Ms Lawlor. It is not clear they were ever provided a copy of the actual policy, however it is clear they are aware of its existence. The email from Ms Lawlor stated the following: 20 (emphasis added)

Hi Ben

As mentioned by Deb, we need to know the total number of TOIL days you have accrued since the beginning less the 5 days you have already taken. We will record this total number of days on the payroll system where the number of these days will be available for you to take as leave in future. Before we record these accrued TOIL days in the payroll system, company policy requires that the number of days are approved. For yourself and Lucy this approval will be by Paul.

The form you have been given is to record the number of TOIL days you have accrued. After you complete the form with the number of accrued days since the beginning (less the number of days taken), it will be passed to Paul for his approval. After his approval we will update the payroll system.

You apply to take TOIL days as leave by using the Wageloch app on your phone, there is no manual form for this application. You mention that you have got this mobile phone app. This request has to be approved electronically.

As Paul does not have access to the Wageloch system we will arrange for Kate to approve the request (presumably she will liaise with Paul before electronically approving the leave request). In future you should complete the form you have been given whenever you accrue TOIL days. I recommend that you complete the form weekly or fortnightly so that, after approval, the payroll system contains an accurate numbers of accrued TOIL days owing to you and Lucy.

[45] It is worth noting that in this correspondence, advice is directly given to the Applicants which is at odds with how the Respondent submits the TOIL Policy is technically applied, where approval should be sought before-hand and not on a weekly or fortnightly basis. This does fundamentally change the obligation on the Applicants: it is no longer a question of having their TOIL approved, but an exercise in having their TOIL accrual recorded so that their balance can be properly reflected in the Wageloch system.

[46] After this email, there was a meeting which occurred in either October or November 2018 regarding the TOIL process. This meeting was attended by the Applicants, Mr Darrouzet and Ms Purdie. The meeting is recalled by Mr Darrouzet as follows: 21

Well, there was a meeting, wasn’t there, in approximately November of 2018 which Ms Purdie refers to in her witness statement where the recording of TOIL was discussed between yourself, Ms Purdie, Ben and Lucy? Do you recall the meeting?  -I did, and that is when I said, “Your claims are ridiculous, outlandish and unsustainable. I require you to record any claim that you think you have for time off in lieu and do it in a daily spreadsheet and a weekly spreadsheet.” None of that occurred.

What arrangements did you put in place with Ms Lawler and Ms Purdie to make sure that they were checking for those accruals before they approved the leave?  -I didn’t, and they approved it.

[47] The 2 August 2018 email and the November 2018 meeting are the two primary instances of management direction that the Respondent points to that require the Applicants to comply with the TOIL policy.

[48] It is important that Mr Darrouzet, on his own evidence, told the Applicants to produce a spreadsheet logging these hours. This is significant because the obligation to produce a spreadsheet is not in any way an obligation borne from the Coral Sea Marina TOIL policy – it is a unique and distinct direction from Mr Darrouzet. This is indicative of the unique relationship between the Applicants and Mr Darrouzet, as an individual distinct from the Respondent.

Entitlement to TOIL

[49] The Applicants provided testimony that the accruing and taking of TOIL was a creation of the Respondent. The practice came about as the Applicants did not work a standard week, rather they worked hours that may cover the weekends. Not only were they to provide skippering and hosting duties when the boat was in use, they were also responsible for the maintenance and upkeep of the vessel to a “guest ready” standard. This meant that the hours where the vessel was not being utilised were spent maintaining the systems and facilities of the superyacht.

[50] As the work they performed did not comply with a standard contract of 38 hours, reasonable additional hours were contemplated to account for when there was weekend work with guests and ongoing maintenance which had to be performed when the boat was vacant and unlikely to be used. 22 The Applicants alleged that the Respondent had proposed that the Applicants utilise a process where excess hours worked over the regular hours could be banked and used at a time convenient to the Respondent. This was generally when Mr Darrouzet was overseas and therefore, when the vessel was unlikely to be called into use on short notice. TOIL hours were accumulated and then taken at a mutually agreeable time when the vessel was not being utilised – the TOIL time was considered more flexibly by the Applicants and was capable of being cancelled at short notice, unlike a period of annual leave.23

[51] The recollection of Mr Darrouzet is antithetical to that of the Applicants: 24

You would describe this as a time in lieu arrangement?  -I would describe it as an industry arrangement where - there isn’t time in lieu in this industry. There was no time in lieu put into their letter of appointment, there never is. There was not and there isn’t, but, as I said, it was not in their employment agreement, it was not in any subsequent correspondence; zero. It’s just an industry (indistinct) if you like because of the nature of the thing, that people do work weekends and that’s when a lot of the activity occurs. If a crew works weekends they take Monday/Tuesday off. It’s applicable for probably 50 of the 52 commercial boats in the marina here; very standard. There is nothing, nothing, nothing written or ever said about this accrual of TOIL. I would like you to provide me any letters or any documentation that said they’re entitled to take this.

I was unaware of it. I was unaware of it as I was away and I have, as I said, never ever been aware of this spreadsheet with this nonsensical calculations which have no basis in anything. There is no backup, no recording, no diary entries, no WageLoch provision. This is just sort of like - it should start with “Once upon a time in a land far, far away”.

[52] The Respondent’s contention is that he had never seen any record of TOIL during the entirety of the Applicants’ employment. The Applicants contend that the spreadsheet had to be available for production to either Paul, Kate Purdie (Marina Manager), Deb Lawlor (Financial Controller), and Carol Roberts (Human Resources). 25 Mr Robinson gave evidence that he had discussed the issue with Mr Darrouzet on multiple occasions.26

[53] Ms Purdie gave evidence that in January 2020 both Mr Darrouzet and Ms Purdie realised that there was no oversight as to approval of the TOIL hours. 27 In evidence Mr Darrouzet stated:28

Do you know whether either of the managers - either Ms Lawler or Ms Purdie - ever put in place any arrangement to manage Ben or Lucy’s annual leave balances?  -No, they didn’t, and this is the thing; they thought it was being managed by me. Ben and Lucy were my personal staff.

[54] It seems spurious that Mr Darrouzet could be totally unaware of the TOIL accrual being an implemented system for the benefit of the Applicants. Throughout the evidence there are numerous emails which point to the accrual of TOIL to be a topic of discussion at regular intervals. The spreadsheet was at least provided via email to Deb Lawlor on 9 January 2019. 29 The email attaches the spreadsheet and indicates that Mr Robinson had spoken with Mr Darrouzet and that a solution would be organised between the parties upon his return from holiday. As early as 17 July 2017, there is an email from Mr Robinson to Deb Lawlor indicating some confusion regarding the approval of leave and stating that they had registered for Wagelock but that TOIL was not recorded.30 Deb Lawlor then sent the following email:31 (emphasis added)

Hi Paul

Is it OK for Ben and Lucy to have 5 toil days instead of annual leave. They both have 30 days annual leave accrued as at 30 June.

Kind Regards

Deb Lawlor
Financial Controller

[55] This is contemporaneous evidence which indicates that the issue of TOIL was a topic of consistent discussion and one within the contemplation of Mr Darrouzet. Given the evidence, it would be highly unusual for Mr Darrouzet to “really [be] unaware completely and utterly that [TOIL] was accruing at this rate”. 32 Ms Lawlor made him aware as early as 2017 of the fact that there was some accrual of TOIL – this is implied by the fact the Applicants were seeking to take 5 days of accrued TOIL as leave. There is no indication that Mr Darrouzet questioned or queried the existence of a TOIL balance, the fact that the Applicants were entitled to TOIL, that both the Applicants were capable of drawing 5 days of leave exclusively from TOIL, or that there was an entitlement to TOIL at all.

[56] If Mr Darrouzet was as ignorant as his testimony reflects, then this was a product of his own failure to keep proper oversight of his personal staff. Any allegation that the Applicants were “manipulating the WageLoch to grow their leave balances” 33 should be more correctly characterised as a failure of Mr Darrouzet to pay close, if any, attention to the staff aboard the Norseman.

[57] Further, each of the leave approval forms generated by the Wageloch system clearly state that the leave is classified as “TOIL PAID”. The relevance of this is that any managerial oversight whatsoever would indicate that TOIL was being taken. The natural corollary is, as a matter of common sense, that TOIL was being accrued. It is clear that confusion existed surrounding how best to deal with the accrual of TOIL, but to place the burden on the Applicants to ensure that Mr Darrouzet and one of his managerial staff are communicating due to an improper set up of the Wageloch system is nonsensical.

