Rees v Worthington Services Pty Ltd & Anor (No.3) [2019] FCCA 2785 (1 October 2019)

Last Updated: 4 November 2019

FEDERAL CIRCUIT COURT OF AUSTRALIA

REES v WORTHINGTON SERVICES PTY LTD & ANOR (No.3)

[2019] FCCA 2785

Catchwords: INDUSTRIAL LAW – Application seeking declaratory relief and penalties for contravention of ss.340 and 352 of the Fair Work Act 2009 (Cth) – consideration of the activating reason in respect of the applicant’s dismissal – no contravention as alleged – application dismissed. COSTS – Whether the requirements of s.570(2) of the Fair Work Act 2009 (Cth) have been made out – no order for costs made in respect of the cross-claim.

Legislation: Fair Work Act 2009 (Cth), ss.340, 352, 361, 566

Cases cited: Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298

Applicant:

MR JOEL REES

First Respondent:

WORTHINGTON SERVICES PTY LTD

Second Respondent:

BRADLEY WORTHINGTON

File Number:

SYG 1087 of 2016

Judgment of:

Judge Street

Hearing dates:

30 September 2019 and 1 October 2019

Date of Last Submission:

1 October 2019

Delivered at:

Sydney

Delivered on:

1 October 2019

REPRESENTATION

Counsel for the Applicant:

Mr T Kane

Solicitors for the Applicant:

Swaab Attorneys

Counsel for the Respondents:

Mr A Fernon

Solicitors for the Respondents:

Yates Beaggi Lawyers

ORDERS

(1) The application is dismissed.
(2) In respect of the order made by Judge Barnes in favour of the applicant for the payment of costs in respect of the application for leave to bring a cross claim, this Court fixes those costs that were orders under s.570 of the Fair Work Act 2009 (Cth) in the sum of $4,000.00.

DATE OF ORDERS: 1 October 2019

FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY

SYG 1087 of 2016

MR JOEL REES

Applicant

And

WORTHINGTON SERVICES PTY LTD

First Respondent

BRADLEY WORTHINGTON

Second Respondent

REASONS FOR JUDGMENT

1. These are proceedings within the Court’s jurisdiction under s 566 of the Fair Work Act 2009 (Cth) (“the Act”) in respect of an alleged contravention of ss 340 and 352 of the Act.

Background

2. The applicant was a car sales manager who had been working for the first respondent for a period of almost nine years. The applicant held a management position. On 28 January 2016, the applicant was dismissed. On 14 December 2015, prior to the applicant’s dismissal, there was a meeting which took place in respect of which there is a disputed transcript.
3. In that meeting, Mr Worthington, being the corporate mind of the first respondent and being the second respondent to the proceedings, raised with the applicant an incident which occurred involving an employee and that employee allegedly listening to a telephone conversation between Mr Worthington and the applicant. In the transcript of the meeting, Mr Worthington identified a concern in that regard as giving rise to a breach of trust. That proposition of a breach of trust being raised at the meeting is expressly acknowledged by the applicant in his version of the events which occurred.
4. The Court heard evidence from a number of witnesses in relation to the running of the business of the first respondent and in relation to dealings between management and other employees.

Adverse action

5. The applicant has the benefit of the presumption in relation to ss 340 and 352 of the Act in circumstances where he was dismissed. That dismissal amounts to adverse action.
6. The applicant alleges that the adverse action was taken because he raised a complaint in relation to workplace safety in respect of a particular employee, Mr Du. The applicant also alleges that he was terminated because he exercised a workplace right in terms of taking leave because he was sick.

