Federal Court of Australia
Cummins South Pacific Pty Ltd v Keenan [2020] FCAFC 204
ORDERS
CUMMINS SOUTH PACIFIC PTY LTD (ACN 006 332 949) Appellant | ||
AND: | Respondent | |
DATE OF ORDER: |
THE COURT ORDERS THAT:
1. The appeal be allowed in part in respect of appeal grounds 3 – 9 and appeal ground 12.
2. Paragraphs 1, 2, 4, 5, 6, and 7 of the Order of the Federal Circuit Court of Australia dated 8 March 2019 be set aside.
3. The proceeding be referred for urgent mediation before a Registrar of the Court to be held on a date to be fixed.
4. Should the proceeding not be resolved at mediation, the proceeding be listed for a Case Management Hearing before the presiding judge on a date to be fixed.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
BROMBERG J:
INTRODUCTION
1 This appeal concerns an application made under the general protections provisions in Pt 3-1 of the Fair Work Act 2009 (Cth) (“FW Act”) by Andrew Keenan (“Mr Keenan”) against Cummins South Pacific Pty Ltd (“Cummins”).
2 Cummins is the Australian emanation of a multinational corporate group which is in the business of manufacturing diesel engines. Mr Keenan worked for Cummins and its related entities for approximately 34 years, first as an engineer and later as a member of Cummins’ senior managerial staff.
3 The principal allegation in Mr Keenan’s application was that six adverse actions, including his dismissal from employment with Cummins, had been taken against him because he made certain complaints about his employment. His application was based on Cummins having taken each of the adverse actions it took against him including because he made one or more of the following five complaints: a complaint made about his colleague Sharmili Baldota (“Ms Baldota”) on 17 July 2014 (“first complaint”); a further complaint on 26 February 2015 about Ms Baldota (“second complaint”), a complaint on 27 May 2015 that a certain Performance Improvement Plan (“PIP”) was subjective or ambiguous (“third complaint”); a complaint on 29 July 2015 that he was extremely stressed (“fourth complaint”); and a complaint raised by way of an ‘ethics case’ against Ms Baldota and Christina Beaulieu (“Ms Beaulieu”) on 25 October 2015 (“fifth complaint”). Mr Keenan also alleged that in contravention of s 352 of the FW Act, he was dismissed because he had been absent from work whilst ill. Further, he claimed that on the termination of his employment Cummins had underpaid his long service leave entitlements because the service he had provided to a related corporation of Cummins had not been counted.
4 Mr Keenan’s application was successful in the Federal Circuit Court of Australia. At first instance, the primary judge made declarations to the effect that, among other things, Cummins breached s 340(1) of the FW Act by each of the six instances of adverse action pleaded by Mr Keenan. His Honour also found that s 352 had been contravened as alleged. The primary judge ordered that Mr Keenan’s employment with Cummins be reinstated along with substantial compensation. A declaration was made requiring Cummins to recognise the service provided by Mr Keenan to its related corporation for the purposes of Mr Keenan’s long service leave entitlements. Penalties were imposed upon Cummins for contravening ss 340(1) and 352 of the FW Act.
5 Each of those orders and declarations made in favour of Mr Keenan is the subject of this appeal.
6 The procedural background to this matter is further set out in the reasons for judgment of Anastassiou J. I gratefully adopt his Honour’s summary of those matters as well as the summary of the facts there given in so far as they supplement the facts set out herein.
were “complaints” within the meaning of section 341(1)(c)(ii) made by mr keenan?
7 The first and second grounds of appeal challenge the primary judge’s findings that s 340(1) was contravened. Those grounds are confined to the first to fourth complaints. Cummins asserted that those complaints did not constitute the exercise of a “workplace right” by Mr Keenan within the meaning of s 341(1)(c)(ii) of the FW Act. There are two separate bases for that assertion. First, that the complaints were not founded in or upon a source of entitlement as the phrase “able to make a complaint” (s 341(1)(c)(ii)) requires. Second, that each of the complaints were not a “complaint” within the meaning of that expression in s 341(1)(c)(ii).
Was Mr Keenan “able to make a complaint”?
8 On this issue and several other issues later addressed, the task with which I am confronted is largely that of statutory construction. That task requires the attribution of legal meaning to statutory text: Taylor v The Owners – Strata Plan No 11564 (2014) 253 CLR 531 at [65] (Gageler and Keane JJ). It is a task which requires that the text of the legislative provision in question be construed by reference to its context and its legislative purpose: Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at [78] (McHugh, Gummow, Kirby and Hayne JJ); SAS Trustee Corporation v Miles (2018) 265 CLR 137 at [20] (Kiefel CJ, Bell and Nettle JJ). Context includes legislative history and extrinsic materials: Thiess v Collector of Customs (2014) 250 CLR 664 at [22] (French CJ, Hayne, Kiefel, Gageler and Keane JJ). Legislative history may, and in this case does, provide a contextual aid. Extrinsic material such as the Explanatory Memorandum to the Fair Work Bill 2008 (“Explanatory Memorandum”) is also of assistance.
9 In SZTAL v Minister for Immigration and Border Protection (2017) 262 CLR 362, Kiefel CJ, Nettle and Gordon JJ emphasised that text, context and purpose must be construed together, saying at [14] (references omitted):
The starting point for the ascertainment of the meaning of a statutory provision is the text of the statute whilst, at the same time, regard is had to its context and purpose. Context should be regarded at this first stage and not at some later stage and it should be regarded in its widest sense. This is not to deny the importance of the natural and ordinary meaning of a word, namely how it is ordinarily understood in discourse, to the process of construction. Considerations of context and purpose simply recognise that, understood in its statutory, historical or other context, some other meaning of a word may be suggested, and so too, if its ordinary meaning is not consistent with the statutory purpose, that meaning must be rejected.
10 Before I turn to consider s 341(1)(c) specifically, including by reference to its text, legislative context, legislative history and purpose, it is helpful that I briefly outline the central provisions most relevant to the constructional exercise I need to perform.
11 Part 3-1 of the FW Act is headed “General Protections” and has five Divisions. The operative prohibition in Div 3 is set out in s 340(1) which relevantly provides that “[a] person must not take adverse action against another person because the other person: (i) has a workplace right; or (ii) has, or has not, exercised a workplace right; or (iii) proposes or proposes not to, or has at any time proposed or proposed not to, exercise a workplace right”. The meaning of the statutory expression “adverse action” is given in s 342. The meaning of the statutory expression “workplace right” is given by s 341. It is necessary to set out the first two sub-sections of s 341 in full:
Meaning of workplace right
(1) A person has a workplace right if the person:
(a) is entitled to the benefit of, or has a role or responsibility under, a workplace law, workplace instrument or order made by an industrial body; or
(b) is able to initiate, or participate in, a process or proceedings under a workplace law or workplace instrument; or
(c) is able to make a complaint or inquiry:
(i) to a person or body having the capacity under a workplace law to seek compliance with that law or a workplace instrument; or
(ii) if the person is an employee--in relation to his or her employment.
Meaning of process or proceedings under a workplace law or workplace instrument
(2) Each of the following is a process or proceedings under a workplace law or workplace instrument:
(a) a conference conducted or hearing held by the FWC;
(b) court proceedings under a workplace law or workplace instrument;
(c) protected industrial action;
(d) a protected action ballot;
(e) making, varying or terminating an enterprise agreement;
(f) appointing, or terminating the appointment of, a bargaining representative;
(g) making or terminating an individual flexibility arrangement under a modern award or enterprise agreement;
(h) agreeing to cash out paid annual leave or paid personal/carer's leave;
(i) making a request under Division 4 of Part 2-2 (which deals with requests for flexible working arrangements);
(j) dispute settlement for which provision is made by, or under, a workplace law or workplace instrument;
(k) any other process or proceedings under a workplace law or workplace instrument.