[58] It seems unlikely that leave being taken as TOIL on such a frequent basis can be characterised as deceptive or deceitful – it was occurring in plain sight and on the simplest investigation would have become apparent. If Ms Purdie was not responsible for approving the TOIL the Applicants sought to take, then she should not have approved it – at the very least Ms Purdie should have communicated with Mr Darrouzet to inform him. Indeed, the email from Carol Roberts dated 2 August 2018 gives the impression that Ms Purdie will liaise with Paul in approving any leave. There appears to be a disconnect with respect to the communication between the Coral Sea Marina management. The Applicants are told in the above email by Ms Lawlor that “presumably [Ms Purdie] will check before approving” 34 and Ms Purdie stated in evidence several times that she always checked with Mr Darrouzet before approving any outstanding leave.35 Despite this, Mr Darrouzet claims to have practically no recall as to the Applicants’ leave accrual. Clearly, there is either a breakdown in communication between Ms Purdie and Mr Darrouzet or a degree of dishonesty in the delivery of the evidence before the Commission. Regardless, it seems clear that the failure was not a failure of the Applicants.

[59] The Applicants are given the distinct impression that Mr Darrouzet was aware of their TOIL accruals and that if there was a problem with those accruals that he would, or at least should, have been informed. The email from Deb Lawlor accounts for a reconciliation of the current TOIL days and requires that a total number be provided. It is clear the Respondent required an accrual figure – it is unclear whether a figure was provided in response to this email. What is apparent is that the Applicants did keep a record that was capable of production when required and that if there had been a legitimate issue with the TOIL accrual it would have been mentioned much earlier than January 2020. It was brought to the attention of senior management some 18 months prior. To provide no management of the TOIL system and then seek to dismiss staff over their non-compliance, when approvals by management were consistent – and, to the Applicant – presented as the ostensible approval of Mr Darrouzet, would be manifestly unfair.

[60] It is apparent on the evidence led that the engagement between Mr Darrouzet and the Applicants was materially different from the other staff employed by Coral Sea Marina. It is clear from the testimony of Mr Darrouzet 36, Ms Purdie37 and the Applicants38 that they were considered his “personal staff”. While theoretically they utilised many of the systems implemented for the staff of Coral Sea Marina, in practice the Applicants were not required to strictly comply with these procedures.

[61] An obvious example is the requirement to clock in and out to record time – this would be quite literally impossible for the Applicants whenever the boat is not docked. As the Applicants did not utilize the system of clocking in and out, there was not a proper system for the recording of their hours. Therefore, the Respondent was reliant upon the Applicants to document the days worked and they accrual of time off for hours in excess of 5 days. Most of the conversations appear to have been informal in nature and in person between the Applicants and Mr Darrouzet: 39

Can we now ask you about the process around both yourself and Ben accruing and taking a TOIL. How was this initiated?  -So we were working very hard. I mean it was apparent that we were racking up the days. So Paul wanted to sort of work out when we’re going to have time off. So he said, “Look, I’m away then, and if you work - you’ve worked a lot lately so you can take those days off when I’m away”, and it just kind of - just snowballed from there really and it just kept going.

[62] Further, they did not directly report to the senior management of Coral Sea Marina, but only tangentially when required to complete administrative tasks. Ms Purdie and the Applicants were under the impression that they took instruction from Mr Darrouzet directly, which does appear to be the case. 40 The product of this is, by design of the Respondent, a less regimented system of reporting required of the Applicants. This was summarised well by Mr Robinson:41

We weren’t required to check in every day. Everyone else in the marina sort of had like an 8 till 4 job, and some, maybe a couple of people, outside of those areas. Our roles were very different, very varied, and so on. It was a completely different and personal arrangement.

…

So when you were applying for TOIL using the WageLoch system you would apply for a certain number of days or whatever?  -Sure. Paul would instruct us that he’s going to be away and that he would like us to take some leave, and then between Lucy and myself we work out what we’re going to do, how much we can take off, because a lot of the time he’d be away we’d have to then continue doing maintenance, and we’d have scheduled maintenance, because some maintenance for the yacht can’t be done when Paul is around because then there’s days that the boat won’t be available. And so we always scheduled that, because Paul travels quite regularly and we’d always keep that sort of in the list, the defect list, and try and schedule that for when he was away. So working around that, if then we could take time, we would, and to make up for the extra days that we’d worked. And most of this time, a lot of instances, we were still in town, we were around, and a lot of instances we still came back and did work. We weren’t too far from the vessel. We were constantly checking on it, and sometimes contractors would come down and do work even though we were booked out to be actually away on TOIL. So it was a very sort of loose arrangement…

[63] This entire situation could have been avoided by either integrating the Applicants as marina staff, strictly complying with Coral Sea Marina processes, or alternatively, having the staff be managed entirely by Mr Darrouzet through the more informal method of communication which he chose to adopt. The Applicants appear to be put to the stringency of the Coral Sea Marina processes, as if their employees, but then when convenient labelled Mr Darrouzet’s “personal staff” so that any failure to properly oversee them can be explained away.

[64] I am content that despite the emails to the Applicant indicating the need to record TOIL accruals, the Applicants did not believe they were required to comply with the Marina processes. Following those emails, they met with Mr Darrouzet and Ms Purdie where they were instructed to record any entitlement to TOIL that they made. They did this through the spreadsheet produced to Mr Darrouzet. I favour the evidence of Mr Robinson that this sheet was shown to Mr Darrouzet, over the evidence of Mr Darrouzet to the contrary. Had no indication been given of a record of accrual between November 2018 and 2020, Mr Darrouzet would have questioned why his previous direction was not complied with – there is no evidence that this occurred.

[65] The 2 August 2018 email and the November 2018 meeting do not portray that the Applicants were strictly required to adhere the Coral Sea Marina TOIL policy. There is a clear deviation from the Coral Sea Marina processes and an indication that the Applicants were to take directions from Mr Darrouzet. Mr Darrouzet asked for a spreadsheet to be produced and the Applicants duly complied. The frequency with which Mr Darrouzet bothered to check it does not seem material – the data was there for production as a record of their accruals. It is believable that following the November 2018 meeting, the Applicants believed that they were complying with the direction of Mr Darrouzet, regardless of whether this complied with the Coral Sea Marina processes.

[66] Following the email from Ms Lawlor, the Applicants sought to discuss the TOIL arrangement with Mr Darrouzet – they characterised it as an “ongoing discussion”. 42 A meeting with Mr Darrouzet was arranged where he expressed that a spreadsheet was to be provided detailing the Applicants’ accruals. The Applicants complied. This seems to be a likely manifestation of Mr Darrouzet’s management style: he stated that he prefers to raise matters “verbally”, rather than “sit down and write a report”.43 The expectations raised between the Coral Sea Marina policies and Mr Darrouzet are not strictly aligned. Where there is deviation, one would expect the Applicants to comply with Mr Darrouzet’s instruction, given they were his “personal staff.”44

Application of TOIL policy to the Applicants

[67] Given the evidence above, it is clear that the TOIL policy as outlined by Coral Sea Marina management did not strictly apply to the Applicants. Even if, on a strict reading of the policy it did apply to the Applicants, the Respondent did not act as though it did and does not appear to have ever enforced the policy in respect of the Applicant as though it did. They were not told to fill out approvals in advance and used the Wageloch system largely as a means of allowing payroll to process their leave. The Applicants had a discussion with Mr Darrouzet where they were instructed to keep a spreadsheet of the hours accrued and they complied with this direction. The failure to keep Mr Darrouzet informed was not a Machiavellian scheme, but more accurately a lack of communication and proper oversight between the Respondent’s management staff. The Applicants did not abuse this lack of oversight.

[68] Given that there was no strict obligation to comply with the TOIL policy in practice, this does not form a valid reason for dismissal.

Improper accumulation of TOIL through fraudulent reporting

[69] There were allegations made that the Applicants were accruing time off without having worked the corresponding time. The Respondent alleges that the Applicants recorded TOIL during periods when they were not working. The evidence put forward was an analysis of the movement logs of the ship and how it correlated to accrual of TOIL – the inference being that higher ship use means a higher likelihood of accruing TOIL. The Applicants put forward in response that the Norseman is consistently maintained to a high standard both external (hull, topsides and teak decking) as well as the interior surfaces, furnishings, the host of complex systems to run the engines and the navigation system. Further, this activity occurs in the marine environment, which has a degrading effect on the systems through UV and salt. The contention by the Applicant was that they were kept busy ensuring the vessel was in first class condition ready for use by the Respondent and guests on potentially short-term notice.

