United Voice v MDBR123 Pty Ltd - [2014] FCA 1344

FEDERAL COURT OF AUSTRALIA
United Voice v MDBR123 Pty Ltd [2014] FCA 1344

Citation: United Voice v MDBR123 Pty Ltd [2014] FCA 1344

Parties: UNITED VOICE v MDBR123 PTY LTD and DENIS HINTON

File number: QUD 498 of 2013

Judge: RANGIAH J

Date of judgment: 11 December 2014

Catchwords: INDUSTRIAL LAW – general protections – adverse action – member of applicant dismissed from employment with first respondent – employee attempted to persuade colleagues to become members of the applicant – where another employee made a complaint of bullying and harassment in relation to recruitment activities – whether employee’s conduct constituted exercising a workplace right or engaging in industrial activity – whether the protections in ss 340 and 346 of the Fair Work Act2009 (Cth) (“the Act”) apply – whether reasons given by respondents were the real reasons for dismissal – whether adverse action taken for prohibited reason – whether second respondent involved in contravention pursuant to s 550 of the Act – failure to discharge onus in s 361 of the Act

Legislation: Fair Work Act 2009 (Cth) ss 340, 341, 341(1), 341(1)(b), 342, 342(1), 346, 347, 347(b), 347(b)(ii), 347(b)(iii), 360, 361, 545, 546, 547, 550, 550(1), 550(2)(a), 793
Federal Court of Australia Act 1976 (Cth) s 51A

Cases cited: Board of Bendigo Regional Institute of Technical and Further Education v Barclay (2012) 248 CLR 500 cited
Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd (2014) 88 ALJR 980; [2014] HCA 41 cited
General Motors-Holden’s Pty Ltd v Bowling (1976) 51 ALJR 235 cited
National Tertiary Education Union v Royal Melbourne Institute of Technology [2013] FCA 451 cited

Date of hearing: 31 March 2014 to 4 April 2014

Place: Brisbane

Division: FAIR WORK DIVISION

Category: Catchwords

Number of paragraphs: 159

Counsel for the Applicant: Mr RE Reed

Solicitor for the Applicant: Hall Payne Lawyers

Counsel for the Respondents: Mr JE Murdoch QC

Solicitor for the Respondents: Carter Newell Lawyers for the hearing period of 31 March 2014 to 2 April 2014 and 4 April 2014.

Mr B Heath of Carter Newell Lawyers for 3 April 2014

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY

FAIR WORK DIVISION

QUD 498 of 2013

BETWEEN:
UNITED VOICE
Applicant

AND:
MDBR123 PTY LTD
First Respondent

DENIS HINTON
Second Respondent

JUDGE:

RANGIAH J

DATE:

11 DECEMBER 2014

PLACE:

BRISBANE

THE COURT ORDERS THAT:
1.The applicant file and serve written submissions on the questions of compensation and penalty by 4.00 pm on 14 January 2015.
2.The respondents file and serve written submissions in response by 4.00 pm on 28 January 2015.
3.The matter be set down for further hearing on the questions of compensation and penalty at 10.15 am on 4 February 2015.

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

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY

FAIR WORK DIVISION

QUD 498 of 2013

BETWEEN:
UNITED VOICE
Applicant

AND:
MDBR123 PTY LTD
First Respondent

DENIS HINTON
Second Respondent

JUDGE:

RANGIAH J

DATE:

11 DECEMBER 2014

PLACE:

BRISBANE

REASONS FOR JUDGMENT

On 16 May 2013, the first respondent, MDBR123 Pty Ltd (“MDBR”), terminated the employment of Ms Margaret Smith. MDBR did so upon the advice of the second respondent, Mr Denis Hinton. Ms Smith is a member of the applicant union, United Voice (“the Union”).
The Union contends that the respondents’ actions contravened ss 340 and 346 of the Fair Work Act 2009 (Cth) (“the Act”), which prohibits taking adverse action against a person because the person exercises or proposes to exercise a workplace right or engages or proposes to engage in industrial activity.
The Union seeks the following remedies:
(a)the imposition of pecuniary penalties upon each respondent pursuant to s 546 of the Act;
(b)an award of compensation to Ms Smith pursuant to s 545 of the Act; and
(c)interest on any award of compensation pursuant to s 547 of the Act or s 51A of the Federal Court of Australia Act 1976 (Cth) (“the Federal Court Act”).
In its originating application, the Union also sought an order for the reinstatement of Ms Smith to her employment with MDBR under s 545 of the Act, but at the commencement of the trial, counsel for the Union informed the Court that the order for reinstatement was no longer pressed.
Background facts
There are 12 childcare centres which trade under the name “Mother Duck”. Those centres were established by Mr Hinton and his wife, starting some 24 years ago. Over the years Mr Hinton and his wife have divested themselves of 11 of those childcare centres by entering into franchise agreements with some of their former employees under which the former employees own and operate the centres.
MDBR has operated a long day care business known as “Mother Duck Bracken Ridge” (“the Bracken Ridge Centre”) since February 2012. MDBR operates the business as franchisee under a franchise agreement with Mother Duck (Bracken Ridge) Pty Ltd. Mr Hinton is the director of Mother Duck (Bracken Ridge) Pty Ltd and he and his wife own 60% of the shares in that company.
The shareholders, directors and licensees of MDBR are Ms Brown and Ms Matchett. Ms Brown has a 78% shareholding in MDBR while Ms Matchett has a 22% share. Each of them is a former employee of Mr Hinton or one of his companies.
Mr Hinton is not a director of MDBR. He has an interest in the financial performance of MDBR and the other Mother Duck childcare centres. Under the franchise agreements, the franchisor receives 60% of the profits after the expenses of running the centre are met.
I will describe the franchisee and franchisor companies trading under the name “Mother Duck” as “the Mother Duck organisation”. The CEO of the Mother Duck organisation is Ms Karen Prestedge.
Mr Hinton is the chair of the Mother Duck Management Committee (“the Management Committee”). The Management Committee consists of Mr Hinton and representatives of each of the franchisees. The members of the Management Committee have an equal vote. The Management Committee is responsible for setting the general policy and direction of the Mother Duck organisation.
Ms Smith commenced employment with MDBR on 13 February 2012 as an assistant educator. She has been a member of the Union since 22 August 2012. She obtained a Certificate III in Children’s Services during the course of 2012.
The Union is an industrial association within the meaning of s 12 of the Act. It conducted a campaign, known as the “Big Steps” campaign, to improve the wages of early childhood educators. As a consequence, or partly as a consequence, of the Big Steps campaign, the Australian Government announced the creation of the Early Years Quality Fund (“the Fund”) in about March 2013. The Fund was to provide for wage increases to educators at long day care centres. The wage increases were directly proportional to the level of qualifications of the relevant educators, with an increase of $3 per hour for Certificate III qualified educators. In order to access the funding, the relevant wage increases were required to be included in an enterprise agreement.
Prior to and following the announcement of the Fund, the Union engaged in a campaign to increase its membership in the childcare industry. It was part of the campaign that once the Union’s membership in a particular long day care centre reached 60%, the Union would seek to negotiate an enterprise agreement with the employers of the relevant centre so as to access the Fund to achieve wage increases.
The central issue in dispute concerns the reasons for Ms Smith’s dismissal. Ms Smith had sought, with mixed success, to persuade her fellow employees of MDBR to join the Union in a bid to achieve wage increases through the Fund. One such colleague was Ms Alana Clignett. Ms Clignett declined to join the Union and submitted a complaint to Ms Brown and Ms Matchett regarding Ms Smith’s conduct in attempting to persuade her to join the Union. Ms Smith’s employment was terminated following the allegation.
The Union’s case is, in substance, that the reason or one of the reasons for Ms Smith’s dismissal was her attempts to recruit her colleagues to join the Union with a view to the negotiation of an enterprise agreement.
The respondents deny the Union’s allegation and plead that the following reasons were the reasons for Ms Smith’s dismissal:
(a)the receipt of complaints by MDBR from an employee of MDBR of Ms Smith’s engagement in workplace bullying and harassment;
(b)the receipt of a complaint by MDBR from an employee of MDBR of Ms Smith having sought to coerce staff members to join the Union, using false and misleading information about the “Early Years Quality Fund”, in her efforts to persuade staff members of MDBR to join the Union; and
(c)the receipt of verbal and written complaints by MDBR from parents in respect of Ms Smith’s “aggressive and unprofessional” conduct towards certain parents and certain children in her care.
The evidence
The trial proceeded with evidence-in-chief by way of affidavit. The Union filed affidavits given by Mr Jim Smith, Ms Jenny George, Ms Margaret Hughes, Ms Suzanne Piasecki, Ms Smith, Ms Corinne Wagner, Mr Michael Clifford, Ms Susan Lamb and Ms Tamara Burns. Another witness, Ms Renee Williams, attended the trial pursuant to subpoena and gave oral evidence.
Ms George, Ms Piasecki, Ms Wagner and Ms Burns worked alongside Ms Smith at MDBR. Their evidence was to the effect that Ms Smith did not apply pressure when asking them to join the Union, nor did she apply pressure, as far as they saw, to other employees. Ms Burns decided not to join the Union but was treated no differently by Ms Smith.
Mr Clifford and Ms Lamb were employed by the Union. They provided evidence about the Union campaigns. They also rejected the respondents’ allegation that, when attempting to recruit members, the Union made misrepresentations to the effect that an enterprise agreement could only be brought about by the Union, and that a childcare centre needed 60% Union membership to be eligible for the fund.
Mr Smith is Ms Smith’s brother-in-law and attended the meeting at which Ms Smith was told her employment had been terminated.
Ms Hughes was also employed by the Union. She gave evidence about the conduct of that meeting, saying that Ms Smith was not given a chance to respond to the allegations against her. I reject that aspect of Ms Hughes’ evidence because it is inconsistent with the evidence of each of the other witnesses present at the meeting.
The respondents relied on affidavits of Mr Hinton, Ms Brown, Ms Matchett, Ms Heidi Hawkins, Ms Clignett, Ms Prestedge and Ms Melissa Wyatt.
Ms Wyatt is director and licensee of the Mother Duck Petrie franchise. Her evidence concerned her lack of opposition to increased unionisation of the workforce at Petrie and a meeting with Ms Lamb and Mr Clifford at which they made the alleged misrepresentations.
Ms Hawkins is a parent who made a complaint to MDBR about comments that Ms Smith had made about marks on her child’s body.
The parties approached the case as if a central issue involves the credit of Ms Smith and Ms Clignett, particularly whether the content of Ms Clignett’s statutory declaration was true or untrue. As I will explain, it does not matter whether Ms Clignett’s declaration was true or untrue. What is important is whether the reasons for the dismissal given by Mr Hinton, Ms Brown and Ms Matchett were their real reasons. What is crucial is their credit. Whether they believed the content of the statutory declaration to be true bears on that issue, but whether that content was in fact true does not.
The evidence of Ms Smith and Ms Clignett is of secondary importance. The evidence of the remaining witnesses is largely incidental in the disposition of this proceeding, except to the extent that I will indicate later in these reasons.
The Early Years Quality Fund
The government allocated $300 million to the Fund. The Fund was designed to attract and retain qualified childcare workers to the industry by providing wage increases proportional to the qualifications of educators. The government prepared various documents to provide details about the Fund and its requirements. One of those documents was entitled “The National Quality Agenda – Early Years Quality Fund”. It provided:
Who can apply
All Long Day Care centres approved for Child Care Benefit can apply for the funding.
Eligible services must demonstrate a commitment to improve quality outcomes for children, including workforce plans to attract and retain qualified staff.
…
Funding will be provided through an application and assessment process using a defined set of eligibility criteria, including:
Ÿa demonstrated commitment at the service to national quality outcomes for children under the National Quality Framework (NQF), including a detailed plan to meet NQF qualification requirements
Ÿan agreement to utilise grant funds exclusively for wage increases, including detailed acquittal of funds
Ÿa commitment to affordability for families through fee restraint limited to actual operating cost increases (and no increases as a result of wages arising from the operation of the Fund)
Ÿincreased fee transparency requirements for services, including explaining to parents the level of financial assistance provided by the Australian Government through Child Care Benefit and Child Care Rebate, and meeting specific reporting requirements for MyChild
Funding will be conditional on wage increases being included in an enterprise bargaining agreement.
Another document was entitled “Frequently Asked Questions”. Those questions, and the answers, were, relevantly:
What are the eligibility criteria?
…
ŸFunding will be conditional on wage increases being included in an enterprise bargaining agreement.
…
Is union membership a criteria for funding eligibility under the Fund application process?
ŸNo. The proportion of employees who are members of a union at a service is not an eligibility or assessment criteria for funding under the Early Years Quality Fund.
…
Do all the employees at my service need to be union members in order for my service to apply for funding under the Early Years Quality Fund?
ŸNo. It is not a requirement for employees of a service to be members of a union in order for a service to be eligible to apply for funding through the Early Years Quality Fund.
ŸUnder the Fair Work Act 2009, all employers, employees and independent contractors are free to become or not to become, members of an industrial association, such as a trade union or employer association.
…
United Voice campaigning
Following the announcement of the Fund, the Union was engaged in a campaign directed towards increasing its membership in the industry. The membership target set by the Union was 60% of staff of each employer in the industry. Once the level of 60% membership in a particular centre had been reached, the Union would then seek to make an enterprise agreement with the relevant employer so that employees could access the wage increases provided by the Fund.
The respondents allege that the Union promoted falsehoods as part of this campaign, namely that an enterprise agreement could only be brought about by the Union, and that a childcare centre needed 60% membership of the Union for staff to be eligible for pay increases from the Fund. The Union produced promotional material and facilitated discussions aimed at furthering the campaign. The respondents rely on this material in order to support their contention that the Union’s campaign was misleading.
The Union produced a “special victory edition” of their newsletter dated 20 March 2013 which centred on the successes of the Big Steps campaign in establishing the Fund. Part of the newsletter contained information on how members could ascertain whether their centre was eligible for the funding. Under the heading “How Does My Centre Qualify?”, three steps were outlined:
1.        Join United Voice
A clear majority of workers join United Voice.
2.        New EBA
United Voice negotiates a new EBA.
3.        Sign Agreement
Owner / Operator signs agreement with government.
Meeting at Mother Duck Petrie
On 15 April 2013, Ms Wyatt invited Mr Clifford and Ms Lamb to attend a meeting at the Mother Duck Petrie centre. Mr Hinton and Ms Prestedge were also in attendance at that meeting. A majority of staff at Mother Duck Petrie were members of the Union and the meeting was arranged by Ms Wyatt to discuss an enterprise bargaining agreement.
Mr Hinton and Ms Wyatt gave evidence that the representatives of the Union stated that there was a requirement of 60% membership to access the Fund. Mr Clifford and Ms Lamb deny this.
Distribution of material at MDBR
On 15 or 16 April 2013, Ms Brown and Ms Matchett left copies of a Commonwealth government publication concerning the Fund with a note for staff to take a copy. The document was entitled “The National Quality Agenda – Early Years Quality Fund” (see reasons at [27]). Across the top of the front page of the document were the handwritten words “NO REQUIREMENT FOR UNION MEMBERSHIP”. The words were written by Mr Hinton. Ms Smith received a copy.
On 15 April 2013, Ms Prestedge distributed an email to Mother Duck franchisees attaching the government publications and fact sheets referred to earlier and a summary prepared by Mr Hinton discussing the options available to the Mother Duck organisation in relation to the Fund (“the document of 15 April 2013”). The documents were circulated in preparation for the meeting of the Management Committee to be held on 17 April 2013. Mr Hinton’s summary included the following:
The Union has launched a concerted membership campaign visiting centres and telling workers that they will get a pay rise if they join the union, and telling centres that they must unionise to be eligible for funding. They say it is first come, first served, for the funding to create an atmosphere of crisis to assist their membership drive. As the Government has not advised centres on these issues, although the facts are available on the government website. It appears that the Government is holding back to allow time for the union to unionise the workforce and hence be in a position to make substantial contributions to ALP election funds. It should be remembered that almost all ALP members of parliament are either ex union officials or Labor lawyers, so their support for the union is very clear, and hence non unionised centres are extremely unlikely to receive the funding.
Impacts Of A Unionised Workforce On The Childcare Sector.
In the 1940s and 50s most workplaces in Australia which had a huge manufacturing sector were heavily unionised with union shop stewards participating in company management particularly in relation to rostering, safety issues, dispute creation and settlement and ensuring that all staff were members before they could join the workforce.
Staff could only do tasks according to their trade. Carpenters could not pick up a spanner, only cleaners could clean. The Hawke Keating Government in particular recognised that these practises were highly inefficient and introduced enterprise bargaining agreements etc. and union membership and control declined. Today few industries are controlled by unions with the coal industry, large building construction, state education, and the automotive industry being notable exceptions. It is an unknown what impact unionisation of the childcare industry, and aged care industry would have, but it is unlikely that privately owned childcare businesses will want to take the risk of having to deal with shop stewards being involved in the fixing of rosters, staff not being involved in any cleaning, union involvement in every staff issue such as written warnings, etc and then having to apply to the Pay Equity Unit at Fairwork Australia for permission to lift fees to cover increased costs. It is probable that the not for profit sector including Good Start will unionise (if they are not already) and absorb all the funds and not appreciate the risks involved. This may well mean a loss of staff from the private sector to the not for profit sector, but there will not be many extra openings and the lost staff could be the most desperate financially.
Loss Of Culture
Mother Duck Childcares are a family owned enterprise run by families (franchisees) and we have been most successful in creating in our centres a culture of caring, and consideration for others that is essential in providing the nurturing and happy environment that attracts mothers. It is the key element in our success in achieving high utilisation rates, well above the Brisbane average (67%). In union controlled workplaces, such atmospheres rarely exist. For example, in state schools which are controlled by the Teachers union, negativity is constantly fuelled by union demands for lower class sizes, pay rises, strict demarcation (you do not see a teacher or teachers aide sweeping the floor) and the staff rooms have a negative air where interaction between the teachers is often minimal. Mother Duck’s successful culture is worth protecting.
…
Loss of Profit
The loss of pricing power for those centres that enter into Enterprise agreements could lead to sustained and relentless loss of profit, as the Pay Equity Unit would consider our margins to be excessive. In Mother Duck’s case, luxuries such as Xmas parties, staff bonuses, and our extensive staff training would go first, and franchisees could find their franchises worthless and eventually and eventually surrender them. Mother Duck could become run by paid directors, if the company had not been sold first.
Options Available To Mother Duck Centres
1.Unionise and apply for funding accepting the risks, and hope to be included in the quota.
2.Maintain our present status and explain to staff and parents our reasoning accepting that some staff will be angry and leave, and some parents will not accept our reasoning, but accept our position as it will probably be the same across the private sector. We can point to the fact that we already pay 5% above the award to non qualified staff and 7% above the award to qualified staff, and this is approx. 50% of the proposed gain. By the time staff pay tax on the extra $1.50/Hour available under the enterprise agreement, pay union dues annually, and lose their $400 Xmas bonus (20 cents per hour), there is not much in it. Staff naïve enough to believe the union pitch, and having joined the union already without taking advice from their centre, would just have to wear the union cost or cancel their memberships. Any staff that do leave would go with our best wishes, and we would use the opportunity to improve our staff quality.
3.Maintain our present status and lift by say 1% the margin we pay over the award to demonstrate our commitment to staff pay and conditions
4.Maintain our present status, and match the full cost of the proposed pay rise from our own resources. This would involve an additional fee increase with the resultant risk of losing utilisation in our centres. This proposal would be supported by some franchisees but probably not all