12 The nexus in s 340(1) between the prohibition on taking adverse action and the holding or exercise of a “workplace right” is found in the word “because”. As is well demonstrated by the authorities, that nexus will be established, and therefore s 340(1) will be contravened, where the holding or exercise by a person of a “workplace right” is a substantial and operative reason for the adverse action taken against that person: Short v Ambulance Victoria [2015] FCAFC 55 at [55] (Dowsett, Bromberg and Murphy JJ).
13 The natural meaning of the term “complaint” in the context in which it is used in s 341(1)(c) connotes an expression of discontent which seeks consideration, redress or relief from a matter in relation to which the complainant is aggrieved. A complaint is more than a mere request for assistance and must state a particular grievance or finding of fault: Shea v TRUenergy Services Pty Ltd (No 6) [2014] FCA 271 at [579]-[581] (Dodds-Streeton J) and the authorities there cited. Whether an employee has made a complaint is a matter of substance, not form, and is to be determined in light of all the relevant circumstances, it being only necessary that the relevant communication, whatever its form, is “reasonably understood in context as an expression of grievance or a finding of fault which seeks, whether expressly or implicitly, that the employer or other relevant party at least take notice of and consider the complaint”: Shea at [626]-[627] (Dodds-Streeton J).
14 As Dodds-Streeton J observed in Shea at [619], the relevant object of s 340 (in combination with s 341(1)(c)) “is to protect employees from retribution in the form of adverse action because they have exercised a workplace right by making a complaint in relation to their employment”. The protection from retribution is not a protection provided for any and all complaints. What is protected is the right of an employee to complain about the employee’s employment and the matters that relate to it. That seems to be based on the rationale that an employee should be entitled to advocate in support of her or his interests in the employment without fear of retribution for having raised those interests with her or his employer or another person or body to whom the employee has turned for assistance.
15 On many of the principles arising from Shea in relation to what constitutes a complaint within the meaning of s 341(1)(c), I respectfully agree with the observations made by Dodds-Streeton J. There is however one aspect of the reasoning in Shea that I respectfully consider to be problematic. In Shea at [625] and by reference to s 341(1)(c)(ii) of the FW Act, Dodds-Streeton J held (emphasis added):
In my opinion, the requirement that the complaint be one that the employee ‘is able to make’ in relation to his or her employment suggests that there are complaints which the employee is not able to make in relation to his or her employment. The ability to make a complaint does not arise simply because the complainant is an employee of the employer. Rather, it must be underpinned by an entitlement or right. The source of such entitlement would include, even if it is not limited to, an instrument, such as a contract of employment, award or legislation.
16 In providing a summary of that holding at [29], Dodds-Streeton J said:
(f) 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;
17 Those observations, although variously interpreted, have been followed by a number of authorities to which I will return. It is convenient, however, to identify now the two different and contradictory ways in which the principle emanating from those observations has been construed by those authorities. The first interpretation is that for a complaint to fall within the scope of s 341(1)(c), there must be a right or entitlement held by the employee to make the complaint. In other words, the complaint must be sourced in a right or entitlement to complain held by the employee. That view seems to flow from what Dodds-Streeton J said at [625]. The second way in which the observations of Dodds-Streeton J have been interpreted by later authority is that the making of a complaint need not be sourced in a right or entitlement to do so but that the complaint must be about a right or entitlement of the employee. Some support for that interpretation may be taken from the summary given by Dodds-Streeton J at [29] of Shea. Arguably, the words “founded on a source of entitlement” could have been intended to mean that the subject matter of the complaint must be a right or entitlement held by the employee. However, if that were so, the summary of the principle given by Dodds-Streeton J would seem to be out of accord with the observations which it purports to summarise. Further, the way in which Dodds-Streeton J applied the principle to the particular complaints alleged in Shea tends to support the view that her Honour considered that s 341(1)(c) required that the complaint must be sourced in a right or entitlement to make it: see for example at [651]-[652], [680] and [729]-[730].
18 The observations made by Dodds-Streeton J in Shea are relied upon by Cummins in support of its contention that each of the first four complaints made by Mr Keenan were not capable of constituting a complaint of the kind contemplated by s 341(1)(c)(ii) and that the primary judge erred in not so holding. Relying upon each of the two different interpretations of the observations in Shea, Cummins contended that those complaints were neither sourced in a right or entitlement to complain held by Mr Keenan nor were they complaints about a right or entitlement held by him. Mr Keenan contended that there was nothing in the legislation which supported either of the requirements upon which Cummins relied. He contended that the requirement that a complaint be either sourced in a right or entitlement or about a right or entitlement were the product of a judicial gloss wrongly imposed on the plain language of the provision in question.
19 In my view, for the purposes of s 340(1)(c) of the FW Act, a complaint need not be sourced in the right or entitlement of the employee to make the complaint or be about a right or entitlement held by the employee. The imposition of either limitation is not supported by the text, context or purpose of the provision.
20 The observations made by Dodds-Streeton J command respect. However, I regret to say that I am unable to agree with the construction of s 341(1)(c)(ii) adopted by her Honour in the passages quoted above. Whichever way those observations are understood, her Honour’s construction imposes a substantial limitation on the protections which s 340(1) is intended to provide. As I shall seek to explain, the imposition of either limitation is not supported by the text of s 341(1) or by the purpose of that provision in the longstanding legislative scheme of which it forms part. So much is revealed by the text, context and legislative history, and by the Explanatory Memorandum. The construction adopted by Dodds-Streeton J also narrowly construes a provision which must be beneficially construed: see Construction Forestry Mining and Energy Union v Endeavour Coal Pty Ltd (2015) 231 FCR 150 at [180] (Bromberg J) and the cases there cited.
21 In the constructional task which needs to be undertaken, it is important that the function of the matters listed in s 341(1), in the scheme for which that provision forms part, be properly appreciated. The matters listed in s 341(1) are central to the prohibition mandated by s 340(1). Section 340(1) of the FW Act is contravened when the person taking the adverse action is actuated by one or other of the circumstances listed in s 341(1). Those circumstances are what I will call the “actuating circumstances”. Their function is to identify the circumstance or reason for the taking of the adverse action which s 340(1) prohibits.
22 That very same function is served by the matters listed in s 347 which is found in Div 4 of Pt 3-1. The operative prohibition in Div 4 is found in s 346 which largely adopts the same structure as s 340(1) and relevantly provides that a person must not take adverse action against another person because the other person (i) engages, has engaged or proposes to engage or (ii) does not engage, has not engaged or proposed to engage, in “industrial activity”. Section 347 provides the list of actuating circumstances. They are there given the statutory description “industrial activity”.
23 A prohibition on adverse action being taken by one person against another where that action is actuated by specified circumstances has existed in federal industrial legislation since its very inception in 1904. A depth of understanding is provided by the legislative history and it ought not to be overlooked. Since 1904, federal industrial legislation has contained a scheme designed to prohibit specified action taken by one person against another by reason of particular actuating circumstances specified by the scheme. The number of those actuating circumstances has grown over time and their nature has varied. Sometimes the actuating circumstance has been an attribute of the person victimised or a status held or an entitlement to something which that person has. Alternatively, the actuating circumstance has been that person’s ability or capacity to do something. At other times the actuating circumstance has been described by reference to a particular activity the person has engaged in or has refused to engage in.
24 The scheme was modest at the outset. Only three actuating circumstances were specified – membership of a union, the holding of an office in a union, and entitlement to the benefit of an industrial agreement or award: s 9(1) of the Conciliation and Arbitration Act 1904 (Cth). In 1914, s 9 of the Conciliation and Arbitration Act was amended to include an activity as an actuating circumstance. The pre-existing actuating circumstances mentioned above were supplemented with the additional prohibition that an employer shall not take specified action against an employee who “has appeared as a witness, or has given any evidence, in a proceeding under this Act”.