[70] It has already been accepted that Mr Darrouzet expected the ship to be “maintained to a first-class standard.” 45 This is entirely acceptable and the prerogative of an employer to expect a level of service from their staff. However, it is a logical corollary that exacting standards will require a high degree of attention to detail and in turn, a greater amount of time. An extract from Ms Rockell’s evidence indicates the standard required and the level of detail delivered:46

Just like itineraries, where we’re going to go, what we’re going to do with the guests, all the groceries, the provisioning with the alcohol. There was a lot of planning that went in - involved to ensure that these guest had a five star experience on a very, very prestigious yacht. Yes. Let me just think because it’s an important question, I’m trying to validate my job. Obviously the cleaning as well. I mean I was cleaning with a cotton bud and a toothpick in some areas. The cleaning is very extensive and the air handlers on board that has to be done regularly because, you know, the flow of air has to be pure for the guests. That’s very intricate work to be done. There was like 13 air handlers on the boat, and to get into those you have to - the wood on the boat is so precious you can’t damage anything, and it’s easily damageable, so you have to be very careful. Yes. So a lot of detail, and you’re talking about a boat that’s outside all the time, it’s in the elements constantly. So you’ve got rust on the (indistinct) that you’re dealing with, and you’ve got (indistinct) and you’re battling with the weather, and it has to be immaculate, and Paul made that so from the beginning, because he demonstrates it. We were out at sea - we were out at sea for a few days and I woke - I didn’t wake up, I was in the galley preparing breakfast, and I came outside and he was - he was at the windows with a shower that you scrape the - and he was doing it on the outside window with the salt water. So he made it clear that he didn’t want any speck of like sea salt, you know, but even though we were out at sea. So it was - we had to get up at like six in the morning to do a wash down before he got up, and his boat is in his marina all the time. So it has to look immaculate - immaculate. So I would do like polishing. I’d polish the windows, and this is a big buffer thing, and that would take me like a day and a half to do, and I was very proud of my work and he loved everything that I did on the boat…

[71] Mr Darrouzet asserts that it is “nonsense and a joke” and “beyond belief” that the Applicants could accrue TOIL to the extent documented. 47 However, when the Applicants were questioned on the accrual of time, particularly when the Norseman was not in use, they were able to provide clear and detailed answers to rebut the Respondent’s otherwise unsupported claim.

[72] In cross-examination Ms Rockell was clear, detailed and immediate in her recall: 48

And then the ship movement logs indicate that the ship is taken out on two days. So there’s a very large period when the ship is not out on the water. So I am wondering how you substantiate the six days of TOIL in those circumstances?  -So are you talking about like what type of work I would do when the boat isn’t being used, is that what you’re asking?

Yes, because it’s saying six days of TOIL, more than the five day week, each week of the month. So like what would that look like?  -It depends what projects needed doing really. I called them projects, it’s maintenance, I call them projects. So I’m pretty sure that’s when I did the sanding, which took me like a week and a half on my knees on the teak, because the teak is like a very, very precious piece of wood, and upstairs it was getting a bit below par, because that’s the bar area and it needed working, but we had to do it while the boat wasn’t being used, because you can’t take the boat out with like - I think I’ve got a photo actually of my work being done. Yes, so I think I did the sanding. That was - yes, I’m pretty sure that was March, and that took like a week and a half. So it was - - -

What would be the remaining sort of two and a half weeks of time?  -Other projects or putting the boat together and catching up on work that I couldn’t do when the boat was going out. It’s easier in my head if I do like a breakdown, because I don’t know what I did in that particular week, but if I give you like a breakdown of all my chores would that help you?

Sure. Yes, that’s very helpful?  -Okay. So in my head I have like pre trip, post trip, a normal week, and then I have a refit period, and then I also have like maintenance, and they changed all the time, like the little things that needed done, and you have to remember like Paul always wanted stuff done on the boat. Like he’d point at things and he’d say, “I don’t want that there any more, you’re going to have like get rid of it.” So we would put it on a list and it will go, and when he was away, like off the top of my head, and I can’t - I don’t know, like I have to go back with Ben and he would have to look at like invoices of when we ordered parts and stuff like that. So he would say, “I don’t like the music system. Let’s get a new sound system.” So that would be a project that we would do. Or he would say, “There’s too much plastic bottles on the boat, Luce, let’s get a water filter system on board”, and that’s when we brought in a really clean water filter system that you could drink the water on board. That was another project. So sanding - and we also did the corking as well. We did loads on just corking and the teak, because all the rubber corking around the - it eroded, but you need a professional job, but we attempted to do like a little area ourselves, and there was a person on the Gold Coast - there was a professional in Airlie Beach that - they couldn’t do that, so that’s another reason why we have to go down to the Gold Coast. Anyway, what other thing - like (indistinct) corking in the bathrooms. That was another project, that took a while, in all the bathrooms, and then like he didn’t want the life rafts on the side of the boat, so we had to look at that, and that took work looking into that. There was just so many things, hold on, please. And this was on top of our - of our main jobs. Like we have to regularly check all the safety systems on board, like the fire, we used to get all that, like the fire hose and do little drills, and then there was like emergency steering, that was done every month, and I check all the first aid, go over all of that. Would you like to know like post - I should really just written a list for you guys.

That’s okay. I think that’s very, very helpful. I think we are getting a picture of the kind of detailed work that you were undertaking - - -?  -But it just changed, like - sorry to interrupt, but it just - it would depend, because he would walk through the boat and say, “I don’t like that”, so we’ll change it, if we have to look at things. And also there was a lot of planning of trips. Like he wanted to take the boat to Europe. Sorry, I’m going off course because you want to know what stuff I did. The cleaning was very, very in depth obviously, and I’d help Ben in the engine room as well, like just doing oil change and things, whatever he needed help with I would do, and all the bed linen and stuff like - yes. Sorry, you’ll have to keep me on track.

[73] The Respondent’s requirements were such that work clearly had to be done to maintain the vessel in a guest ready condition when it was not being used – the use of the ship movement logs merely showed the vessel usage and it did not provide an accurate insight into the work maintenance and other activities needed to keep the vessel ready to receive guests and go to sea on short notice. There was work required to be done constantly, not just when the boat was out at sea: 49

Two days on which the boat went out?  -See, boat usage is only one element of a super yacht. There is a lot more going on on a super yacht than just taking the guests out, and it’s a difference - when the guests are off the vessel it’s in sort of maintenance mode and getting work done. There’s usually, you know, covers put on things and it’s repair and maintain and so on, and then you get it ready for guests. So there’s always work carrying on the boat. Just because the boat is somewhere and the owner isn’t using it doesn’t mean there’s no work going on. There’s always lots of work happening.

[74] To the extent of any divergence in the evidence, for the reasons expressed, I accept the evidence of the Applicants over that of the Respondent. The Respondent has not established any fraudulent reporting or any impropriety on the part of the Applicants in this respect. Consequently, I am not satisfied that the conduct occurred and therefore find that it was not a valid reason to dismiss.

TOIL Conclusion

[75] While I have taken into account that the Applicants are in a relationship and that may affect the reliability of their evidence, I nonetheless favour the Applicants account over that of the Respondent and, in particular, Mr Darrouzet. I found the Applicants expressed their evidence in a manner specific to their perspective of the situation being described. The Applicants provided evidence on their attention to detail, the hours that they worked and why, and the high level of maintenance that they stated a superyacht requires. I find that there was no substantive evidence presented to the contrary. The Applicants’ testimony was given genuinely and with little embellishment. Conversely, the Respondent had the propensity to occasionally lapse into hyperbole, use a fairytale metaphor and had selective recall which would vary from highly detailed, to no memory at all. Mr Darrouzet seemed to revel in the opportunity to discredit the entirety of the Applicants’ period of service. I find that the testimony of Mr Darrouzet was less grounded in fact and was at times, disingenuous.

[76] The Respondent throws much shade upon the Applicants’ integrity, claiming that they deliberately gamed or manipulated the system and he was the victim of this deceptive behavior. I do not believe this version of events because there is simply no cogent evidence before this Commission to justify such a view. The amount of work required to operate the vessel was very much underplayed by the Respondent in an effort to discredit the Applicants’ work in maintaining the vessel to a standard that he and his guests enjoyed.

[77] With respect to the record keeping and failure to use Wageloch for accrual of time, I find that an informal arrangement between Mr Darrouzet and the Applicants was taken in favour of the system used by the other Coral Sea Marina staff. The working hours and days were not fixed, there was no regular pattern rather the hours that were worked were self-managed to the Applicants to ensure the readiness and high standard of the vessel. The system was informal in that the Applicants kept a record of their hours and I find that the Respondent was aware that Mr Robinson had been recording and documenting the TOIL balance.

[78] With respect to the fraudulent accrual of TOIL, much energy was expended by the Respondent upon the Norseman’s travel log. The contention the Respondent put was that the amount of accrual was excessive comparative to the ship’s use. However, as the Applicants’ pointed out this was a private luxury vessel that was maintained both meticulously and sedulously, inside and out. The upkeep of the vessel was a requirement of the owner and the use of two persons to keep this vessel in a state of readiness for short- and long-term cruises was a requirement. As the Applicants explain, they did as much work on the maintenance of the vessel as possible and employed contractors for specialist work. This is the work that is not visible in the ship’s movement log.

