FEDERAL COURT OF AUSTRALIA

Cigarette & Gift Warehouse Pty Ltd v Whelan [2019] FCAFC 16

ORDERS

THE COURT ORDERS THAT:

1.    The appeal be dismissed.

2.    All questions as to costs in relation to the appeal be reserved for consideration in the event that a party makes an application for costs.

3.    If a party (or parties) wishes to make application for costs, notice in writing should be given to the Registrar and the opposing party (or parties) not later than 20 February 2019.

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

REASONS FOR JUDGMENT

THE COURT:

1    In Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd (2015) 230 FCR 298, at [64] – [65] (Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd) the Full Court observed:

64.    Litigation is not a free for all. The overarching purpose of the civil practice and procedure provisions that apply in this Court is to facilitate the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible (Federal Court of Australia Act 1976 (Cth) (“FCA Act”), s 37M). It would not be just to decide a case on a different basis than the way it was conducted. Nor would it be just to permit an applicant to change the nature of its case after the evidence has closed and its weaknesses pointed out, at least not without a formal application and the grant of leave, on terms if necessary.

65.    The long and the short of it, then, is that, in a civil proceeding of a penal nature, a statement of claim must allege a contravention known to law and with a sufficient statement of material facts to alert a respondent to the case to be met. Nevertheless, where an applicant’s pleading is ambiguous but a respondent has nonetheless meaningfully engaged with it in its defence, that engagement and the manner in which an applicant’s case is consequentially opened and the trial conducted and defended can and ought to be considered in deciding whether a respondent has suffered any procedural unfairness. That is so even if there has been no formal application to amend the pleading. The obligations imposed on the Court and the parties by Pt VB of the FCA Act do not lead to any different conclusion.

2    The appellants, Cigarette & Gift Warehouse Pty Ltd and its managing director, Mr Travers Beynon, contend that the orders under challenge in the present appeal were the result of a failure by the learned primary judge to decide the case brought against them by the respondent, Mr Andrew Whelan, by reference to the nature of that case as disclosed in the pleadings. They contend that they were denied procedural fairness in just the way described by the Full Court in the observations made in the passage quoted from Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd, quoted above.

3    Cigarette & Gift Warehouse Pty Ltd, as the primary judge found, carries on a business of providing services in the cigarette and gift supply industry by way of franchising. It is also known as “Freechoice”, although there is a separate, related company known as Freechoice Vending Australia Pty Ltd (Freechoice Vending). Each is a member of the Freechoice Australia corporate group. In the evidence led at trial, there were numerous references to “Freechoice”, particularly in a significant, contemporaneously recorded conversation between Messrs Beynon and Whelan on the date of his dismissal, 24 August 2015. There is no doubt that these are references to Cigarette & Gift Warehouse Pty Ltd. It is therefore convenient likewise to use that name to refer to that company in these reasons for judgment.

4    Mr Whelan was employed by Freechoice as its National Sales Manager from around 6 June 2013 to 10 November 2013, and from 11 November 2013 until 24 August 2015, as its General Manager.

5    The primary judge found that, in August 2015, Freechoice had contravened s 340(1) of the Fair Work Act 2009 (Cth) (FW ACT) by taking adverse action against Mr Whelan by dismissing him and s 44(1) by failing to give him a notice of termination (the adverse action and notice claims). In respect of these contraventions, the primary judge awarded Mr Whelan $17,625.72 for economic loss and $5,000.00 for non-economic loss. Her Honour found that Freechoice had further contravened s 44(1) of the FW ACT, by failing to pay $17,160.40 to him on termination for accrued but untaken annual leave (the accrued leave claim). Mr Beynon was held to have been “involved” in each of these contraventions, within the meaning of s 550 of the FW ACT.

6    In this appeal, Freechoice challenges the orders made in respect of the adverse action and notice claims but does not challenge the order made in respect of the accrued leave claim. For his part, Mr Beynon contests his accessorial liability in respect of each claim. Freechoice also challenges the dismissal of its cross-claim in the amount of $70,000.00 in respect of a loan allegedly made to Mr Whelan by it.

7    Mr Whelan advanced causes of action against Freechoice under the Australian Consumer Law and at common law for alleged breach of contract. These failed at trial. There is no appeal in relation to these claims. Thus, putting aside for the moment the dismissal of the cross-claim, the appeal entails challenges to the conclusions of the primary judge in relation to the adverse action causes of action.

8    In Board of Bendigo Regional Institute of Technical and Further Education v Barclay (2012) 248 CLR 500 at [45], French CJ and Crennan J observed in respect of an adverse action claim that, “generally, it will be extremely difficult to displace the statutory presumption in s 361 if no direct testimony is given by the decision-maker acting on behalf of the employer”. The reasons of the learned primary judge, which, with respect, are hardly cursory in their examination of the elements of an adverse action claim, the evidence led at trial and the absence of Mr Beynon from the witness box make it overt (at [84]) that her Honour was acutely aware of the potential ramification of that absence.

9    The evidence led at the trial disclosed and the primary judge found (at [6] – [7]) that Mr Beynon was not a remote figure in the management of Freechoice. This evidence included recordings of conversations between Mr Beynon and Mr Whelan (and transcripts thereof). This was introduced by the appellants, who discerned forensic advantage in so doing as a means of putting into question the accuracy of Mr Whelan’s recollection as revealed by his affidavit evidence in chief, when compared with the recorded content of the conversations to which he referred. The conversations so recorded also reveal that Messrs Beynon and Whelan dealt directly one with the other in relation to questions of remuneration.

10    In their submissions on the appeal, the appellants sought to explain away the absence from the witness box of Mr Beynon on the basis that, having regard to the way in which Mr Whelan had pleaded his adverse action claim, there was, in the end, no need to call him. This submission, inter-related with the claim of a denial of procedural fairness, also prompted our recollection of what had been stated in Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd.

