TechnologyOne Limited v Roohizadegan

Case [2021] FCAFC 137


FEDERAL COURT OF AUSTRALIA

TechnologyOne Limited v Roohizadegan [2021] FCAFC 137

Appeal from:

Roohizadegan v TechnologyOne Limited (No 2) [2020] FCA 1407

Roohizadegan v TechnologyOne Limited (No 4) [2020] FCA 1729

Roohizadegan v TechnologyOne Limited (No 5) [2020] FCA 1734

File number: VID 691 of 2020
Judgment of: RANGIAH, WHITE AND O'CALLAGHAN JJ
Date of judgment: 5 August 2021
Catchwords:

INDUSTRIAL LAW – adverse action – where primary judge found that respondent was dismissed in contravention of s 340(1) of the Fair Work Act 2009 (Cth) – appeal against order to that effect on the grounds that the judge failed to provide adequate reasons for his conclusion and did not answer the question whether the appellants had established that the adverse action was not taken for a reason proscribed by the Fair Work Act 2009 (Cth), or for reasons which included such a reason, by reference to all the evidence – appeal allowed – cross-appeal and notice of contention dismissed, new trial of adverse action claim ordered

CONTRACT – where primary judge found that respondent was entitled to be paid an incentive payment pursuant to the respondent’s contract of employment – whether on its proper construction respondent so entitled – appeal allowed, cross-appeal dismissed – new trial of claim for breach of contract of employment and other claims for damages ordered

Legislation: Fair Work Act 2009 (Cth) Pt 3-1, ss 340(1), 340(1)(a)(ii), 340(1)(c), 341, 341(1)(c)(ii), 342(1), 360, 361, 361(1)
Cases cited:

Alexandria Landfill Pty Ltd v Transport for NSW [2020] NSWCA 165; 243 LGERA 102

Australian Building and Construction Commissioner v Hall (2018) 261 FCR 347

Australian Competition and Consumer Commission v MSY Technology Pty Ltd (2012) 201 FCR 378

Beale v Government Insurance Office of New South Wales (1997) 48 NSWLR 430

Board of Bendigo Regional Institute of Technical and Further Education v Barclay (2012) 248 CLR 500

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

Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd (2014) 253 CLR 243

Cummins South Pacific Pty Ltd v Keenan [2020] FCAFC 204

Doney v The Queen (1990) 171 CLR 207

General Motors-Holden’s Pty Ltd v Bowling (1976) 51 ALJR 235

Goodrich Aerospace Pty Limited v Arsic (2006) 66 NSWLR 186

Jones v Bradley [2003] NSWCA 81

Mifsud v Campbell (1991) 21 NSWLR 725

Mount Bruce Mining Pty Limited v Wright Prospecting Pty Limited (2015) 256 CLR 104

Moylan v Nutrasweet Co [2000] NSWCA 337

Nagamuthu v Shanmugarajah [2019] NSWCA 288

Palmer v Clarke (1989) 19 NSWLR 158

Rural Press Ltd v Australian Competition and Consumer Commission (2003) 216 CLR 53

Soulemezis v Dudley (Holdings) Pty Limited (1987) 10 NSWLR 247

State of Victoria (Office of Public Prosecution) v Grant [2014] FCAFC 184; 246 IR 441

Tattsbet v Morrow (2015) 233 FCR 46

Waterways Authority v Fitzgibbon [2005] HCA 57; (2005) 79 ALJR 1816

Division: Fair Work Division
Registry: Victoria
National Practice Area: Employment and Industrial Relations
Number of…

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TechnologyOne Limited v Roohizadegan [2021] FCAFC 137
Case
[2021] FCAFC 137
Decision Date

CaseChat Overview and Summary

TechnologyOne Limited initiated proceedings against Mr Roohizadegan, who was employed as Regional General Manager for Victoria. The dispute encompassed claims of unfair dismissal under the Fair Work Act 2009 (Cth) and breach of contract, among other contentions. The case was heard and decided by the Full Bench of the Federal Court of Australia. The core legal issues before the court involved whether the dismissal of Mr Roohizadegan was unlawful and if he was entitled to an incentive payment under his employment contract. The court was tasked with determining if the primary judge provided adequate reasons for his findings and whether the appellants proved the dismissal was not for a proscribed reason.