[79] None of the arguments raised regarding TOIL constitute a valid reason for dismissal.

Performance Concerns

[80] The Respondent contended that there were a series of performance concerns that also led to the determination that the Applicants should be terminated from their employment. The Respondent did not present any documented performance evidence, there were no written warnings or diary notes to substantiate this alleged performance concerns. Rather the Respondent relied upon broad statements made by Mr Darrouzet that maintenance was not appropriately managed and incurred additional expense in repairing the vessel, that the Applicants had been absent without notice and that they had engaged other contractors to perform work within their duties. 50

General performance

[81] With respect to feedback from guests, Ms Rockell provided evidence that there had been consistent praise regarding their performance from guests aboard the Norseman: 51

What type of feedback, performance feedback did you receive from Mr Darrouzet during the course of your employment?  -Always positive, and always positive from all the guests as well, and like his daughter wanted to - because she used the boat frequently and she was so happy and she would say, “I don’t have to get my own drinks. Like before with the last captain I used to have to get my own drinks, and I don’t have to move at all. The food’s amazing.” And then she would - we’re not allowed to accept any gifts or anything, and she would want us to go out to dinner at her expense, and we declined. That was her and Harry. And we took Paul’s cousin out and her family for over a week, and she wanted to do something for us and we declined, but then she gave a gift to Paul to give to us, and that’s how we know. It’s (indistinct) his family, you know. And also we had like a mayor on board, and he had some Corona for us and he left it up in the office, and he came down and he said that there’s Corona and we just left it up there, and we weren’t told by the officer it was there, but we just left that there, but we were polite about it. And his - like his guests that he had on frequently, he had a close friend, and he always said that we’re doing all right and we’re doing well, and one of the stewardesses that I replaced that used to work prior to me she would then come on as a primary guest, and she would like look at the bar area and say, “Oh my God, look how organised it is. It’s amazing. I would never have done that”, and like that was feedback for me, and then, what else - there was loads of stuff, and like a partner of Paul’s would say, “Paul’s so happy with you guys. Like the boat is looking so good and it’s so great”, and I took that as positive feedback, and you can tell by Paul with his tone as well. If he talks to you nicely he’s very happy with you. So you know you’ve done well and you know that they’ve had a good trip and stuff, and that was very constant.

[82] While this is indirect and must be tempered, given that it is the statement of the Applicant, it is consistent with other objective evidence including that Ms Rockell was also awarded a pay increase of $30,000 to bring her salary to be equal to Mr Robinson: 52

Can you tell us, Lucy, about the $30,000 k increase that you were awarded in January 19. What were the circumstances of that being awarded?  -Because I was doing a very good job and he was very happy with everything that we - that I was doing, and you could see that I was doing equally as much work as Ben. So he brought my pay up.

The Respondent contends this was on the insistence of the Applicants, as Mr Robinson was being remunerated at a rate below the industry standard and that this was more tax efficient than giving the pay increase to Mr Robinson. While this is logical and I have no reason to disbelieve it, the fact is that the Applicant still had her wage significantly increased. It would be unusual to award such an increase to an employee exhibiting poor performance and it defies logic that an employer would award a $30,000 pay increase to an employee underperforming to the level asserted by the Respondent.

[83] Further, both Applicants were paid a Christmas bonus in 2018: 53

And were you paid any bonuses at any point during the course of your employment?  -Yes, we had a Christmas bonus.

And how much were you paid as a bonus?  -Five thousand each, and he sat us down - that was in December - he sat us - he came down to the boat, and we didn’t know about it, so it was a very nice shock, and he said, “I’m really happy with the work that you’ve done this year”, and then he said, “Look, like we need to go over the TOIL as well, and I’m going away, so we need to sort that out. We’ll get that TOIL down”, and that was in the same meeting.

And that was Christmas of 2018 just to be clear?  -Yes.

Did you ever receive any warnings from Paul or any of the senior managers relating to either your performance or conduct?  -No, and the only time they - because it was quite tricky to keep the guests happy, but (indistinct) AT the same time, and there was one example, and we had one of Paul’s partners was on board and she wanted to go diving, but she wanted to go diving by herself, and Ben said no. So that was a little bit awkward, but then we weren’t reprimanded or had a warning or anything, no, never.

[84] I find this to be convincing evidence of the general performance of the Applicants. It is not evidence that is consistent with the Respondent’s insistence that the Applicants were poorly performing. The Respondent has levied many complaints about the Applicants’ performance on board the vessel: that he should have dismissed them back in 2019 for damage to the boat, 54 that Mr Robinson had no technical knowledge of the boat55 and that he had a total “lack of confidence”.56 Mr Darrouzet even attempted to recharacterise the award of the pay increase as the “soft option” and dismissed a personally signed letter accompanying their bonus, which stated the Applicant exhibited “outstanding performance,” while disparaging Ms Rockell simultaneously:57 (emphasis added)

Now, in July of 2019 you gave Ms Rockell a 30,000-dollar pay increase. That was from an annual salary of 60,000 up to 90,000. Why did you give her this pay increase?  -I had had - basically from constant and incessant moaning and whinging that they were not being paid enough. The payment would have gone to Ben, but they asked if it could be paid to Lucy for the avoidance of tax or for the minimisation of their tax. I was in the middle of purchasing and reopening the hotel, and I really just did not have enough time to worry about these people because I was very concerned about the asset and what was happening with it, and what was not happening with it, so I probably took the lesser of two evils or the soft option back then. I should have dismissed them both back then.

But you also, did you not, issue a letter to Ms Rockell at the same time that you gave the increase?  -Somebody from the office typed it up. I don’t actually recall the letter, but I’m sure there would have been a letter. For sure, yes.

It makes the statement in the letter that:

Thank you for your contribution to the maintenance and upkeep of the Norseman. It is with pleasure I confirm a pay increase from 60 to 90 thousand from 1 June 2019. I want to personally thank you for your efforts and congratulate you on your outstanding performance.

?  -Yes. I think that’s a fairly standard letter that we write with all pay increases for the company. I would say it’s a generic letter, it’s not specific. I’m at a bit of a loss as to how you can say that a stewardess has an outstanding contribution to the company. She basically is looking after the interior of the boat.

[85] Mr Darrouzet appears to have tried his best to recast the entirety of the employment relationship in a negative light, from any mistake to even the award of a bonus. Unfortunately for Mr Darrouzet, his evidence is not consistent with the objective, contemporaneous, documentary evidence or the consistent and reliable evidence of the Applicants (which I accept) to this Commission. The Applicants were employed for several years and in that time were never reprimanded; there is evidence that their performance was adequate, if not excellent and I find no question as to their general performance. I will now step through the specific allegations.

Poor maintenance of the Norseman

[86] The Respondent put forward 5 examples of poor general maintenance aboard the Norseman, which related to:

•  jammed trim tabs;

•  insufficient logbook records;

•  tampering of hydraulic lines;

•  yacht controller system; and

•  fuel shut off.

[87] The current skipper, Ms Latimer, gave evidence that the trim tabs had become jammed, resulting in the Norseman veering in its course. Mr Robinson in his evidence pointed to the fact that the boat had been recently serviced at the Gold Coast Marina and that the Norseman had presented properly at that point in time. 58 Mr Robinson elaborated that like any vehicle, servicing errors can occur during maintenance and that this would be a warranty issue:59

They’re talking also that I didn’t oversee properly because of the trim tabs. We had all hydraulic systems on the Norseman serviced when we were at Gold Coast City Marina, and of those systems, you know, we had everything serviced, so all pulled apart; we had new oil, hoses put on a lot of systems, and when it got back there, the whole trip back from the Gold Coast to Whitsundays, there was no problem. We did a week of trips in the Whitsundays. There was no issue, but I believe I heard after we’d left that there was an issue with one of the trim tabs… They fixed the system and then they tried to send the bill to Axo Marine. Now, this is a warranty issue. It’s like getting anything fixed anywhere. If there’s ever an issue after you’ve had it fixed, and it’s the same issue that has been fixed, you engage the person or the company that has fixed it and you say something’s wrong, and of course it’s under warranty; they’ll come and fix it and rectify the problem. 

[88] Maintenance upon the trim tabs was clearly performed upon the Norseman while at the Gold Coast Marina. The Respondent has not satisfied me that the jammed trim tabs were a result of the conduct of the Applicant. There is nothing more than speculation that this was as a result of some action, or inaction, of the Applicants.

[89] The Respondent points to a failure to keep a detailed logbook as evidence of a lack of maintenance. On the evidence before me, significant maintenance did occur, such as the servicing at the Gold Coast Marina and the various invoices that the Respondent contends are excessive or unauthorized expenditure. Little weight can therefore be given to a record lacking detail as evidence that the Norseman was poorly maintained. Further, it is not that there is no record, merely a less than perfect record. It would be a leap in logic to assume that a failure to keep an adequate record is evidence of a poorly maintained vessel.