11    While the appellants did not call Mr Beynon at trial, the evidence they led included the reading of affidavits made by a Ms Suzanne Ozioko, Freechoice’s National Human Resources and Operations Manager. In the corporate hierarchy at Freechoice, Mr Beynon was the most senior, Mr Whelan the next most senior with Ms Ozioko, in turn, being third, reporting to Mr Whelan. Mr Whelan did not seek to cross-examine Ms Ozioko in respect of her evidence. Even so, the learned primary judge chose (at [75]) not to accept all of Ms Ozioko’s evidence. This was said by the appellants to be indicative of another error by her Honour.

12    This last point is something of a distraction.

13    Mr Whelan’s adverse action claim was based, in part, upon a request made of him by Ms Ozioko in August 2015 on behalf of Freechoice that his wife sign a confidentiality agreement. Mrs Whelan had previously been an employee of Freechoice but that employment had ceased in February 2015. The primary judge found (at [75]), accepting in this regard Mr Whelan’s evidence, contrary to Ms Ozioko’s evidence, that Mr Whelan did ask her whether other employees’ partners were receiving non-disclosure agreements that day. Unusual, with respect, though it may be to reject the evidence of a witness who has not been called for cross-examination and thus not had the opportunity to comment upon other evidence to the contrary, the point ultimately leads nowhere. That is because her Honour’s ultimate conclusion (at [78]) in respect of this aspect of the case was that Mr Whelan’s claim of adverse action against him relating to Mrs Whelan being required to sign a non-disclosure agreement had no merit.

14    Another criticism made of the judgment below was that her Honour had not acted upon “unchallenged” evidence from Ms Ozioko in relation to the dismissal and the reasons for it. To describe Ms Ozioko’s evidence as “unchallenged” is something of an overstatement. That is because, as to her relating what Mr Beynon had said to her about reasons for Mr Whelan’s dismissal, it had hearsay content. To this extent, it was the subject of an objection, upheld by her Honour, with the passages concerned being admitted only for operative (termed by the primary judge “narrative”), not assertive purposes. Further, the reasons of the primary judge disclose a careful analysis of Ms Ozioko’s evidence, including that it was unchallenged in particular respects. That analysis highlights the uncontroversial fact that Ms Ozioko was not the decision-maker in relation to Mr Whelan’s dismissal on 24 August 2015. That was Mr Beynon. Ms Ozioko, on the evidence, was just a conduit. Insofar as there was any need to explain what were and were not reasons for Mr Whelan’s dismissal, that task, in the circumstances of this case, was one for Mr Beynon, not for Ms Ozioko. Her Honour was patently well aware of this.

15    The workplace right which the primary judge found (at [80]) made out was the making of “inquiries about either payment of a bonus or the establishment of a bonus plan both in the weeks prior to, and on the day of, his dismissal”. It was this right which her Honour found had not been excluded as a substantial or operative reason for Mr Whelan’s dismissal on 24 August 2015. The following passage in her Honour’s reasons for judgment ([131] – [133]), which also canvases other reasons which, on the evidence, may have been operative in Mr Whelan’s dismissal, is pertinent:

131    Notwithstanding Mr Whelan’s explanation in his evidence, it does appear likely that Mr Beynon’s decision to summarily dismiss him was at least partially due to his anger at Mr Whelan’s early departure from the office on a day when Mr Beynon had specifically told him not to leave early, whether for medical consultations or otherwise. I make this observation, placing to one side the question whether dismissal of Mr Whelan for attending a medical consultation because of illness would not itself be a contravention of s 352 of the FW Act. I also consider it likely that Mr Beynon would have been angered by Mr Whelan’s failure to answer his telephone calls. This is consistent with Ms Ozioko’s evidence concerning Mr Beynon’s response when she informed him that Mr Whelan had left the office.

132    However, this conclusion does not mean that Mr Beynon’s views of Mr Whelan repeatedly inquiring about a bonus was not a substantive or operative factor in his decision.

133    The onus was on the respondents to prove that Mr Whelan’s inquiries about payment of a bonus or establishment of a bonus plan were not a substantive or operative reason for his dismissal, and I do not consider that they have discharged that onus.

[Emphasis added]

16    A complaint, taken up in one way or another in grounds 1, 2 and 3 of the notice of appeal but rather more succinctly stated in the appellants’ outline of submissions was that, “Since there was no pleaded case that there was any cause of action at all that there were “repeated requests” for more money by way of bonus payments, the [appellants] were not called upon to answer such a case, nor was there a reversal of onus in relation to it”.

17    As the primary judge noted in her reasons for judgment, Mr Whelan’s statement of claim underwent multiple amendments. By the time of trial, it was the Third Further Amended Statement of Claim which was applicable. Inserting, for ease of understanding, the names of the parties, the material allegations in that pleading were as follows:

Adverse Action

41.    [Freechoice] took adverse action against [Mr Whelan].

Particulars of adverse action

…

(b)    [Freechoice] dismissed [Mr Whelan] from his employment.

General Protections Contraventions - Section 342 of the Act

42.    The First Respondent took the adverse action pleaded at paragraph 41 above because:

(a)    The Applicant had a workplace right to make the complaints or inquires pleaded at paragraphs 34 and 36 herein;

(b)    Further and/or in the alternative, the Applicant had exercised a workplace right by making the complaints or inquiries pleaded in paragraphs 34 and 36 herein, or for reasons that included such a reason or reasons.

43.    By reason of the matters pleaded at paragraph 41, the First Respondent has contravened section 340(1) of the Act and, thereby, caused the Applicant loss and damage.