Reason for termination

7. The evidence given by Mr Worthington was to the effect that the reason why he terminated the applicant’s employment was because of a breach of trust. Whilst there was careful cross‑examination in relation to the events which had taken place in respect of the employees of the first respondent, the Court accepts the evidence of Mr Worthington that the reason for the termination of the applicant was because of a breach of trust which Mr Worthington had raised in the meeting with the applicant on 14 December 2015.
8. The breach of trust involved the applicant having permitted another employee to listen to a telephone conversation between Mr Worthington and the applicant. The Court accepts Mr Worthington’s version of events in that regard. They are corroborated by the transcript and the applicant’s evidence in respect of the breach of trust issue.
9. Whilst the Court accepts that the applicant was endeavouring to do his best in giving evidence, the Court does not accept that the applicant was a reliable witness. The applicant’s evidence in relation to the meeting with Mr Worthington, which was a critical part of the applicant’s case, and as to whether or not the reason for his dismissal was an adverse action reason identified that the applicant did not get a chance to address the issues. Yet the applicant identified certain responses to the issues in the version of the transcript which he accepts occurred. The applicant’s proposition that he did not get a chance to address the issues is also inconsistent with the reality that he then went on leave for a month. The applicant had ample time to respond to the issues if he chose to.
10. In relation to the reliability of the applicant, on 18 January 2016 when the applicant returned to work, the Court accepts Mr Worthington’s evidence that he endeavoured to have a meeting with the applicant to discuss a further letter in respect of the applicant’s conduct and possible termination. The Court accepts Mr Worthington’s evidence that the applicant took steps to avoid having any such meeting.
11. Whilst the Court accepts that the letter refers to a proposal to have a meeting the next day, the Court does not regard that as inconsistent with or contradicting Mr Worthington’s evidence, which is both logical and sensible, of the applicant being the subject of an endeavour to have a meeting and presenting to him a serious and important letter.
12. The applicant’s evidence that there was no request for such a meeting is not credible. Further, it is inconsistent with the reference to the opportunity to have a meeting identified in the letter dated 28 January 2016 which expressly referred to the steps taken by Mr Worthington, unsuccessfully, to meet with the applicant on 18 January 2016.
13. The Court explored with the applicant why the applicant had not responded to the contentions in that letter if the applicant believed them not to be true. The applicant asserted it was because of the immediate steps he took to take other action. The Court does not accept that as a credible response if the applicant believed the content of the letter was not true. The letter dated 28 January 2016 corroborates the evidence of Mr Worthington in that regard and further undermines the reliability of the evidence of the applicant in respect of the events which occurred on 14 December 2015 and 18 January 2016.
14. Reference was also made to the defence, the collective pleading of events which occurred and the collective communications identified.
15. The Court accepts Mr Worthington’s evidence that the real and activating reason why the applicant was dismissed was because of a breach of trust. The Court finds that there was no other activating reason in respect of the applicant’s dismissal.

Alleged reasons

16. Mr Worthington confirmed on oath that the applicant was not dismissed because he had raised complaints in respect of other employees. To the extent relevant, the Court would accept that the raising of such complaints would constitute a workplace right. The Court accepts, however, the evidence of Mr Worthington that that was not a reason why he dismissed the applicant. The Court also accepts the evidence of Mr Worthington that the applicant was not dismissed because the applicant was on sick leave.
17. The steps taken in relation to the termination were not precipitous. The applicant had a real and genuine opportunity to respond to what occurred at the meeting on 14 December 2015 and to the letter dated 18 January 2016. While the applicant provided a medical certificate after a period of time in respect of his leave, the Court does not accept that the applicant was not in a position to respond to what occurred at the meeting or to respond to the letter dated 18 January 2016.
18. The Court does not accept the contention that the dismissal of the applicant that occurred on 28 January 2016 was conduct taken to prevent the engagement by the applicant with the issues that had been raised.
19. The applicant contended that the evidence established that the reason for the termination of the applicant was that the applicant was making complaints about Mr Du. The Court does not accept that proposition.
20. The theory behind the applicant’s case in that regard is further undermined by the written warning letter dated 23 October 2015, marked Exhibit I, which was given to Mr Du as a final warning letter. That final warning letter identified serious conduct in respect of Mr Du. It is apparent that, as a result of that warning letter, Mr Du was required to stay away from the place of employment and consult a psychiatrist. Those are not steps which were taken as a device or artifice in relation to the complaints that were raised concerning Mr Du. They were real and positive steps consistent with the employer’s duty in respect of the whole of the employees of the first respondent.
21. There was an issue as to whether or not the return of Mr Du on the weekend was due to instructions from Mr Worthington or Mr Rees. The Court accepts Mr Worthington’s evidence in that regard, which was corroborated by the evidence of Mr Du. Whilst Mr Du was not the most impressive witness and it appeared that he had difficulty with English, it is apparent that Mr Du was endeavouring to answer questions to the best of his ability. The Court accepts Mr Du’s evidence as to Mr Rees being involved in directing him to return on the weekends. The return of Mr Du at the direction of Mr Rees is not consistent with the rationale behind the applicant’s case in respect of the alleged reason for termination being complaints he made about Mr Du.
22. Focus was made by the applicant upon the issue of Mr Worthington raising an alleged exaggeration of the incident to get rid of Mr Du in the meeting with the applicant on 14 December 2015. Whilst the Court accepts that the incident involving Mr Du and its seriousness was raised with the applicant at the meeting, the Court does not accept that that was a real or activating reason for the dismissal of the applicant.
23. The applicant seeks to rely upon what is pleaded at paragraph 13L(c) of the defence to contend that everything which occurred in the communications identified at subparagraph (i) must be regarded as reasons for dismissal. The Court does not accept that that construction fairly characterises the defence, nor does the Court find that the incident raised with the applicant at the meeting of 14 December 2015 was a real or activating reason for the dismissal of the applicant. The Court accepts the evidence of Mr Worthington in that regard, which denied such a proposition.
24. The applicant contended that the reason for his termination was because Mr Worthington thought he was part of a plot to get rid of Mr Du. Mr Worthington denied such a plot. The Court accepts the evidence of Mr Worthington in that regard.
25. The applicant sought to rely on a file note of the second respondent’s father, referring to a potential conspiracy as supporting the applicant’s case. The father of the second respondent was not the decision‑maker. Mr Worthington denied the contention that a reason for terminating the applicant was because he thought the applicant was part of a plot to get rid of Mr Du. The Court accepts Mr Worthington’s evidence in that regard.
26. The Court does not accept that the applicant was terminated because of complaints he made about how the dealership was dealing with Mr Du’s poor conduct. It is apparent that real and genuine steps were taken in that regard, consistent with that of a responsible employer. Mr Worthington denied that the reason for the dismissal of the applicant was because of the complaints about the handling of Mr Du’s poor conduct. The Court accepts Mr Worthington’s evidence in that regard. The Court does not regard the timing of the steps taken in relation to Mr Du in his warning letter, the subject of Exhibit I, as reflecting other than genuine and proper conduct.
27. Concerns in respect of other employees, some of whom were subsequently dismissed or resigned, does not give rise to any further basis upon which the Court is persuaded that a reason for the applicant’s dismissal was a complaint raised by the applicant with management as to the adequacy of the steps taken in respect of Mr Du’s conduct. The Court accepts Mr Worthington’s evidence denying that that was a reason for the termination of the applicant.
28. Focus was also made by the applicant upon paragraph 63 of Mr Worthington’s affidavit affirmed 9 November 2018 which, relevantly, says:
    • “My decision to terminate Mr Rees’ employment was made after I had time to deliberate on and consulted other business acquaintances concerning Mr Rees including...”