Ms Brown, Ms Prestedge and Mr Hinton were in attendance at the meeting of the Management Committee on 17 April 2013. The Management Committee unanimously voted against Option 1 and instead resolved to adopt Option 3, but with a slightly higher wage increase than had been proposed. Mr Hinton was to write to staff and parents explaining the decision that had been taken.
On 17 April 2013, a letter written by Mr Hinton (“the letter of 17 April 2013”) was circulated to staff and parents at the Mother Duck centres. The letter was headed “‘THE EARLY YEARS QUALITY CHILDCARE FUND’. MOTHER DUCK CHILDCARE’S RESPONSE”. The letter said, relevantly:
Some weeks ago, the Prime Minister Julia Gillard announced that the Government was providing $300M through a “Early Years Quality Childcare Fund” over two years to the childcare industry to “offset” the costs of employers paying wage increases to childcare workers … What the Prime Minister did not say is that the increases will only be available to a minority of staff … The Prime Minister said that the scheme was available to centres which were participating in the Early Years Learning Framework, and who signed an Enterprise Agreement, provided by United Voice, with their staff, and which included
1.“Childcare fee restraint” Price control by a new unit in Fair Work Australia called the “Pay Equity Unit” but with no details as [to] how it would work.
2.The provision of a plan as to how the centre was implementing the new Early Years Learning Framework.
At this stage the Government has supplied no further information to centres, leaving it to the union to disseminate information to the industry. The union website states that the enterprise agreement can only be entered into by childcare centres which have a unionised workforce with at least 60% membership. This is not a requirement on the government website. The union has launched a concerted membership campaign visiting centres. Reports from staff appear to be telling workers that if they join the union, they will get the pay rise, although there is no guarantee their centre would qualify for the payments, or would even apply.
On Monday 15^th April, Miss Karen Prestedge, myself and Miss Melissa Wyatt of our Petrie centre met representatives of “United Voice” union where they presented an enterprise agreement for us to sign which included a requirement that our centre have 60% union membership. We disputed the claim citing the government website and also statements in” The Australian” newspaper.
…
… Today the Mother Duck management committee comprising all Mother Duck franchisees met, and unanimously decided not be involved in the scheme for the following reasons
1.The criteria for price control has not been developed and consequently there is no knowing what we would be involved in if we signed an enterprise agreement now as requested. No sane business would take such a risk, and we cannot envisage any substantial involvement by centres in this scheme, other than Not For Profit centres.
2.Union involvement in our centres could be highly undesirable. Unions are adversorial [sic] by nature, and the Mother Duck culture is one of caring and consideration for others. We always put as our first objective the happiness and job satisfaction of our staff. We believe that if the staff are happy, then everything else important to families such as creating a nurturing environment, falls into place. Our culture is worth protecting.
3.Price control and union interference in the management of our centres would lead to a substantial loss of profit and lower occupancy levels. Mother Duck would soon be no longer able to afford luxuries such as Xmas bonuses and gifts, our glamorous Xmas party, and the extensive training we give our staff. Resources would suffer next as it is very difficult to cut costs in staff (regulated numbers) or rent. Mother Duck pays staff substantially over the award, and this too would be at risk.
…The management committee has decided that from 1st July 2013, when the award rate will increase anyway, that we will increase the over award payments to 6.5% for unqualified staff, 8.5% for qualified staff, and 5% for juniors. We are able to do this because Mother Duck centres have the highest utilisation rates in Brisbane, a reflection of the quality of our programs and staff.
…
Yours sincerely
Mr Denis Hinton
Director of Mother Duck Child Care Centres
Ms Smith’s recruitment of staff as members of the Union
Ms Smith first became aware of the Big Steps campaign while working in another childcare centre. She deposed to understanding that it was not a requirement of the Fund that childcare workers be members of the Union in order to be eligible for the wage increases, and she stated that she conducted discussions with her colleagues on this understanding.
Ms Smith estimated that there were 28 employees of MDBR who were eligible to become members of the Union. Between mid-March and mid-May 2013, she was successful in recruiting 14 employees. She stated that she accepted the decisions of the 13 employees who decided not to join the Union and did not pressure, harass or act inappropriately towards them.
Ms Smith stated that she tried to be discreet in the way she approached conversations with her colleagues, especially those who did not want the management of MDBR to know that they were discussing union membership. After receiving the letter of 17 April 2013, she tried to be even more discreet in approaching staff members about joining the Union.
During the course of March and April 2013, Ms Smith offered her home as a venue for two meetings that were arranged to allow employees of MDBR to meet representatives from the Union. Ms Smith had contacted Ms Lamb for assistance in recruiting her colleagues to become members of the Union. A meeting was held over lunch at Ms Smith’s house in March 2013.
A second meeting was scheduled on the evening of 18 April 2013 at the Bracken Ridge Tavern. Ms Smith was waiting to commence the meeting with Ms Lamb. She learned from Ms George, a fellow employee, that Ms Matchett had just entered the Tavern. Ms Smith decided to relocate the meeting to her house.
There were less than five people in attendance at each of the meetings. The attendees were shown a short video about the Big Steps campaign and given an opportunity to ask questions.
Ms Smith denied that she pressured, bullied, harassed or otherwise intimidated her colleagues when asking them to join the Union and that she simply invited them to do so.
Allegations of unprofessional conduct
The respondents adduced evidence to support their contention that Ms Smith’s unprofessional conduct extended beyond her interactions with fellow staff members. Ms Hawkins gave evidence that in December 2012, Ms Smith made comments regarding birthmarks on her son’s arms which upset her. Ms Hawkins deposed that Ms Smith had said that the markings resembled cigarette burns, which she interpreted to mean that Ms Smith was insinuating she had abused her son. Ms Brown recommended that Ms Smith apologise to Ms Hawkins, which she then did. Ms Hawkins was not cross-examined.
In early May 2013, Ms Brown received a complaint from another parent, Mrs Tiffany Askew. Mrs Askew was concerned that her son was placed in time out as punishment, which is not a policy in place at MDBR. Ms Smith confirmed that she had placed the child into time out, but did not believe that this action was unacceptable. In response, Ms Brown provided a further copy of MDBR’s behaviour guidance policy, interactions with children policy and her role statement. She also issued Ms Smith with a formal warning.
The formal warning was issued to Ms Smith on 8 May 2013. It lists her actions of putting children in time out and the fact she was “consistently speaking in an abrupt tone and not displaying supportive and comforting mannerisms” as the reasons for the warning. The warning details that Ms Smith must immediately improve interactions with children and families and that failure to do so may result in further discussion. The warning was signed by Ms Brown as director and witnessed by Ms Matchett. Ms Smith also signed the warning.
Complaint by Ms Clignett
Ms Clignett’s statutory declaration made on 14 May 2013 has greater relevance to this proceeding than her affidavit and her oral evidence. Ms Clignett declared:
Between four to six weeks ago myself and a number of other staff members were approached by Margaret regarding the government funded pay rise that is supposed to be happening soon for childcare workers.
Margaret asked me if I knew if I was eligible, and told me that in order for our centre to receive the pay rise 60% of staff needed to be members of the union. Our conversation was cut short as I was taking the toddlers to the toddler room.
The next morning Margaret approached me and said that she was arranging for a union rep to be at her house one day that week between 11am – 2pm so that staff from our centre could go and get information on the intended payrise – and how to get it.
Initially I was interested in the $3.50/hour pay rise, and asked Margaret who else was going. I asked if Carol and Gabby would be signing up also. Margaret told me that Carol and Gabby shouldn’t be told about any of this – that once 60% of staff were members, that the union could come in and make Carol and Gabby sign an E.B.A for the payrise can [sic] go ahead.
I asked why and said that Carol & Gab would probably be happy for us to receive the payrise. Margaret became quite short with me and told me that if I wanted to let the team down to go ahead. Margaret finished the conversation with a brief comment about coming to see her if I wanted her address.
I didn’t go to Margaret’s house, but Margaret bought [sic] in joining packs for the union, and handed one out to most of the staff. Margaret told me when she handed it to me that she needed it back, filled out, that afternoon, as paperwork needed to be processed.
I felt extremely pressured – to the point that I felt like I needed to make up excuses as to why I didn’t want to join not only to Margaret, but to other staff that had joined.
I told Kate that something didn’t sit right with me, and the fact that the whole thing had to be done behind Carol & Gabby’s backs to me felt wrong, and that’s why I wasn’t going to join.
Kate told Margaret that afternoon why I wasn’t joining (as I had already left).
Margaret approached me again the next day and asked me why I wasn’t joining, and told me that Kate had told her.
Margaret told me that my reasoning was rediculous [sic], and if I was scared of getting sacked, the union wouldn’t let that happen (even though I had said nothing of the sort) Margaret was quite, and rude even, saying that obviously I don’t care about the payrise.
That was the last real conversation that I had about it as I avoided Margaret completely, but there were lots of whispering circles with Margaret and staff members that had joined.
In her affidavit, Ms Clignett elaborated upon some of the contents of her statutory declaration. As neither Mr Hinton, Ms Brown nor Ms Matchett had asked her to elaborate, her affidavit is of little assistance in illuminating the motivations of those persons for Ms Smith’s dismissal. Her affidavit does, however, describe the process which led to the making of the statutory declaration, and that is of more relevance.
Ms Clignett deposed that Ms Smith told her they would only be eligible for the pay rise if 60% of MDBR staff were union members. Sometime later, Ms Clignett asked Ms Smith whether Ms Brown and Ms Matchett would also be joining because it seemed that Ms Smith had been acting secretly. Ms Smith said she would not be approaching the directors. Ms Clignett deposed that Ms Smith brought in union membership forms and requested they be completed and returned the same day. Ms Clignett felt pressured by this and told Ms Smith that she could not afford to join the Union. Ms Smith said that the membership fees were fully refundable via tax. Ms Clignett informed Ms Smith that she was happy working at MDBR and did not think she would be able to afford the weekly payments as a single mother. Ms Smith said words to the effect of, “[O]h well, obviously you don’t like money then because it’s an additional $150 in your pocket each week”, and walked away.
Ms Clignett deposed that there then was a “snowball” effect in the workplace. Employees frequently clustered in groups for what she assumed were discussions about the Union, leaving a single staff member looking after the children, and often this was Ms Clignett. Ms Clignett considered that Ms Smith’s conduct promoted division between those who wanted to join the Union and those who did not. Ms Clignett deposed that she was concerned that the attention of the staff was being directed towards private discussions at the expense of supervision of the children. She said it became overwhelming for her because other staff were busy whispering about what she assumed was the Union.
When asked by Ms Matchett what was occurring amongst the staff, Ms Clignett informed her that Ms Smith was attempting to recruit employees to join the Union (Ms Matchett states this occurred in or around April 2013). When Ms Matchett asked who had joined, Ms Clignett said that she thought a lot of people had joined but did not say who had joined as she was uncertain as to whether it would be a problem. Ms Matchett asked how Ms Smith had gone about trying to get people to join the Union and Ms Clignett told her, but kept the details quite vague. Ms Clignett did not know if having knowledge of the membership drive could cause her to be disciplined, but other staff members had voiced concerns about getting into trouble for being involved. Ms Smith had told them that they could not be sacked for their involvement because the Union would fight for them.
Ms Clignett had conducted research which revealed that 60% union membership was not a requirement to be eligible for a pay rise through the Fund and she told other staff members of this. Ms Clignett deposed to feeling like she did not want to come to work because she knew that Ms Smith would be pressing her for the return of the direct debit form. She reiterated that she felt pressured by Ms Smith and felt that the membership drive had segregated the team.
On 12 May 2013, Ms Brown and Ms Matchett asked Ms Clignett to put her concerns in writing. Ms Clignett did so and gave the document to Ms Brown the following day. On 14 May 2013, Ms Prestedge attended the Bracken Ridge Centre and asked Ms Clignett to commit her complaint to a statutory declaration. Ms Clignett copied her complaint into a statutory declaration, which Ms Prestedge witnessed.
Dismissal of Ms Smith
After receiving Ms Clignett’s written complaint, Ms Brown sought advice from Mr Hinton. Ms Brown deposed that Mr Hinton had been her boss for a very long time and that she values his opinion. Ms Matchett was present during her discussions with Mr Hinton. Ms Brown concluded that she “could not have this type of behaviour occurring within the centre”. On this basis, she thought that it was necessary to terminate Ms Smith’s employment. Ms Matchett and Mr Hinton supported her decision.
On 14 May 2013, Ms Brown approached Ms Smith during the morning shift. Ms Brown indicated that there was no need for Ms Smith to work her afternoon shift or her shift the next morning. She was invited to attend a meeting at 9.30 am the next day and was stood down until that time. Ms Smith deposed that Ms Brown did not provide her with advice about the nature or purpose of the meeting.
Ms Smith contacted the Union after she was stood down and sought assistance. Ms Brown was contacted by a representative of the Union, Ms Hughes, who said that the Union required 24 hours’ notice in writing specifying MDBR’s intentions with regard to Ms Smith’s employment.
On the evening of 15 May 2013, a letter signed by Ms Brown and Ms Matchett was delivered to Ms Smith’s home advising that the meeting had been moved to 2 pm on 16 May 2013. That letter said, relevantly:
Further to our discussion late this afternoon with Margaret from United Voice, we wish to advise you of the following –
This letter is to formally give you written notification of our wish to arrange a meeting with you to discuss the termination of your employment with Mother Duck Bracken Ridge.
We have received a written complaint regarding harassment by you towards another employee.
It is our decision to terminate your employment because of continued unprofessional conduct.
The meeting will be held at Mother Duck Child Care Centre … at 2 pm Thursday 16^th May 2013.
The meeting of 16 May 2013 (“the Termination Meeting”) was attended by Ms Brown, Ms Matchett, Mr Hinton, Ms Prestedge, Ms Smith, Mr Smith, and Ms Hughes (via telephone). Mr Hinton read the allegations made against Ms Smith. Ms Smith was given the opportunity to respond to the allegations, but declined to do so. Ms Smith deposed that she declined because she felt intimidated by the panel of persons representing Mother Duck and because she had already been told that her employment was going to be terminated so she felt there was no point in responding.
Ms Brown stated that in circumstances where Ms Smith chose not to respond to allegations of bullying and harassment, “we confirmed that we would be dismissing her from her position of employment, effectively immediately.”
A letter had been prepared by Mr Hinton prior to the Termination Meeting dated 16 May 2013 setting out the basis for Ms Smith’s dismissal (“the Termination Letter”). The Termination Letter was then given to Ms Smith. The letter stated:
TERMINATION OF EMPLOYMENT OF MS MARGARET SMITH BY MDBR123 PTY LTD
This termination is in response to unprofessional conduct by Ms Margaret Smith both at her workplace (Mother Duck Brackenridge childcare) and outside of the work place, apparently to coerce other staff members to join the union “United Voice” by knowingly disseminating false information for the purpose of that coercion.
Centre management has received complaints of workplace bullying and harassment from staff members both written and oral stating that they have been aggressively told by Ms Margaret Smith that they must join the union immediately to be eligible for the $3.00 per hour (for assistants) and other varying pay rises according to qualifications and years of service, that may be available under the Federal Government’s proposed “Early Learning Quality Fund”. The Government is proposing to commence the fund from July 1^st 2013. Ms Margaret Smith has apparently relentlessly pursued other staff members harassing them to join the union to achieve a 60% at least union membership of the staff, which she has reportedly told staff is a prerequisite for eligibility for joining the “Early Learning Quality Fund.” This claim is demonstratedly [sic] false and statements by Federal Ministers Peter Garret and Bill Shorten have emphasised this point.
Ms Margaret Smith must be aware that there is no requirement for staff to be union members for the centre to receive this funding, having received written confirmation with regard to this from centre management, and circulars from the Department of Education, Employment, and Workplace Relations were handed personally to her which state emphatically that no union membership is required for eligibility to the fund. Despite this she is reported to have aggressively coerced staff members to join the union using false information to convince staff members.
MS Margaret Smith has been totally unprofessional in her zeal to recruit union members in the staff in that she is reported to have continually moved around the centre harassing staff, and interrupting their work, during work hours when she was being paid to supervise children, and it is reported to management that this was particularly prevalent during the early morning before management had arrived for work. Staff have reported they felt harassed as she provided union membership forms to staff telling them that they needed to have them completed by the end of the day and not to let the team down. Further, it is reported that she told staff not to let the Centre Directors know what was going on, as once 60% of union membership had been achieved, the union could force the management to sign an Enterprise Bargaining Agreement. This is patently false.
Ms Margaret Smith appears to be in breach of the Fair Work Act 2009 where the act states;
“It is unlawful for a person to organise or take action (or threaten to) with the intent to coerce another person or third party to
1.        Use or not use a workplace right, or use it in a particular way.
2.        Take part in an industrial activity
“A person must not knowingly or recklessly make a false or misleading representation about
1.        The workplace rights of another person
2.        The use, or the effect of the use, of a workplace right by another person
It is the intention of centre management to lodge a formal complaint against Ms Margaret Smith with Fair Work Australia
On the 8^th May 2013 Ms Margaret Smith received a written warning following a written complaint by a parent in relation to an aggressive attitude and unprofessional conduct towards parents and children, and had previously received a verbal warning in December 2012 for similar conduct. The current situation whereby some staff members are somewhat frightened of Ms Margaret Smith and seeking to avoid her because of her continued aggression and harassment, cannot be allowed to continue, and hence her employment is terminated on the basis of continued unprofessional conduct.
The Fair Work Act