Paragraph 36 of the pleading contained allegations, termed the Second Complaint or Inquiry, relating to the signing of a confidentiality agreement. It is not relevant. Paragraphs 33, 34 and 35 made these allegations:

General Protections Breach

Workplace right Complaints and inquiries - Section 340 of the Act

33.    [Mr Whelan] had a workplace right, namely [he] was able to make a complaint or inquiry in relation to his employment with [Freechoice].

Particulars

(a)    [Mr Whelan] was able to make a complaint or enquiry to [Mr Beynon] in relation [to] his employment;

(b)    [Mr Whelan] was able to make a complaint or enquiry to [Freechoice’s] Human Resource Manager, Suzie Ozioko (‘Ms Ozioko’).

Complaints and Inquiries

34.    [Mr Whelan] made complaints or inquiries in relation to his employment regarding the payment of a bonus:

Particulars of First Complaint or Inquiry

(a)    On or about 17 August 2015, [Mr Whelan] sent [Mr Beynon] a text message, requesting a meeting with him to discuss:

    i.    [Mr Whelan’s] private personal and financial goals; and

ii.    A medical procedure that [Mr Whelan] was required to undertake due to his family's medical history.

(b)    On about 24 August 2015, [Mr Whelan] was directed by Ms Cassandra Blight, being [Mr Beynon’s] personal assistant, to meet with [Mr Beynon] in his office to discuss the matters referred to in subparagraph 34(a) herein;

(c)    During the meeting, [Mr Whelan] told [Mr Beynon] words to the effect that he had exceeded [Freechoice’s] company budget by at least one hundred percent, and that the company had made more than $10 million dollars in profit for the 2014-2015 financial year;

(d)    [Mr Whelan] told [Mr Beynon] that as per the Contract, [Freechoice] should have paid him a bonus equal to one hundred percent of his annual salary, being $309,586.00.

   (e)    [Mr Whelan] inquired as to why this was not paid;

(eA)    [Mr Whelan] inquired about a plan for the payment of a bonus in respect of the current financial year; and

   (f)    [Mr Beynon] denied [Mr Whelan] was entitled to any bonus.

35.    In the premises, the contact by [Mr Whelan] with [Mr Beynon] pleaded at paragraph 34 was:

(a)    An inquiry as to the terms and conditions of his employment;

(b)    An inquiry as to whether the bonus would be paid in accordance with the terms the Contract; and

(c)    A complaint as to why this payment had not been made.

18    As to these allegations, the pleading in the Second Further Amended Defence was as follows:

Alleged General Protections Breach

Workplace Right Complaints and Inquiries - Section 340 of the FW Act

33.    As to paragraph 33 of the Statement of Claim, [the Appellants] admit the allegations contained therein.

Alleged Complaints and Inquiries

34.    As to paragraph 34 of the Statement of Claim, [the Appellants]:-

a.    admit that [Mr Whelan] made an enquiry in relation to his employment as particularised in paragraphs (a) and (b) therein; and

b.    otherwise deny the allegations contained therein and say that:­

i.    no complaint as alleged therein was made;

ii.    [Mr Whelan] did not say the matters particularised in paragraphs (c), (d) or (e) therein;

iii.    [Mr Beynon] did not say the matters particularised in paragraph (f) therein; and

iv.    [Mr Whelan] in fact said at the meeting words to the effect that the meeting was "not about a bonus now".

35.    As to paragraph 35 of the Statement of Claim, [the Appellants]:-

   a.    as to paragraph (a), admit the allegations contained therein; and

b.    otherwise deny the allegations contained therein and repeat and rely upon the matters pleaded in paragraph 34b above

Issue was then joined in relation to the adverse action claim as follows:

Alleged Adverse Action

41.    As to paragraph 41 of the Statement of Claim, [the Appellants] deny the allegations contained therein and repeat and rely upon the matters pleaded in paragraphs 31b and 34 to 40 above.

Alleged General Protections Contraventions - Section 342 of the FW Act

42.    As to paragraph 42 of the Statement of Claim, [the Appellants] deny the allegations contained therein and repeat and rely upon the matters pleaded in paragraphs 34 to 41 above.

43.    As to paragraph 43 of the Statement of Claim, [the Appellants] deny the allegations contained therein and repeat and rely upon the matters pleaded in paragraphs 34 to 42 above.

19    As this excerpt demonstrates, on the face of the pleadings, the only complaint or inquiry which had the payment of a bonus as its subject was that alleged to have been made on 24 August 2015. The plural is used in para 34 but that is referable to the Second Complaint or Inquiry, which concerned a different subject (the confidentiality agreement direction).

20    To this extent, it may be accepted that Mr Whelan did not allege that multiple complaints or inquiries were a reason for the adverse action constituted by his dismissal on 24 August 2015. It does not follow from this that the appellants were denied procedural fairness or, more particularly, that, in deciding whether it was a reason for that adverse action, her Honour did other than view the complaint or inquiry which she found was made on 24 August 2015 in the wider context of a lengthier history of dealings between Messrs Whelan and Beynon which had been productive of inter-personal tensions.

21    Explaining why that is so requires quite some excursion into her Honour’s reasons for judgment.

22    In summarising, at an early stage in her reasons for judgment, Mr Whelan’s claims, the primary judge did so by explicit reference to his pleading. Such explicit reference is not a promising marker for the commission of the error for which the appellants contend. Materially, in para 25(2) of her reasons for judgment, her Honour records the allegation to be:

The reason the first respondent took the adverse action was because:

(a)    Mr Whelan had a workplace right to make complaints or inquiries concerning his unpaid bonus and/or the plan whereby that bonus would be calculated, and the first respondent’s request concerning Mrs Whelan’s execution of a confidentiality agreement; and/or

(b)    Mr Whelan had exercised that workplace right (paragraph 42);

The parenthetical reference to “paragraph 42” is a reference to that paragraph in Mr Whelan’s Third Further Amended Statement of Claim. Working back through that pleading, relevantly excerpted above, discloses that the only complaint or inquiry about a bonus alleged is that said to have been made on 24 August 2015 (termed, “the First Complaint or Inquiry”). Reading the reasons fairly and in context, it is the exercise of the alleged right on 24 August 2015 to which her Honour is referring in this summary.