[90] Regarding the tampering of the hydraulic lines, this was found to be some blue tape. It is unclear what the tape was used for. Ms Latimer gave evidence that someone “had put blue tape on these hydraulic lines, whether it was to do maintenance, change them, to do whatever works was going on with them”. 60 It is unclear what damage the tape caused, if any. This point regarding the tape was not raised prior to the hearing and therefore no photos or substantive detail was provided, merely the statement the cables had been tampered with. I am unsure how this can be characterised as tampering, which was supposedly the language used by an external company AXO. While Ms Latimer presents credibly, if the opinion of AXO was to be relied upon, it should have been properly presented before me. Given that Ms Latimer found the tape could have been for maintenance, I cannot conclude that it would amount to tampering or poor maintenance of the vessel.

[91] Regarding the yacht controller, Mr Robinson gave evidence that the system was upgraded during servicing to install a toggle switch to allow the alarm to be turned off. His evidence was that this was done due to the noise frustrating guests aboard the Norseman and that this was done with the full knowledge of Mr Darrouzet. While Mr Darrouzet stated he was unaware of this arrangement, it seems unlikely that such a specific installation would occur for no reason and that no question would be raised as to why this was done. I favour the evidence of Mr Robinson, extracted below: 61 (emphasis added)

And in relation to the warning system which alerts the captain?  -Okay, so we had the yacht controller system upgraded I think maybe 18 months ago, something like that. The alarm it has, so when you start up the vessel and you’re going to move it, you do testing: you engage the gears; you test your bow and stern thruster; and if you’re going to be using the yacht controller, you would test your yacht controller as part of the start-up procedure. You would test that that’s fully functioning, and so you would know if there was no alarms going, because to engage yacht controller, fist you hear an alarm, and then you turn it on. This is a dual-frequency yacht controller. He upgraded from a single frequency because we were getting interference; and these are far more effective, that combat interference. On Norseman there are a few black spots where you won’t get a full reception, and you just need to know where those are. The alarm itself going off all the time was a problem that we had because Paul - you can’t hear this alarm when you’re downstairs on the lower deck and moving the boat around. You might hear it faintly, but it’s not very loud down there, but it is very loud up in the bar area upstairs where all the guests are. And unfortunately on several occasions someone - I was informed it was Paul - had turned the yacht controller off. So you can just hit a button to engage it or disengage it. This caused some sweaty moments, but no damage was caused. But I was always mindful then to make sure it was always connected. Let’s just say if there’s interference between the control unit that’s giving a signal and the actual little controller, which is like a little keypad and you can - you know, like playing video games, really. And it’s wireless, and it connects to the boat. And you can operate your main engines and bow thrusters. So on it is lit up, and it’s telling you it’s connected. Now, if, for a certain amount of time, if it wasn’t connected, and normal circumstances the alarms would be going off, it will then shut down, and you will have to then turn the controller, just the keypad, back on, and it would reconnect, and then move it into an area where it is connected. There’s only really one spot on the boat that has this bit of a black spot. All of this, I probably did it in passing, but there was no proper handover between my passing of the vessel. I’ve never met Kim Latimer, so I wouldn’t have discussed it with her. To combat this alarm system, while we were in Gold Coast I - South Pacific Marine Group, who did - conducted quite a lot of the electrical work on the boat, put in two switches on the yacht controller that can disable the alarm. It doesn’t affect any frequency or anything, but they’re just two switches, just two little toggle switches, on or off. So if the alarm was on, the alarm was on; if the alarm was off, the alarm is off.

To the best of your knowledge was it left on or off when you left the vessel?  -Probably would have been off. But going back to the start-up procedure, before you engage, you drop the lines on a vessel, you check everything. And so if there’s no - a functioning problem, you investigate. I would have told Sean, I’m sure I did. And I probably would have left a note in the parting log book about it, and it would have been - and yes. So - - -

If Latimer was the captain of this vessel for three months, and the vessel is presumably going out over that period, would this be something you would expect she would have identified, that the alarm was off, before 29 May?  -Definitely, because (indistinct) procedures and engagement procedures of the yacht controller, you turn everything on and then you press the button, it turns the yacht controller on, it starts beeping, then you engage the keypad.

Thank you?  -Alarm isn’t going. And you don’t know that there’s alarm switches. And, sorry, we did this through Pacific Marine Group and Gold Coast City, but under the guidance of yacht controller. So I was in communication with them, because we were trying to see if we can turn it down; can we do this (indistinct) “it’s really annoying the boss, and when he turns it off it can be quite dangerous.” So we’re trying to find a solution, and - yes, there’s certainly no sabotage.

As far as you’re aware, you’ve just relayed to us Mr Darrouzet has personally switched this system on and off. He knows where the button is, does he?  -Yes. Now, just to turn the actual alarms off, we don’t have that readily available. You’ve got to actually go - take the panel off and go to the yacht controller units, there are two units, and they signal the radio frequencies to connection, and they’re sitting there. They’re lit up, little toggle switches, on and off. Very professionally done, certainly no sabotage.

[92] Mr Robinson’s evidence further raises that the event happened several months after the Applicants departed the boat, making it more likely that Ms Latimer should have been aware of the proper functioning of the yacht controller by that point in time.

[93] This ground does not point to any error on behalf of the Applicants.

[94] In relation to the fuel shut off being propped open, there is no evidence tying this to the Applicant. The evidence of Ms Latimer is given at a point later in time. It has not been established when this alteration occurred and whether it was done by the Applicants at all. Further limiting the weight I give this ground is that the Applicant was not at any point questioned regarding the fuel shut off. It does not present in his statement or in oral evidence. The statement of Mr Robinson attempts to go through the grounds raised in the F3 and to rebut them, but this cannot be done regarding the fuel shut off, as it is only first mentioned in the oral evidence of Mr Darrouzet. 62 Ms Latimer gave evidence of Mr Robinson undertaking some maintenance work himself including checking the oil filters, fuel filters and greasing the shaft, however this does not provide any notice that there were concerns regarding the fuel shut off.63

[124] Mr Darrouzet signed off on the invoices after they had been paid. There is no contemporaneous evidence that he presented any concern at the time. Had this been a legitimate exercise beyond the Applicant’s authority, it is an inference open to me that they would have been informed of such prior to being dismissed.

[125] Even if these services had been rendered with no consultation, this would not constitute a valid reason in my mind. The invoices were pertinent to the role of the Applicant and sufficient explanation was given during oral evidence.

Invoice consideration

[126] The evidence that was presented to support the Respondent’s view that there was serious misconduct is not supported. The expenditure on the three invoices was properly characterised by the Applicant as normal expenditure. The Respondent portrayed the expenses as outlandish, however the evidence of the Applicant regarding the largest invoice, from Sweep Marine, would suggest that either the Respondent attempted to mislead the Commission or that he was confused as to the nature of the service and failed to make the proper inquiries. On the Applicants’ evidence, the contract was not simply for pumping out water; it required specialist equipment and the disposal of contaminated material.

[127] I do not consider the above expenditure a valid reason for dismissal.

Sabotage claim

[128] During oral evidence Mr Darrouzet made allusions to potential sabotage of the vessel by the Applicants. This claim is spurious and without any basis.

[129] I am not satisfied that there is sufficient evidence, if any, to establish a claim of sabotage. Without proper evidence this ground cannot be contemplated as a valid reason.

Fire system not properly maintained

[130] Evidence was given that the fire system on board the Norseman was out of date and in need of being replaced. The current skipper, Ms Latimer gave evidence that the system was not properly maintained, was European and not compliant to Australian standards and that it had been two to three years since the system had been serviced or looked at. 78

[131] It does not appear contentious that both parties were of the mind the system needed to be replaced. The Applicants, in May 2019, had already engaged Trinity Fire to provide a quote on an upgrade of the system aboard the Norseman – this quote was in the possession of the current skipper. 79 This indicates that the Applicants were acutely aware that the system was to be replaced and that they had taken active steps to begin that process.80 It can also be inferred that the Applicants must have conducted some review of the fire system to be aware of the need for it to be upgraded – this indicates that there had not been two to three years of absolute neglect.

[132] The current skipper also gave evidence that she would routinely check the fire system and that it was of “paramount” importance to her. 81 Ms Latimer presented credibly and I do not discount her evidence, however her background is from a commercial setting where safety is more regulated.82 Both Mr Robinson and Ms Latimer gave evidence that the standard would “differ to commercially”83 and that ultimately it is the “master’s discretion”.84

[133] In these circumstances, where there is no technical breach of any standard and where the Applicants were taking steps to replace the system, this ground does not constitute a valid reason for dismissal.