25 By November 1988, when the Conciliation and Arbitration Act was replaced by the Industrial Relations Act 1988 (Cth), there were 11 actuating circumstances specified by the prohibition imposed by s 334(1) of that Act, that an employer shall not dismiss, injure or prejudicially alter the position of an employee “because” of the circumstances listed by that provision. By that time, the actuating circumstances included the protected person’s participation in specified processes as well as involvement in industrial activities such as the seeking of better industrial conditions or the refusal to join in industrial action.
26 A very significant extension of the list of actuating circumstances was introduced in 1996 when the Industrial Relations Act became the Workplace Relations Act 1996 (Cth). The scope of the scheme was enlarged so as to capture not only conduct of employers against employees but also conduct by employees, independent contractors and industrial associations taken against an employer as well as action taken by an industrial association against employees and against members of the industrial association (see ss 298N, 298P, 298Q and 298R). In relation to employer conduct, the actuating circumstances were listed in s 298L and were described as “prohibited reasons”.
27 By this time there were 14 actuating circumstances listed in relation to employer conduct. Many of those actuating circumstances were replicated in relation to employee or industrial association conduct, but additional actuating circumstances were included in those categories. Broadly speaking and confining the analysis to employer conduct, there was some expansion in relation to activities such as participation in specified processes and, relevantly to the issue I am addressing, the making of an inquiry or complaint by the protected person. The making of inquiries or complaints has its genesis as an actuating circumstance or “prohibited reason” in s 298L of the Workplace Relations Act (although an earlier but somewhat different iteration is found in s 170DF of the Industrial Relations Act). Section 298L(i) provided for the following “prohibited reason”:
(i) has made or proposes to make any inquiry or complaint to a person or body having the capacity under an industrial law to seek:
(i) compliance with that law; or
(ii) the observance of a person’s rights under an industrial instrument
28 With the enactment of the FW Act, the scheme was substantially re-organised. The action prohibited to be taken against another person was given the statutory description of “adverse action” and defined in s 342. The actuating circumstances were no longer grouped by reference to the nature of the actor whose conduct was prohibited (ie employer conduct, employee conduct or industrial association conduct) but became grouped by subject matter under the actor-neutral prohibition that “a person must not take adverse action against another person…because” (ss 340(1) and 346).
29 There were two subject matter groupings of actuating circumstances created. The groupings are somewhat arbitrary. They were described in the Explanatory Memorandum [1338] as follows:
The principal protections in Part 3-1 have been divided into protections relating to workplace rights (which can be broadly described as employment entitlements and the freedom to exercise and enforce those entitlements) and engaging in industrial activities (which encompasses the freedom to be or not be a member or officer of an industrial association and to participate in lawful activities, including those of an industrial association).
30 The Explanatory Memorandum at [1336] also noted that:
The consolidated protections in Part 3-1 are intended to rationalise, but not diminish, existing protections. In some cases, providing general, more rationalised protections has expanded their scope.
31 The observation to be made is that, consistently with the function of each of the paras in s 347, the function of each of the paras of s 341(1) is to describe particular circumstances which will engage the prohibition upon the taking of adverse action where those circumstances actuate the taking of that action. Each of the actuating circumstances described by s 341(1) has been given the statutory descriptor “workplace right”, but that is a statutory construct used to facilitate a particular style of statutory drafting. No legal right or entitlement is conferred by s 341(1), nor is the function of s 341(1) to describe particular legal rights, although in describing actuating circumstances, the holding of a particular legal right may be referred to as a circumstance – an entitlement to the benefit of an industrial instrument being one example. Actuating circumstances with the very same function are, as I have noted, each described in s 347 as “industrial activity”. In s 9 of the Conciliation and Arbitration Act (on or after 1914) each of the actuating circumstances was described as a “circumstance”. The description “prohibited reason” was applied in the drafting of the Workplace Relations Act. A proper understanding of the function of the actuating circumstances listed in s 341(1) should not be distracted by the “workplace rights” label which the legislation has employed to describe them.
32 The next observation that needs to be made is that the actuating circumstances described by s 341(1) are expressed in possessory terms, that is, what “[the protected person] has”. They are not described as activities (as most could have been) but, in para (a), as entitlements or roles or responsibilities held by the protected person and, in paras (b) and (c), as abilities or capacities held by that person, namely, either the ability to “initiate” or “participate” in certain processes or proceedings or, relevantly, the ability to make certain complaints or inquiries.
33 For paras (b) and (c) of s 341(1), the phrase “is able to” is used to identify that the actuating circumstance being there addressed is an ability held by the protected person. The meaning of that phrase throughout s 341(1) must be assumed to be consistent. That the same structure is adopted in both paras (b) and (c) of s 341(1) is instructive.
34 The words “is able to” are not of themselves words of limitation. Their function when used in paras (b) and (c) of s 341(1) is to identify an actuating circumstance by reference to an ability held by the person that the scheme seeks to protect. The subject of that ability or those abilities is then specified in the remainder of the paragraph. The plain words of the provision only raise one inquiry. Does the protected person hold or possess the particular ability specified? That is a factual inquiry made as part of an exercise for discerning whether a particular circumstance does or does not exist. There is nothing in the text and in particular the words “is able to”, which suggests that any inquiry is required as to the provenance of the ability held, that is, how the ability was acquired or whether or not there is some underlying foundation for its existence. All that matters, on the plain words of the provision and in the context of its function, is whether or not the circumstance exists that the protected person has or holds the specified ability.
35 If there is a limitation imposed in paras (b) and (c) of s 341(1), that limitation is to be found in the subject matter of the ability in question. Thus, the text of s 341(1)(b) is to be understood as providing that any limitation on a person’s ability to initiate or participate in the processes or proceedings there referred to (as defined by s 341(2)), is to be found in the process or proceeding in question. To illustrate, if the process was a dispute resolution process provided for by the workplace instrument and that process provided that only a person aggrieved could initiate it, there would for that reason be a limitation imposed as to who “is able to initiate” such a process. It may be that the process in question may require a person to have a right or entitlement to initiate or participate in that process. If that is so, there would be a limitation imposed by reference to the particular right or entitlement.
36 The same structure has been adopted for paragraph (c) of s 341(1). The phrase “is able to” is repeated and the subject of that ability held – a capacity to make a particular kind of complaint or inquiry – is specified. If any limitation is imposed on that ability, the drafting structure adopted suggests again that the limitation is to be found in the subject specified for that ability. For s 341(1)(c)(i) any limitation that applies will be found in the processes of the particular “person or body having the capacity under a workplace law to seek compliance with that law or workplace instrument”. The remit or the area of activity of such a person or body may impose the limitation. It may be, for instance, that a body such as a regulator for a particular industry will only receive complaints from participants within the industry that the regulator is authorised to regulate.
37 Turning then to s 341(1)(c)(ii), a limitation is found at the outset – the ability to complain or inquire is limited to a person who is an employee. There is no other limitation upon the ability there dealt with which is discernible from the text of that provision. It is possible that because the complaint or inquiry must be made in relation to the particular employment of the employee, some limitation may arise out of that particular employment. However, that seems unlikely, and it appears that it was that very unlikeliness of the existence of any further limitation that drove Dodds-Streeton J to imply a limitation. Her Honour’s reasoning is confined to the following two sentences at [625], set out again for convenience:
In my opinion, the requirement that the complaint be one that the employee “is able to make” in relation to his or her employment suggests that there are complaints which the employee is not able to make in relation to his or her employment. The ability to make a complaint does not arise simply because the complainant is an employee of the employer.