23    The primary judge addressed that allegation in detail in her reasons for judgment in a lengthy passage commencing at para 32 under the heading, “Did Mr Whelan have a workplace right, and did he exercise or propose to exercise such a right?”. It is not necessary to set out all of this portion of the judgment, only its introduction in para 32:

32    Mr Whelan pleads that he exercised a workplace right as defined in section 341 of the FW Act by:

•    Inquiring of Mr Beynon when he would be paid an incentive bonus for the 2014/2015 financial year, or when a plan for the payment of an incentive bonus for the 2015/2016 financial year would be put in place, and

•    Refusing to comply with a direction that he obtain his wife’s execution of a non-disclosure agreement.

Three observations may be made about this introductory paragraph. Firstly, it commences by explicit reference to Mr Whelan’s pleading. Secondly, as to the inquiry based alleged workplace right, it is cast in the singular. Thirdly, that alleged workplace right is grouped with the confidentiality agreement direction, which was made but once, on 24 August 2015.

24    Read in isolation, para 40 in this section of the reasons for judgment might be thought to support the appellants’ claim. It engendered that thought on the hearing of the appeal.

40    Fourth, there is evidence before me that Mr Whelan made inquiries or complaints concerning his entitlement to be paid a bonus, or the formulation of a bonus plan by the first respondent, both in the months leading up to his summary dismissal and on the day of his dismissal.

However, reading a passage in reasons for judgment in isolation from the whole is something one must not do. It is immediately followed by detailed consideration by the primary judge of evidence as to what was said on 24 August 2015. This culminates in the following (at [50]):

50    Fifth, while the respondents plead that Mr Whelan was not entitled to be paid a bonus for the financial year ending 30 June 2015, I consider his entitlement or otherwise is irrelevant to the question whether he actually made a complaint or inquiry in relation to his employment for the purposes of s 341(c)(ii).

[Emphasis added]

Once again, the reference to the pleadings, this time to the Defence, will be noted. More importantly, in reciting “the question” her Honour does so in the singular, “a complaint or inquiry” and, inferentially, by reference to that pleaded. Reading this part of the reasons for judgment as a whole, her Honour is doing no more than considering whether a complaint or inquiry constituting a workplace right was made on 24 August 2015.

25    It also needs to be remembered that it was the appellants who introduced the recording and related transcript of the meeting on 24 August 2015 between Messrs Whelan and Beynon into evidence. Relevantly for present purposes, this description by her Honour (at [110]), based on that transcript, was accurate:

Turning to the transcript of the meeting of 24 August 2015, I note that Mr Whelan explained to Mr Beynon that he had acquired too many debts, was having difficulty paying them, and it was in that context that he had pressed Mr Beynon earlier in the year for a bonus and was continuing to press for a bonus plan to be developed.

It is plain enough from this transcript that the discussion on 24 August 2015 on the subject of a bonus, the only workplace right pleaded, is occurring in the context, known to each participant, of the earlier raising of the subject of a bonus. Once this is appreciated the following further paragraphs in the reasons for judgment of the primary judge take on a less promising quality for the appellants’ complaint:

114    To the extent that I can draw inferences from the meeting transcript, I consider that, in light of the repeated and extensive discussion during that meeting of Mr Whelan’s financial position and Mr Whelan pressing for a bonus based on his previous employment, the issue of Mr Whelan asking for either a bonus or the development of a bonus plan was on Mr Beynon’s mind on 24 August 2015.

…

131    Notwithstanding Mr Whelan’s explanation in his evidence, it does appear likely that Mr Beynon’s decision to summarily dismiss him was at least partially due to his anger at Mr Whelan’s early departure from the office on a day when Mr Beynon had specifically told him not to leave early, whether for medical consultations or otherwise. I make this observation, placing to one side the question whether dismissal of Mr Whelan for attending a medical consultation because of illness would not itself be a contravention of s 352 of the FW Act. I also consider it likely that Mr Beynon would have been angered by Mr Whelan’s failure to answer his telephone calls. This is consistent with Ms Ozioko’s evidence concerning Mr Beynon’s response when she informed him that Mr Whelan had left the office.

132    However, this conclusion does not mean that Mr Beynon’s views of Mr Whelan repeatedly inquiring about a bonus was not a substantive or operative factor in his decision.

133    The onus was on the respondents to prove that Mr Whelan’s inquiries about payment of a bonus or establishment of a bonus plan were not a substantive or operative reason for his dismissal, and I do not consider that they have discharged that onus. Taking into account the material before the Court I consider that Mr Beynon dismissed Mr Whelan because he considered Mr Whelan unreliable and his performance poor, exacerbated by repeated requests by Mr Whelan for more money by way of bonus payments or the development of a bonus plan. At the meeting on 24 August 2015, Mr Beynon had derisively dismissed Mr Whelan’s applications for bonus or a bonus plan as undeserving, and was clearly annoyed by Mr Whelan’s supplications in light of his unfavourable view of Mr Whelan’s conduct in the workplace and his perception of Mr Whelan’s mismanagement of his personal financial affairs. The meeting between Mr Beynon and Mr Whelan on 24 August 2015, where Mr Whelan again sought a bonus plan and Mr Beynon’s dismissal of Mr Whelan’s inquiries discussed in some detail, set the scene for Mr Whelan’s dismissal later that day. I consider it likely that, as far as Mr Beynon was concerned, Mr Whelan’s conduct on the afternoon of 24 August 2015 – specifically leaving early on the very day when Mr Beynon had stridently criticised Mr Whelan’s workplace performance and his allegedly frequent early departures from the workplace, and then failing to answer Mr Beynon’s telephone calls – was “the last straw” for Mr Beynon.