The Act provides, relevantly:
Division 3––Workplace rights
340     Protection
(1)       A person must not take adverse action against another person:
(a)       because the other person:
(i)        has a workplace right; or
(ii)       has, or has not, exercised a workplace right; or
(iii)proposes or proposes not to, or has at any time proposed or proposed not to, exercise a workplace right; or
(b)       to prevent the exercise of a workplace right by the other person.
…
341     Meaning of workplace right
Meaning of workplace right
(1)       A person has a workplace right if the person:
(a)is entitled to the benefit of, or has a role or responsibility under, a workplace law, workplace instrument or order made by an industrial body; or
(b)is able to initiate, or participate in, a process or proceedings under a workplace law or workplace instrument; or
(c)is able to make a complaint or inquiry:
(i)to a person or body having the capacity under a workplace law to seek compliance with that law or a workplace instrument; or
(ii)if the person is an employee––in relation to his or her employment.
Meaning of process or proceedings under a workplace law or workplace instrument
(2)Each of the following is a process or proceedings under a workplace law or workplace instrument
…
(e)       making, varying or terminating an enterprise agreement;
…
342     Meaning of adverse action
(1)The following table sets out circumstances in which a person takes adverse action against another person.

Meaning of adverse action

Item Column 1
Adverse action is taken by … Column 2
if …

1 an employer against an employee
the employer:

(a) dismisses the employee; or

…
Division 4––Industrial activities
346 Protection
A person must not take adverse action against another person because the other person:

(a)is or is not, or was or was not, an officer or member of an industrial association; or
(b)engages, or has at any time engaged or proposed to engage, in industrial activity within the meaning of paragraph 347(a) or (b); or
(c)does not engage, or has at any time not engaged or proposed to not engage, in industrial activity within the meaning of paragraphs 347(c) to (g).

…

347 Meaning of engages in industrial activity
A person engages in industrial activity if the person:
(a)becomes or does not become, or remains or ceases to be, an officer or member of an industrial association; or

(b) does, or does not:
…
(ii)organise or promote a lawful activity for, or on behalf of, an industrial association; or
(iii)encourage, or participate in, a lawful activity organised or promoted by an industrial association; or
…
(v)represent or advance the views, claims or interests of an industrial association;

…
Division 7 – Ancillary rules
360 Multiple reasons for action
For the purposes of this Part, a person takes action for a particular reason if the reasons for the action include that reason.

361 Reason for action to be presumed unless proved otherwise
(1) If:

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

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

…
550Involvement in contravention treated in same way as actual contravention

(1)A person who is involved in a contravention of a civil remedy provision is taken to have contravened that provision.
(2)A person is involved in a contravention of a civil remedy provision if, and only if, the person:

(a)has aided, abetted, counselled or procured the contravention; or
(b)has induced the contravention, whether by threats or promises or otherwise; or
(c)has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention; or
(d)has conspired with others to effect the contravention.