38 With respect, there are a number of difficulties with that reasoning and I will deal, in turn, with each of the two interpretations that later authorities suggest were intended by Dodds-Streeton J commencing first with the limitation that, to be a complaint or inquiry within the scope of s 341(1)(c), the complaint or inquiry must concern or be about a right or entitlement held by the employee. That limitation is a limitation on the subject matter of the complaint or inquiry which an employee is able to make. But it is not open to imply a limitation upon that subject matter where the provision has expressly specified that limitation. The subject matter of the complaint or inquiry is specified in s 341(1)(c)(ii) in the phrase “in relation to his or her employment”. That is the requisite subject matter of the complaint or inquiry and, in turn, of the ability to do so with which that provision is concerned.
39 As I said in Walsh v Greater Metropolitan Cemeteries Trust (No 2) [2014] FCA 456 at [41], the words “in relation to” are words of wide import. It is the nature and purpose of s 341(1)(c) which informs the relationship or the requisite nexus between the “complaint” and the “employment” for which the words “in relation to” provide: see Pilbara Iron Company (Services) Pty Ltd (No 3) [2012] FCA 697 at [63]-[64] (Katzmann J); Walsh at [41] and Milardovic v Vemco Services Pty Ltd (Administrators Appointed) [2016] FCA 19 at [68]-[69] (Mortimer J).
40 Within the limit there identified for the phrase “in relation to”, complaints or inquiries in relation to an employee’s employment cover a broad field. On the plain language of s 341(1)(c)(ii), “in relation to his or her employment” is a far broader field than the available field if the provision had said “about his or her rights or entitlements” in the employment. The adoption of the view that for a complaint or an inquiry to fall within the scope of s 341(1)(c)(ii) it must be concerned with a right or entitlement of the employee would essentially re-write the subject matter of a complaint or inquiry to which s 341(1)(c)(ii) plainly refers.
41 That departure from the plain language of the provision finds no support. It is not only at odds with the plain words of the provision but also ignores its structure. The subject matter of a complaint or inquiry is dealt with expressly in sub-para (ii) of s 341(1)(c). The opening words “is able to” cannot be understood as also impliedly addressing that subject matter and, in so doing, overriding the express language of sub-para (ii).
42 Further, there is no purposive basis revealed either by context, legislative history or the Explanatory Memorandum to support any departure from the express words that address the subject matter of the requisite ability to complain or inquire.
43 It can readily be appreciated that an employee’s dissatisfaction about an existing entitlement may actuate retribution. But dissatisfaction with a lack of an entitlement is equally capable of actuating retribution. Why would it be that Parliament intended that an employee dismissed for complaining about her existing rate of pay should have a remedy, but an employee dismissed for complaining about her lack of any entitlement to work at home should not? In an employment relationship the potential for dissatisfaction is broad. It is not confined to dissatisfaction over rights or entitlements. It may extend to dissatisfaction over a lack of a right or entitlement and may also relate to a wide range of existing conditions which are not able to be characterised as rights or entitlements. To illustrate from actual circumstance raised in the cases (for example Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (The Bay Street Case) (No 2) [2019] FCA 1859), would dissatisfaction about the lack of a female dedicated toilet on a building site employing a single female employee but otherwise dominated by male employees, be a complaint about a right or entitlement?
44 True it is that “in relation to his or her employment” gives rise to a wide field of potential dissatisfactions that may fall within the scope of the protection provided for by the scheme in question. However, to my mind, that has been deliberately provided for in recognition of the fact that dissatisfaction in respect of a wide range of matters relating to employment may actuate the behaviour that the FW Act seeks to prohibit. There is neither a purposive nor a rational basis for confining that protective field to complaints or inquiries about an extant right or entitlement of the employee.
45 For many of the reasons already canvassed, there is no textual basis for the other way in which the observations in Shea have been understood – that the ability to complain or inquire referred to in s 341(1)(c) must be underpinned by a right or entitlement. It is the fact that the protected person has the particular ability described that is the actuating circumstance serving the function which I have explained. As earlier stated, how the person acquired that ability, or the source or provenance of that ability is not addressed by the text of s 341(1). It may be accepted that the text contemplates that not all persons will necessarily have the particular ability in question, but, contrary to the approach taken by Dodds-Streeton J, it does not follow that the intended beneficiaries of the protective reach of the provision are only those persons who have that ability because of some right or entitlement. The actuating circumstance is the fact that the protected person has the ability and not a right or entitlement which has enabled that ability to be held. Read in context with its operative prohibition (s 340(1)(a)(i)), if an ability specified by s 341(1) held by the protected person actuates the adverse action taken, the prohibition will have been engaged.
46 The position may have been different if a person’s ability to initiate or participate in a process or proceeding under a workplace law or workplace instrument or the ability to make a complaint or inquiry were necessarily acts only able to be done as of right or by virtue of some legal entitlement. But that is not the case. In particular, a complaint or an inquiry are both simple acts constituted by a communication. It is difficult to think of a circumstance in which the ability of a person to make an inquiry depends upon a legal right to do so. People are ordinarily free to make an inquiry of others without some legal right or entitlement to do so. So too in relation to the making of a complaint. These are activities which are not ordinarily enabled by some legal right or entitlement. There is nothing in the inherent features of those activities which suggests that the draftsperson sought to limit the protective reach of s 340(1) so that only adverse action taken because of a right or entitlement to inquire or complain is prohibited. Nor is there any discernible basis for thinking that, in providing the protection of s 340(1), the framers of the legislation sought to distinguish between an ability to complain or inquire as of right and an ability to complain or inquire absent some legal right or entitlement to do so. What policy or purpose can be discerned to justify that distinction? If the purpose of the provision is to facilitate the making of complaints or inquiries without fear of retribution, as I consider it is, why would it matter whether the complaint or inquiry is sourced in a particular right or entitlement? It is the protected person’s ability or capacity to inquire or complain, not some legal right or entitlement to do so, which is the subject of the protective intent of the scheme. To my mind, when s 341(1)(b) and (c) are construed by reference to their text and purpose, with a proper appreciation of their function undistracted by the “workplace right” label which has been assigned to the actuating circumstances described in s 341(1), that conclusion is crystal clear.
47 The correctness of that conclusion is supported by the Explanatory Memorandum, which states at [1370] that subpara 341(1)(c)(ii) of the Fair Work Bill 2008 (emphasis added) “specifically protects an employee who makes any inquiry or complaint in relation to his or her employment”, and that it would “include situations where an employee makes an inquiry or complaint to his or her employer”. This suggests that the legislature intended that the only limitation on the protection of complaints and inquiries would be that the subject matter of the complaint or inquiry be “in relation to [the employee’s] employment”.
48 The illustrative examples which follow [1370] include:
an employee who makes a complaint to her employer about safety concerns;
an employee who is dismissed for approaching his union for assistance with calculating his overtime entitlements; and
an employee who erroneously complains to the Australian Competition and Consumer Commission in respect of an underpayment claim.
49 There is no suggestion in the examples given that the inquiries or complaints exemplified must be underpinned by some right or entitlement. Nor, given the nature of the examples given, is there a basis for thinking that there would be a right or entitlement necessary to enable such a complaint or inquiry to be made. They are simply examples of complaints or inquiries that employees are able to make about their employment.
50 One illustration of the limitation that would be imposed if the construction adopted in Shea is correct, concerns the protection intended for persons who participate in proceedings under a workplace law or workplace instrument (see s 341(2)(b)). As referred to above, protection of that kind has existed in predecessor provisions to the current provision since 1914 where s 9 of the Conciliation and Arbitration Act prohibited action taken against an employee because the employee appeared as a witness or gave evidence in a proceeding under that Act. That is an important protection. One can readily understand why it was thought necessary to provide an employee who may be called as a witness against his or her employer the comfort of knowing that it would be unlawful for the employer to penalise the employee for that reason. However, a witness does not participate in a court or like proceeding as of right or by reason of some entitlement. To the contrary, the participation of a witness may be compelled. If the ability to participate in a proceeding of the kind referred to by s 341(1)(b) of the FW Act is confined to an ability as of right or because of some legal entitlement, as the construction arguably adopted in Shea applied consistently across paras (b) and (c) of s 341(1) would hold, the protection that federal industrial relations legislation has provided to employee witnesses for nearly a century was reversed with the enactment of the FW Act. In the absence of clear language, I would not ascribe such an intent to Parliament.