134    In my view, Mr Whelan has substantiated his claim against the first respondent for contravention of s 340 of the FW Act.

[Emphasis added]

26    In our view, in these excerpted passages the primary judge is doing no more than viewing the pleaded complaint or inquiry as to a bonus on 24 August 2015 through a prism which the appellants themselves invited by the tendering of the transcript. That prism was the context of the earlier discussions as to a bonus revealed in the transcript itself. In evaluating whether the pleaded complaint that day was a reason, her Honour was entitled to do so, by reference to the evidence, as to the context in which that complaint occurred. The sentence emphasised from para 133 of her reasons for judgment and her Honour’s reference to “again” makes it clear enough that this is what she was doing. The appellants were not denied procedural fairness in the way described in Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd. Rather, the case which they sought to make on the evidence was evaluated with quite some care to the end of deciding whether Mr Whelan’s pleaded case was established.

27    The appellants also criticised the primary judge’s conclusion, at para 50 (set out above) as to the irrelevance in relation to whether Mr Whelan made an inquiry on 24 August 2015, of whether he actually had an entitlement under his contract of employment to be paid a bonus. This was also said to bear upon the question of whether Freechoice, via Mr Beynon, had as a reason for his dismissal, Mr Whelan’s making of an inquiry about a bonus.

28    We are quite unable to see how any of this follows. The relevant clauses from Mr Whelan’s contract of employment are set out at para 36 of the primary judge’s reasons for judgment. It is not necessary again to reproduce them. They made provision for the annual fixing of a bonus plan and, at the very least, contemplated the payment to him, as a matter of discretion, of bonuses. He was entitled to make complaint or inquiry on these subjects. The following discussion of principle by the primary judge (at [33] – [34]) is, with respect, unremarkable and correct:

33    Section 341(c)(ii) defines a workplace right in an employee as being the entitlement of the employee to make a complaint or inquiry in relation to his employment. In such cases as Shea v TRUenergy Services Pty Ltd (No 6) [2014] FCA 271; (2014) 242 IR 1 (Shea), Murrihy v Belezy.com.au Pty Ltd [2013] FCA 908; 238 IR 307 and Walsh v Greater Metropolitan Cemeteries Trust (No 2) [2014] FCA 456; 243 IR 468 (Walsh), s 341(c)(ii) was interpreted broadly. In Walsh [41], Bromberg J observed that the requirement in s 341(c)(ii) that a complaint or inquiry by the employee be “in relation to” his employment means that there must be a relationship between the subject matter of the complaint and the complainant’s employment. As Dodds-Streeton J further observed in Shea, a complaint that an employee is able to make in relation to his or her employment is not at large, but must be founded on a source of entitlement, whether instrumental or otherwise.

34    As a general proposition, a complaint or inquiry to the employer by an employee in relation to his or her entitlement to an incentive bonus, or the failure of the employer to prepare an incentive bonus plan, where the terms of employment of that employee make provision for payment of such bonuses or the preparation of such plans, would fall within the scope of s 341(c)(iii) of the FW Act.

The pleaded complaint or inquiry in relation to a bonus constituted, for the reasons given by her Honour, the exercise of a workplace right for the purposes of the FW Act.

29    The evidence led at trial, especially including the “objective” evidence of the transcript of the meeting on 24 August 2015 was well capable of supporting the finding of the primary judge that a complaint or inquiry as pleaded in relation to a bonus had been made. Mr Beynon chose not to give evidence that the making of this complaint or inquiry was not at least a reason for his decision that day on behalf of Freechoice summarily to dismiss Mr Whelan. The mere tender of the transcript did not compel a contrary conclusion. Indeed, the conclusions reached by her Honour at para 133 of the judgment, set out above, as to the multi-factorial reasons attending the dismissal, based as they were on the whole of the evidence, including both the transcript as well as her assessment of Mr Whelan’s evidence, were reasonably, perhaps even compellingly, open.

30    The reality was that Mr Whelan laid an evidentiary foundation for an adverse action claim based on a dismissal for reasons which included his making of the pleaded inquiry or complaint in relation to a bonus on 24 August 2015. Given the interchanges which occurred between him and Mr Whelan that day and which had so obviously earlier occurred, and that Mr Beynon had made the dismissal decision, the case was one which cried out for Mr Beynon to give evidence as to his reasons. Not to call him was, at the time of the trial, not just in hindsight, truly fraught with the prospect that what Buchanan and Tracey JJ described in State of Victoria (Office of Public Prosecutions) v Grant (2014) 246 IR 441 at [32] as the “central question” as to why the employee was dismissed would be decided on the facts in favour of Mr Whelan by a conclusion that the presumption found in s 361 of the FWA had not been displaced. When all is said and done, that is all that occurred in this case insofar as an adverse action claim was made on the basis of dismissal for a reason which included the making of a complaint or inquiry concerning a bonus.

31    It is pellucid that, as the relevant corporate actor on the evidence, Mr Beynon was an accessory to this adverse action in the sense described by the Full Court in Construction, Forestry, Mining and Energy Union v Director of the Fair Work Building Industry Inspectorate (2012) 209 FCR 448 at [38]. The inference was open on the evidence that his reasons included the making of the complaint or inquiry on 24 August 2015. That inference might have been displaced had he chosen to give evidence that this was not a reason and had that evidence been accepted. As it was, his absence from the witness box meant that there was nothing to displace an inference otherwise open.

32    The foregoing disposes of all issues raised in grounds 1 to 4A of the amended notice of appeal. Ground 5A in that notice was not addressed in submissions, either orally or in writing.