Section 793 governs situations where it is necessary to consider the conduct of a body corporate for the purposes of determining whether a corporation engaged in adverse action. That section provides, relevantly:
793     Liability of bodies corporate
Conduct of a body corporate
(1)       Any conduct engaged in on behalf of a body corporate:
(a)by an officer, employee or agent (an official) of the body within the scope of his or her actual or apparent authority;
…
is taken, for the purposes of this Act and the procedural rules, to have been engaged in also by the body.
State of mind of a body corporate
(2)If, for the purposes of this Act or the procedural rules, it is necessary to establish the state of mind of a body corporate in relation to particular conduct, it is enough to show:
(a)that the conduct was engaged in by a person referred to in paragraph 1(a) … ; and
(b)that the person had that state of mind.
Meaning of state of mind
(3)       The state of mind of a person includes:
(a)the knowledge, intention, opinion, belief or purpose of the person; and
(b)the person’s reasons for the intention, opinion, belief or purpose.
In Board of Bendigo Regional Institute of Technical and Further Education v Barclay (2012) 248 CLR 500, French CJ and Crennan J considered ss 346 and 361 of the Act. Their Honours said:
[44] There is no warrant to be derived from the text of the relevant provisions of the Fair Work Act for treating the statutory expression “because” in s 346, or the statutory presumption in s 361, as requiring only an objective enquiry into a defendant employer’s reason, including any unconscious reason, for taking adverse action. The imposition of the statutory presumption in s 361, and the correlative onus on employers, naturally and ordinarily mean that direct evidence of a decision-maker as to state of mind, intent or purpose will bear upon the question of why adverse action was taken, although the central question remains “why was the adverse action taken?”.
[45]This question is one of fact, which must be answered in the light of all the facts established in the proceeding. Generally, it will be extremely difficult to displace the statutory presumption in s 361 if no direct testimony is given by the decision-maker acting on behalf of the employer. Direct evidence of the reason why a decision-maker took adverse action, which may include positive evidence that the action was not taken for a prohibited reason, may be unreliable because of other contradictory evidence given by the decision-maker or because other objective facts are proven which contradict the decision-maker’s evidence. However, direct testimony from the decision-maker which is accepted as reliable is capable of discharging the burden upon an employer even though an employee may be an officer or member of an industrial association and engage in industrial activity.
(Footnotes omitted)
Their Honours said that the judgment of the High Court in General Motors-Holden’s Pty Ltd v Bowling (1976) 51 ALJR 235 (“Bowling”) remained authoritative as s 361 did not differ in relevant aspects from its legislative predecessors. Their Honours continued at [62]:
Secondly, it is a related error to treat an employee’s union position and activity as necessarily being a factor which must have something to do with adverse action, or which can never be dissociated from adverse action. It is a misunderstanding of, and contrary to, Bowling to require that the establishment of the reason for adverse action must be entirely dissociated from an employee’s union position or activities … The onus of proving that an employee’s union position and activity was not an operative factor in taking adverse action is to be discharged on the balance of probabilities in the light of all the established evidence.
Gummow and Hayne JJ held at [104]:
… An employer contravenes s 346 if it can be said that engagement by the employee in an industrial activity comprised “a substantial and operative” reason, or reasons including the reason, for the employer’s action and that this action constitutes an “adverse action” within the meaning of s 342.
Their Honours continued at [127]:
In determining an application under s 346 the Federal Court was to assess whether the engagement of an employee in an industrial activity was a “substantial and operative factor” as to constitute a “reason”, potentially amongst many reasons, for adverse action to be taken against that employee. In assessing the evidence led to discharge the onus upon the employer under s 361(1), the reliability and weight of such evidence was to be balanced against evidence adduced by the employee and the overall facts and circumstances of each case; but it was the reasons of the decision-maker at the time the adverse action was taken which was the focus of the inquiry.
In Bowling, Mason J stated at 241:
Section 5(4) imposed the onus on the [employer] of establishing affirmatively that it was not actuated by the reason alleged in the charge. The consequence was that the [employee], in order to succeed, was not bound to adduce evidence that the [employer] was actuated by that reason, a matter peculiarly within the knowledge of the [employer]. The [employee] was entitled to succeed if the evidence was consistent with the hypothesis that the [employer] was so actuated and that hypothesis was not displaced by the [employer]. To hold that, despite the sub-section, there is some requirement that the prosecutor brings evidence of this fact is to make an implication which in my view is unwarranted and which is at variance with the plain purpose of the provision in throwing on to the [employer] the onus of proving that which lies peculiarly within his own knowledge.
In Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd (2014) 88 ALJR 980; [2014] HCA 41, French CJ and Kiefel J said at [7]:
The focus of the enquiry as to whether s 346(b) has been contravened is upon the reasons for [the employer] taking the adverse action. This is evident from the word “because” in s 346, and from the terms of s 361. The enquiry involves a search for the reasoning actually employed by [the employer]. The determination to be made by the court is one of fact, taking account of all the facts and circumstances of the case and available inferences.
The parties’ submissions
The Union submits that as Ms Smith proposed to make an enterprise bargaining agreement, she was exercising or was proposing to exercise a workplace right within the meaning of s 341(1)(b) and (2)(e) of the Act.The Union also submits that Ms Smith’s actions constituted engagement in an industrial activity within the meaning of s 347(b)(ii), (iii) and (v). The Union positions its case on the fact that Ms Smith’s recruitment extended to each of her colleagues and not merely Ms Clignett.
The Union’s principal submissions may be summarised as follows. The three reasons asserted by Mr Hinton, Ms Brown and Ms Matchett as the reasons for Ms Smith’s dismissal are spurious. Although the Further Amended Defence alleges that that there was a complaint that Ms Smith made false statements to “employees”, on the evidence it is only Ms Clignett who alleges that a false statement was made to her. The evidence supports a finding that Ms Smith did not make misleading representations to Ms Clignett. The allegation that Ms Smith’s employment was terminated as a result of complaints of bullying and harassment by Ms Clignett does not stand up to scrutiny. Ms Smith’s employment was terminated as a result of her efforts to recruit staff members as members of the Union, which is activity protected under the Act.
The Union submits that Mr Hinton is liable by reason of s 550 of the Act. The Union claims that Mr Hinton was a guiding force behind MDBR’s decision to terminate Ms Smith’s employment and that his anti-union sentiment influenced the directors of MDBR.
The respondents pleaded that the conduct in which Ms Smith was engaged cannot be characterised as the exercise of workplace rights or industrial activity. This is based on the contention that Ms Smith had told Ms Clignett that it was necessary to achieve 60% membership of the Union in order to access the wage increases provided by the Fund. The respondents pleaded that because Ms Smith was engaged in the “promotion of falsehoods” regarding access to the Fund, the protections in ss 340 and 346 of the Act are not applicable. The conduct of Ms Smith was outside the meaning of the expressions “workplace right” in s 341(1) and the meaning of “industrial activity” in s 347(b). However, during oral argument, senior counsel for the respondents indicated that the respondents did not pursue this argument. I would, in any event, have rejected that argument. Assuming that Ms Smith made the false statements alleged, she did so inadvertently and without any intention to mislead. Even assuming that making false statements could take her conduct outside s 341(1) and 347(b), it would not do so in the circumstances of this case.
The respondents’ case is that they have proved that Ms Smith’s termination was for reasons that do not include her exercise of a workplace right or her proposal to engage in industrial activity. The Further Amended Defence pleads that the real reasons for her dismissal were that the respondents received Ms Clignett’s complaint that Ms Smith had made false and misleading representations and that Ms Smith had bullied and harassed Ms Clignett. They submit that it is also necessary to view Ms Smith’s dismissal against the background of the two prior complaints by parents about Ms Smith’s conduct.
The respondents submit that in circumstances where it was not put to Ms Clignett in cross-examination that her complaint was not genuine and there was no suggestion that the complaint was procured by the respondents, the real reason for her termination is, as Mr Hinton, Ms Brown and Ms Matchett testified, Ms Smith’s bullying and harassment of Ms Clignett. This contention differs from the way the respondents’ case is pleaded, namely that the real reasons included the receipt of a complaint from Ms Clignett concerning bullying and harassment. The submission seems to set a higher hurdle for the respondents than does the pleading. However, I will decide the case on the basis that the respondents need not prove that there was bullying and harassment of Ms Clignett, but that they were motivated by Ms Clignett’s complaint of bullying and harassment.
The respondents contend that Mr Hinton, Ms Brown and Ms Matchett are honest witnesses whose evidence as to the reasons they gave for the dismissal should be accepted. They argue that the evidence demonstrates that these witnesses were not opposed to trade unions or their staff joining a trade union. They submit, rather, that the termination was based upon the way in which Ms Smith carried out her recruiting activities and the history of prior complaints by parents.
Analysis of evidence
Mr Hinton
It is necessary to say something more about Mr Hinton’s relationship with MDBR and Ms Brown and Ms Matchett.
My impression is that the Mother Duck organisation is a close knit and tight one, bound together by Mr Hinton’s authority, drive and obvious regard and affection for Ms Brown, Ms Matchett and the other former employees who run the franchisee businesses. In turn, it is clear that Ms Brown and Ms Matchett treat Mr Hinton with considerable respect and affection. Mr Hinton seems to be something of a patriarchal figure. One indication of the closeness of the relationship is the form of address used amongst Mr Hinton and those running the franchisee businesses and other employees. Mr Hinton is known as “Mr Denis”, Ms Brown is known as “Miss Carol” and Ms Matchett is known as “Miss Gabby”. Mr Hinton maintains a close relationship with the franchisee businesses. He likes to keep a strong personal bond with the workforce. He visits each centre once a fortnight and then has lunch with those running the centres.
Ms Brown and Ms Matchett regularly discuss the operation of the Bracken Ridge Centre with Mr Hinton. They seek his advice and have high regard for the advice that he provides. They turned to Mr Hinton for advice concerning the termination of Ms Smith’s employment.
Mr Hinton’s evidence was that in about April 2013 he was told by Ms Brown and Ms Matchett over a lunch meeting that Ms Smith had been organising union activities within the Bracken Ridge Centre. He deposed that while he does not personally support union activities, he was unconcerned by the activities at the Bracken Ridge Centre as the Petrie branch had previously been unionised and had continued to operate well. He understood that the Union had been attempting to generate more memberships on the back of the Fund. His only concern with this was the fact that the Union had been publishing inaccurate information by indicating that a minimum of 60% membership was required in order to be eligible for the pay rise available through the Fund and that union membership would not cost anything because it was fully refundable via tax. Mr Hinton deposed that he had observed that the Union had published on its website words (later removed) to the effect that the enterprise agreement could only be brought about by the Union and that the childcare centre needed a minimum of 60% union membership to be eligible for the Fund.
Mr Hinton stated that Ms Smith’s dismissal was unrelated to any workplace right or industrial activity. He stated that union involvement is a matter of personal prerogative for each of the staff and is of no concern to the directors, provided the activities do not adversely impact upon the day to day operations of the centres.
Mr Hinton deposed that any failure to respond to Ms Clignett’s “concerns of ongoing harassing behaviour perpetrated by Mrs Smith” may have placed Ms Clignett at risk of psychological harm. He also stated that he was concerned that the conduct of Ms Smith in pursuing other staff members destroyed the atmosphere of the Bracken Ridge Centre.
Mr Hinton stated that at the Termination Meeting, Ms Smith did not deny Ms Clignett’s allegations and did not respond to the allegations after being invited to do so at the meeting. As a consequence Mr Hinton stated that, “we confirmed to Mrs Smith that we would be dismissing her from her role at Mother Duck Bracken Ridge because we could not tolerate harassing behaviour and unprofessional conduct in the centre.”
Under cross-examination, Mr Hinton maintained that Ms Smith’s involvement in recruiting fellow employees as members of the Union in order to attempt to achieve an enterprise agreement was no part of the reason for her dismissal. An important part of Mr Hinton’s evidence was his repeated claim that he did not oppose employees in the Mother Duck organisation being members of the Union and did not oppose the workforce being unionised. However, I consider that this expressed view is inconsistent with earlier comments made by Mr Hinton in writing.
Mr Hinton’s document of 15 April 2013 is scathing about the impact of a unionised workforce upon the workplace and the loss of the culture of the Mother Duck centres that would be associated with a unionised workforce. He accepted that the document represented his views at the time. The document is inconsistent with Mr Hinton’s statements in his affidavit that, “I was unconcerned by the activities at the Bracken Ridge branch”. It is inconsistent with his oral evidence that “union membership has never been a problem for us”. It is inconsistent with his answer, “No, not in the least” to the question, “You were concerned about that recruitment activity, weren’t you?” It is inconsistent with his evidence that, “We did – we were not that concerned about union membership in our centres. Exactly the same thing had happened in Petrie. It was no problem to us.”

