Zarb v Australia and New Zealand Banking Group Limited
[2014] FCCA 967
•5 June 2014
FEDERAL CIRCUIT COURT OF AUSTRALIA
| ZARB v AUSTRALIA & NEW ZEALAND BANKING GROUP LIMITED | [2014] FCCA 967 |
| Catchwords: INDUSTRIAL LAW – Whether adverse action – discrimination – breach of employment agreement – terms implied into agreement to give it efficiency – employee resigned. |
| Legislation: Disability Discrimination Act 1992, ss.5(2)(a), 6(1), 15, 21A, 29A. Fair Work Act 2009, ss.342, 361, 570, 789FD. Federal Circuit Court of Australia Act 1999, s.18. |
| Jones v Queensland Tertiary Admissions Centre Ltd (No 2)(2010) 186 FCR 22 Renard Constructions (ME) Pty Ltd v Minister for Public Works(1992) 26 NSWLR 234 The Moorcock (1989) All ER 530 Grant v State of Victoria (The Office of Public Prosecutions) [2014] FCCA 17 |
| Applicant: | DAVID ZARB |
| Respondent: | AUSTRALIA & NEW ZEALAND BANKING GROUP LIMITED |
| File Number: | MLG 707 of 2012 |
| Judgment of: | Judge F. Turner |
| Hearing date: | 27 February 2014 |
| Date of Last Submission: | 13 March 2014 |
| Delivered at: | Melbourne |
| Delivered on: | 5 June 2014 |
REPRESENTATION
| Counsel for the Applicant: | Ms Gladman |
| Solicitors for the Applicant: | MAX Legal |
| Counsel for the Respondent: | Ms Dowsett |
| Solicitors for the Respondent: | Ashurst Australia |
ORDERS
All claims in the application filed 14 June 2012 are dismissed.
The respondent’s application for costs is dismissed.
All extant applications are dismissed and the matter is removed from the list of pending cases.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLG 707 of 2012
| DAVID ZARB |
Applicant
And
| AUSTRALIA & NEW ZEALAND BANKING GROUP LIMITED |
Respondent
REASONS FOR JUDGMENT
This matter involves claims by an ex-employee, Mr David Zarb (“Mr Zarb”) of Australia and New Zealand Banking Group Pty Ltd (“the Bank”) that:
·The Bank took “adverse action” against him;
·That the Bank discriminated against him because of his illness and injury; and
·That the Bank breached its Employment Agreement (“EA”) with him. That claim is made pursuant to the Court’s associated jurisdiction.
The meaning of “adverse action” is set out in s.342 of the Fair Work Act 2009 (the “FW Act”) as follows:
(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
(b) injures the employee in his or her employment; or
(c) alters the position of the employee to the employee's prejudice; or
(d) discriminates between the employee and other employees of the employer.2 a prospective employer against a prospective employee the prospective employer:
(a) refuses to employ the prospective employee; or
(b) discriminates against the prospective employee in the terms or conditions on which the prospective employer offers to employ the prospective employee.3 a person (the principal ) who has entered into a contract for services with an independent contractor against the independent contractor, or a person employed or engaged by the independent contractor the principal:
(a) terminates the contract; or
(b) injures the independent contractor in relation to the terms and conditions of the contract; or
(c) alters the position of the independent contractor to the independent contractor's prejudice; or
(d) refuses to make use of, or agree to make use of, services offered by the independent contractor; or
(e) refuses to supply, or agree to supply, goods or services to the independent contractor.4 a person (the principal ) proposing to enter into a contract for services with an independent contractor against the independent contractor, or a person employed or engaged by the independent contractor the principal:
(a) refuses to engage the independent contractor; or
(b) discriminates against the independent contractor in the terms or conditions on which the principal offers to engage the independent contractor; or
(c) refuses to make use of, or agree to make use of, services offered by the independent contractor; or
(d) refuses to supply, or agree to supply, goods or services to the independent contractor.5 an employee against his or her employer the employee:
(a) ceases work in the service of the employer; or
(b) takes industrial action against the employer.6 an independent contractor against a person who has entered into a contract for services with the independent contractor the independent contractor:
(a) ceases work under the contract; or
(b) takes industrial action against the person.7 an industrial association, or an officer or member of an industrial association, against a person the industrial association, or the officer or member of the industrial association:
(a) organises or takes industrial action against the person; or
(b) takes action that has the effect, directly or indirectly, of prejudicing the person in the person's employment or prospective employment; or
(c) if the person is an independent contractor--takes action that has the effect, directly or indirectly, of prejudicing the independent contractor in relation to a contract for services; or
(d) if the person is a member of the association--imposes a penalty, forfeiture or disability of any kind on the member (other than in relation to money legally owed to the association by the member).(2)Adverse action includes:
(a)threatening to take action covered by the table in subsection (1); and
(b)organising such action.
(3)Adverse action does not include action that is authorised by or under:
(a)this Act or any other law of the Commonwealth; or
(b)a law of a State or Territory prescribed by the regulations.
(4)Without limiting subsection (3), adverse action does not include an employer standing down an employee who is:
(a)engaged in protected industrial action; and
(b)employed under a contract of employment that provides for the employer to stand down the employee in the circumstances.
In a claim of adverse action, a “reverse onus” applies. Section 361 of the FW Act provides:
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.
(2)Subsection (1) does not apply in relation to orders for an interim injunction.
The claim of discrimination is made pursuant to s.342(1), Item 1(d) of the FW Act which provides that adverse action is taken by an employer against an employee if the employer “discriminates between the employee and other employees of the employer”.
The claim of breach of the EA is made within the “associated jurisdiction” of the Court. Section 18 of the Federal Circuit Court of Australia Act 1999 (“the FCC Act”) provides:
To the extent that the Constitution permits, jurisdiction is conferred on the Federal Circuit Court of Australia in respect of matters not otherwise within its jurisdiction that are associated with matters in which the jurisdiction of the Federal Circuit Court of Australia is invoked.
It is claimed that the Bank had an EA with Mr Zarb to provide him with the training required for him to perform his duties (post).
