Woolley v Kronos Australia Pty Ltd
[2023] FedCFamC2G 57
Federal Circuit and Family Court of Australia
(DIVISION 2)
Woolley v Kronos Australia Pty Ltd [2023] FedCFamC2G 57
File number(s): BRG 297 of 2022 Judgment of: JUDGE VASTA Date of judgment: 8 February 2023 Catchwords: INDUSTRIAL LAW – application for discovery – order made – application for enforcement of discovery order – counter application for summary dismissal of part of claim – costs. Legislation: Federal Circuit and Family Court of Australia Act 2021 (Cth): s 143,
Fair Work Act 2009 (Cth): s 351, s 570
Division: Division 2 General Federal Law Number of paragraphs: 58 Date of last submission/s: 3 February 2023 Date of hearing: 30 January 2023 Place: Brisbane Solicitor for the Applicant: Russells Counsel for the Respondent: Mr Seck Solicitor for the Respondent: Seyfarth Shaw Australia ORDERS
BRG 297 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: JOSEPH WOOLLEY
Applicant
AND: KRONOS AUSTRALIA PTY LTD ACN 074 408 067
Respondent
order made by:
JUDGE VASTA
DATE OF ORDER:
8 February 2023
THE COURT ORDERS THAT:
1.The Respondent shall, within 21 days, make discovery of documents comprising all the information available to it that was used to justify all of the findings that were made in relation to all of the allegations mentioned in the letter dated 5 May 2022 (annexed to the Form 2 Claim filed on 18 July 2022).
2.The remainder of the Application in a Proceeding filed on 9 December 2022 be dismissed.
3.Paragraphs 5, 10, 11, 16, 17, 18, 19, 20, 21, 22 and 23 of the originating application filed 18 July 2022 be struck out.
4.The Respondent pay the costs of the Applicant of and incidental to these applications, fixed in the sum of $5,000.
5.The Applicant shall, by 20 March 2023, file and serve on the Respondent, the affidavits on which he intends to rely at the trial.
6.The Respondent shall, by 17 April 2023, file and serve on the Applicant, the affidavits on which it intends to rely at the trial.
7.The Applicant shall, by 29 April 2023, file and serve on the Respondent, any affidavits in reply on which he intends to rely at the trial.
8.The matter be referred to a Registrar of this Court for mediation pursuant to s.169 of the Federal Circuit and Family Court of Australia Act 2021 and r.30.14 of the Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 on a date to be fixed by the Registrar after first liaising with the parties as to their availability.
9.This matter be adjourned for mention/directions only at 9:30am on 24 July 2023 in the Federal Circuit and Family Court of Australia at Brisbane.
10.The parties have liberty to apply.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
JUDGE VASTA
Introduction
On 18 July 2022, the Applicant, Joseph Woolley, filed an originating application in this Court. In that application, the Applicant alleged that his employer, the Respondent company Kronos Australia Pty Ltd, took adverse action against him on the basis of his age and therefore contravened s 351 of the Fair Work Act 2009 (Cth) (“the FW Act”).
The application also alleged that the Respondent conducted an investigation into allegations against the Applicant and, in conducting that investigation in the manner in which it did, breached the employment contract. The Court has jurisdiction to hear this part of the claim pursuant to its accrued jurisdiction.
On 10 October 2022, the matter came before me on its first court date. There was an application made for discovery. I made an order for limited discovery on that date.
On 9 December 2022, the Applicant filed an interlocutory application alleging that the Respondent had not complied with the order for discovery. That application also sought an order for further and better particulars of the response of the Respondent.
On 23 December 2022, the Respondent filed an interlocutory application seeking that I summarily dismiss the claim for breach of contract or, alternatively, I strike out those paragraphs in the application that relate to the allegation of breach of contract.
The matter came before me on 30 January 2023 and written submissions for the Respondent were filed about two hours before the hearing was to commence. I heard the substance of the interlocutory application of the Applicant (as well as the reply by the Respondent). Due to time pressures and the lateness of the filing of written submissions by the Respondent, I only heard the submissions of the Respondent (but not the submissions of the Applicant) in their interlocutory application.
I ordered that the Applicant file written submissions and that the Respondent file reply submissions. I have now received those submissions.
Factual Matrix
On 22 December 2015, the Applicant and Respondent entered into a contract of employment whereupon the Applicant would be employed by the Respondent in the position of business development manager. It would seem that the Applicant was born in either 1962 or 1963.