33    Ground 5B is predicated upon successfully demonstrating that the adverse action claim against Freechoice ought to have failed such that, for this reason alone Mr Beynon could not be said to have been a party to a contravention. As the appellants correctly acknowledged, the fate of this ground is dictated by the fate of the challenge to the adverse action conclusion.

34    Ground 5 in the amended notice of appeal puts forward the contention that the primary judge erred by finding that cl 9.1(d) of Freechoice’s contract of employment with Mr Whelan did not apply so as to entitle it to dismiss him without notice. It was submitted that, as a consequence, the primary judge had wrongly concluded that Freechoice had contravened s 44(1) of the FW Act by not paying to Mr Whelan salary in lieu of notice and in awarding the sum of $17,625.72 in lieu of notice to him pursuant to s 545 of the FW Act.

35    Clause 9.1 of Mr Whelan’s contract of employment with Freechoice provided:

9.1     Termination by Employer

(a)    The Employer may dismiss the Employee only if the Employee has been given the following notice:

(b)    In addition to the notice in (a) above, if the Employee is 45 years old or over and has completed at least 2 years’ continuous service with the Employer, the Employee shall be entitled to an additional week’s notice.

(c)    Payment in lieu of notice shall be made in accordance with the table above when appropriate notice is not given.

Provision that employment may be terminated by part of the period of notice specified and part payment in lieu thereof.

(d)    The period of notice in this clause shall not apply in the case of dismissal for gross misconduct or other grounds that justify instant dismissal.

(Original emphasis)

36    Subject to presently immaterial exceptions, s 44(1) of the FW Act prohibits contravention of the “the National Employment Standards”. One such standard (see s 61(2)(i) of the FW Act) is found in s 117, which deals with the requirement for notice of termination or payment in lieu. Materially, it provides:

Amount of notice or payment in lieu of notice

(2)    The employer must not terminate the employee’s employment unless:

(a)    the time between giving the notice and the day of the termination is at least the period (the minimum period of notice) worked out under subsection (3); or

(b)    the employer has paid to the employee (or to another person on the employee’s behalf) payment in lieu of notice of at least the amount the employer would have been liable to pay to the employee (or to another person on the employee’s behalf) at the full rate of pay for the hours the employee would have worked had the employment continued until the end of the minimum period of notice.

The prescription in s 117(3) of the FW Act as to the calculation of the minimum period of notice corresponds with that set out in cl 9.1(a) and (b) of the contract of employment. The obligation created by s 117 of the FW Act is materially qualified by s 123(1)(b) of that Act. It does not apply to “an employee whose employment is terminated because of serious misconduct”.

37    The primary judge did not, in terms, refer to s 123 of the FW Act. There was an express reference to s 123(1)(b) of the FW Act in paragraph 56(c) of the second further amended defence as a reason why the obligation found in s 117(2) of the FW Act was inapplicable. This paragraph in the pleading must be read with para 52, which alleges that neither notice of termination nor payment in lieu was necessary because Mr Whelan’s employment “was terminated for serious misconduct”.

38    For the purposes of the definition of “serious misconduct” in s 12 of the FW Act, reg 1.07 of the Fair Work Regulations 2009 (Cth) offers a definition of the “means and includes” variety. It provides that the term carries its ordinary meaning and then also lists in a non-exhaustive way certain types of conduct which are expressed to fall within the meaning of the term. These include, “wilful or deliberate behaviour by an employee that is inconsistent with the continuation of the contract of employment”. That and each of the other specified types of conduct constitute conduct which would be regarded at common law as warranting the summary termination of an employment relationship. The utility of the definition may therefore be doubted.

39    The difficulty about paras 52 and 56(c) of the Defence is that, even read together, they just make a bald allegation that the employment was terminated for serious misconduct. There is no allegation that there existed other reasons, not known at the time of termination but since discovered which further or alternatively also constitute serious misconduct. Nor is there an allegation that such later discovered reasons are capable of making Mr Whelan fall within the description, “an employee whose employment is terminated because of serious misconduct” found in s 123(1)(b) of the FW Act.

40    Freechoice did terminate Mr Whelan’s employment on 24 August 2015 for the expressed reason of breach of confidentiality. Mr Whelan was said to have breached confidentiality associated with the publication of an article and associated photoshoot in Zoo Magazine by giving an advance copy of that article to a Ms Chanel Stewart. For reasons set out at para 118 of the judgment, the primary judge did not accept that this was a reason for Mr Whelan’s dismissal. Her Honour’s finding that breach of confidentiality was not a legitimate basis for the dismissal was not challenged by the appellants on the appeal. They no longer put in issue that the contemporaneously specified reason for termination constituted serious misconduct.

41    Freechoice did plead, in relation to the contractual claim for payment in lieu of notice, that there were other reasons, not known to it at the time of termination but later discovered, which would in any event have entitled it to terminate summarily the contract of employment: see para 39 of the Second Further Amended Defence. Obviously enough, in relation to the contractually based claim, this was an endeavour to rely on the principle in Shepherd v Felt & Textiles of Australia Ltd (1931) 45 CLR 359, as discussed in Melbourne Stadiums Ltd v Sautner (2015) 229 FCR 221. However, this rationale was not repeated in the pleading as a reason why the s 44 statutory claim founded on s 117(2) of the FW Act was rendered inapplicable by s 123(1)(b) of that Act. In these circumstances and given that there is no longer any contest that the contemporaneously specified reason for termination constituted serious misconduct, no error, flowing from the failure to address s 123 of the FW Act by the primary judge, arises. In particular, it is not necessary to consider, much less determine, whether the use of the present tense in s 123(1)(b) of the FW Act (“is terminated for”, as opposed to, “is or was capable of being terminated for”) excludes what might be termed the Shepherd v Felt & Textiles as a basis for rendering s 117(2) applicable.