Statement of Claim
Mr Zarb filed a Statement of Claim on 14 August 2012 in which he claims:
·That he was employed by the Bank as a “direct employee” from March 2006 until 21 March 2012.
·That he filed an application to the Fair Work Commission (the “FWC”) to deal with the dispute and his dismissal on 18 May 2012, and as to alleged adverse action. The FWC issued a certificate that it was satisfied that all reasonable attempts to settle the dispute had been, or were likely to be unsuccessful;
·That in 2010 Mr Zarb sought, and was selected for, a position as a Loans Scenarios Consultant (“Consultant”) with the Bank.
·That on or about 9 July 2010, Mr Zarb entered into an EA with the Bank for the position of Consultant. That agreement includes a provision that:
“ANZ operates within the Financial Services Reform Act and all employees providing financial services to retail customers are required to do so efficiently, honestly and fairly. In accordance with this, ANZ is committed to ensuring all employees complete and maintain the required training to meet these customer-focussed outcomes. Upon commencing in your new position, ANZ may review your current training and qualifications in this regard. If necessary, ANZ may require you to undertake further training, consistent with these requirements.”
·That Mr Zarb commenced as a Consultant in August 2010;
·That the Bank failed to provide Mr Zarb with proper and sufficient training to enable him to perform his duties as a Consultant (post).
·That upon meeting with the new Loans Scenarios Manager Mr Glenn Cremin (“Mr Cremin”) in late February 2011, Mr Cremin said the following to Mr Zarb which undermined the ‘relationship of trust and confidence’:
(i)that he didn’t know why the applicant had been hired for the role;
(ii)that the applicant didn’t have the experience to do the role; and
(iii)if he was the hiring manager at the time he wouldn’t have given the applicant the job, but “now that you are here I have to deal with you”.
Mr Cremin denies making those comments.
·That Mr Zarb was informed (threatened) on 14 April 2011 that he would be placed on a Performance Improvement Plan (“PIP”) because he was not meeting his targets, and that the targets had not previously been communicated to him. At that meeting Ms Lisa Ericsson (“Ms Ericsson”) told Mr Zarb that he had two options:
(i)To work in Network…; or
(ii)To move across to Credit Cards
He was given the weekend to think about it.
·That Mr Zarb was under pressure to agree to move to a different position, further undermining trust and confidence.
·That the Mr Zarb felt bullied at the meeting on 18 April 2011 (Statement of Claim at [15(b)]) by being required to make a choice over the weekend about whether to move to Network or Credit Cards. (The Court finds that the proposal was put to Mr Zarb because it was clear to management that he could not perform the duties of a Consultant, and a move was therefore necessary).
·That Mr Zarb then received some training from Don Padmaperuma and after three weeks moved back as a Consultant. He was advised by Mr Cremin that he was required to assess home loan applications for four weeks, and needed to show improvement so that he could qualify for a Credit Assessment Discretion (“CAD”).
·
That on 16 July 2011, Mr Zarb was assaulted while on public transport and a finger on his right hand (his dominant hand) was fractured. Mr Zarb was absent from work from 18 July 2011 to
14 September 2011.
·That in October 2011 Mr Zarb complained to Mr Cremin that he was suffering from depression.
·That in October 2011 Mr Zarb was moved from Consultant to Credit Cards without notice.
·Mr Zarb was required to sit CAD tests on 31 January, 7 February and 5 March 2012. (The Court notes he did not pass any of them).
·That the CAD tests were not a fair or objective test of Mr Zarb’s skill and knowledge and that he was not provided with sufficient training to pass them.
·That Mr Zarb was discriminated against in the administration of the CAD tests because no allowance was made for his physical and mental impairments. (That claim is rejected by the Court (post)).
·That Mr Zarb was dismissed by the Bank on 21 March 2012, being told that the reason for his dismissal was that he had failed the third CAD test.
·That the Bank took adverse action against Mr Zarb
(a)By changing his duties from Consultant to Credit Assessment Officer:
(b)Because Mr Zarb exercised a workplace right;
(c)Because Mr Zarb had a disability or disabilities;
(d)By requiring Mr Zarb to take unfair CAD tests;
(e)By discriminating against Mr Zarb in the administration of the CAD tests;
(f)By dismissing Mr Zarb;
(g)By dismissing Mr Zarb because he was temporarily absent from work due to illness or injury;
·That the Bank did not:
(a)maintain trust and confidence in the execution of the Employment Agreement;
(b)act in good faith in the execution of the Employment Agreement;
(c)….
(d)provide a safe system of work for the applicant and take all reasonable steps to protect the safety of the applicant.
·That the Bank breached the employment agreement by failing to provide Mr Zarb with proper training and by changing Mr Zarb’s duties without notice.
Alleged Factual Background
Mr Zarb was employed full time by the Bank from March 2006 until 21 March 2012. In 2010 Mr Zarb sought and was selected for a position as a Consultant with the Bank. He entered into an EA for that position on 9 July 2010. He commenced as a Consultant in August 2010. A requirement of the position is that the occupants hold a CAD.
On 14 April 2011 Mr Zarb was told that he would be placed on a PIP as he was not meeting his targets. He was told that he had two options – to work in Network, or move to credit cards. He felt bullied when told this.
On 16 July 2011, Mr Zarb was assaulted and fractured a finger on his right hand. He complained of depression in October 2011.
He was moved to credit cards without notice in October 2011.
He was required to sit three CAD tests on 31 January, 7 February and 5 March 2012 but did not pass any of them. He was dismissed by the Bank on 21 March 2012 being told that the reason for his dismissal was that he failed the third CAD test.
Training
Mr Zarb alleges that the Bank failed to provide him with sufficient training to perform his duties as a Consultant. To perform those duties an employee is required to obtain a CAD.
The Court refers to the respondent’s Outline of Submissions filed
18 October 2013 where the following details are given about a CAD at [7] to [12] and [46]:
(7)In order to perform the second aspect of his role, the Applicant was required to obtain a Credit Approval Discretion (CAD). A CAD is an authority allowing a credit assessor to make a decision on whether to approve a customer’s application for a loan, credit card or mortgage up to a particular limit. Prior to obtaining a CAD, employees of the Respondent working in credit assessor roles (including the Applicant) are able to make recommendations regarding applicants, but cannot make decisions.