The court meticulously examined the reasoning provided by the primary judge and concluded that there was a lack of adequate justification for the dismissal ruling. Additionally, the court found that the primary judge did not sufficiently address whether the dismissal was for reasons not prohibited by the Fair Work Act 2009 (Cth). The court also delved into the contractual obligations and determined that the primary judge erred in his interpretation of the contract concerning the incentive payment. The reasoning was grounded in the objective interpretation of contract terms and the necessity to consider external circumstances that were known to the parties or relevant to the contract's purpose.

Given the deficiencies in the primary judge's reasoning and interpretation, the appeal was allowed, and the cross-appeal and notice of contention were dismissed. The court ordered a new trial to reassess the adverse action claim and the contract breach claim, ensuring all evidence and legal principles were properly considered. This decision underscored the importance of thorough and reasoned judicial findings in employment disputes.

Orders

Orders of the court

1. The appeal be allowed.

2. The orders made by the primary judge on 2 October 2020 and the orders in respect of pre-judgment interest and costs made on 30 November 2020 be set aside.

3. The cross-appeal and the notice of contention be dismissed.

4. The matter be remitted for a new trial.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

It follows that the party making an allegation that adverse action was taken “because” of a particular circumstance must establish, in light of all the facts established in the proceeding, the existence of the circumstance as an objective fact. See, eg, Tattsbet v Morrow (2015) 233 FCR 46 at 75 [119] (Jessup J, Allsop CJ and White J agreeing); Australian Building and Construction Commissioner v Hall (2018) 261 FCR 347 at 380 [100] (Tracey, Reeves and Bromwich JJ); Board of Bendigo Regional Institute of Technical and Further Education v Barclay (2012) 248 CLR 500 at 523-524 [62] and [65] (French CJ and Crennan J).The evidence about the seven complaints It is important to set out the evidence of those complaints upon which the learned judge relied in concluding that his dismissal was unlawful, because for the most part the detail of that evidence finds no place in the Reasons dealing with the question whether the appellants had established that the adverse action was not taken for a proscribed reason. Before turning to the evidence relied upon by counsel for Mr Roohizadegan in their closing written submissions about the seven complaints, it is helpful to identify some of the relevant individuals referred to. Between February and October 2014, Mr Lee Thompson was Mr Roohizadegan’s immediate manager. Between October 2014 and 11 April 2016, Mr Martin Harwood held the position of Operations Officer for Sales and Marketing and was Mr Roohizadegan’s immediate manager. Mr Harwood was replaced as Operations Officer for Sales and Marketing on 11 April 2016 by Mr Stuart MacDonald. In March 2015, Mr Harwood had appointed Mr Metcalfe to the position of Regional Sales Manager for Victoria. He said that he had done so in order to assist Mr Roohizadegan in the increased responsibilities which he had as Regional General Manager for Victoria. Mr Peter Sutching was the Products and Local Government General Manager (a position of equivalent seniority to that of Mr Roohizadegan). Ms Marie Philips was employed as Industry Manager.Complaint 1 (3 February 2016) The first complaint was defined as “the 3 February 2016 complaint”. The pleading relied on was the SFASOC at [9], which relevantly alleged: “On 3 February 2016 Mr Roohizadegan attended [a] meeting with Mr Di Marco. At the meeting, Mr Roohizadegan complained to Mr Di Marco of the threatening phone calls and behaviour Mr Harwood had subjected him to”. Counsel’s closing submission in respect of that allegation cited the following extract from the transcript of Mr Roohizadegan’s evidence-in-chief as constituting the substance of the 3 February 2016 complaint:Adrian [De Marco], I feel that I’m being undermined. I feel decisions are being made behind my back. I feel I’m being forced to recruit sales managers for my region, who I am responsible for. I feel that basically I’m not getting resources and tools of trade that I can do my work in order to – to – to grow my business …During the last two days, Martin Harwood has called me a number of times to cancel your meeting with me.I just wanted to let you know that Martin has said if I have – if you have this meeting with me today, and I don’t cancel it, by end of the day or end of the week … Martin has said ‘One of us has to go’. Complaint 2 (20 April 2016)