51 The next matter of some importance is that the observations in Shea are in conflict with the judgment of Jessup J in Murrihy v Betezy.com.au Pty Ltd [2013] FCA 908 which preceded it. In that case Jessup J held that Ms Murrihy’s employer had contravened s 340(1)(a)(iii) of the FW Act because, in response to Ms Murrihy’s proposal that she would seek legal advice in relation to her employment, her employer took “adverse action” against her by threatening to dismiss her from her employment.
52 In Murrihy, Jessup J considered that s 341(1)(c)(ii) was drafted in “wide terms” (at [143]) and that there was “little doubt but that the provision was intended to mean what it says” (at [141]). In adopting a literal reading of the provision, Jessup J rejected any implication that the provision did not extend to cover a complaint or inquiry made by an employee to his or her employer (at [141]); accepted that the seeking of legal advice fell within “the connotation of a complaint or inquiry”; and his Honour’s conclusion at [143] can only be understood as the wholesale rejection of the employer’s contention (outlined at [140]) that s 341(1)(c) is only invoked where the complaint or inquiry is underpinned by “some [statutory, regulatory or contractual] provision for the making of a complaint or inquiry”.
53 In Shea, Dodds-Streeton J (at [594]) suggested that the reasoning of Jessup J “appeared to assume the existence of an entitlement or right under an instrument”. With respect to her Honour, I can find no such suggestion in the reasoning to which her Honour referred. At [143], Jessup J made the general observation that it should not be assumed that an unrepresented employee with legal rights (as distinct from an employee who is a member of a union) was not within the scheme’s protective intent in relation to the making of complaints or inquiries. There is nothing in that passing reference to an employee’s legal rights to suggest that his Honour was satisfied that Ms Murrihy had a legal right to make an inquiry of her solicitor. The very notion that Ms Murrihy had, or needed to have, a legal right or entitlement to make an inquiry about her employment with her solicitor is simply absurd. The facts of Murrihy illustrate well that it is highly unlikely that s 341(1)(c) of the FW Act was intended to require the employee to have a right or entitlement to complaint or inquire in order for the employee to take the benefit of the protective reach of s 341(1)(c).
54 The observations made in Shea were then considered by Judge Manousaridis in Henry v Leighton Admin Services Pty Ltd [2015] FCCA 1923 and, in a careful survey of the relevant authorities then available, Judge Manousaridis appreciated that Murrihy involved a rejection of the proposition that the expression in s 341(1)(c) “is able to” requires a complaint or inquiry to be grounded in some source of legal entitlement whether contractual or in an industrial instrument or a statute (at [65]). His Honour expressed apparent disagreement with the observations made by Dodds-Streeton J in Shea (at [69]) and made the observation (at [73]) that “the construction favoured by Dodds-Streeton J in Shea does not reflect any settled construction in the Federal Court or elsewhere of the words ‘is able’ in s 341(1)(c)(ii) of the [FW Act]”. His Honour concluded (at [77]) that a workplace right within the meaning of s 341(1)(c)(ii) was a “capacity or capability to make a complaint or inquiry”, having made the observation (at [74]) that:
It is difficult to imagine that Parliament would have required that there exist some express contractual, statutory or instrumental provision entitling an employee to do that which he or she would already be entitled to do before it could be said that the employee is able to make a complaint or an inquiry.
55 In Whelan v Cigarette & Gift Warehouse Pty Ltd [2017] FCA 1534, Collier J held that s 340(1) was contravened because adverse action had been taken against Mr Whelan for reasons including that he had made inquiries or complaints. Those inquiries or complaints were described as “concerning his entitlement to be paid a bonus or the formulation of a bonus plan by [his employer]” (at [40]). It is not apparent from the reasons of Collier J that her Honour either considered or made any findings to the effect that Mr Whelan had any right or entitlement to make an inquiry or complaint about any entitlement to be paid a bonus or the formation of a bonus plan. It is also not apparent from her Honour’s reasons that the proper construction of s 341(1)(c) in the respect in which it is here being dealt with, was in issue in that case.
56 Beyond the absence of any consideration or finding that Mr Whelan had a right or entitlement to make an inquiry or complaint in the context of her Honour holding that an inquiry or complaint within the scope of s 341(1)(c) had been made by Mr Whelan, there are two observations made by Collier J which may throw some light upon how her Honour may be said to have relevantly construed s 341(1)(c). At [50], her Honour said that Mr Whelan’s “entitlement or otherwise” to a bonus was “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)”. At [33] and [34], Collier J said this:
[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) 242 IR 1 (Shea), Murrihy v Betezy.com.au Pty Ltd (2013) 238 IR 307 and Walsh v Greater Metropolitan Cemeteries Trust (No 2) (2014) 243 IR 468 (Walsh), s 341(c)(ii) was interpreted broadly. In Walsh at [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.
57 There is at [33] a reference made to what Dodds-Streeton J observed in Shea. It appears from the language employed by Collier J that this was a reference to the summary observation at (f) of [29] of Shea. Grammatically, [33] of Whelan including the reference there made to Shea in the last sentence, reads as though the whole paragraph was relied upon merely to support the proposition that s 341(c)(ii) has been “interpreted broadly”. It is, however, likely that Collier J intended to endorse the holding of Dodds-Streeton J in Shea. Her Honour’s implicit reliance on the summary at (f) of [29] of Shea and the content of her Honour’s reasons at [34] suggests (although it is far from clear) that her Honour was endorsing the view that for a complaint or inquiry to fall within the scope of s 341(1)(c)(ii) of the FW Act, it has to be about a right or entitlement of the employee.
58 If that was the nature of the endorsement, whilst the endorsement was not obiter, it was not a clear endorsement and I think it is fair to say that, in circumstances where the point was not in apparent contest before Collier J, the endorsement was not based on a considered analysis of the meaning and intent of s 341(1)(c)(ii).
59 Paragraphs [33] and [34] of Whelan were then reproduced in the reasons for judgment of the Full Court (Cigarette & Giftware House Pty Ltd v Whelan (2019) 268 FCR 46) on the appeal of Whelan. In so doing and at [28] Greenwood, Logan and Derrington JJ said that the discussion of Collier J at [33]-[34] of Whelan was “unremarkable and correct”. Again, whilst not obiter, I would respectfully regard that observation as a passing endorsement unassisted by a considered analysis of what s 341(1)(c)(ii) provides. The nature of that endorsement is also clouded by the fact that the nature of the endorsement made by Collier J of Shea is not clear.
60 That the principle from Shea and its consequent endorsement in Whelan and in Cigarette & Gift Warehouse suffers from a lack of clarity may well explain why a recent Full Court (Rangiah, Charlesworth and Snaden JJ) in PIA Mortgage Services Pty Ltd v King [2020] FCAFC 15 split on the issue of how the observations made in Shea are to be understood.
61 It is convenient to consider the dissenting judgment of Snaden J first. His Honour concluded that neither of the two complaints or inquiries made by Mr King were complaints or inquiries that Mr King was “able to make” within the meaning of that phrase in s 341(1)(c) of the FW Act. Snaden J reasoned that in order to ascertain whether, by making the inquiries or complaints, Mr King “should be understood to have exercised a workplace right, attention should turn first to whether he possessed a right to do so” (at [160]). His Honour couched the question arising from the phrase “is able to make” in s 341(1)(c) as “was Mr King endowed with an ability to make a complaint or inquiry” (at [161]) concerning the subjects to which complaints or inquiries were directed. To be so “endowed”, Snaden J reasoned that Mr King had to demonstrate that he possessed an “identifiable entitlement or right” to complain or inquire as he did (at [165] and [166]). At [168] his Honour stated (emphasis in original):
A person is not endowed with an ability to complain about something merely because he or she has something to complain about. What must be shown is some right or entitlement to complain or inquire: some conveyed ability that distinguishes a complaint or inquiry that qualifies as the exercise of a workplace right from a complaint or inquiry made merely as an incident of the complainant’s ability to communicate.