(8)In his role as Loans Scenario Consultant, the Applicant was provided with a copy of the Credit Assessment Manual, and partnered with a number of experienced personnel for training and development purposes. The Applicant did not sit the CAD test during his time in Loans Scenarios.
(9)In October 2011 the Applicant was transferred to Credit Cards. In that team, the Applicant was provided with a personalised training plan, which culminated in him sitting the CAD test.
(10)The Applicant sat, and failed, the CAD test on three occasions. Without a CAD, the Applicant was unable to approve customer credit (in the form of loans, credit cards or mortgages) on behalf of the Respondent.
(11)The Applicant was informed on 19 March 2012 that as a consequence of having failed the CAD test for a third time, his employment would be terminated.
(12)The Applicant was offered the choice of using the four weeks’ notice to access the Respondent’s career support services and other resources to find a role that did not require a CAD, or to be paid out the four weeks.
…
(46)At paragraph [4] of her affidavit, Ms Ericsson stated that the Respondent required all credit assessment officers to obtain a CAD. At paragraph [7] she stated:
…The CAD framework in an internal ANZ control designed to ensure that sound credit assessment decisions are made so that ANZ meets Australian Prudential Regulatory Authority governance requirements.
The Court refers to the Affidavit of Karunesh Sharma (the “Sharma Affidavit”) filed on 21 August 2013. At [23] he states:
(23)ANZ uses active operation management system (ATOM), to record how much time people have spent doing types of work. David allocated 375 hours to training on ATOM.
Attached at “KS-15” (pages 36-40) is a copy of an excel spread sheet of uploaded data that shows the hours David recorded in ATOM.
The Court notes that “David” is Mr Zarb. The Court notes from “KS-15” that Mr Zarb had 229 hours of training from October to December 2013 and 146.3 hours of training from January to March 2012. Mr Zarb entered those details into the records.
In addition Mr Sharma swears that:
(24)I offered to David, and he accepted, time during work hours to study before each test. This was not usual practice for other assessors. David had one or one and a half days to do this study. During this time I was available and told David to come to me with any questions. I said “If I’m not here mark your question down and when I come back we’ll discuss it”.
Dummy CAD test – January 2012
(25)A few days before David sat the CAD test the first time I gave him a dummy test. Normally assessors are not given dummy tests. The dummy test had five or six questions from part one and one or two questions from part two. It took David almost an hour to complete the dummy test. Based on the number of questions, the dummy test should have taken about 15 or 20 minutes to complete.
(26)The idea of the dummy test was to give David the opportunity to understand exactly what I wanted to see on his test.
(27)After David sat the dummy test I corrected it and went through the answers and explained to him on the whiteboard where he needed to improve. I tried to explain to him how he should be writing the test. In the dummy test David left half of the information out and just gave dot point answers. I thought the best way to help him was to give him one-on-one feedback. So I sat with him, explained and told him “this is how I want you to write the test”.
(28)I did not give David a copy of the dummy test to keep. I did not give it to his managers or place it on his file. I considered it to be just a tool to help David understand how to do the test.
First CAD test – 31 January 2012
(29)David sat his first CAD test on 31 January 2012 which I believe was in the 16th week of his training.
(30)Normally the CAD test takes between one and a half to two hours. I do not recall anyone else who I have trained for a CAD taking more than two hours for the test. David took between two and a half to three hours each time he sat the CAD test. I let David take as long as he needed when sitting the CAD test because I knew that he took almost an hour on the dummy test and I wanted to give him the opportunity to get his CAD. It took him almost three hours to complete the test.
(31)I told David before he sat down “if you are unclear about anything, I’m sitting there, come ask me and I’ll come explain it to you”, I do not distinctly remember David coming to ask me something on the first test, but he may have. For each test I made sure I was available during the CAD tests for this reason, I was just sitting across the room so David could open the door and come and speak to me.
(32)After David sat the test I marked it and he received 63%. A pass mark is 90%. Because David failed I sat with him and gave him feedback on each of his answers telling him where to improve. As I was going through the paper with David I marked up the paper.
(33)I gave David a full day with the marked test so that he could go through the paper. He was welcome to take a copy. I then asked for my copy back.
Attached at “KS-16” (pages 41-55) is a copy of the first CAD test.
Pursuant to the principles asserted and established in The Moorcock (1989) All ER 530, the Court finds that it is necessary to imply an addition into the clause in the EA (supra) by inserting the words “taking all reasonable steps to ensure” after the words “ANZ is committed to” in the third introductory clause of the EA. (Annexure ‘DZ1’ to the Affidavit of Mr Zarb affirmed 30 July 2013) and to delete the word “ensuring”.
The Court finds that the implied addition is “necessary to give the agreement such effacy as both parties must have intended that at all events it must have” per Bowen LJ (Ibid 534 and 538), and that the amended term is one to which both parties, as reasonable men would have agreed at the time of the agreement.
The law recognises that the parties may have intended to include terms in their agreement that were not articulated. Implied terms thus give effect to “the anxiety of courts, by various techniques, to promote fair and reasonable contract performance”. Renard Constructions (ME) Pty Ltd v Minister for Public Works(1992) 26 NSWLR 234 at p.271
If the clause is not amended the Bank would be required to give unlimited, indefinite training to an employee, even if the employee was incapable of doing it and learning from it – as here. That would not be fair and reasonable contractual performance.
The Court finds that Mr Zarb was given extensive training and ample opportunity to obtain a CAD. Normally assessors are not given dummy CAD’s (Sharma Affidavit [25]). Normally a CAD takes between one and a half to two hours (Ibid [30]). Mr Zarb took two to three hours for each test. He was allowed to take as long as he needed (Sharma Affidavit [30]).
It is clear that the Bank was trying to enable Mr Zarb to obtain his CAD – it departed from normal procedures to enable him to do so – but he still failed.
The Court finds that the Bank did not discriminate between Mr Zarb and other employees (s.342(1) Item 1(d) of the FW Act) but acted in favour of Mr Zarb. Procedures were modified to accommodate him. It is therefore not actionable by Mr Zarb. He has no grounds for the complaint of discrimination.