42    The statement of the primary judge (at [159]) that, “the FW Act does not permit an employer to withhold statutory entitlements of this type in circumstances other than contemplated by s 324(1) of the FW Act” necessarily presumed that a statutory entitlement existed. If s 123(1)(b) of the FW Act were applicable, no statutory entitlement under s 117(2) of that Act could arise. However, for the reasons given, there is no operative exclusion under s 123(1)(b) of the FW Act that falls for consideration. Thus, the basis for the conclusion that s 44 of the FW Act was contravened, because a National Employment Standard provision (s 117(2)) was contravened remains. That statutory contravention supplied a basis for the making of an award in favour of Mr Whelan in respect of his unpaid leave in the sum specified in the judgment under appeal.

43    In these circumstances, it is not to the point that her Honour did not address later discovered conduct which at common law may have supplied a reason why the separate, contractually grounded (cl 9) claim for payment in lieu of notice could not have succeeded. Ground 5 uncritically conflates the common law contractual and statutory bases for the claim in respect of payment in lieu of notice. For the reasons given, it leads nowhere in terms of a foundation for the order for payment and should be dismissed.

44    Ground 6 challenged the finding of accessorial liability made against Mr Beynon in respect of the contravention of s 44 of the FW Act constituted by its failure to make payment to Mr Whelan in lieu of notice of termination. This finding was based on a preference for the evidence of a Ms Parnia Marshall over that of Ms Ozioko. Ms Marshall was a promotional model who was employed by Freechoice from May to November 2015. Ms Marshall related in evidence her recollection of a conversation on the evening of 24 August 2015 to which Mr Beynon and Ms Ozioko were also parties which was, “mainly to do with Andrew’s [Mr Whelan’s] firing – being sacked.”

45    The primary judge had the benefit of observing both Ms Marshall and Ms Ozioko giving oral evidence. As to their evidence, her Honour stated (at [118], last dot point):

I consider that Ms Marshall was a credible witness, and prefer her evidence in respect of the events of the evening of 24 August 2015 to that of Ms Ozioko. I take this view because Ms Marshall was an independent witness, with no convincing motive to give untruthful evidence in this respect. It was also apparent from her testimony that the events of that evening made a significant impression on her, such that she was able to recall with those events with clarity. I also consider her version of events plausible.

46    Her Honour’s preference for Ms Marshall’s evidence over that of Ms Ozioko informed her conclusion as to Mr Beynon’s accessorial liability in respect of the s 44 contravention, as the following passage from her reasons for judgment ([163] – [169]) discloses:

Was Mr Beynon involved in the first respondent’s contravention of s 44(1) of the FW Act?

163    Earlier in this judgment I set out principles relevant to accessorial liability under s 550(1) of the FW Act.

164    Mr Beynon gave no evidence concerning the first respondent’s failure to pay Mr Whelan his statutory entitlements.

165    Evidence was however given by Ms Ozioko and Ms Marshall concerning this issue during the hearing.

166    Relevantly Ms Ozioko said:

Well, we withheld them on the basis of the confidential documents being withheld, and they were not – they were not paid after that time either.

(Transcript page 454 lines 41-43)

…

MR WHITE: Yes. Was it your decision, though, Ms Ozioko, to not pay it?---Was it my decision? Yes. I was the person responsible for it.

(Transcript page 455 lines 40-41)

167     Ms Marshall gave evidence of witnessing a conversation between Mr Beynon and Ms Ozioko on the evening of 24 August 2015 after Mr Whelan had been dismissed, as follows:

And then to finish up the conversation, like, he was sort of smirking at the time after he said that, and then to finish off the conversation he was like, don’t pay him – sorry to swear, but – a fucking cent.

168    Although Ms Ozioko claims that it was her decision not to pay Mr Whelan his statutory entitlements, on the material before me I consider that Mr Beynon was knowingly involved in that conduct. Ms Ozioko referred to “we” withholding Mr Whelan’s money – I consider it implausible that Ms Ozioko would have done so in the absence of approval or indeed direction by Mr Beynon. He was the mind and will of the first respondent, and Mr Whelan was a senior officer of the first respondent. I consider it very likely that Mr Beynon would have taken the angry and vengeful approach to Mr  helan described by Ms Marshall.

169    I find that Mr Beynon has also contravened s 44 of the FW Act.

47    The factual findings of a trial judge are not lightly to be disturbed on appeal: see Warren v Coombes (1979) 142 CLR 531 at 552 to 553; Saints Gallery Pty Ltd v Plummer (1988) 80 ALR 525. Of course, in an appeal by way of rehearing we are obliged to consider the available evidence, the findings made by the primary judge in the passage quoted cannot be regarded as glaringly improbable or contrary to compelling inferences: Fox v Percy (2003) 214 CLR 118 at 128. Indeed, when we consider Ms Marshall’s account of what was said by Mr Beynon in the context of the language he employed in the exchange he had earlier that day with Mr Whelan, her account strikes us as inherently credible.

48    On the findings which her Honour made in the passage quoted and in terms of approaches to conclusions of accessorial liability approved earlier this year by the Full Court in EZY Accounting 123 Pty Ltd v Fair Work Ombudsman [2018] FCAFC 134, Mr Beynon had a “practical connection” - Fair Work Ombudsman v Devine Marine Group Pty Ltd [2014] FCA 1365 [178] per White J - or was “linked in purpose” - Australian Communications and Media Authority v Mobilegate Ltd (No 8) (2010) 275 ALR 293 at 327 per Logan J - with Freechoice’s non-payment of anything in lieu of notice to Mr Whelan. Quite how one could reach any different conclusion in respect of a statement by the managing director (Mr Beynon) to the, by then, next most senior officer of Freechoice (Ms Ozioko) escapes us.