62 Those observations were made on the basis that the observations made by Dodds-Streeton J in Shea were a correct statement of the law (at [174]). In identifying what his Honour thought distinguished his approach from that taken by the majority in PIA, Snaden J said this (at [172], emphasis in original):
In Shea, Dodds-Streeton J did not conclude that a complaint would qualify as one that an employee was “able to make” if it was founded upon a source of entitlement, instrumental or otherwise. Her Honour’s conclusion was that it was the ability to complain that required that foundation, not the subject matter of the complaint itself. With respect to those who think otherwise, I discern no ambiguity in that conclusion. It was, and remains, consistent with the language of s 341(1)(c) of the FW Act (which, of course, speaks of complaints or inquiries that a person is “able to make”).
63 That observation may, however, overstate the difference between Snaden J and the majority. At [11], the majority (Rangiah and Charlesworth JJ) endorsed the observations made in Shea which are extracted above at [15]. Their Honours (at [13]) considered that Dodds-Streeton J had stated that the word “able” referred to an entitlement or a right and agreed that it did. They considered that the meaning of the statement made by Dodds-Streeton J that a complaint “must be underpinned by an entitlement or right to make a complaint” (emphasis in original) was ambiguous. Their Honours identified two alternative meanings available – first that there must be an entitlement or right to make the complaint or, alternatively, that the complaint must concern an entitlement or right. Their Honours preferred the former meaning (at [13]). It appears that their Honours preferred the former interpretation but with the significant qualification that the entitlement or right to complain did not need to arise under the employee’s contract of employment but could arise under the general law (at [18]) or under a statute whether or not the statute directly conferred a right to complain (at [26]).
64 There is in the majority’s view in PIA a significant relaxation of, but not a rejection of, a construction of s 341(1)(c)(ii) which requires that the ability to make an inquiry or complaint must be underpinned by a right or entitlement to do so. With great respect I disagree with that holding. For the reasons expressed above, there is no textual or contextual basis for construing s 341(1)(c)(ii) as requiring a complaint or inquiry to be underpinned by a right or entitlement to make it, whether sourced in the employee’s contract or sourced elsewhere.
65 For completeness, I should note that in three separate judgments, Steward J has had cause to consider the observations made in Shea. In The Environmental Group Ltd v Bowd [2019] FCA 951, Steward J considered that despite the observations of Jessup J in Murrihy, he was bound to follow the observations in Shea as applied in Cigarette & Gift Warehouse considering that the Full Court in Cigarette & Gift Warehouse had confirmed that a complaint must be founded in some entitlement or right to make it (see at [128]). In Maric v Ericsson Australia Pty Ltd [2020] FCA 452, a judgment delivered after PIA was published, Steward J (at [50]-[55]) stated that he did not understand that the majority in PIA had jettisoned the proposition that a complaint had to be based upon a right or entitlement to make it. His Honour held at [55] that “[f]or a person to be ‘able’ to make an inquiry, that capacity must be anchored in a legal entitlement of some kind, whether it be statute, contract law, the common law of Australia, or some other instrument or thing that confers legal rights, in the sense described by Rangiah and Charlesworth JJ [in PIA]”. Most recently, in Flageul v WeDrive Pty Ltd [2020] FCA 1666, Steward J repeated his comments at [55] of Maric in respect of inquiries (at [273]) and said that the same observation applies to the making of complaints, citing again PIA at [14] (at [274]).
66 It is, I think, apparent that the meaning of s 341(1)(c)(ii) as described by prior authority, is clouded. There is uncertainty as to how the observations in Shea are to be understood. In my respectful view that uncertainty is largely the product of competing views as to which interpretation of the holding in Shea should be preferred in circumstances where those observations are not an appropriate starting point for an analysis of the proper construction of s 341(1)(c)(ii). That is because, for the reasons given, neither interpretation of the holding in Shea is supported by the text, context or purpose of s 341(1)(c)(ii) of the FW Act.
67 Although I respectfully disagree with the holding of the majority in PIA, this Full Court need not decline to follow that holding because it is not necessary to do so for the disposition of the appeal. For the reasons to which I will shortly turn, the appeal should be allowed on other grounds. If it had been necessary to decline to follow PIA and to do so on the basis that PIA was plainly wrong as to the proper construction of s 341(1)(c)(ii), I would have respectfully held that to be the case.
68 If it had been necessary to decide the issue, I would have determined that, insofar as the primary judge failed to apply a requirement that the first to fourth complaints be either sourced in or be about a right or entitlement of Mr Keenan, the primary judge did not err.
Did Mr Keenan make a “complaint”?
69 For the reasons that follow I would have also rejected the second basis relied upon by Cummins for asserting that the primary judge erred in holding that the first, second and fourth complaints were not complaints within the meaning of s 341(1)(c)(ii). I would have accepted the submission of Cummins that the third complaint failed to seek redress and was not a “complaint” within the meaning of s 341(1)(c)(ii).
70 In relation to the first complaint, Cummins contended that this was a mere statement about unidentified issues Mr Keenan had with Ms Baldota and that no redress was sought. Accepting (as earlier discussed at [13]) that a “complaint” within the meaning of s 341(1)(c) connotes an expression of discontent or grievance in which some redress or relief is sought, I see no error in the primary judge’s characterisation of the first complaint (at [225]-[227]) as not merely an expression of frustration but as a communication of a grievance about the conduct of Ms Baldota and its consequent impediment upon Mr Keenan’s capacity to discharge his role. At [222]-[223], the primary judge disagreed with the contention that, by the first complaint, Mr Keenan did not seek redress. There was no error in that holding. That Mr Keenan was seeking assistance and thus redress was expressed in the communication made to Ms Elderbrant when Mr Keenan asked to meet with her in order to develop “a strategy to resolve the current situation” between himself and Ms Baldota, a situation which he described as “causing us both a lot of personal stress”.
71 In relation to the second complaint relied on by Mr Keenan, Cummins contended that this was a rhetorical question with no redress sought. The communication in question occurred whilst Mr Keenan, Ms Elderbrant and Ms Beaulieu attended a bar on 26 February 2015. The main focus of the primary judge’s deliberation was on the rejection of the argument made by Cummins (not pursued on the appeal) that the communication was of no significance because it took place in the social setting of a bar. The primary judge appears to have accepted that Mr Keenan asked why Ms Baldota was making false allegations against him (at [230] and [236]). But whether the allegation that Ms Baldota had been making false allegations against him was put rhetorically or not is of no consequence. The primary judge was correctly satisfied (at [239]) that, “as a matter of substance”, Mr Keenan communicated a grievance about aspects of the work of Ms Baldota. Viewed in its proper context, including the making of the first complaint, the communications made by Mr Keenan was at least impliedly seeking redress. Indeed, as is apparent from [228] of the primary judge’s reasons, Cummins had itself contended that Mr Keenan had approached Ms Baldota’s manager in the hope that she may be able to “smoothe the waters between them”.