The Court finds that there has also been no discrimination in terms of s.15 of the Disability Discrimination Act 1992 (the “DD Act”). Here the Bank made reasonable adjustments for Mr Zarb but he was still unable to obtain his CAD, and by his own admission in evidence, he is unable to do the job of a Consultant. It is not reasonable to expect the Bank to give Mr Zarb never-ending training that would be an “unjustifiable hardship” (Ibid s.29A). Further, obtaining a CAD is an inherent requirement of the job (Ibid s.21A), and Mr Zarb is unable to carry out the inherent requirements of the work even where reasonable adjustments are made for him.
Mr Sharma’s Affidavit continues:
Second CAD test – 7 February 2012
(34)David sat his second CAD test on 7 February 2012. It was the same test as he had sat on 31 January 2012.
(35)Again, I asked him before he started if he was comfortable doing the test in two hours. I said “last time you took over two hours, are you comfortable to do it in two hours?” David asked me how long other people take. I did not want to stress him so I said “don’t worry about that”. David told me he was comfortable doing the test in two hours.
(36)It took David close to three hours to complete the test. I did not stop him at two hours. I let him have as long as he wanted.
(37)I did know that David had a problem with his finger and that he had difficulty typing. I think that was in the back of our minds as one thing that made us give him extended time on everything. At the end of the day I wanted to support him. I do not remember many people taking more than two hours to complete the test but I wanted to give David every opportunity. I never enforced any time limit on David in relation to taking the test. I allowed him as much time as he needed and the test was only over when David said he was finished and handed me the test.
(38)After David sat the second test I marked it, he received 84% which is a fail. Again I sat with David and gave him feedback on the test. After we went through the test I gave it to him for the day to go over and take a copy if he wanted to.
Attached at “KS-17” (pages 56-70) is a copy of the second CAD test.
Third CAD test – 5 March 2012
(39)David sat the third CAD test on 5 March 2012. The third was slightly different to the first and second tests. The reason I changed it was because it would not be a fair assessment of David’s ability to attain and maintain the CAD if he was allowed to sit the same test three times. I have never had to give a third CAD test to anyone I have trained previously.
(40)Again I asked David if he was ok with doing the test in two hours. I said “same as last time?” It took David longer than two hours to do the test but I let him continue, I did not stop him and he had as long as he wanted.
(41)As I do with every person I give the CAD test to, I tried to make sure I was available so that I could answer any questions during David’s third CAD test. I make it clear before they start that I am available if something is unclear. I told David “if you’ve got a question come and see me and I’ll try to explain it a bit better”.
(42)There was a typo in the third test. On page 10, scenario 4 it says “UMI 1256” and it should be “minus, UMI -1256”. David came out to see me because the question was not making sense. I was in a meeting so David went to a senior officer who told him to wait for me or attempt both scenarios, with a negative and a positive UMI. In the test David went ahead and explained both scenarios. He identified that the positive UMI did not make any sense and actually got a higher mark in this question than in other sections of the test.
(43)After David finished the test I marked it and he received 78% which is a fail.
(44)Because David had failed the test for a third time, when I sat down with him to go through his answers it was in the presence of his line manager Nirmala and another line manager Daniel.
Attached at “KS-18” (pages 71-87) is a copy of the third CAD test.
Additional comments about the CAD tests
(45)I prepared each of the CAD tests that David sat. In preparing the tests I chose and wrote the best questions that should be asked based on policy and procedures. The tests are agreed to as valid assessments of knowledge by both the business and the credit control department.
(46)David never raised any concerns with me about any of the tests not being fair or objective or the questions being ambiguous. He did raise an issue with an error – the typo in the third test.
(47)The first and second tests were exactly the same and David received a score of 64% the first time and 84% the second time he sat the test. Because David had already sat the same test twice, I gave him a different test on his third try. He received 78% of the third test. A pass mark id 90% in all the tests.
(48)The CAD test was brought in for Credit Cards in January 2011, almost a year before David started. The test was brought in to better align unsecured credit cards with other areas like mortgages which had had CADS since 2008. The CAD test was a good way of understanding people’s knowledge.
(49)Since the test was first introduced into the credit card team, David is the only person to have failed the test of the second attempt. I have done CAD test for one cards assessor after David’s CAD exam (the person passed) as I am less involved in training at the assessor level at the moment due to my involvement in projects and mortgage assessment.
Being bullied at work
This concept is defined in s.789FD of the FW Act as follows:
(50)A worker is bullied at work if:
(a)while the worker is at work in a constitutionally-covered business:
(i)an individual; or
(ii)a group of individuals;
repeatedly behaves unreasonably towards the worker, or a group of workers of which the worker is a member; and
(b)that behaviour creates a risk to health and safety.
(51)To avoid doubt, subsection (1) does not apply to reasonable management action carried out in a reasonable manner.
The Court observes that there must be “repeated unreasonable behaviour towards the worker”, which creates a risk to health and safety, and in any event the concept does not apply to reasonable management action carried out in a reasonable manner.
Here Mr Zarb has not established repeated unreasonable behaviour towards him by the Bank, or that it created a risk to his health or safety.
At the meeting on 18 April 2011, the choice given by the Bank was “reasonable management action carried out in a reasonable manner”: s.789FD(2).
Mr Zarb failed CAD tests on 31 January, 7 February and 5 March 2012, and the Bank took reasonable management action in a reasonable manner.
Applicant’s Submissions
CAD tests
Mr Zarb complains that he had to sit two hour CAD tests by hand (the evidence is that a time limit was not placed on him to finish the tests, and that other employees completed the test in 1 to 1 ½ hours).
Mr Zarb asserts that requiring him to sit a CAD test was adverse action contrary to s.340. The Court finds that that does not fit within the meaning of “adverse action” in s.342 of the FW Act. There was no discrimination against him. All employees in similar positions were required to have a CAD. Similarly, the way in which the three CAD tests were administered was not adverse action within s.342.
Mr Zarb submits that changing his reporting arrangements, duties and position was adverse action. The Court finds that transferring the employee to credit cards was not to Mr Zarb’s prejudice, as it was a less burdensome job which gave him time to receive training to sit his CAD, without a reduction in pay and conditions.