The contract had a number of “standard conditions”. Clauses 11.1, 11.3, 11.4 and 11.6 of that contract relevantly provided that:
11.1 Your employment may be terminated at any time after the probationary period:
(a)by you giving to the Company the required period of notice in writing as set out in your letter of offer; or
(b)by the company giving to you the required period of notice set out in your letter of offer or by the paying you an amount equal to your Base Salary (or such greater amount required by statute) in lieu of notice for that period or in part by giving you notice and in part by making a payment to you in lieu of notice.
…
11.3 Your employment may be terminated by the Company at any time without notice:
(a) if you are guilty of serious misconduct, including without limitation:
(i) wilfully or deliberately behaving in a way that is inconsistent with the continuation of the contract of employment;
(ii) commission of any act or omission that causes imminent or serious risk to:
(A) the health or safety of a person; or
(B) the reputation, viability or profitability of the company’s or any of its Related Companies’ business;
(iii) in the course of your employment, engaging in theft, fraud or assault;
(iv) intoxication at work; or
(v) refusing to carry out a lawful and reasonable instruction;
(b) if you participate in conduct that could bring you, the Company or any of its Related companies into disrepute;
(c) if you are unable to obtain or cease to hold an appropriate visa/work permit allowing you to lawfully work in Australia;
(d) If you materially neglect your duties;
(e) If you breach any material provision of this Agreement; or
(f) On any other ground for which the Company would be entitled to terminate your employment without notice at law.
11.4The Company may suspend you while investigating any matter which the Company believes could lead to the Company exercising its right under clause 11.3 or taking other disciplinary action.
…
11.6 The rights of termination under clause 11 and clause 2 apply according to their terms and are not limited by any other terms of this Agreement (including implied terms).
The Applicant performed his duties and was promoted in July 2021.
On 1 April 2022, the Respondent sent the Applicant a letter advising him that they were undertaking an investigation into allegations of misconduct against him arising from complaints from customers. The Applicant attended a meeting with representatives of the Respondent on 7 April 2022 accompanied by his solicitor (as a support person). At that meeting, the Applicant said that he required more detail of the allegations and was going to request further information and documents from the Respondent.
There was correspondence between the Respondent and the solicitor for the Applicant as to what information would be given to the Applicant. In that correspondence, the Applicant said that the complaints were untrue and were part of discriminatory conduct against him because of his age.
On 5 May 2022, the Respondent wrote to the Applicant in these terms:
Dear Joe,
We have reviewed your response to the allegation provided to you in writing on 1 April and discussed in a meeting with you on 7 April. We provided you with additional particulars of the allegations by letter dated 12 April.
We note that we have previously addressed the issues you have raised alleging you do not have sufficient information to respond to the allegations, including by providing further information on each individual allegation. In any event, it is clear you have been able to fully respond to these alleged incidents based on your thirteen-page response letter dated 14 April 2022. You clearly understand the allegations made and we do not accept that you did not have sufficient information or time to response to these allegations.
We have now completed our investigation of all the allegations put to you, including by taking into account your written response dated 14 April 2022.
Allegations
We have investigated all the allegations made against you and considered all the available evidence, including the information you have provided to us. We have interviewed additional witnesses where we regarded it as being appropriate and necessary.
We have determined that, on the balance of probabilities, the allegations against you in our letter dated 1 April 2022 have been substantiated.
Your Claims
We have also considered the additional claims made in your letter dated 14 April 2022 as follows:
“It is clear to me that this is an orchestrated litany of malicious fabrications, intended to bring about the dismissal of a long-standing and extremely successful employee. Two reasons emerge from the material known to me – first, the company’s dissatisfaction with my age (as voiced by Liam Watson and Aaron Thorne) and, secondly, some resentment on the part of Liam Watson following my move to the Enterprise sales team from October 1, 2021, under the management of Aaron Thorne.”
UKG entirely rejects your assertion that there has been “an orchestrated litany of malicious fabrications.
This company has investigated your claims you have made and based on all the information we have available to us, we find these claims are unsubstantiated. The company entirely rejects your assertions that these issues have played any part in the company’s decision to raise these allegations with you. Furthermore, they have not played any part in the outcome determined by the company in relation to this matter (which is set out at the end of this letter below).
Outcome
On the basis of the findings made in relation to the allegation against you, your conduct constitutes misconduct and is in breach of UKG’s Code of Conduct. It has jeopardized UKG’s relationship with valued customers.
Given the totality of conduct, and the seniority of your role and the importance of customer relationships to our business, your conduct has fallen significantly short of behaviour we expect from a Business Development Manager IV. We no longer have the necessary trust and confidence in you.
The cumulative effect of all these incidents has led us to the decision that your ongoing employment is untenable and a decision has been made to terminate your employment.
Your dismissal will take effect as of 5 May 2022, and the organisation will make you a payment in lieu of your notice period of 5 weeks. You will also be paid all accrued but unused annual leave calculated up to and including today. Upon return of all Company property, this will be paid to you in the May payroll.