In Mr Hinton’s letter of 17 April 2013, he set out three reasons for the Mother Duck organisation rejecting participation in the Fund. The first reason was that participation in the fund would include “fee restraint” when the criteria for price control had not been developed so that no business would take such a risk. The second reason was that, “Union involvement in our centres could be highly undesirable. Unions are adversorial [sic] by nature, and the Mother Duck culture is one of caring and consideration for others”. The third reason was that “Price control and union interference in the management of our centres would lead to a substantial loss of profit and lower occupancy levels.”
It is clear that Mr Hinton’s concern with participation in the Fund was the possibility of union involvement in and interference with the management of the Mother Duck centres, as well as price control. The letter is inconsistent with Mr Hinton’s answer, “No”, to the question, “You saw the Early Years Quality Fund and the requirement for enterprise bargaining as being likely to lead to union interference in the Mother Duck workplaces?” The letter is inconsistent with Mr Hinton’s oral evidence that, “Price control was the – the issue that stopped us in our tracks at Mother Duck with this thing was not the Union”.
Mr Hinton knew that the aim of the Union was to obtain 60% membership amongst the staff of each centre. He knew that Ms Smith was attempting to recruit staff at the Bracken Ridge Centre. I consider that Mr Hinton’s document of 15 April 2013 and letter of 17 April 2013 clearly demonstrate that he viewed increased union involvement in the Mother Duck centres as undesirable. He therefore must have viewed Ms Smith’s activities as undesirable.
There are also other indications in aspects of Mr Hinton’s affidavit that his attitude to increasing union membership at the Bracken Ridge Centre was not indifferent. His statement that union involvement was of no concern to the directors was qualified by the words “provided those activities do not adversely impact upon the day to day operations of the centres.” It is clear from his document of 15 April 2013 that he thought that union involvement would have such adverse impacts. Mr Hinton also deposed that “the conduct of Mrs Smith in pursuing other staff members destroyed the atmosphere at the Bracken Ridge centre”. By his reference to “staff members”, Mr Hinton cannot have been referring only to Ms Smith’s attempts to recruit Ms Clignett alone, but must have been referring to attempts to recruit members of the staff more generally. This seems to tie in with the attitude expressed in his letter of 17 April 2013 that union involvement would be detrimental to the culture of the Mother Duck centres.
Mr Hinton’s document distributed on 15 April 2013 and his letter of 17 April 2013 are likely to be more accurate representations of Mr Hinton’s opinions, being written at a time when litigation was not in contemplation.
Mr Hinton stated that in April 2013, the Petrie centre was unionised and that proceeded without any management opposition. Mr Hinton relied on this as an indication that he was not concerned by Ms Smith’s attempts to recruit staff at the Bracken Ridge Centre as members of the Union. However, Mr Hinton did not suggest anything that he could lawfully have done to stop the Petrie centre being unionised and does not explain what it is that management refrained from doing.
I reject Mr Hinton’s evidence to the effect that he was unconcerned by Ms Smith’s activities in recruiting employees as members of the Union at the Bracken Ridge Centre. I find that Mr Hinton was concerned about the possibility that the workforce at the Bracken Ridge Centre and other centres could become unionised which could then lead to increased union involvement in the centres and interference with the management of the centres. Mr Hinton was concerned that this could lead to a loss of profitability of the centres and a deterioration of the atmosphere or culture of the centres.
Ms Brown
Ms Brown’s affidavit and her letter of 15 May 2013 refer only to the harassment of Ms Clignett as a reason for the termination. However, she signed the Termination Letter of 16 May 2013, which must be taken to also represent Ms Brown’s reasons for the dismissal. Those reasons include the false representation about there being a requirement of 60% Union membership for eligibility for the Fund and the earlier conduct which resulted in warnings.
Ms Brown did not expressly depose that Ms Smith’s recruitment of staff members was not a reason for her termination and does not say that the reasons given in the Termination Letter were the only reasons. Counsel for the Union relied on National Tertiary Education Union v Royal Melbourne Institute of Technology [2013] FCA 451, where Gray J said at [20]:
…Even if the reasons advanced as actual reasons for the decision are accepted as such, the absence of evidence that there were no additional reasons, or that the actual reasons did not include the alleged proscribed reasons, will usually result in a failure to rebut the presumption.
However, I consider that it is to be inferred that Ms Brown and Ms Matchett, contend that there were no additional reasons and that their actual reasons did not include the proscribed reasons from MDBR’s denial in the Further Amended Defence of the Union’s allegation that the termination was because of Ms Smith’s exercise of workplace rights or engagement in industrial activity. I also draw that inference from MDBR’s particularisation of the reasons and Ms Matchett’s for the termination, which is limited to the three reasons and from Ms Brown’s evidence that they had no problem with union membership growing in the Bracken Ridge Centre.
Under cross-examination, Ms Brown agreed that as far as she was aware, Ms Smith was the only person at the Bracken Ridge Centre who was recruiting members for the Union.
Ms Brown was cross-examined about Mr Hinton’s document of 15 April 2013. Ms Brown indicated that she agreed with what was written in the sections of that document about Loss of Culture and Loss of Profit.
Ms Brown was taken to Options 1 and 2 in that document. She was asked, “So the meeting rejected any proposition that would have resulted in unionising of the centres?” She answered, “That wasn’t the reason. No, that’s not – that’s not correct.” I consider that answer is inconsistent with the Management Committee’s unanimous rejection of Option 1 which was “Unionise and apply for funding accepting the risks” and with Ms Brown’s agreement with the sections of the document indicated above.
Later, Ms Brown was asked a series of questions about her attitude towards the Union coming into the Bracken Ridge Centre, the Fund and an enterprise agreement. She suggested that she had no problem with union membership growing in the Bracken Ridge Centre; but, on the other hand, she said that she was concerned about change occurring within the centre. Although she did not make a direct admission, I consider that the effect of her answers was that increasing union membership at the Bracken Ridge Centre and entering into an enterprise agreement would involve change that was undesirable.
Ms Brown was taken to Mr Hinton’s letter of 17 April 2013, which indicated that the Management Committee had unanimously decided not to be involved with the Fund and set out the reasons for that decision. Ms Brown indicated that she agreed with the reasons set out in the letter.
I conclude that Ms Brown did consider that increased membership of the Union and any enterprise agreement was undesirable. I conclude that Ms Brown considered that Ms Smith’s attempts to recruit staff as members of the Union were undesirable. I draw those conclusions because of Ms Brown’s endorsement of the views expressed by Mr Hinton in his document of 15 April 2013 and her endorsement of the reasons set out in Mr Hinton’s letter of 17 April 2013. This attitude was also reflected in some of her answers under cross-examination. I reject Ms Brown’s evidence to the effect that she was unconcerned about increased union membership at the Bracken Ridge Centre.
Ms Brown stated that at the Termination Meeting she had given Ms Smith an opportunity to respond to all of the allegations and complaints made by Ms Clignett, but she did not, and “[s]o, therefore, we decided to terminate”. Counsel for the Union put to her that the decision to terminate had been made prior to the meeting. Ms Brown said:
The decision had been – was – was pretty set in my mind. However, if Margaret had have said to me, “This is untrue. I deny” and I would have looked into the situation further.
I reject Ms Brown’s evidence to the effect that no final decision had been taken on 15 May 2013 to dismiss Ms Smith and that she would have been open to investigating the situation further if Ms Smith had denied the allegations during the Termination Meeting on 16 May 2013. The letter of 15 May 2013 clearly and unambiguously stated that, “It is our decision to terminate your employment because of continued unprofessional conduct.” Similarly, Ms Brown deposed that she had concluded (on 12 or 13 May 2013) that she could not have the sort of behaviour alleged by Ms Clignett occurring within the centre and, on this basis, was of the view that it was necessary to terminate Ms Smith’s employment. Further, if Ms Brown had been open to the prospect of not dismissing Ms Smith, it is likely that she would have informed Ms Smith that her response to the allegations was sought for that reason. No such statement was made to Ms Smith, who was left with the impression that there was no point in responding because her employment had already been terminated. In addition, Ms Brown, Ms Matchett, Ms Prestedge and Mr Hinton had made no attempt to investigate Ms Clignett’s complaints by asking her any questions or asking her to explain or elaborate upon any aspects of the complaints; they were prepared to accept those complaints at face value in order to decide to terminate Ms Smith’s employment. I consider that Ms Brown’s assertion that she would have been open to conducting an investigation if Ms Smith had denied the allegations at the Termination Meetings to be implausible in these circumstances.
I am also assisted in that conclusion by the fact that the Termination Letter had been prepared prior to the Termination Meeting. That letter set out in considerable detail the fact of and the reasons for Ms Smith’s termination. It is implausible that, the letter having expressed their views in advance of the meeting, Ms Brown and Ms Matchett were prepared to change their minds and investigate Ms Clignett’s allegations if Ms Smith had denied them.
Ms Brown may well have had views which were not against unions in a general sense, but I consider that Ms Brown, like Ms Matchett, was heavily influenced by Mr Hinton’s views against union involvement in the Bracken Ridge Centre (in which she had a proprietary and financial interest). It is obvious that both Ms Brown and Ms Matchett had great respect for Mr Hinton’s advice concerning the running of the franchise business. That respect for his views is demonstrated not only by the fact that they regularly discussed the operation of the Bracken Ridge Centre with Mr Hinton, but by the fact that they sought his advice specifically in relation to the termination of Ms Smith’s employment and that he was allowed to be heavily involved in the termination, including drafting the Termination Letter of 16 May 2013 and effectively conducting the meeting with Ms Smith on that day. In view of their reliance on Mr Hinton’s advice, it is unlikely that they departed from his views concerning the adverse effect of union involvement with the Bracken Ridge Centre. In fact, they expressly endorsed the views set out in Mr Hinton’s letter dated 17 April 2013.
Ms Matchett
Ms Matchett deposed that in or around April 2013, Ms Clignett approached her and Ms Brown. Ms Clignett told her that she had been approached by Ms Smith to join a union, that it was being done in secrecy and that she had been told not to let Ms Matchett and Ms Brown know. About a week later Ms Clignett complained that “she was being properly harassed”. Ms Matchett said that they told Ms Clignett to put her concerns in writing.
Ms Matchett stated that she and Ms Brown came to the decision that they had to protect their staff from the harassment. She stated that at the Termination Meeting Ms Smith was offered an opportunity to respond to the allegations, but she was cut off by Mr Smith who recommended that she refrain from saying anything now and that she should “leave it for later”. Ms Matchett stated that on the basis of Ms Smith’s decision not to offer any response, they considered that it was appropriate to dismiss Ms Smith from her position of employment.
Ms Matchett did not attend the Management Committee meeting on 17 April 2013. Ms Matchett said under cross-examination that she and Ms Brown had agreed that they would not vote for Option 1. She stated that she had decided to vote against that because she and Ms Brown were able to afford to fund a pay rise themselves. In response to a question suggesting that she was against Option 1 because she did not want the Bracken Ridge Centre to be unionised, she said “[t]hat was never an issue”. Ms Matchett said that she agreed with the decision taken at the Management Committee meeting.
Ms Matchett was questioned about the document written by Mr Hinton and distributed on 15 April 2013. She was asked whether the material under the heading “Loss of Culture” was consistent with her beliefs at the time. It seems to me that Ms Matchett was reluctant to answer the question and the answer she provided was somewhat evasive. She said, “I can’t recall – I can’t – I can’t recall how I felt at – at that specific time.”
Ms Matchett said that she agreed with the contents of Mr Hinton’s letter of 17 April 2013. When asked whether she agreed with the reasons set out at points 1, 2 and 3 and if she endorsed them she answered, “I can’t recall. I can’t recall what – back then”. I thought that Ms Matchett was being evasive. She did accept that she did not at any time signify that she disagreed with that material and that she distributed it.
I thought that Ms Matchett was also evasive in other aspects of her evidence. For example, she was asked, “Without the announcement of the Early Years Quality Fund you would not have in the normal course decided on a pay rise at that time?” Her answer was, “We had paid our staff well above award for a long time.” When she was pressed for a responsive answer, she answered, “No”.
Ms Matchett maintained that Ms Clignett’s initial report about Ms Smith’s activity in seeking to recruit staff was not of concern to her. She accepted that she questioned Ms Clignett as to who was in the Union. When asked why she had asked that, she said, “I don’t know exactly why I said it. It wasn’t any – any sinister reason. It was just out of curiosity”. Given that Ms Clignett deposed that Ms Matchett also asked about how Ms Smith had gone about recruiting staff and given that Ms Matchett then relayed the information about Ms Smith’s activities to Ms Brown and Mr Hinton, the suggestion that she did not know why she asked who was in the Union or that she was merely curious is implausible.
When it was put to Ms Matchett that there was no investigation of the matters set out in Ms Clignett’s statutory declaration, Ms Matchett said that she and Ms Brown spoke to other staff members who Ms Clignett said had similar experiences with Ms Smith. She said of those staff members:
They were not willing at all to put anything in writing. They were too intimidated. They felt really uncomfortable by the whole situation.
It is not clear from that answer whether the other staff members were intimidated and felt uncomfortable by the approach of Ms Brown and Ms Matchett or by Ms Smith’s conduct. Accordingly, I will not give any weight to that comment insofar as it may suggest that they were intimidated by Ms Smith’s conduct.
Ms Matchett stated that she did not speak to Ms Clignett directly in order to investigate what was in the statutory declaration because she trusted what she was saying.
Ms Matchett also indicated that the Termination Letter dated 16 May 2013 which was given to Ms Smith towards the conclusion of the Termination Meeting had been drafted by Mr Hinton the day before. She said she stood by the contents of that letter.
In re-examination, Ms Matchett was asked to give the basis of the decision of the Bracken Ridge Centre to not apply to the Fund. She answered:
We wanted to find our own pay rise for our staff and we wanted to – to keep the culture of the centre running the way it always has been.
This was the first time in her evidence that Ms Matchett acknowledged that there was a reason for deciding not to apply for funding other than the fact that she and Ms Brown were able to fund the wage rise from their own pockets. In the context of Mr Hinton’s letter of 17 April 2013, which Ms Matchett had initially said she agreed with, I consider that Ms Matchett’s reference to the “culture” of the Bracken Ridge Centre must have been a reference to a culture without union involvement. Ms Matchett wanted to maintain the culture of the centre the way it always had been; that is, without union involvement.
I do not accept Ms Matchett’s evidence to the effect that she was unconcerned about greater union involvement in the Bracken Ridge Centre and about the possibility of attempts to negotiate an enterprise agreement. Nor do I accept her evidence to the effect that she was unconcerned by Ms Smith’s approaches to her fellow employees to attempt to recruit them to the Union. Ms Matchett’s claims in that regard are contradicted by the content of the letter of 17 April 2013, which Ms Matchett initially said she agreed with and which she caused to be distributed to staff and parents. Again, that letter, prepared when litigation was not in contemplation, provides a more accurate indication of Ms Matchett’s thinking at the relevant time than her evidence in this proceeding. I am assisted in rejecting those aspects of Ms Matchett’s evidence by her reluctance to answer questions put to her in cross-examination and her evasiveness.
The respondents placed emphasis on the fact that Ms Matchett had been a member of a union in the past. The suggestion was that she was not opposed to unions. However, my comments with respect to Ms Brown’s attitude to increased union involvement in the Bracken Ridge Centre and the influence of Mr Hinton apply equally to Ms Matchett.
Ms Smith and Ms Clignett
There are two main points of difference between Ms Smith’s and Ms Clignett’s evidence. Ms Clignett’s statutory declaration indicated that Ms Smith said that in order for the Bracken Ridge Centre to receive the pay rise, 60% of the staff needed to be members of the Union; Ms Smith said that she told Ms Clignett that the best way for the pay rise to be achieved was by 60% of staff joining the Union, but did not advise her that it was compulsory to do so. Ms Clignett also declared that Ms Smith was short with her and rude to her at different times; Ms Smith said that she was not short or rude with Ms Clignett, although she was disappointed that Ms Clignett did not wish to participate in the Union and her disappointment may have been obvious to Ms Clignett. It is not strictly relevant for me to resolve these conflicts, because what is important is whether Ms Brown, Ms Matchett and Mr Hinton believed the content of Ms Clignett’s affidavit to be true. However, I will say something about these conflicts since substantial attention in the affidavits, cross-examination and submissions was directed to issues of credit between Ms Clignett and Ms Smith.
As to the first of these issues, I prefer the evidence of Ms Clignett. In the newsletter the Union published on 20 March 2013, the only way suggested for staff to access the Fund was by 60% of the staff of each childcare centre joining the Union. In cross-examination, Ms Smith was asked whether she knew of any way to get the wage rises apart from signing up 60% of staff into the Union and having the Union negotiate with management. Her frank answer was, “No”. That answer is consistent with Ms Smith understanding that it was necessary for 60% of the staff of each centre to be members of the Union in order to achieve an enterprise agreement and access the wage rises from the Fund. It is likely that she passed that information on to Ms Clignett. (That conclusion makes it unnecessary for me to decide whether or not the Union representatives made a similar statement at the meeting on 15 April 2013 or whether there was any such statement on the Union’s website.)