Mr Zarb alleges that expressed and implied terms in his EA were breached by the Bank. The Court rejects that submission.
Depression
The Court accepts that ‘depression’ is a disability within s.351(1) of the FW Act, if there is a medical diagnosis of it, and of its effects on the person with it. That evidence does not exist in this matter. There is no medical evidence of depression that would impact on the ability of Mr Zarb to obtain a CAD.
Reasonable Notice
Mr Zarb submits that he should have been given reasonable notice of termination of employment. The EA provided for the Bank to terminate his employment by giving 4 weeks written notice or pay in lieu (Clause 12.3). The evidence is that Mr Zarb opted for 4 weeks’ pay in lieu of notice.
Clause 1 of the EA contains a provision that:
“Any change to your position, reporting arrangements, duties or location will not constitute termination of your employment and will not entitle you to any benefits.”
Under the termination provisions in the EA, “reasonable notice” was all that was required to change the Mr Zarb’s position to credit cards. Mr Zarb submits that reasonable notice should have been three to four months.
Given the circumstances of this case – where Mr Zarb could not perform his duties and was given the option to transfer to a less burdensome position in credit cards, so that he could undertake training without any reduction in pay and conditions – the Court finds that the “weekend” was sufficient and reasonable notice of the change. It was being made for Mr Zarb’s benefit, so that he could retain his employment. The change took into account Mr Zarb’s “career considerations and personal circumstances” (EA cl.1), as far as they were known.
Discrimination
Mr Zarb alleges that being required to sit the CAD tests with an injured finger in the “standard time allocation” was indirect discrimination. This allegation is not soundly based; he was not given a time limit to complete the tests (Sharma Affidavit at [30]) and sat three CAD tests. Therefore reasonable adjustments were made for him.
The Court finds that the actions on the Bank were authorised by the DD Act and therefore not within the description of ‘adverse action’ in the FW Act (s.342(3)(a) of the FW Act).
Mr Zarb alleges discrimination in the administration of the CAD. The Court finds that the Bank made reasonable adjustments for Mr Zarb by removing a time restriction for the completion of the CAD (s.5(2)(a) of the DD Act). It is clear from each CAD completed by Mr Zarb that he was able to write (Annexures “KS-16”, “KS-17” and “KS-18” to the Sharma Affidavit). The evidence is that he wrote incorrect answers and that is why he failed.
Another reasonable adjustment that was made, was that after the answers to his first CAD were discussed with Mr Zarb, his second CAD contained exactly the same questions as the first CAD.
It is submitted that Mr Zarb’s absence from work affected his ability to undertake training. The Court finds that Mr Zarb’s training was modified to accommodate his absences and his rate of progress (Affidavit of Ms Ericson affirmed 21 August 20132 at [34]; Sharma Affidavit [6] to [12]).
Mr Zarb alleges that the time allocated for his CAD’s was not increased. That submission is rejected (supra).
Mr Zarb alleges indirect discrimination through the Bank requiring him to hand write his answers in the CAD. The completed CAD’s show that the Mr Zarb was able to write, and the evidence is that he failed because he gave incorrect answers – even to the second CAD, which contained exactly the same questions as the first CAD. There was no indirect discrimination that affected the outcome of the CAD tests [s.6(1)(b) and (c) of the DD Act].
Mr Zarb submits that it is inconceivable that the relevant officers of the Bank did not know about his depression until post termination. That is not so – Mr Zarb produces no medical evidence of it and of its effects. In any event, the Court finds that his depression was not a reason for the termination of his employment.
Mr Zarb submits that it is for the Bank to establish that the CAD test failures were not as a result of the finger injury or the depression.
The Bank has proven that the main cause of action is not that the “applicant failed the CAD tests because of discrimination” it is that “the Bank took adverse action against Mr Zarb” for a reason proscribed in s.340 of the FW Act. That has not been established. The Court refers again to s.342(3)(a) of the FW Act.
Mr Zarb submits that a termination of employment would have been unlikely if Ms Nirmala D’Souza (“Ms D’Souza”) had wanted to keep him in her team. That contention is rejected. A CAD is an inherent requirement for the position of Consultant – without one Mr Zarb was unable to perform the duties of his position. After receiving more than usual training and assistance, and after failing three CAD’s the Bank terminated his employment for that reason.
The applicant relies on the decision in Grant v State of Victoria (The Office of Public Prosecutions) [2014] FCCA 17. However, cases like the present must be decided on their individual facts. In Grant, “Mr Grant’s illness was quite clearly part of the reason why he was dismissed”. Here it was not. There “it was his illness on any view that led him to do the things that he did that caused his dismissal”. Here Mr Zarb failed his CAD tests because he gave incorrect answers.
Mr Zarb submits that the Court should find that the Bank decided that he was “too troublesome” an employee because he complained, had health problems and he was taking time off work. The evidence does not establish those contentions, the evidence establishes that the employment of Mr Zarb was terminated because he could not obtain a CAD, which was an inherent requirement for his position.
Indirect Discrimination
It is alleged that the Bank indirectly discriminated against Mr Zarb by imposing a condition or requirement that he obtain a CAD. However, obtaining a CAD is an inherent requirement of the position Mr Zarb held. That is an exception within s.21A of the DD Act. The Court finds that there was no discrimination in breach of the FW Act or the DD Act.
Mr Zarb submits that the Court should not accept the evidence of Ms Ericsson as she was “not willing to make any concessions, which adversely affects her credit”. That is not the logical inference. Having observed the witness giving evidence, the Court is satisfied that she is a truthful witness. The Court could more correctly infer that Ms Ericsson would not change her evidence because she was telling the truth. She made her decision after accepting advice from the Bank’s HR advisor that the failure of three CAD’s warranted the dismissal of Mr Zarb.
Mr Zarb seeks re-instatement to a position equivalent in status to the position he held. The Court finds that re-instatement to a Consultant or equivalent position would be absurd, as even after training, Mr Zarb showed to the Bank (and accepted in evidence) that he was not able to perform the duties of his position.