49    Contrary to Mr Beynon’s submissions, there is no principled basis for overturning the primary judge’s preference for Ms Marshall’s evidence. Once this conclusion is reached, the primary judge’s conclusion that Mr Beynon was accessorily liable in respect of the s 44 contravention founded on a failure to make payment in lieu of notice is unremarkable. Ground 6 must be dismissed.

50    This then leaves for consideration Ground 7, which challenges the primary judge’s dismissal of Freechoice’s cross-claim.

51    The controversy in relation to Freechoice’s cross-claim was whether it had loaned Mr Whelan the sum of $70,000 (repayable on demand) or paid that sum to him in anticipation of his receipt of a bonus to which he never became entitled (thus in the circumstances the money was repayable). Mr Whelan’s riposte was that the sum was just was a discretionary bonus.

52    Both at trial and on appeal, Freechoice laid great store on what was submitted to be the objective evidence as to the character of the payment, found in a text exchange between Messrs Beynon and Whelan (Exhibit SO3). We have considered the text exchange as a whole. The language employed by each of the parties in the exchange is, to say the least, casual. In our view, the critical text, was one in these terms authored by Mr Beynon (the “T”) and sent to Mr Whelan:

Hey mate, as I said it’s important at this time for the family, especially the boys to have enjoyment of a boat. I will take care of the $38K balance by way of advance or something, enjoy your holiday. T

The statement, “advance or something” was of moment for the primary judge’s conclusion that the cross-claim failed, as this passage from her Honour’s reasons for judgment ([267] – [273]) in which her reasons for dismissing the cross-claim are stated:

267    First, as a general proposition the term “advance” should be given a wide meaning, and does not necessarily equate with “loan”: London Financial Association v Kelk (1884) 26 ChD 107 at 136, Armco (Aust) Pty Ltd v Federal Commissioner of Taxation [1948] HCA 49; (1948) 76 CLR 584 at 621.

268    Second, cl 4.0 of Mr Whelan’s employment contract provided that he would be eligible for additional incentive bonuses at Mr Beynon’s discretion. There is no reference in any contemporaneous communications between Mr Beynon and Mr Whelan to the amount of $70,000 as a “loan” and no suggestion that the provision of funds in this amount was tied to any future performance. Rather, in the circumstances it is more likely that the payment of $70,000 was an additional incentive bonus to Mr Whelan. The warm and approving tone of Mr Beynon’s messages to Mr Whelan concerning the boat Mr Whelan wanted to buy at that time, the obviously close relationship between Mr Beynon and Mr Whelan, and Mr Whelan’s clear gratitude for Mr Beynon’s offer (and subsequent provision) of the money, indicates that the money was an unconditional bonus rather than a loan or a part-payment of a future bonus entitlement.

269    Third, in his text message Mr Beynon wrote that he would “take care” of the $38,000 Mr Whelan required to complete the purchase of the boat “by way of advance or something”. Even if Mr Beynon at one point contemplated a loan to Mr Whelan, the open-ended nature of this communication whereby Mr Beynon also contemplated “something” is consistent with the subsequent provision of the money without ties to future bonus entitlements of Mr Whelan.

270    Fourth, Mr Whelan’s uncontested evidence was that he actually received the amount of $38,001.28, being equivalent to the net amount after deduction of tax of a discretionary bonus payment of $70,000. This evidence is consistent with the statement on Mr Whelan’s group certificate issued by the first respondent for the 2014/15 Financial Year (annexed to Mr Whelan’s affidavit of 1 July 2016) that his gross annual earnings were $468,963 and Mr  Whelan’s evidence that this gross amount included the payment of $70,000. It also supports a finding that the amount of $70,000 was income in Mr Whelan’s hands during the 2014-2015 financial year, rather than a loan.

271    Fifth, while during cross-examination Mr Whelan accepted that there was not a single item of correspondence which described the sum of $70,000 as a discretionary bonus, equally there was nothing in writing produced by the respondents which described that sum as a loan or conditional payment to Mr Whelan.

272    Finally I accept as plausible Mr Whelan’s evidence under cross-examination that Mr Whelan was, in effect, intimidated by Mr Beynon during the meeting of 24 August 2015 and for that reason chose not to point out to Mr Beynon that he had already received a bonus in the form of the $70,000 payment.

273    In my view the payment was a bonus to Mr Whelan, and not repayable by him.

53    The evidence was that payment to Mr Whelan by Freechoice was effected by way of a sum from which tax was deducted such that he received the net amount of $38,001.28. Quite how, contrary to its submission, this tax treatment was in any way consistent with a mutual understanding that a loan of $70,000.00 was being made by Freechoice is elusive. We agree with the conclusion of the primary judge that the text reference “advance or something” left open by ambiguity exactly how and on what terms a payment would be made by Freechoice to Mr Whelan. That it took the form of a payment from which tax on $70,000 was withheld is inconsistent with the making of a loan but consistent with the “or something” option having been adopted by way of a bonus payment. The tax treatment is also inconsistent with the sum being an advance against a future bonus entitlement. It is consistent with the payment of income by way of a taxed bonus. Freechoice has not demonstrated any error on the part of the primary judge in dismissing the cross-claim. The primary judge’s dismissal of the cross-claim, for the reasons given by her, was open on the evidence. Ground 7 should be dismissed.

54    It follows that the appeal should be dismissed.

55    If, having regard to s 570 of the FW Act and the observations as to the import of “in relation to” in that section as made in Melbourne Stadiums Ltd v Sautner either party wishes to make application for costs, notice should be given to the Registrar and the opposing party (parties) not later than 20 February 2019. The Court will then issue directions for an exchange of outlines of submissions on that question.

Associate:

Dated:    8 February 2019