General safety concerns

[134] The Respondent further submitted that the safety equipment check and safety briefing sections of the log were not consistently completed and that safety briefings were not always administered. Mr Darrouzet stated he had never received a safety briefing. 85

[135] The Applicants gave evidence that they did administer safety briefings to passengers new to the Norseman; 86 the fact that Mr Darrouzet had not received a briefing is indicative of his familiarity with the Norseman, given it is his vessel.

[136] I reiterate the statements above regarding the lesser standard to which any regulatory standard needs to be applied, given the private nature of the Norseman. It is unclear how failing to tick 6 boxes – the purpose of which is to act as a reminder to inform any passengers of basic protocol – would constitute a threat to safety that could warrant a valid reason for termination. A failure to complete the corresponding paperwork does not correlate with the conclusion that safety checks and briefings were not conducted. 87 The Applicant gave clear evidence that he was not required to, nor did he, use these checklists, that he conducted his own checks and that safety briefings were performed for unfamiliar passengers:

So is there a reason that those boxes aren’t completed?  -No. Normally on a commercial vessel this would be very much a legal document and you would tick every single box. This is a pleasure craft and it’s a bit more relaxed in that regard, and so - and I had my own checks going on and my own checklist, which I don’t have here, and start-up checks and so on that I check in the vessel. But, yes, so - but with safety briefings, with Paul, he didn’t - you know, when we started he was already very familiar with Norseman. If there was any changes to any safety equipment or anything else he was well informed about those matters, but if you’re talking about safety briefings, if we had guests come on the boat that weren’t, you know, familiar with the vessel, then we would definitely do a safety briefing, and a walk-through. We did several things when they joined the vessel. We do a full walk-through of the vessel and they would receive a safety briefing as well.

[137] This is not a valid reason for termination.

Personal expenditure

[138] There were two separate allegations of misappropriation of the Respondent’s funds. These concerned:

•  Using company funds to make a purchase at the Southport Yacht Club while the Norseman was being repaired on the Gold Coast; and

•  Spending money on a holiday to Noosa, which included flights, car hire and accommodation.

[139] This was summarised by the Applicant’s Representative during examination: 88

In relation to some of the accusations that have been made by Mr Darrouzet in his evidence yesterday Mr Darrouzet has alleged there was some improper use of Ben’s company credit card in relation to a rental vehicle that was hired, which was approximately $900; two airfares from Brisbane - sorry, to Brisbane, from Airlie Beach to Brisbane, and also a charge of $115 on 30 December from Merlo Coffee Torrefazione No.3 Restaurant.

Spending at the Southport Yacht Club

[140] The Respondent alleged that the expenditure was of a personal nature. 89 However, a summary by Ms Rockell indicates it was spending reasonably incurred in providing amenity for the Norseman:90

…Well, Ben bought the coffee at my request, because it’s a five star - it’s a luxury vessel, it needs good coffee, and frankly you can’t get that in Airlie Beach - - -

That’s $115, that’s the $115 is coffee beans?  -Yes, that’s the Merlo coffee beans. Yes, that was for the coffee machine on the boat.

There was no private element of that expenditure at all?  -No. It was 3 kilos of coffee beans, because there is - we’re going up to Airlie Beach for a while, so it was to last, and also I needed my coffee when we were out at sea getting up to Airlie Beach. 

[141] I favour the evidence of the Applicants that this was reasonable expenditure in keeping the Norseman guest ready and to an appropriate standard.

Holiday expenditure

[142] Regarding the travel expenditure, which was purportedly of a private nature, the Applicants had a detailed response as to how the expenditure was incurred. In short, the Applicants flew to collect the crew car and, on the way back to Airlie Beach, stopped for two nights at the Meriton to take a break. The Applicants then proceeded to stop at Noosa on their way back to Airlie Beach, due to the length of the drive. There was no evidence that the Meriton stay was placed on the company card, only the night at Noosa – this is the charge the Respondent has disputed as personal expense. Ms Rockell provided a transparent and detailed summary: 91

On 19 January why did you and Ben fly down to Brisbane?  -We had to pick the crew car up. So we left on a Sunday evening and we flew - went back to the marina, got the car, and we hadn’t had any days off for ages, and I was like why don’t we just have like two days, and we paid for that ourselves because it’s not work related. So we got two days in the Meriton and we just like got - we had Netflix and got Uber Eats and just rested, because we’d been working so much, and then we went back and then we headed back to work in the crew car, and we (indistinct) get there as soon as possible, and we tried to make - we left really early and we tried to make headway, but the weather was really bad. There was so much rain on that day, there were - and we were going along the highway, we hadn’t booked any accommodation yet, and there were accidents all along the road, and I was getting quite scared, but Ben wanted to really get back to the boat, and I was like - and I don’t like driving in the rain, so we had to stop at Noosa, and we found the cheapest accommodation that we could. It was this motel that I didn’t really like, but we stayed in there just because we needed to stay somewhere, and then we headed off early next morning back to the boat, and we got there that night.

And if I can just ask you about the use of the crew car. So the crew car is a car that you hire on a monthly basis since 2017?  -Yes.

And that’s used to pick up supplies, on occasions pick up Mr Darrouzet or another staff member. Is that accurate?  -Sorry.

So the crew car is used to pick up either supplies that you’re purchasing, parts, on occasion to pick up Mr Darrouzet or Ms Purdie, and do those types of things. Is that correct?  -Yes, that is correct. So because we were required to get accommodation on shore we had to make sure if there was any emergency on the boat we had to get there quick, you know. So a crew car is very vital, and to have - we had this discussion with Paul, and, yes, it was all fine, and it was on the credit card every month and it was - and we made sure that we got the cheapest deal going, he was happy.

Yes. So you would sail the Norseman from Airlie Beach down to the Gold Coast for the service. You and Ben then flew back to pick up the crew car. You drove the crew car down for use during that period when you were down south down at the Gold Coast Marina and you utilised that with your run about then, and then you’ve flown back on 19 January to pick up the car and drive it back?  -Indeed.

[143] The Respondent submitted that the Applicants were putting expenses that were not approved on the company credit card. In the case of the monthly expense for the crew car, the vehicle was hired on a monthly basis as part of an arrangement that had been in place most of the Applicants’ employment period and had been agreed to. The crew car was also listed as a benefit in the Applicants’ contract of employment. 92 Further, the flights to and from the Gold Coast were also detailed by the Applicants to ferry the crew car down to the marina where the vessel was having a haul out and service. The motel expense was also explained by the Applicant as an overnight stay on the way back to Airlie Beach. The weekend cost of the Meriton was not evident on the company credit card statement and without evidence that they paid for the weekend’s accommodation on the company card I am inclined to believe the Applicants that the expense for the weekend was their own.

Conclusion as to personal expenditure claim

[144] I am not satisfied that any of the above expenditure could be classified as embezzlement of company funds – it was directly related to the Applicants’ employment obligations and necessary in carrying out their function.

[145] The expenditure does not constitute a valid reason for dismissal.

Concerns regarding retention of confidential information post-employment

[146] The Respondent contends that the Applicants breached their obligation of confidentiality under their employment contracts by retaining documentation post-employment and disclosing them for the purpose of these proceedings.

[147] The Respondent contends that the Applicants were “in the practice of [storing] confidential documents in his own systems and on his own computer, rather than securely stored…” 93 No evidence was led as to the proper procedure regarding storage and appropriate management of documentation. Further, no evidence is given regarding whether a company laptop was provided that should have been used in favour of a personal device. It is clear that the Applicants did not work in an office environment and as such, it may have been the expectation for them to use their personal devices. No mention is made of a company issued laptop, either through submissions of as a benefit in the contract of employment. The Respondent’s submissions on this allegation are extremely brief and do not establish the alleged conduct on the balance of probabilities.

[148] It is important to note that no substantive submissions were made regarding whether the conduct of the Applicants would actually breach clause the conditions in the contract. The contract refers to information that is of a business nature; in the current circumstances it is unclear whether servicing reports of the Norseman, a private vessel owned by Mr Darrouzet, would be of any business significance to the employer, Emprja Pty Ltd. I do not propose to make a determination on the classification of this information, but merely seek to clarify that the assertion of the Respondent is untested. Given the lateness and vague nature of the allegation, it was difficult for the Applicant to sufficiently respond.

[149] The Respondent correctly states that production of this information could have been ordered by the Commission or requested by the Applicant. Given that the information is directly relevant to the case at hand, its production would have been ordered. In these circumstances there is at best an error of procedure, but not one of substance, given that the Applicants would ultimately would have achieved access to the documentation.

[150] There is also a question as to the distinct temporal nature of this particular allegation. Mainly, that this conduct occurred after the dismissal occurred, raising the question of whether the information can be considered at all as constituting a valid reason for dismissal. It seems curious, if not illogical, that conduct which occurred after dismissal might somehow be adequate consideration to inform a decision that had already been made.