Further, having regard to the Court’s findings that the Bank did not do what is alleged, appointment to another position (without a CAD requirement) should not be forced on the Bank. That would not be re-instatement.
The respondent’s submissions
Mr Zarb alleges that he was subjected to adverse action:
a)by changes to his duties in being moved from a Consultant to Credit Assessment Officer in the credit cards team (Statement of Claim [28]);
b)by being required to sit a CAD test;
c)in the administration of CAD tests; and
d)by the termination of his employment.
The Court refers to the summary of evidence in the respondent’s submissions [18] to [21] as follows:
(18)On 13 October 2011 the Applicant was offered an option of transferring to a role in Credit Cards or remaining in Loans Scenarios. In cross-examination, the Applicant confirmed that he had worked in Credit Cards previously. The Applicant sat in Credit Cards for the day on 14 October 2011, and at the end of the day informed Ms Ericsson that he had decided to move to Credit Cards.[1]
[1] Ms Ericsson’s affidavit at [26] to [29].
(19)The transfer took effect from 18 October 2011.
(20)The Applicant chose to move to the new role. There was no change in the Applicant’s financial position as a result of the move.[2]
(21)On 18 October 2011, the Applicant met with Nirmala D’Souza and Daniel Whiteoak (the co-managers of Credit Cards) and Karunesh Sharma (credit coach in Credit Cards). Ms D’Souza says that she explained what was involved in the Applicant’s role, including that he would need to obtain a CAD by sitting a CAD test.”
[2] Exhibit R6
On the evidence, the Court finds that:
a)Mr Zarb was offered a transfer to credit cards;
b)there was no consequential change to his level or remuneration;
c)Mr Zarb agreed to the change in role.
The Court finds that the change in roles to credit cards was not a “dismissal” [s.386 of the FW Act]. Subsequent to failing three CAD tests, Mr Zarb’s employment was terminated for that reason.
The Court accepts the respondent’s written submissions that in paras.(b), (c) and (d) of Item 1 in s.362 the “meaning of adverse action” is follows:
Adverse action other than dismissal
(83)Paragraphs (b), (c) and (d) of the definition of adverse action in s342 of the FW Act were considered in Wolfe v Australia and New Zealand Banking Group Limited:[3]
[3] [2013] FMCA 65 at [81] to [83].
The terms ‘injures an employee in his employment’ and ‘alters the position of the employee to the employee’s prejudice’ were considered by the Court in the context of s.342 of the Act in Qantas Airways Limited v Australian Licensed Aircraft Engineers Association (“QANTAS Airways”).[4] The origins of those expressions, however, go back to Patrick Stevedores Operations No 2 Pty Ltd v MUA (“Patrick Stevedores”).[5]
[4] Qantas Airways Limited v Australian Licensed Aircraft Engineers Association (2012) 202 FCR 244 at [30]-[31].
[5] Patrick Stevedores Operations No 2 Pty Ltd v MUA (No 3) (1988) 195 CLR 1
In general it may be stated that:
· The phrase ‘injures the employee in his employment’ extends to any injury of a compensable kind, a legal injury or an adverse effect on an existing legal right.
· The phrase ‘alters the position of the employee to the employee’s prejudice’ is a broad additional category of adverse action which convers not only legal injury, but any adverse affection of, or deterioration in, the advantages enjoyed by the employee before the conduct in question; and
· A prejudicial alternation to the position of an employee for the purposes of s.342(1) may occur even though the employee suffers no loss or infringement of a legal right; it will occur if the alteration in the employee’s position is real and substantial rather than merely possible or hypothetical.[6]
[6] Klein v Metropolitan Fire and Emergency Services Board [2012] FCA 1402 at [84].
The issue of the meaning of ‘discriminates between employees [Item (1)(d)] is discussed… by Gordon J in her… decision in Klein v Metropolitan Fire and Emergency Services Board (“Klein”).[7] After examining the High Court decision in Waters v Public Transport Corporation (“Waters”)[8] and Board of Bendigo Regional Institute of Technical and Further Education v Barclay and Another (“Bendigo Tafe”),[9] her Honour concluded that the provisions in s.342(1) of the Act were not limited to direct discrimination and could encompass ‘indirect discrimination’:
[7] Klein v Metropolitan Fire and Emergency Services Board [2012] FCA 1402
[8] Waters v Public Transport Corporation (1991) 173 CLR 349.
[9] Board of Board of Bendigo Regional Institute of Technical and Further Education v Barclay and Another (2012) 290 ALR 647.
It is now recognised that an employer’s particular reason for choosing a “facially neutral” criterion may in fact be its adverse impact on a protected group. In other words, although the employer chose a seemingly innocent or innocuous criterion, the employer did so for a prohibited reason or basis.[10]
83. The evidence before the Court does not support a conclusion on the balance of probabilities that the Applicant:
83.1 suffered any injury of any kind as a result the transfer offer or his decision to move to the new role;
83.2 suffered a real and substantial adverse affectation of, or deterioration in, the advantages he had enjoyed prior to the transfer offer or his decision to move to the new role. Accordingly, there is no evidence that demonstrates that his position was altered to his prejudice; and/or
83.3 was treated less favourably that other employees (direct discrimination) or that the transfer offer and his acceptance of the new role in Credit Cards had a disparate impact upon him (indirect discrimination).
84. Accordingly, it is open to the Court to find that the Applicant has not established the objective facts said to give rise to this aspect of his claim.
[10] Klein v Metropolitan Fire and Emergency Services Board [2012] FCA 1402 at [102].
The Court accepts that Mr Zarb must establish on the balance of probabilities the objective facts upon which his claim is based before the reverse onus in s.361 is triggered: Jones v Queensland Tertiary Admissions Centre Ltd (No 2)(2010) 186 FCR 22 at [10].
The Court finds that Mr Zarb has not established the objective facts alleged to give rise to his claims. The Court finds that the Bank has rebutted the presumption in s.361.
The Court finds that the transfer of Mr Zarb to credit cards did not contravene s.340 of the FW Act. Mr Zarb was not transferred because he had a disability. He was transferred to a less demanding role at the same rate of pay and conditions to enable him to undertake training and pass his CAD test.