Paragraph 63 then sets out seven subparagraphs. Subparagraph e. says:

“The fact that I could no longer trust Mr Rees in all facets of his job, including his communications with BMW, his communications with clients, his management of his subordinates and financial decisions.”

29. The applicant’s focus was upon the reference to Mr Worthington consulting others and the evidence which Mr Worthington gave as to that being another business sales officer and an internal person, Mr Russotti. The reference to consulting others does not give rise to the decision to terminate being one which was made other than by Mr Worthington. The submission was advanced that the failure to call Mr Russotti should be the subject of a Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298 inference in relation to the reasons for termination of the applicant. Mr Russotti was not a decision‑maker and the Court does not accept that the failure to call Mr Russotti is a basis upon which any adverse inference should be drawn that there was an activating reason in respect of a workplace right that would amount to a contravention of s 340 of the Act.
30. Further, just because Mr Russotti was present at the meeting on 14 December 2015, that does not make him a material witness in respect of whom the failure to call should give rise to any adverse inference in respect of the reasons for the dismissal of the applicant. The meeting on 14 December 2015 was the subject of a transcript. Whilst the transcript was the subject of dispute, it more than adequately explains the reason for not calling Mr Russotti.
31. The applicant also alleges that there were complaints made in relation to the employment concerning Ms Hodge and Mr Du. The Court does not accept that the communications raised by the applicant with Mr Worthington, in respect of Ms Hodge or Mr Du, were a real or activating reason for the dismissal of the applicant.
32. Whilst the Court has accepted that the contents of the communications would meet the characterisation of a workplace right and that the communications included workplace safety, the Court does not accept that those complaints or the raising of the workplace safety issue were a reason for the dismissal of the applicant.
33. The applicant has the benefit of the presumption under s 361 of the Act in relation to the requirement of ss 340 and 352 of the Act. The Court finds that the respondent has discharged its onus in rebutting that presumption under s 361 of the Act in respect of the reasons for dismissal of the applicant, that the applicant was not dismissed because he took or was on sick leave so far as concerns s 352 of the Act and that the applicant was not dismissed because he exercised a workplace right as alleged.