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Senior counsel for Mr Roohizadegan did not say much about the contract claim in the course of his oral submissions. He agreed that the learned primary judge was mistaken in thinking that the royalty rules for the 2010 financial year could not have been known to Mr Roohizadegan at the time of the 26 November 2009 variation because his Honour did not appreciate that the rules in fact pre-dated the variation. His submissions, including concerning that “slip” as counsel called it, were as follows:And with respect, in particular, to the royalties rules, it is … difficult to understand how they can be taken into account in understanding the terms that his Honour construed with respect to variations expressed in negotiation not to be changing substantive rights except favourably to our client. And it is for those reasons, in our submission, that those royalty rules can’t be a tail that wags the dog and, in fact, it was not demonstrated whether or when they were made known to our client.You’ve got a generic statement about being sent to regional managers, if his Honour, perhaps, slips in relation to an inference that an amendment late in ‘09 must have preceded rules for Financial Year ‘10 and what my friend submits in that regard has force, with respect, it still remains the case in terms of matters commonly known to both sides there’s simply no evidence importing that knowledge, let alone, of the detail to be extrapolated from a reading of it in in detail to my client.And the authors of those royalty rules are not delegates for the purpose of making substantive terms of a contract whereby, at best, it is a subsequent contract with respect to the interpretation of terms existing, coming to be varied. And for those reasons, it is wrongly, this material is wrongly called in aid by our learned friend.Consideration of the contract claim In our view, grounds 9 and 10 of the amended notice of appeal must be allowed. By the terms of the pleaded contract (the 26 November 2009 variation) Mr Roohizadegan was entitled to be paid an incentive payment “based upon Profit Before Tax (PBT) performance for Business Unit 03 – Victoria – Service Delivery”. The question that arises therefore is what did “Business Unit 03 – Victoria – Service Delivery” mean to a reasonable person in the position of the parties? As the High Court explained in Mount Bruce Mining Pty Limited v Wright Prospecting Pty Limited (2015) 256 CLR 104 at 116-117 [46]-[50] (French CJ, Nettle and Gordon JJ):46The rights and liabilities of parties under a provision of a contract are determined objectively, by reference to its text, context (the entire text of the contract as well as any contract, document or statutory provision referred to in the text of the contract) and purpose. 47In determining the meaning of the terms of a commercial contract, it is necessary to ask what a reasonable businessperson would have understood those terms to mean. That enquiry will require consideration of the language used by the parties in the contract, the circumstances addressed by the contract and the commercial purpose or objects to be secured by the contract. 48Ordinarily, this process of construction is possible by reference to the contract alone. Indeed, if an expression in a contract is unambiguous or susceptible of only one meaning, evidence of surrounding circumstances (events, circumstances and things external to the contract) cannot be adduced to contradict its plain meaning. 49However, sometimes, recourse to events, circumstances and things external to the contract is necessary. It may be necessary in identifying the commercial purpose or objects of the contract where that task is facilitated by an understanding “of the genesis of the transaction, the background, the context [and] the market in which the parties are operating”. It may be necessary in determining the proper construction where there is a constructional choice. The question whether events, circumstances and things external to the contract may be resorted to, in order to identify the existence of a constructional choice, does not arise in these appeals. 50Each of the events, circumstances and things external to the contract to which recourse may be had is objective. What may be referred to are events, circumstances and things external to the contract which are known to the parties or which assist in identifying the purpose or object of the transaction, which may include its history, background and context and the market in which the parties were operating. What is inadmissible is evidence of the parties' statements and actions reflecting their actual intentions and expectations.(Citations omitted.)