I also prefer Ms Clignett’s recollection because Ms Clignett seems to have been particularly affected by Ms Smith’s attempts to recruit her as a member of the Union and therefore had reason to remember the conversation in detail, whereas Ms Smith did not.
Ms Smith’s statement to Ms Clignett may have been literally true – it is not clear whether the statement was made before or after Mr Hinton announced that the Mother Duck organisation would not seek to access the Fund. However, I will accept that Ms Smith did make a false or misleading representation to Ms Clignett concerning the need for 60% of the staff to be members of the Union in order to access the Fund. I do not suggest that Ms Smith knew that the information was false or misleading, but it was.
I accept that Ms Smith was not deliberately short or rude to Ms Clignett. I thought that Ms Smith was frank and straight-forward in her denial of such allegations and Ms Burns’ evidence provides some support for Ms Smith’s denial. Ms Smith said that she was disappointed that Ms Clignett did not join the Union and Ms Clignett may have perceived her disappointment as shortness or rudeness.
I accept that Ms Clignett perceived Ms Smith to be short with her on one occasion and rude on another. Ms Smith struck me as a somewhat taciturn person not inclined to waste more words than she needs to. Accepting the accuracy of Ms Clignett’s statutory declaration, her reaction to Ms Smith’s statements and comments seems to be extraordinarily sensitive. It is difficult to understand how Ms Smith saying that she needed the membership form back that day would cause her to feel “extremely pressured”. Mr Hinton gave evidence that he saw Ms Clignett at the Bracken Ridge Centre on what appears to be 15 May 2013, that she was crying and that her distress had a substantial impact on him. It is difficult to understand how Ms Smith’s conduct could have had such an effect on Ms Clignett. Ms Clignett describes “lots of whispering circles” in her statutory declaration, which meant that the staff who had decided to join the Union were talking together. She seems to have felt excluded from those conversations because she had not joined the Union. The tenor of her statutory declaration seemed to be that it was division and tension in the workplace that was a particular cause of her distress. All of this indicates that Ms Clignett’s great distress was not due to some fault or wrongdoing on the part of Ms Smith, but Ms Clignett’s extraordinary sensitivity to her perception of Ms Smith being short or rude with her and to the divisions that she perceived in the workplace as a result of some staff joining the Union and others not.
Ms Clignett’s statutory declaration indicated that on the second occasion in which she was approached by Ms Smith, Ms Smith had said that once 60% of the staff were members, the Union could come in and make Ms Brown and Ms Matchett sign an enterprise agreement for the pay rise to go ahead. In cross-examination it was put to Ms Clignett that Ms Smith said that if 60% of union membership was obtained in the centre, then the Union would get involved and seek to negotiate an enterprise agreement with Ms Matchett and Ms Brown. Ms Clignett’s response was that she did not believe that was what was said, but it was very similar to what was said. I do not think that anything turns on the resolution of precisely what was said, but that answer demonstrates that evidence of what is said in short conversations based on imperfect recollections can take on a sinister or innocent connotation depending on the inclination and perception of each of the parties to the conversations.
Consideration
It is clear that from March 2013, Ms Smith attempted to recruit her fellow employees as members of the Union. She did this in order to secure at least 60% of the employees of the Bracken Ridge Centre as members so that the Union would then attempt to negotiate an enterprise agreement with MDBR with a view to accessing the Fund and obtaining a wage rise. Mr Hinton, Ms Brown and Ms Matchett were well aware of what Ms Smith was attempting to do at the time her employment was terminated.
I find that Ms Smith proposed to exercise a workplace right within s 341(1)(b) of the Act by proposing to make an enterprise agreement.
I find that Ms Smith engaged and proposed to engage in industrial activity within s 347(b)(ii), (iii) and (v) of the Act by: encouraging fellow employees to become members of the Union; participating in the process of making an enterprise agreement; and by representing or advancing the views, claims or interests of the Union by seeking to increase the membership of the Union.
I find that MDBR took adverse action within the meaning of that expression in s 342(1) of the Act against Ms Smith by dismissing her from her employment.
The issue in dispute is whether MDBR has proved that it did not take adverse action against Ms Smith “because” she proposed to exercise a workplace right or because she engaged or proposed to engage in the industrial activity.
The respondents’ Further Amended Defence pleads that the reasons for the termination of Ms Smith’s employment were:
(a)the receipt of a complaint from Ms Clignett of Ms Smith’s engagement in workplace bullying and harassment;
(b)the receipt of a complaint from Ms Clignett of Ms Smith having sought to coerce staff members to join the Union using false and misleading information about the Fund in her efforts to persuade staff members to join the Union; and
(c)the receipt of complaints from parents in respect of Ms Smith’s “aggressive and unprofessional conduct”.
It is necessary to decide whether these reasons were real reasons for Ms Smith’s dismissal. It is also necessary to decide whether there was another reason for the dismissal, namely Ms Smith’s attempts to recruit fellow employees to join the Union with a view to an enterprise agreement being negotiated.
The resolution of that issue largely involves a question of credit. It is necessary to decide whether Ms Brown and Ms Matchett were honest in their denial that Ms Smith’s attempts to recruit members with a view to the negotiation of an enterprise agreement did not form a part of their reasons for dismissing her. It is also necessary to consider Mr Hinton’s reasons for advising that Ms Smith’s employment should be terminated and the influence of Mr Hinton’s reasons on Ms Brown and Ms Matchett.
My rejection of the evidence of Mr Hinton, Ms Brown and Ms Matchett regarding their lack of concern about increasing union membership at the Bracken Ridge Centre and Ms Smith’s recruitment activities means that I will treat their evidence on other matters with considerable caution. Another reason for caution is my rejection of the evidence of Ms Brown and Ms Matchett concerning their willingness to conduct an investigation, rather than terminate Ms Smith’s employment, if she had denied the allegations contained in Ms Clignett’s statutory declaration.
The fact that Mr Hinton, Ms Brown and Ms Clignett were concerned about Ms Smith’s attempts to recruit her fellow employees suggests, but does not does not inevitably lead to, the conclusion that they were influenced by that concern to dismiss her.
It is convenient to begin with the respondents’ claim that one of the reasons for Ms Smith’s dismissal was the complaint by Ms Clignett that Ms Smith sought to coerce staff members to join the Union using false and misleading information about the Fund.
It is clear from the evidence that Mr Hinton was concerned from an early stage that the Union was spreading false information. That was evident from the meeting with Union representatives, from Mr Hinton’ document of 15 April 2013 and from his letter to parents and staff of 17 April 2013. Ms Clignett’s statutory declaration asserted that Ms Smith told her that in order for the Bracken Ridge Centre to receive the pay rise, 60% of the staff needed to be members of the Union. I accept that Mr Hinton, Ms Brown and Ms Matchett believed the statutory declaration to be true and believed that Ms Smith made a false representation to Ms Clignett. The Termination Letter of 16 May 2013 indicates that one of the reasons for the termination was the false and misleading representations that were attributed to Ms Smith. I accept that it was, in fact, one of the reasons for the dismissal.
The Union did not plead that if a reason for the dismissal was that Ms Smith had made or was alleged to have made false and misleading representations, her dismissal was nevertheless because she was proposing to exercise a workplace right or because she had engaged or proposed to engage in industrial activity. Neither was any submission to that effect developed. Therefore, I accept that the fact that Ms Smith was alleged to have engaged in false or misleading conduct in attempting to recruit another staff member was not a proscribed reason under ss 340 and 346 of the Act.
I consider that the complaints made by two parents in the past and the reprimand and warning given to Ms Smith as a result were genuinely a part of the reasons for the termination. While those matters made a contribution, it is not asserted by the respondents that they, by themselves, justified the dismissal.
The next reason given by the respondents for Ms Smith’s dismissal was the receipt of Ms Clignett’s complaint that Ms Smith had engaged in “workplace bullying and harassment”. It is readily understandable that Ms Clignett’s allegations concerning Ms Smith’s conduct towards her would cause concern to her employer.
However, I do not accept that Ms Clignett’s complaints could be described as complaints of “workplace bullying and harassment”. I consider that Mr Hinton, Ms Brown and Ms Matchett in the Termination Letter of 16 May 2013 overstated or exaggerated the effect of Ms Clignett’s complaint.
Ms Clignett initially made a verbal complaint to Ms Brown, then made the complaint in writing and then transposed that complaint into the statutory declaration. The evidence of each of Ms Brown, Ms Matchett, Mr Hinton and Ms Prestedge was that they did not ask Ms Clignett any questions about her complaint. Therefore, the statutory declaration was the sole source of the information set out in the Termination Letter of 16 May 2013 insofar as it concerns Ms Smith’s conduct towards Ms Clignett. To that, it may be added that they were able to observe that Ms Clignett was upset.
In her statutory declaration, Ms Clignett’s complaint about Ms Smith’s conduct during Ms Smith’s first approach to her was that she said that in order for the Bracken Ridge Centre to receive the pay rise, 60% of the staff needed to be members, but there is no suggestion of shortness or rudeness. In respect of the second approach, Ms Clignett’s complaints were that Ms Smith said that Ms Brown and Ms Matchett should not be told about the discussion and that Ms Smith “became quite short with me and told me that if I wanted to let the team down to go ahead.” Ms Clignett’s complaint about the third approach was that Ms Smith said that she needed the joining pack filled out that afternoon, causing Ms Clignett to feel “extremely pressured”. Ms Clignett’s complaint about the fourth approach was that Ms Smith said that Ms Clignett’s reasoning for not joining the Union was ridiculous and that she was “rude even” and said that Ms Clignett obviously did not care about the pay rise. The last complaint must be read in the context of Ms Clignett’s earlier statement that she had made a false excuse for not joining the Union to the effect that she was concerned that it was being done behind Ms Brown’s and Ms Matchett’s backs, that this excuse was conveyed to Ms Smith, and that Ms Smith had evidently interpreted that excuse as meaning that Ms Clignett was concerned that if she joined the Union she would get into trouble with Ms Brown and Ms Matchett.
The language of Ms Clignett’s statutory declaration falls to be compared to the interpretation of that declaration by Mr Hinton who drafted the Termination Letter of 16 May 2013 and of Ms Brown and Ms Matchett who signed and adopted that letter.
The Termination Letter asserts that management “has received complaints of workplace bullying and harassment from staff members.” It may be noted that the respondents expressly plead in their Further Amended Defence that the conduct of Ms Smith complained of was directed at one staff member, despite Ms Clignett’s statutory declaration referring to Ms Smith’s conduct towards two other staff members. No evidence was called from any other staff members of any complaint of workplace bullying and harassment. No evidence was led from Mr Hinton, Ms Brown or Ms Matchett that they believed that staff members other than Ms Clignett were bullied or harassed. The references to complaints from “staff members” in this part of the Termination Letter and elsewhere in it must therefore be regarded as an exaggeration. I also consider that the allegation that Ms Clignett had been bullied and harassed was an exaggeration for reasons that I will discuss.
The Termination Letter went on to state that Ms Smith “has apparently relentlessly pursued other staff members harassing them to join the union”. The conduct of Ms Smith towards Ms Clignett could hardly be described as a “relentless” pursuit. Ms Smith approached Ms Clignett on four occasions. Ms Clignett does not suggest that she ever told Ms Smith or otherwise indicated to her that she did not wish to be approached again. In fact, Ms Clignett does not assert that she ever told Ms Smith that she did not want to join the Union. After the third approach it was conveyed to Ms Smith that Ms Clignett was not going to join and Ms Smith evidently interpreted this as meaning that she was too scared to do so. Ms Clignett says that the fourth conversation was the last real conversation that she had with Ms Smith about joining the Union. She does not suggest that Ms Smith attempted to approach her again. The matter that appears, from the statutory declaration, to have prompted Ms Smith to complain was not any continuing approaches from Ms Smith, but the “whispering circles with Margaret and other staff members”. Ms Clignett’s statutory declaration does not support the claim in the Termination Letter that Ms Smith had “relentlessly pursued other staff members.”
In addition, Ms Clignett’s statutory declaration does not support the allegation in the Termination Letter that Ms Smith not only relentlessly pursued other staff members, but was “harassing them to join the Union.” It is difficult to see how Ms Smith’s approaches to Ms Clignett could be described as harassment in circumstances where there was no indication by Ms Clignett that Ms Smith’s approaches were unwelcome. Mr Clignett may have made it clearer after the fourth approach that she was not interested in joining the Union and Ms Smith did not talk to Ms Clignett again about joining. The description of Ms Smith’s conduct as “harassing” staff is an exaggeration.
The Termination Letter asserts that Ms Smith:
has been totally unprofessional in her zeal to recruit union members in the staff in that she is reported to have continually moved around the centre harassing staff, and interrupting their work.
It is the case that Ms Clignett’s statutory declaration indicated that Ms Smith’s discussions with staff members interrupted their work, but the suggestion that she continually moved around the centre harassing staff is an overstatement and exaggeration.
The Termination Letter indicated that the current situation:
whereby some staff members are somewhat frightened of Ms Margaret Smith and seeking to avoid her because of continued aggression and harassment, cannot be allowed to continue…
Again, the only staff member who reported any difficulty with Ms Smith was Ms Clignett. She did not suggest in her statutory declaration that she was frightened of Ms Smith. This is also an overstatement and exaggeration.
I do not accept that the allegations made by Ms Clignett in her statutory declaration can be described as allegations of bullying and harassment against Ms Smith. Ms Clignett’s allegations were confined to Ms Smith being short with her, pressuring her by asking that the membership form be returned on the same day and being “rude even” on the last occasion. Ms Clignett did not use the words “bullying” or “harassment” or “coerced” or “frightened” so the use of those words in the Termination Letter must represent an interpretation of the conduct described by Ms Clignett. It is possible that by some subjective and idiosyncratic interpretation of the statutory declaration, Mr Hinton, Ms Brown and Ms Matchett genuinely believed that Ms Clignett’s statutory declaration did allege that Ms Smith had bullied or harassed Ms Clignett. However, the exaggerations and overstatements in the ways that I have described are telling and I do not accept that they had any such genuine belief.
I consider that Mr Hinton, Ms Brown and Ms Matchett probably did have some genuine concern about Ms Smith’s conduct towards Ms Clignett and Ms Clignett’s reaction to Ms Smith’s approaches. However, I consider that they seized upon Ms Clignett’s complaint and exaggerated the effect of it in the Termination Letter to justify Ms Smith’s dismissal. The exaggeration casts further doubt upon the respondents’ claim that the only reasons for Ms Smith’s dismissal were the three pleaded reasons.
In my opinion, the most significant factor influencing Ms Smith’s dismissal was the fact that she was recruiting staff as members of the Union. Contrary to their claims, Mr Hinton, Ms Brown and Ms Matchett were concerned about the prospect of increased union involvement in the workplace through Ms Smith’s recruitment activities. They were concerned about the impact of union involvement upon the profitability of the Bracken Ridge Centre and the culture of the Centre. This is clearly indicated by Mr Hinton’s document of 15 April 2013 and Ms Brown’s agreement with the content of it. It is also indicated by Mr Hinton’s letter of 17 April 2013 and the endorsement of its contents by Ms Brown and Ms Matchett.
In these circumstances, I do not accept the evidence of Mr Hinton, Ms Brown and Ms Matchett insofar as they contended that the only reasons for the termination of Ms Smith’s employment are those that are pleaded. An additional reason for Ms Smith’s termination was her attempts to recruit staff as members of the Union and that reason was a substantial and operative factor. I therefore find that MDBR took adverse action against Ms Smith because she proposed to exercise a workplace right and had engaged in or proposed to engage in industrial activity. I find that the first respondent contravened ss 340 and 346 of the Act.
It is clear that Mr Hinton was intimately involved in the decision to dismiss Ms Smith. The decision was ultimately that of Ms Brown and Ms Matchett as directors of MDBR. However, Ms Brown and Ms Matchett sought Mr Hinton’s advice about the dismissal and he provided them with advice that her employment should be terminated. He drafted the Termination Letter which set out the grounds for dismissal. He effectively conducted the Termination Meeting on behalf of MDBR, Ms Brown and Ms Matchett. Mr Hinton acknowledged his role in the decision to terminate Ms Smith’s employment when he deposed that:
we confirmed to Mrs Smith that we would be dismissing her from her role at Mother Duck Bracken Ridge because we could not tolerate harassing behaviour and unprofessional conduct in the centre.
I find that Mr Hinton counselled the contravention of ss 340 and 346 by MDBR. Accordingly, Mr Hinton is taken pursuant to s 550(1) and (2)(a) to have contravened ss 340 and 346 of the Act.
The parties agreed that if I found that the respondents had contravened s 340 or s 346 I should then proceed to determine the question of compensation, but hear submissions on penalty at a later date.