Notice

34. In relation to s 352 of the Act, the Court has taken into account the applicant’s submissions concerning s 107(3) of the Act and the reference to the explanatory memorandum and provision of a certificate on 21 January 2019. An email was sent by the employer asking for more detail in respect of the medical condition which was reasonable. The applicant did not respond to the same or, more importantly, to the concerns in respect of the meeting on 14 December 2015 or the content of the letter of 18 January 2016. The Court finds that the applicant had a real and genuine opportunity to do so prior to the dismissal on 18 January 2016.
35. The applicant contended that the evidence failed to grapple with the negative proposition that the action was not taken for the alleged reason or with the alleged intent, falling within s 340 of the Act. That contention is inconsistent with the evidence given by Mr Worthington who directly addressed his reason for the applicant’s dismissal, which the Court accepts as being a breach of trust by the applicant. Further, Mr Worthington gave evidence denying the reasons advanced by the applicant for the termination. The Court accepts the evidence of Mr Worthington in that regard.
36. It was submitted by the applicant that there was not sufficient evidence adduced in respect of the reasoning for the applicant’s dismissal. This is a case where there is ample evidence in respect of the reasoning for the applicant’s dismissal which started at the meeting on 14 December 2015 where the issue of a breach of trust was raised. This is not a case where the reasoning process was disbursed amongst a number of persons. The reasoning process for the applicant’s dismissal were the reasons of Mr Worthington.
37. The absence of evidence of other persons being referred to that were identified by Mr Worthington at paragraph 63 of Mr Worthington’s affidavit affirmed 9 November 2018 does not identify any basis on which the Court should not accept the evidence of Mr Worthington. For the reasons already given, no Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298 inference would arise in the circumstances of the present case by reason of the absence of calling Mr Russotti who had attended the meeting on 14 December 2015, given the record of the same and the further communications which took place.
38. In the circumstances, the Court finds that the respondent has discharged its onus and that there is no contravention of ss 340 or 352 of the Act as alleged.

Orders of proceedings

39. The respondent seeks orders of proceedings on the basis that the proceedings should not have been brought. There is a general rule that applies in respect of proceedings under the Act identified in s 570 of the Act. The Court is not satisfied that the requirement of either limb of s 570(2) of the Act is made out. Accordingly, the Court declines to make any order under s 570 of the Act in favour of the respondent in respect of the proceedings.

Costs against the respondent

40. The applicant has asked for an order for costs against the respondent in circumstances where, although the substantive application has been dismissed, the respondent obtained an order from the Court after an initial unsuccessful attempt granting leave to file a cross-claim. That order was not itself the subject of any further challenge and a cross-claim was filed on 3 November 2017. That cross-claim was then the subject of communications between the parties.
41. An application was filed on 21 February 2019 seeking the dismissal of the cross-claim and an affidavit was filed in support by the solicitor of the applicant. The arguments advanced in that regard were to the effect that, given the evidence served, the cross-claimant could not establish any relevant loss.
42. The scheme of the Act identifies important protections, specifically for employees in respect of the general protections identified in Chapter 3 Part 3.1 of the Act. Those provisions include civil remedy provisions.
43. The proceedings in the present case were ones which were brought by a party falling within s 539 of the Act, identified in Column 2 in respect of an alleged contravention of Part 3.1 of the Act, taking into account the powers conferred under ss 545 and 546 of the Act and the jurisdiction conferred under s 566 of the Act.
44. The jurisdiction is not one which facilitates or permits the filing of cross-claims by an employer in respect of a civil penalty contravention suit. That was a short and succinct answer both to the leave granted and the cross-claim.
45. The applicant alleges incurring of costs in the order of $40,000 in relation to steps taken to prepare to meet the cross-claim. It is not necessary for this Court to evaluate whether those would have been reasonable party/party costs even if an entitlement under s 570 of the Act had been made out.
46. The intention of s 570 of the Act is that there should be no order for costs in proceedings arising under the Act unless the requirements of s 570(2) are made out. The applicant submitted that because the loss could not be proved, the cross-claim was doomed to failure. In circumstances where there was no entitlement to pursue the cross‑claim, and that issue was not raised, the Court is not satisfied that there should be any order made under s 570(2) of the Act. Further, the Court is not satisfied that the costs were reasonably incurred in circumstances where the cross-claim was not able to be pursued. The applicant submitted that that is a further reason why a costs order should be made in favour of the applicant.
47. Even if a different view was taken as to the entitlement to bring a cross-claim to the view taken by this Court, the Court does not regard the circumstances of the present case where the cross-claim was withdrawn, albeit after a period of time, as giving rise to satisfying the requirements of s 570(2) of the Act. The ordinary rule should apply in that there should be no order for costs in respect of the cross-claim that was withdrawn.

I certify that the preceding forty-seven (47) paragraphs are a true copy of the reasons for judgment of Judge Street delivered in open Court on 1 October 2019 and the parties were provided sealed copies of the Court’s orders.

Associate:

Date: 4 November 2019