If you have any questions concerning the financial aspects of your separation, please contact either Rebecca Moulynox, HR Manage [omitted] or [omitted] for assistance. I just want to remind you of your employment and post-employment contractual obligations to Kronos specifically, however not limited to Code of Conduct, confidentiality and intellectual property.
Yours sincerely
Rebecca Moulynox
Head of HR ANZ SEA
The Applicant ceased employment on that day and was paid the five weeks pay in lieu of notice as well as all of his statutory entitlements.
General Protections Claim
The Applicant has alleged that he was a subject of adverse action in that he was dismissed. He said that this adverse action was taken for a prohibited reason, namely discrimination based on his age.
Breach of Contract Claim
The Applicant has claimed that on a proper construction of the contract that, when the Respondent would exercise the powers of discipline, investigation and termination for alleged misconduct, the Respondent was obliged to act reasonably and in good faith. The Applicant claims alternatively that there is an implied term that when exercising those powers, the Respondent would act reasonably and in good faith.
The Applicant argues that the Respondent did not act reasonably and in good faith and therefore has breached the contract.
On a fair reading of the claim, the allegation of the Applicant is that the breach of contract led to the dismissal of the Applicant.
This is important because the claim for breach of contract is that the Applicant has been dismissed contrary to the contract and that this breach has resulted in damages to the Applicant.
During the course of the hearing, I had postulated that the breach of contract had led to the reputation of the Applicant being “stained” and that damages may have flowed from the findings being made without the due process having been undertaken. But this is clearly not what is being claimed.
Discovery
On 10 October 2022, I was asked to make an order for discovery. This was based on what was written in the letter of 5 May 2022 where the Respondent said that they had investigated all the allegations made against the Applicant and considered all the available evidence. Later in that same letter, the Respondent said that they had investigated the claims of the Applicant and “based on all the information we have available to us” they had found that there was no substance to those claims.
Cognizant of the fact that there was a breach of contract claim as well as the general protections claim, I considered that it was relevant for the Applicant to have all of the information that had been referred to in that letter. I made that very clear in what I had said to the parties in my ruling.
The parties said that they would devise a form of wording of the order consistent with what I had said and would give that to my Chambers. What was presented to my Chambers ended up being “the order of 10 October 2022”. Order 4 of those orders state that the Respondent shall “make discovery, confined to “all the information we have available to us” as mentioned in the letter dated 5 May 2022 that was used to justify the findings that were made in the letter”.
The Interlocutory Application by the Applicant – Discovery
The Respondent interpreted that order to mean that they had to make discovery of all the information they had relating to their rejection of the Applicant’s claims as to age discrimination. While this may have been an honest interpretation, it was an incompetent one and was totally contrary to everything that I had said during the hearing on 10 October 2022.
This is behaviour by the Respondent that is quite unreasonable and, while they may have been acting subjectively honestly, the only way to objectively describe the behaviour is that it is incompetent and obstructionist.
The Interlocutory Application by the Applicant – Particulars
The Respondent has argued that there is no power for the Court to order further and better particulars. The power of the Court to do so must come from the Rules. Whilst the Rules dictate that the Court can order further and better particulars in relation to a “pleading”, the definition of “pleading” does not include a Form 2 Application or Response.
The Applicant had submitted that this is a pedantic approach that flies in the face of common sense.
What the Applicant has submitted is that the response is vague and un-particularised in certain areas.
In paragraph 9(a), the Respondent refers to “other complaints”. The Applicant requests details and particulars of those other complaints.
In paragraph 9(b), the Respondent refers to having had caused to speak to the Applicant on several occasions about his behaviour. The Applicant requests details and particulars of those several occasions.
In paragraph 10, the Respondent refers to the Applicant receiving ratings lower than “exceptional” on several occasions. The Applicant requests details and dates upon any performance review that was labelled lower than “exceptional”.
In paragraph 14, the Respondent refers to the Applicant been intoxicated at a dinner and making an inappropriate comment about a female employee who then, on the next day, raised a concern with her manager about that comment. The Applicant requests details of what the actual comment was and who was the manager who received the complaint.
In paragraph 14(d), the Respondent referred to the time that the Applicant was given a promotion and that a “Mr Watson” provided his feedback. The Applicant requested details as to what this feedback was and how it was communicated.
The Interlocutory Application by the Respondent
The Respondent argues that the Applicant has no reasonable prospect of successfully prosecuting the breach of contract claim in this proceeding.