72 As to the third complaint relied upon by Mr Keenan, Cummins contended that this was a mere criticism of a ‘personal improvement plan’ with no redress sought. At [247] of the primary judge’s reasons, his Honour found that on 27 May 2015, during a meeting between Ms Beaulieu and Mr Keenan, Ms Beaulieu told Mr Keenan that Cummins was disappointed with his performance and that as a consequence he would be placed on a ‘performance improvement plan’. The primary judge held that “Mr Keenan complained that several items on the performance improvement plan were subjective and ambiguous”. At [249] the primary judge said that he was satisfied that this was a complaint within the meaning of the term “complaint” as espoused by Dodds-Streeton J in Shea. Implicit in that statement is his Honour’s satisfaction that the communication was to be characterised as a grievance in which redress was sought. Although the primary judge did not give reasons for that conclusion, I am not satisfied that Cummins has established that conclusion to be erroneous. The communication viewed in context cannot be characterised as mere criticism of a particular plan of Cummins. The plan in question was a performance improvement plan directed at a requirement being made of Mr Keenan that he improve his performance in circumstances where a failure to do so may lead to his dismissal. In that context it may be readily appreciated that Mr Keenan’s communication that several items in the ‘performance improvement plan’ were subjective and ambiguous was raised as an expression of discontent or grievance.
73 However, I accept the contention made by Cummins that no redress was sought. Mr Keenan’s evidence was that he did not believe that he asked for the personal improvement plan to be redrafted and that he was “just giving feedback on the document”. That evidence serves to confirm that no redress was sought. It negates the implication that might otherwise have been available that the criticism made of the personal improvement plan called for its adjustment.
74 As to the fourth complaint relied upon by Mr Keenan, Cummins contended that this was a communication put forward as an excuse for Mr Keenan’s poor performance with no redress being sought by him. By reference to the Statement of Claim, the primary judge described the fourth complaint as having being made on 29 July 2015 by Mr Keenan when, at a midyear performance appraisal with Ms Beaulieu, Mr Keenan told Ms Beaulieu that he was extremely stressed given the events that had occurred between him, Ms Elderbrant and Ms Baldota. The primary judge accepted that, in that context, Mr Keenan told Ms Beaulieu that he was extremely stressed. His Honour was satisfied that the statement made by Mr Keenan that he was extremely stressed was a “complaint” within the meaning of that expression in s 341(1)(c)(ii) of the FW Act. In doing so, his Honour rejected the contention made by Cummins that the communication was merely an expression of frustration. His Honour did not expressly deal with whether the communication was put forward as an excuse for Mr Keenan’s poor performance or with the question of whether the communication sought redress. It is not clear that those matters were put in issue by Cummins. Assuming they were put in issue, I am not satisfied that, Cummins has demonstrated any error in the primary judge’s characterisation of the communication as a “complaint”. The context in which the communication was made was likely to have been important to its proper characterisation. Again, the context included the prior history of difficulty between Mr Keenan, Ms Baldota and Ms Elderbrant which the reasons of the primary judge record at length, as well as prior calls for redress made by Mr Keenan.
was the approach taken to the assessment of the evidence ERRONEOUS?
75 The next challenge by Cummins to the findings that it had contravened s 340(1) of the FW Act was raised by appeal grounds 3 – 9. These grounds concerned factual findings made by the primary judge. Appeal ground 12 made a similar challenge to the finding that s 352 of the FW Act was contravened. Before turning to those challenges directly, the following principles are relevant and worthy of being mentioned at the outset.
76 The appeal is in the nature of a rehearing, not a new hearing: Branir Pty Limited v Owston Nominees (No 2) Pty Ltd (2001) 117 FCR 424 at [20]–[22] (Allsop J, with Drummond and Mansfield JJ agreeing). Such an appeal requires a court to conduct “a real review” of the trial and the trial judge’s reasons: Fox v Percy (2003) 214 CLR 118 at [25] (Gleeson CJ, Gummow and Kirby JJ). As Allsop J observed in Branir at [28], appellate judges are required to make up their own minds, that is not done as if they are sitting on the trial. Weight must be given to the views of and advantages enjoyed by the trial judge:
[I]f a choice arises between conclusions equally open and finely balanced and where there is, or can be, no preponderance of view, the conclusion of error is not necessarily arrived at merely because of a preference of view of the appeal court for some fact or facts contrary to the view reached by the trial judge.
77 Those principles were recently endorsed by Katzmann, Mortimer and Jackson JJ in Kodari Securities Pty Ltd v Tran [2020] FCAFC 164 who went on to say (citing Branir at [24]) that “[w]hat constitutes an error will depend, however, not only on the evidence, but also on the nature of the findings and conclusions of the trial judge” (at [43]).
The s 340(1) Contraventions
78 By ground 4 of its Notice of Appeal, Cummins challenged the primary judge’s conclusion that it had contravened s 340(1) of the Act on six separate occasions. It did so on the basis that the primary judge erred in finding that Cummins had failed to rebut the statutory presumption in s 361 of the FW Act (to which I will shortly turn) in relation to each of the adverse actions which the primary judge held were taken against Mr Keenan. That ground, as well as grounds 3-9 inclusive, raised challenges to the approach taken by the primary judge to the assessment of the evidence, much of which was encapsulated at [13]-[20] of the appellant’s written submissions. With some adaptation to the way those challenges were there put, I am, with respect to the primary judge, persuaded that by reason of the primary judge adopting an erroneous approach to the assessment of the evidence, his Honour erred in concluding that Cummins had failed to rebut each of the operative s 361 statutory presumptions.
79 It is convenient to commence the discussion with an outline of the statutory task which was required of the primary judge. The central statutory provisions (ss 340, 341 and 342) which lay out that task have already been referred to. By reference to High Court authority including Board of Bendigo Regional Institute of Technical and Further Education v Barclay (2012) 248 CLR 500, the following observations made by Dowsett, Bromberg and Murphy JJ in Short at [55], identify the central question that is to be determined in relation to a contravention of s 340(1):
Where adverse action is taken by one person against another, the task of a court in a proceeding alleging contravention of s 340 or s 351 is to determine why the person took the adverse action and to ask whether it was for a prohibited reason or reasons which included a prohibited reason (Barclay at [5], [44] per French CJ and Crennan J). The question is whether a prohibited reason was a “substantial and operative” reason for the respondent’s action (Barclay at [104] per Gummow and Hayne JJ, see also [59] per French CJ and Crennan J). The relevant inquiry is therefore into the “particular reason” of the decision maker for taking action (Barclay at [42] per French CJ and Crennan J, [102] per Gummow and Hayne JJ), which is a determination of fact to be made by the court taking account of all the facts and circumstances of the case and available inferences (Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd (2014) 88 ALJR 980 at [7] per French CJ and Kiefel J, Barclay at [45] per French CJ and Crennan J, [79] per Gummow and Hayne JJ).
80 There are three important points there made of relevance here. First, the task of a court is to determine why the adverse action was taken and specifically was it taken for a prohibited reason (or what I earlier called an “actuating circumstance”). Second, the prohibited reason must be a “substantial and operative” reason for the action taken. Third, whether the decision-maker took the adverse action for a prohibited reason is a factual question to be determined by the court taking into account all the facts and circumstances of the case and any available inferences.
81 Sections 360 and 361 of the FW Act must also be mentioned. As will become apparent, the manner in which the primary judge dealt with whether the presumption created by s 361 had been displaced, is of importance to the disposition of the appeal. The principles dealing with that presumption need to be considered.
82 As the Full Court (Logan, Bromberg and Katzmann JJ) stated in Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd (2015) 230 FCR 298 at [182]:
The FW Act provides that a person takes action for a particular reason if the reasons include that reason (s 360). If it is alleged in an application in relation to a contravention of Pt 3-1 of the FW Act (which includes the relevant alleged contravention) that a person took action for a particular reason and taking that action for that reason would constitute such a contravention, then it is presumed that the action was taken for that reason unless the person proves otherwise (s 361).
83 The statutory presumption created by s 361 places an onus on a respondent to establish the fact that the reason alleged was not a reason which actuated the adverse action taken by the respondent: BHP Coal at [192]. Given that, for s 340(1) to be engaged, the reason which actuated the adverse action must be a “substantial and operative” reason, the respondent’s burden is that of negating the alleged reason as a “substantial and operative” reason for the taking of the adverse action in question. A failure to displace the statutory presumption enables the allegation by an applicant that the adverse action was taken for a particular reason to stand as sufficient proof of the fact: Short at [56].