[151] In considering this temporal question, it is worth noting that the Respondent alleges that the retention, and distribution, of the purportedly confidential information both constitute a breach. On a close reading of clause 23 of the contracts of employment, it is more likely that only the distribution of information would constitute a breach, meaning that the conduct in breach only occurred after termination.

[152] This is not the same question as considered in Shepherd above, which is concerned with discovery post termination of conduct that had already occurred. It is concerning new conduct that, even if breaching the contract of employment, had not yet come into existence at the time of termination. While post-employment conduct can be relevant in determining credibility of a party and in considering the appropriate remedy, it should not be considered in establishing a reason for dismissal. 94 It was not a circumstance that was “in existence” when the decision to dismiss the Applicants was made and occurred after the termination of the employment relationship.95

[153] This conduct cannot be considered as a valid reason for dismissal. However, even if it were to be contemplated, I am not satisfied that these documents would be considered confidential information of the Respondent.

Conclusion as to valid reason

[154] Having considered each of the grounds individually, it is important to consider the evidence as a whole. The Respondent has clearly adopted a retrospective approach, searching for further allegations to help bolster the claim that there was a valid reason beyond what began as a rather vague and generic justification: that the decision was made “purely on the basis of [the Applicants’] performance not being at the required level to meet the operational needs of the business.” 96 The genesis from this simple statement to the numerous allegations put forward by the Respondent broaches on an attempt to obfuscate from the potential fact that the Applicants were dismissed on nothing more than the whim of Mr Darrouzet.

[155] My finding in relation to s.387(a) of the Act is that the Respondent has not established that there was a valid reason for dismissal. In particular, and to summarise my various findings above, I am not satisfied that the Applicants:

•  Failed to adhere to the correct TOIL accrual policy; the Applicants did what was asked of them by Mr Darrouzet;

•  Deliberately abused the lack of oversight by Mr Darrouzet in having TOIL approved;

•  Engaged in fraudulent reporting.

•  Failed to properly diagnose maintenance issues;

•  Failed to seek the best alternative for required works, resulting in excessive expenditure on fuel transporting the Norseman;

•  Failed to adequately supervise maintenance while at the Gold Coast;

•  Hired labourers without authorisation at an additional cost, instead of performing works themselves;

•  Took unauthorised leave in January 2019 or November 2019;

•  Failed to maintain the boat;

•  Improperly used the company credit card for personal expenses; or

•  Gained access to, and retained copies of, confidential information relating to the Norseman post-employment, in breach of their contract of employment.

Were the Applicants notified of the valid reason?

[156] The reason for termination shifted dramatically from the initial termination meeting, with several grounds only materialising after termination. As stated above, the Full Bench in APS Group (Placements) Pty Ltd v Stephen O’Loughlin articulated that the failure to notify the Applicant would not render those grounds improper, but “any reason not relied upon at the time of dismissal the employer will have to contend with the consequences of not giving the employee an opportunity to respond to such reason (see s.387(b) and (c) of the FW Act).” 97

[157] However, as I have found there is no valid reason for dismissal, this factor is not relevant to the present circumstances.   As stated by the Full Bench in Odgers: 98

Section 387(b) requires the Commission to have regard to whether an employee was notified of that reason. This notification relates to the valid reason for dismissal. Section 387(c) then deals with the question of whether the employee was given an opportunity to respond to any reason related to their capacity or conduct. If there is no valid reason, s.387(c) has no work to do.

Was the Applicant given an opportunity to respond to any valid reason?

[158] Notification of a valid reason for termination must be given to an employee protected from unfair dismissal before the decision is made to terminate their employment, 99 and in explicit100 and plain and clear terms.101

[159] The Full Bench in Odgers provides recent commentary surrounding the application of s 387(c):

[40] In our determination of this matter, the observations of the Full Bench in Abdel-Karim Osman v Toyota Motor Corporation Australia Ltd are apposite. The Full Bench described the obligation to provide an opportunity to respond as requiring an employer to take reasonable steps to investigate the allegations and give the employee a fair chance of answering them. It adopted the observations of Wilcox CJ in Gibson v Bosmac Pty Limited, approved by Northrop J in Selvachandran v Peteron Plastics Pty Ltd, where Wilcox CJ said:

…Ordinarily, before being dismissed for reasons related to conduct or performance, an employee must be made aware of the particular matters that are putting his or her job at risk and given an adequate opportunity of defence. However, I also pointed out that the section does not require any particular formality. It is intended to be applied in a practical, common sense way so as to ensure that the affected employee is treated fairly. Where the employee is aware of the precise nature of the employers concern about his or her conduct or performance and has a full opportunity to respond to this concern, this is enough to satisfy the requirements of the section.

[160] In the current case, as I am not satisfied there was a valid reason related to dismissal, this factor is not relevant to the present circumstances.

Was the Applicant warned about unsatisfactory performance before the dismissal?

[161] A mere exhortation for an employee to improve their performance would not be a sufficient warning. A warning must: 102

•  identify the relevant aspect of the employee’s performance which is of concern to the employer; and

•  make it clear that the employee’s employment is at risk unless the performance issue identified is addressed.

[162] The Applicants submitted that they had not been warned about their unsatisfactory performance prior to dismissal on the basis that there had been no written or verbal warning prior to the termination proceedings beginning.

[163] The Respondent made no submission directly on s 387(e). The Respondent did generally put forward that procedural fairness should not be strictly adhered to in this matter, given that some “conduct uncovered was discovered following termination of employment [and] it obviously was not able to be put to the Applicants during employment.” 103

[164] I find this argument would only seek to bolster the Respondent’s rather abysmal failure to follow proper procedure. Had the Respondent simply conducted an investigation prior to terminating the employees, then the grounds which they “discovered” post termination would have been abundantly clear.

[165] I find that no warning as to performance concerns were given prior to the dismissal.

Size of the Respondent’s Enterprise (s 387(f)) and Presence of a Human Resource Specialist (s 387(g))

[166] The Respondent made no submission as to the size of their enterprise and the effect it would have.

[167] The Applicants submitted that given the Respondent employs 89 people and employs a dedicated HR specialist that they should have known better than to terminate the Applicants in a manner lacking procedural fairness and on the grounds alleged.

[168] The Respondent did however put forward that the “employment relationship between the Applicants was legally with the Respondent, but it was on a day-to-day basis between the Applicants and Mr Darrouzet.” 104 I find this would mitigate the technical size of the Respondent’s enterprise, given that most of the procedures employed by the Respondent did not practically apply to the Applicants – they are more properly characterized as Mr Darrouzet’s personal staff. This is further supported by the fact that the HR Specialist, Laura Bishop was notified after the dismissal took effect and was only relied upon in preparing the template letter.

[169] Having regard to the matters above, I find that the size of the Respondent’s enterprise was not likely to impact on the procedures followed in effecting the dismissal.

[170] Having regard to the above, I find that while the Respondent did not lack a HR specialist, given the peculiar employment relationship, these services were not utilised – this factor should be given due weight.

What other matters are relevant?

[171] Section 387(h) requires the Commission to take into account any other matters that the Commission considers relevant.

[172] The Applicant submitted that the following other matters are relevant to the Commission’s consideration of whether the dismissal was harsh, unjust or unreasonable:

•  This is a specialist profession where the loss of employment can only have profound personal consequences;

•  That withholding the annual leave balance of 30 days as restitution for the improperly accrued TOIL is manifestly harsh; and

•  That the Applicants have found no alternate work.

[173] The Respondent made no submissions as to other factors to consider.

[174] The Applicant has not indicated what kind of profound personal consequences the termination may have, beyond the loss of income which stems from the fact they were unable to find alternate work.

Is the Commission satisfied that the dismissal of the Applicant was harsh, unjust or unreasonable?

[175] I have made findings in relation to each matter specified in section 387 as relevant.

[176] I must consider and give due weight to each as a fundamental element in determining whether the termination was harsh, unjust or unreasonable. 105

[177] Having considered each of the matters specified in section 387 of the FW Act, I am satisfied that the dismissal of the Applicant was both harsh and unjust. The grounds purported by the Respondent were not made out; as there was no finding of a valid reason, the Applicants’ termination is clearly harsh.

[178] The Respondent during the hearing laid many spurious and denigrating comments which could not be substantiated and appeared to serve no purpose other than to discredit the Applicants. Many of the allegations were the product of a perfunctory and inchoate investigation; had the Respondent merely bothered to conduct anything that had the semblance of a proper inquiry, then it would have been clear several of the alleged grounds were without any proper basis.

Conclusion

[179] I am satisfied that the Applicants were unfairly dismissed within the meaning of section 385 of the FW Act.