A breach of s.351 of the FW Act has not been established. The Court refers to the evidence of Ms Ericsson (supra).
Mr Zarb alleges that being required to sit the CAD tests was “adverse action” against him as they were not a fair assessment of his skills, and that he was not provided with sufficient training to pass the test.
There is no evidence that the CAD tests are not a fair and objective test of skills and knowledge. The Court refers to para.3 of the respondent’s written submissions as follows:
“In cross-examination, Mr Sharma said that he was the author of the CAD tests. He also said that the scenarios in the tests were the kinds of things that the Applicant had been working on during his training. At [45] of his Affidavit, Mr Sharma said that the “tests are agreed to as valid assessments of knowledge by both the business and the credit control department”. It was not put to Mr Sharma (or any of the Respondent’s witnesses) that the CAD test was not a fair and objective test of the Applicant’s skill and knowledge.”
The Court finds that Mr Zarb was provided with far more training and assistance to pass a CAD test than is provided to other employees of the Bank. He was given a dummy CAD. His second CAD test contained exactly the same questions as his first.
Training
The Court accepts that the evidence of Ms D’Souza and Mr Sharma shows that a structured training plan was developed for Mr Zarb and discussed with him at a meeting on 18 October 2011 (Outline of Evidence of Ms D’Souza [7] and Annexure “ND-1”). Details of the training given to Mr Zarb while in the credit cards section (18 October 2011) are set out in the Outline of Evidence of Ms D’Souza and Sharma Affidavit.
The Court accepts the evidence of Mr Sharma that he was the author of the CAD tests and that the scenarios in Mr Zarb’s CAD tests were the kind of things that Mr Zarb had been working on during his training.
The Court accepts that at a meeting on 16 February 2012, Mr Zarb was told that the CAD was a key requirement for his role, which he would need to pass in order to perform his role (Ibid [34] and [35]). In cross examination Mr Zarb accepted that he had to have a CAD before he could approve credit applicant (Transcript “T” 26/02/14 p.34, l.40) and that obtaining a CAD was a key requirement of the role of Credit Assessment Officer (T 26/02/14 p.66, l.7).
Ms Therese Shanthu Methika Yanes (“Ms Yanes”) is a Senior Employee Relations Advisor with the Bank (Affidavit of Ms Yanes sworn 21 August 2013). Ms D’Souza sought advice from Ms Yanes about what to do when Mr Zarb failed the CAD test for the third time (Ibid ‘TSMY-4’).Ms Yanes advised that as the CAD was a key requirement, and Mr Zarb was unable to obtain it, he was unsuitable for the role, and his employment could be terminated (Ibid [18]). Ms Yanes was “more than satisfied that ANZ had done everything it could reasonably do to assist (Mr Zarb) to obtain his CAD. He had received more training and support than any other person to try and have him pass the CAD test.” (Ibid [25(a)].
The Court does not find that Mr Zarb was treated less favourably than other employees in the administration of CAD tests.
The Court rejects Mr Zarb’s submissions that he received very little training. He received more training for a CAD test than other employees; the Bank took reasonable steps to ensure that he completed the required training (post).
Evidence that Mr Zarb’s injured finger or his depression were not the reason, or part of the reason, for dismissing him.
The Court accepts the evidence of Ms Yanes that in giving her advice that the Bank could dismiss Mr Zarb she “knew about (Mr Zarb’s) finger injury but it played no part in my advice that his employment could be terminated” (Yanes Affidavit [25(c)]) Also, Ms Yanes was “concerned about his state of mind. However, he never told me that he had mental health issues or had been diagnosed with any condition. I did not take any mental health issue or illness (Mr Zarb) may have into account when making my recommendation” (Ibid [25(d)]).
Ms Ericsson made the decision to terminate the employment of Mr Zarb and the injury to his hand “played no part in my decision” (Affidavit of Lisa Ericsson affirmed 21 August 2013 at [46]). Ms Ericsson was “not aware of the claim in the Statement of Claim that Mr Zarb was depressed ([20], [27], [35(a), (b) and (c) of the Ericsson Affidavit] (Ibid [40]), and that:
37. The only reason for the decision to terminate (Mr Zarb’s) employment was because he had not been able to obtain his CAD, which is a requirement to perform him role as credit assessor, despite extensive training and support.”
Section 361 of the FW Act provides:
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.
(2)Subsection (1) does not apply in relation to orders for an interim injunction.
The presumption arising from s.361 has been rebutted.
Alleged breaches of the EA
The applicant’s EA for the position of Consultant is Annexure ‘DZ-1’ to the Affidavit of Mr Zarb affirmed 30 July 2013 and provides in [1] that:
“Your position is classified as Senior Officer, Group 5.3. At any time following your commencement, ANZ may, at its discretion, change your position, reporting arrangements, duties and location on giving you reasonable notice, following consultation with you, and taking into account you career considerations and person circumstances. Any such change to your position, reporting arrangements, duties or location will not constitute a termination of your employment, and will not entitle you to any benefits under the termination provisions in this employment arrangement.”
There is a provision in the third introductory paragraph to the EA that:
“ANZ operates within the Financial Services Reform Act and all employees providing financial services to retail customers are required to do so efficiently, honestly and fairly. In accordance with this, ANZ is committed to ensuring all employees complete and maintain the required training to meet these customer-focussed outcomes. Upon commencing in your new position, ANZ may review your current training and qualifications in this regard. If necessary, ANZ may require you to undertake further training, consistent with these requirements.”
The Court has found (supra) that it is necessary to imply an addition into that clause by inserting the words “taking all reasonable steps to ensure” after the words “ANZ is committed to” and then deleting the next word “ensuring”.
The Court finds that the Bank did not breach the EA when it transferred Mr Zarb to credit cards, and that it took all reasonable steps to ensure that Mr Zarb completed the required training. The change to Mr Zarb’s reporting arrangement duties and position did not contravene s.340 of the FW Act.
Mr Zarb claims (Statement of Claim at [49]) that:
(49)…
The respondent:
ii)did not maintain trust and confidence in the execution of the Employment Agreement;
iii)did not act in good faith in the execution of the Employment Agreement;
iv)did not provide a safe system of work for the applicant and take all reasonable steps to protect the safety of the applicant;
v)conducted itself in a manner calculated and likely to destroy the relationship of trust and confidence between itself and the applicant;
–and in the premises, the respondent breached the Employment Agreement being the terms pleaded in paragraph 12 hereof.