Section 143 of the Federal Circuit and Family Court of Australia Act 2021 (Cth) allows a Court to summarily dismiss an action, or part of an action, if the Court is of the view that an Applicant has no reasonable prospect of successfully prosecuting the proceeding, or a particular part of the proceeding. The section legislates that a proceeding, or part of a proceeding, need not be either hopeless or bound to fail for it to have no reasonable prospect of success.
Discussion
The breach of contract claim is predicated upon the allegation that the Respondent dismissed the Applicant pursuant to cl 11.3 of the contract. The Applicant points to the fact that the Respondent made actual findings of misconduct that would justify summary dismissal and the employment agreement was terminated from that day.
However, the other surrounding indicia do not indicate that this was a summary dismissal. The language that was used in the letter of 5 May 2022 does not correlate with the language of cl 11.3 of the contract of employment. There is no mention of the applicant being “summarily dismissed” or of him being found “guilty of serious misconduct”.
The Applicant was paid the five weeks’ notice period. This could only occur if the dismissal was one that occurred pursuant to cl 11.1 of the contract. I cannot see that there is any room to say that the Applicant was summarily dismissed but the company paid him the notice period out of the goodness of their hearts.
If the dismissal occurred pursuant to cl 11.1 of the contract, there can be no breach of the contract.
It may be different if the Applicant were claiming that the breach of contract led to findings which have now “stained” his character such that damages flowed. But the Applicant had claimed that the breach of contract led to the dismissal.
The Applicant has submitted that the “breach-of-contract” claim is intrinsically linked with the “general protections” claim, such that they should not be severed. I disagree. Whilst the Applicant may claim that the investigation, and even the making of findings, were a ruse to hide the fact that the reason for dismissal was discrimination relating to the age of the Applicant, this does not mean that there is an intrinsic link between the two claims.
In light of these conclusions, I cannot see how the Applicant has a reasonable prospect of prosecuting his claim for breach of contract.
I allow the application made by the respondent filed on 23 December 2022 and dismiss the part of the Applicant’s originating application that related to a claim for breach of contract.
The Other Applications
The general protections claim is one that must proceed. Notwithstanding that I made the order for discovery mostly because of the breach-of-contract claim, it is not an order that should be revoked.
What was intended by my order is very clear on the transcript of proceedings and would have been clear to any person who was in attendance at that hearing. The parties themselves formulated the words to give effect to my intention. It is regrettable that the parties then engaged in a totally unnecessary war of words which led to the filing of the application of the Applicant on 9 December 2022.
I should not have to clarify what it is that the parties themselves, having heard everything I said on 10 October 2022, have put in writing to reflect that intention. Nevertheless, to ensure that my intention is crystal-clear, I will make the order that has been suggested by the Applicant.
As for the application for further and better particulars, I do not see that there is, now, any utility in such particulars. As noted earlier, the request aims to clarify the pathway and reasoning for the findings made in the letter of 5 May 2022. This is not relevant to the general protections claim. The adverse action can be taken for an unreasonable purpose; it is only when it is taken for an unlawful purpose (as proscribed by the FW Act) that it becomes a matter for this Court to censure.
Costs
The Applicant has asked this Court to award costs. This is based upon a submission that the unreasonable act of the Respondent has caused the Applicant to incur costs (s 570(2)(b)).
There is merit to this submission.
Notwithstanding that the Respondent has successfully argued that the breach-of-contract claim should be summarily dismissed, it was an application that should have been brought much earlier. During the hearing, I commented that the chronology of events could lead the Court to conclude that the application was brought simply to try and avoid the consequences of not complying with my earlier order for discovery.
Counsel for the Respondent submitted that this was not the case, yet he could not explain why this application had not been made at the first court date.
Instead, there was a belligerence by the Respondent in refusing to comply with the spirit of the order that had been made for discovery having regard to what I had said on 10 October 2022, even if there could be a technical explanation that the words agreed to by both parties did not reflect that intention.
If that application had been made on 10 October 2022, then the request for discovery made by the Applicant, could well have failed. Instead there has been an incurring of costs by the Applicant which could, and should, have been avoided.
The failure to bring this action until 23 December 2022 was, in my view, an unreasonable act.
To avoid further costs, I will make a costs order in a fixed sum. In all the circumstances the respondent should pay the costs of the Applicant fixed in the sum of $5,000.
Orders
I will make an order allowing the Applicant’s application regarding discovery and dismissing the Applicant’s application regarding further and better particulars.
I will make an order allowing the Respondent’s application regarding summary dismissal. In the context of this application, this is best achieved by simply striking out the relevant paragraphs in the Originating Application filed on 18 July 2022.
I will make an order for costs as contained in these reasons.
I certify that the preceding fifty-eight (58) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Vasta. Associate:
Dated: 8 February 2023
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