Remedy

[180] I will now allow the parties to file submissions on remedy, with the parties to answer what would be appropriate compensation. The parties should also address the question of any outstanding annual leave balance and what powers the Commission may have to address this issue.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

<PR725150>

 1   Philip Morris Inc v Adam P Brown Male Fashions Pty Ltd (1981) 148 CLR 457, 512 (Mason J).

 2 Section 577 Fair Work Act 2009.

 3   Transcript, PN 132 (Paul Darrouzet).

 4   Sayer v Melsteel Pty Ltd[2011] FWAFB 7498, [14]; Smith v Moore Paragon Australia Ltd PR915674 (AIRCFB, Ross VP, Lacy SDP, Simmonds C, 21 March 2002), [69].

 5   Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371, 373.

 6   Ibid.

 7   Walton v Mermaid Dry Cleaners Pty Ltd(1996) 142 ALR 681, 685.

8 King v Freshmore (Vic) Pty Ltd Print S4213 (AIRCFB, Ross VP, Williams SDP, Hingley C, 17 March 2000), [23]-[24]. See also Edwards v Justice Giudice [1999] FCA 1836, [7].

 9   Mr Stanley Sully v CBMG North Pty Ltd[2020] FWC 3509, [11]-[13].

 10   Byrne v Australian Airlines Ltd (1995) 185 CLR 410, 465 (McHugh and Gummow JJ) (Byrne).

 11   Transcript, PN 59 (Benjamin Robinson); PN 204 (Paul Darrouzet); PN 961 (Lucy Rockell); PN 1328 (Kate Purdie).

 12   Transcript, PN 162 (Paul Darrouzet).

 13   Transcript, PN 164 (Paul Darrouzet). In the Respondent’s Final Submissions reference is made at [28] to some unauthorised transactions, but it is unclear whether this pertains to those relative to maintenance that was allegedly not authorised, or the expenses associated with the trip to Noosa.

 14   Transcript, PN 157-160 (Paul Darrouzet).

 15   Transcript, PN 806 (Benjamin Robinson). Relevantly, clause 23 of the contract relating to confidentiality can be found at page 48 of the Applicant’s Court Book.

 16   Respondent’s Closing Submissions, page 16.

 17   Shepherd v Felt & Textiles of Australia Ltd (1931) 45 CLR 359, 373 (Shepherd).

 18   Byrne v Australian Airlines Ltd (1995) 185 CLR 410, 467 (McHugh and Gummow JJ).

 19   APS Group (Placements) Pty Ltd v Stephen O’Loughlin[2011] FWAFB 5230, [51] (Lawler VP, O’Callaghan SDP, Roberts C).

 20   Witness Statement of Laura Bishop, Annexure LB-6.

 21   Transcript, PN 238-239 (Paul Darrouzet).

 22   Respondent’s Court Book, page 90.

 23   Witness Statement of Benjamin Robinson, [9].

 24   Transcript, PN 227 (Paul Darrouzet).

 25   Witness Statement of Benjamin Robinson, [9].

 26   Transcript, PN 679 (Benjamin Robinson).

 27   Witness Statement of Kate Purdie, 6.9.

 28   Transcript, PN 243 (Paul Darrouzet).

 29   Applicants’ Court Book, page 60.

 30   Applicants’ Court Book, page 122-124.

 31   Ibid.

 32   Transcript, PN 237 (Paul Darrouzet).

 33   Transcript, PN 237 (Paul Darrouzet).

 34   Applicants’ Court Book, page 122-124.

 35   Transcript, PN 1282, 1329 and 1350 (Kate Purdie). Witness Statement of Kate Purdie, 3.2.

 36   Transcript, PN 243 (Paul Darrouzet).

 37   Transcript, PN 243 (Kate Purdie).

 38   Transcript, PN 243 (Ben Robinson).

 39   Transcript, PN 966 (Lucy Rockell).

 40   Transcript, PN 46, 563 (Ben Robinson).

 41   Transcript, PN 689-690 (Benjamin Robinson).

 42   Transcript, PN 678 (Benjamin Robinson).

 43   Transcript, PN 306 (Paul Darrouzet).

 44   Transcript, PN 243 (Paul Darrouzet).

 45   Transcript, PN 162 (Paul Darrouzet).

 46   Transcript, PN 952 (Lucy Rockell).

 47   Transcript, PN 152 (Paul Darrouzet).

 48   Transcript, PN 1071-1075 (Lucy Rockell).

 49   Transcript, PN 754 (Ben Robinson).

 50   Witness Statement of Paul Darrouzet, 6.12.

 51   Transcript, PN 955 (Lucy Rockell).

 52   Transcript, PN 955 (Lucy Rockell).

 53   Transcript, PN 958-961 (Lucy Rockell).

 54   Transcript PN 219 (Paul Darrouzet).

 55   Transcript PN 205 (Paul Darrouzet).

 56   Transcript PN 206 (Paul Darrouzet).

 57   Transcript PN 217,218, 211-213 (Paul Darrouzet).

 58   Transcript, PN 85 (Benjamin Robinson).

 59   Transcript, PN 85 (Benjamin Robinson).

 60   Transcript PN 285 (Paul Darrouzet).

 61   Transcript PN 547 – 551 (Benjamin Robinson).

 62   Transcript PN 162 (Paul Darrouzet).

 63   Witness Statement of Kim Latimer, 1.10.7.

 64   Witness Statement of Ben Robinson, [97].

 65   Transcript PN 71 (Benjamin Robinson).

 66   Transcript PN 86 (Benjamin Robinson).

 67   Transcript PN 271 - 273 (Paul Darrouzet).

 68   Transcript PN 67 (Benjamin Robinson); Witness Statement of Ben Robinson, [93].

 69   Respondent’s Court Book, page 345-347.

 70   Transcript PN 285 (Paul Darrouzet).

 71   Transcript PN 984 (Lucy Rockell).

 72   Witness Statement of Paul Darrouzet, 3.9.

 73   Transcript PN 300-304 (Paul Darrouzet).

 74   Transcript PN 992-994 (Lucy Rockell).

 75   Respondent’s Court Book, page 340.

 76   Respondent’s Court Book, page 342.

 77   Respondent’s Court Book, page 343.

 78   Transcript, PN 1518 (Kim Latimer).

 79   Transcript, PN 1520 (Kim Latimer).

 80   Transcript, PN47 (Benjamin Robinson).

 81   Transcript, PN 1526 (Kim Latimer).

 82   Transcript, PN 1447 (Kim Latimer).

 83   Transcript, PN 47 (Benjamin Robinson).

 84   Transcript, PN 1525 (Kim Latimer).

 85   Transcript, PN 774 – 780 (Benjamin Robinson).

 86   Transcript, PN 775, 779 (Benjamin Robinson).

 87   Transcript, PN 1467 (Kim Latimer).

 88   Transcript, PN 996 (Lucy Rockell).

 89   Transcript, PN 286 (Paul Darrouzet).

 90   Transcript, PN 996-998 (Lucy Rockell).

 91   Transcript, PN 999-1003 (Lucy Rockell).

 92   Respondent’s material, page 90.

 93   Respondent’s Closing Submissions, page 17.

 94   Mr Richard Paternella v Electroboard Solutions Pty Ltd[2011] FWA 3323, [91]-[93] (Commissioner Asbury).

 95   Ibid.

 96   Witness Statement of Laura Bishop, Annexure LB-8.

 97   APS Group (Placements) Pty Ltd v Stephen O’Loughlin[2011] FWAFB 5230, [51] (Lawler VP, O’Callaghan SDP, Roberts C).

 98   Central Queensland Services Pty Ltd v Tara Odgers[2020] FWCFB 304, [35] (Odgers). Quoting from Chubb Security Australia Pty Ltd v Thomas Print S2679 (AIRCFB, McIntyre VP, Marsh SDP, Larkin C, 2 February 2000), [41]. see also Read v Cordon Square Child Care Centre [2013] FWCFB 762, [46]-[49].

 99   Crozier v Palazzo Corporation Pty Ltd (2000) 98 IR 137, 151.

 100   Previsic v Australian Quarantine Inspection Services Print Q3730 (AIRC, Holmes C, 6 October 1998).

 101   Ibid.

 102   Fastidia Pty Ltd v Goodwin Print S9280 (AIRCFB, Ross VP, Williams SDP, Blair C, 21 August 2000), [43]-[44].

 103   Respondent’s Outline of Submissions, [38].

 104   Respondent’s Outline of Submissions, [43].

 105   ALH Group Pty Ltd t/a The Royal Exchange Hotel v Mulhall (2002) 117 IR 357, [51]. See also Smith v Moore Paragon Australia Ltd PR915674 (AIRCFB, Ross VP, Lacy SDP, Simmonds C, 21 March 2002), [92]; Edwards v Justice Giudice [1999] FCA 1836, [6]–[7].