Paragraph 12 of the Statement of Claim provides:
(12)There were further implied terms of the Employment Agreement, inter alia, that the respondent would:
(a)maintain trust and confidence in the execution of the Employment Agreement;
(b)act in good faith in the execution of the Employment Agreement;
(c)not, without reasonable and proper cause, conduct itself in a manner calculated and/or likely to destroy or seriously damage the relationship of trust and confidence between itself and the applicant;
(d)provide a safe system of work for the applicant and take all reasonable steps to protect the safety of the applicant.
Particulars
The implications arise to give business efficacy to the relationship between the parties and as a matter of law.
The Bank has admitted the implied terms for the purposes of this matter (Defence [12]).
The Court finds that on the evidence the Bank acted reasonably towards Mr Zarb at all times in that:
·He was given a choice of moving to credit cards;
·He was given a dummy CAD and three CAD’S, with feedback. His second CAD contained exactly the same questions as his first CAD.
If Mr Zarb lost trust and confidence in the Bank, that loss of trust and confidence was not reasonable, in the circumstances.
Mr Zarb claims that on being transferred to credit cards, his old EA ceased to apply. However, that submission ignores the fact that under the EA there could be changes to “position, reporting arrangements, duties and location will not constitute termination of your employment” (‘DZ-1’) (Affidavit of Mr Zarb filed 31 July 2013).
The Bank requires Consultants to pass a CAD. The Court has no doubt that Mr Zarb was unable to perform the duties of the positions he occupied. This was because he was unable to obtain a CAD. Ms Ericsson was the person responsible for making the decision on whether to dismiss Mr Zarb after accepting advice from HR. She deposed in her Affidavit that:
36. I had never experienced the situation where an employee had failed the CAD test three times and, as a CAD is required to perform the role which David held of credit assessor, I asked Nirmala to seek advice from HR. Nirmala advised me that Methika Yanes (Methika), Senior Employee Relations Advisor advised her that ANZ could terminate David’s employment because he was not able to attain a CAD, which was an essential requirement of his role. After discussing this advice with Nirmala, I accepted the advice provided by HR and authorised the termination of David’s employment.
37. The only reasons for the decision to terminate David’s employment was because he had not been able to attain his CAD, which is a requirement to perform his role as credit assessor, despite extensive training and support.”
The Court accepts that evidence.
Mr Zarb opted to be paid in lieu of notice and left the Bank. The Bank did not take adverse action against Mr Zarb. The Bank did not act for any reason defined as adverse action. The Bank did not breach its EA with him. The Bank did not act because Mr Zarb had a fractured finger and/or was depressed. The Bank did not discriminate against him. The Bank did not bully Mr Zarb. If anything, it nurtured him in an endeavour to assist him obtain his CAD and retain his position.
All claims in the application filed 14 June 2012 are dismissed.
Costs
The Bank seeks costs against the Mr Zarb. Section 570 of the FW Act provides:
(13)A party to proceedings (including an appeal) in a court (including a court of a State or Territory) in relation to a matter arising under this Act may be ordered by the court to pay costs incurred by another party to the proceedings only in accordance with subsection (2) or section 569 or 569A.
Note: The Commonwealth might be ordered to pay costs under section 569. A State or Territory might be ordered to pay costs under section 569A.
(14)The party may be ordered to pay the costs only if:
(a)the court is satisfied that the party instituted the proceedings vexatiously or without reasonable cause; or
(b)the court is satisfied that the party's unreasonable act or omission caused the other party to incur the costs; or
(c)the court is satisfied of both of the following:
(i)the party unreasonably refused to participate in a matter before the FWC;
(ii)the matter arose from the same facts as the proceedings.
“Vexatious and oppressive” is defined in Butterworths Australia Legal Dictionary as follows:
Productive of seriousness and unjustified trouble and harassment; seriously and unfairly burdensome, prejudicial, or damaging; Oceanic Sun Line Special Shipping Co Inc v Fay (1988) 165 CLR 197 at 247; 79 ALR 9. A vexatious and oppressive action may be stayed because there is not a reasonable or probable cause of action ((CTH) High Court Rules O 63 r 2) or if the plaintiff does not genuinely intend to pursue the action the plaintiff has instituted: L Grollo Darwin Management Pty Ltd v Victor Plaster Products Pty Ltd (1978) 19 ALR 621; 33 FLR 170.
“Reasonable and probable cause” is defined (Ibid) as:
An honest belief based upon a full conviction, founded upon reasonable grounds, of the existence of a state of affairs which would justify the doing of something which would otherwise be unlawful: Hicks v Faulkner (1881) 8 QBD 167. In an action for malicious prosecution, the defendant will not be liable if he or she had a reasonable and probable cause for prosecuting the plaintiff: Herniman v Smith [1938] AC 305. A reasonable and probable cause for arresting another may also serve as a defence in actions for false imprisonment if there were reasonable grounds for believing that the accused person was guilty of an offence: Hazell v Parramatta City Council [1968] 1 NSWR 165; (1967) 87 WN (Pt 1) (NSW) 229. Futhermore, a defendant’s entry onto another’s premises for the purposes of making an arrest may be lawful where he or she has reasonable and probable grounds for believing that the accused is on the premises: Lippl v Haines (1989) 18 NSWLR 620.
Section 570 of the FW Act refers to “without reasonable cause” not to “without strong grounds”. The Court finds that the proceedings were issued with an honest belief based upon a full conviction, formed upon reasonable grounds of the existence of a state of affairs which justified bringing the action. It was therefore issued with “reasonable cause” and was not instituted vexatiously.
The Court is not satisfied that an “unreasonable act or omission” by Mr Zarb caused the Bank to incur costs.
The Bank’s application for costs is dismissed.
I certify that the preceding ninety-nine (99) paragraphs are a true copy of the reasons for judgment of Judge F. Turner
Associate:
Date: 5 June 2014
0
12
4