There is no dispute between the parties that Ms Smith should receive compensation for her loss of earnings since the date of her dismissal and there is no dispute as to the amount of that loss. The Union contends that Ms Smith should also be compensated for her loss of annual leave and loss of earnings in the future, but the respondents argue to the contrary. These aspects of compensation received little attention in the submissions of the parties. I would prefer to receive more assistance concerning the principles upon which compensation may be ordered and the calculation of appropriate amounts before deciding upon compensation. Further submissions concerning compensation can be provided when I hear submissions on penalty.

I certify that the preceding one hundred and fifty-nine (159) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rangiah.
Associate:
Dated: 11 December 2014

Citation:	United Voice v MDBR123 Pty Ltd [2014] FCA 1344
Parties:	UNITED VOICE v MDBR123 PTY LTD and DENIS HINTON
File number:	QUD 498 of 2013
Judge:	RANGIAH J
Date of judgment:	11 December 2014
Catchwords:	INDUSTRIAL LAW – general protections – adverse action – member of applicant dismissed from employment with first respondent – employee attempted to persuade colleagues to become members of the applicant – where another employee made a complaint of bullying and harassment in relation to recruitment activities – whether employee’s conduct constituted exercising a workplace right or engaging in industrial activity – whether the protections in ss 340 and 346 of the Fair Work Act2009 (Cth) (“the Act”) apply – whether reasons given by respondents were the real reasons for dismissal – whether adverse action taken for prohibited reason – whether second respondent involved in contravention pursuant to s 550 of the Act – failure to discharge onus in s 361 of the Act
Legislation:	Fair Work Act 2009 (Cth) ss 340, 341, 341(1), 341(1)(b), 342, 342(1), 346, 347, 347(b), 347(b)(ii), 347(b)(iii), 360, 361, 545, 546, 547, 550, 550(1), 550(2)(a), 793 Federal Court of Australia Act 1976 (Cth) s 51A
Cases cited:	Board of Bendigo Regional Institute of Technical and Further Education v Barclay (2012) 248 CLR 500 cited Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd (2014) 88 ALJR 980; [2014] HCA 41 cited General Motors-Holden’s Pty Ltd v Bowling (1976) 51 ALJR 235 cited National Tertiary Education Union v Royal Melbourne Institute of Technology [2013] FCA 451 cited
Date of hearing:	31 March 2014 to 4 April 2014
Place:	Brisbane
Division:	FAIR WORK DIVISION
Category:	Catchwords
Number of paragraphs:	159
Counsel for the Applicant:	Mr RE Reed
Solicitor for the Applicant:	Hall Payne Lawyers
Counsel for the Respondents:	Mr JE Murdoch QC
Solicitor for the Respondents:	Carter Newell Lawyers for the hearing period of 31 March 2014 to 2 April 2014 and 4 April 2014.
Mr B Heath of Carter Newell Lawyers for 3 April 2014

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
FAIR WORK DIVISION	QUD 498 of 2013

JUDGE:	RANGIAH J
DATE:	11 DECEMBER 2014
PLACE:	BRISBANE