84 Although direct testimony from the person who decided to take the adverse action, which is accepted as reliable, is capable of discharging the statutory presumption imposed by s 361, direct testimony from that person is not a necessary pre-condition for the discharge of the statutory presumption: BHP Coal at [184]-[188]. It is possible, for instance, that the alleged reason may be negated on the applicant’s own evidence: BHP Coal at [192] and see also Australian Red Cross v Queensland Nurses’ Union of Employees (2019) 273 FCR 332 at [72] (Greenwood, Besanko and Rangiah JJ). Whilst the direct testimony of the decision-maker, if given, will need to be considered and may be a weighty consideration, whether or not the statutory presumption made by s 361 is rebutted will depend upon a consideration of all the relevant facts and circumstances that shed light upon why the adverse action was taken.
85 Relying in large part upon the observations made by French CJ and Crennan J in Barclay at [41] and [45], including the observation that the question of why an employer took adverse action against an employee is a question of fact which much be answered in the light of all of the facts established in the proceeding, in Construction, Forestry, Mining and Energy Union v Anglo Coal (Dawson Services) Pty Ltd (2015) 238 FCR 273 at [27], Jessup J (with whom Rangiah J agreed) said this (emphasis added):
In the context of a provision such as ss 340 and 352, the effect of s 361 is to reverse the legal onus in relation to the reason or reasons for which the adverse action was taken. That is to say, at the end of the trial of fact, the question will be whether the respondent has established, on the civil standard, that the action taken was not taken for a reason, or for reasons which included a reason, proscribed by the legislation. That question is to be answered by reference to all of the evidence which bears upon it. Section 361 does not impose upon the respondent concerned the onus of calling any and every piece of evidence that might arguably influence the answer to the question of reasons or intent. The section is not, in other words, concerned to impose upon the respondent a continuing, unchanging, evidentiary onus with respect to that question.
86 At [28], his Honour continued:
In other words, whether the onus arising under s 361 has been discharged in a particular case will depend upon the assessment of all of the facts by the trier of fact, including, most importantly in the conventional case, his or her assessment of the evidence given by the decision-maker acting on behalf of the employer.
87 Mr Keenan alleged that six adverse actions were taken against him by Cummins. In summary they were:
16 March 2015 – the making of allegations against Mr Keenan in an ethics investigation interview (“first adverse action”);
18 May 2015 – the making of an ethics complaint about Mr Keenan (“second adverse action”);
27 May 2015 – the implementation of a performance improvement plan (“third adverse action”);
2 November 2015 - the statement in the appellant’s letter to Mr Keenan that the appellant was considering dismissing Mr Keenan; (“fourth adverse action”)
2 November 2015 – The suspension of Mr Keenan from his employment (“fifth adverse action”);
25 November 2015 – The dismissal of Mr Keenan from his employment (“sixth adverse action”).
88 As part of the statutory task required of him, the primary judge was required to determine whether each of those events just listed constituted “adverse action” within the meaning of that expression in s 342 of the FW Act. Although, in relation to some of those events, that issue was in contest, the primary judge determined that each of the six events constituted adverse action. In so doing and as I further explain at [110] below, the primary judge seems to have resolved the contest as to whether the first event occurred at all in favour of Mr Keenan. Those determinations are not in contest on the appeal. There is no issue that the primary judge correctly performed that aspect of the statutory task.
89 Next, as already identified, Mr Keenan relied upon the making by him of five complaints. The primary judge needed to and did deal with whether each of the five communications relied upon was a “complaint” within the meaning of s 341(1). Those matters have already been addressed and my reservations have been recorded. For current purposes I will assume that that aspect of the statutory task was correctly performed.
90 It is necessary then to appreciate that Mr Keenan alleged that each of the six adverse actions taken against him by Cummins was motivated by one or more of the complaint or complaints made by him that preceded the adverse action in question. Thus it was contended that the first and third adverse actions were each motivated by each of the first and second complaints, the second adverse action was motivated by the first, second and third complaints, and that each of the fourth, fifth and sixth adverse actions were motivated by each of the first to fifth complaints.
91 Why Mr Keenan introduced that level of complexity to his claim, when his claim for relief must be understood as principally focused on his dismissal as the event which caused his claimed financial loss, is not clear. Whatever the reason, it is clear that Mr Keenan’s case was that each of the six adverse action taken against him was done in contravention of s 340(1) of the FW Act. As the declarations made by the primary judge demonstrate, his Honour found six contraventions of s 340(1) of the FW Act, that is, a contravention in relation to each of the six adverse actions relied upon by Mr Keenan.
92 To have correctly performed the statutory task required of him in relation to each contravention of s 340(1) found, the primary judge needed to be satisfied of the fact that a complaint made and relied upon by Mr Keenan as actuating the adverse action the subject of the contravention, was a substantial and operative reason for Ms Beaulieu (whom the primary judge held was the decision-maker) to have taken that action. In reaching that state of satisfaction, the primary judge was entitled to rely on the s 361 statutory presumption relating to the particular reason alleged by Mr Keenan as actuating the particular adverse action. That was so if the presumption had not been rebutted and thus remained operative. Whether the particular presumption had not been rebutted and remained operative had to be considered not merely by reference to the testimony of Ms Beaulieu, but by reference to all of the facts and circumstances relevant to whether the particular alleged reason was a reason which had actuated the particular adverse action in question.
93 Given the number of reasons alleged in relation to each of the adverse actions alleged, there were 22 alleged reasons in play and therefore 22 s 361 statutory presumptions that were operative unless rebutted. As I will explain, the relevant facts and circumstances as to whether any one of those particular statutory presumptions had been rebutted were necessarily distinct from the next. It follows that whether or not any particular statutory presumption had been rebutted by the evidence relevant to it needed to be considered individually and not collectively as though there was only a single statutory presumption in respect of all of the 22 reasons asserted by Mr Keenan.
94 The reasons of the primary judge do not support the conclusion that his Honour dealt with the question of whether any of the statutory presumptions were rebutted on an individual basis. Nor do those reasons support the conclusion that all of the facts and circumstances relevant to whether a particular statutory presumption had been rebutted by the evidence, was taken into account.
95 A great deal of evidence was received by the primary judge in a trial that ran for seven days and in which eight witnesses were called and a court book of over 1,000 documents was received. Ms Beaulieu, as well as four other senior employees of Cummins, gave extensive evidence. Their evidence was largely directed to establishing the assertions made in the defence filed by Cummins which denied each of the reasons asserted by Mr Keenan as actuating the adverse action alleged by him and, in relation to most but not all of the adverse actions in question, positively asserted that those actions were taken “purely due to performance issues”, that is, purely due to issues relating to Mr Keenan’s performance in the position he held with Cummins.
96 The reasons of the trial judge contained a very long narrative of events. That narrative includes the making of the complaints made by Mr Cummins as well as what his Honour held to be the adverse action taken by Cummins. Much of that narrative is concerned with what at [17] his Honour described as the matter which consumed a very large portion of the trial – “the unworkability of the business relationship” between Mr Keenan and Ms Baldota, another senior employee at Cummins.
97 The narrative is not a recitation of uncontested facts. It contains many findings made by the primary judge. Many if not most of those findings are concerned with the relations between Mr Keenan and Ms Baldota and are critical of either Ms Baldota or critical of how Ms Beaulieu and other senior managers dealt with what his Honour later found to have been an “unworkable relationship” ([220]), or a “toxic” relationship, ([324]) between Mr Keenan and Ms Baldota in which the tension between them “was insoluble” ([219]).
98 Beyond the narrative, the primary judge turned to consider legal issues including whether the complaints asserted were “complaints” within the meaning of s 341(1) and whether action taken against Mr Keenan was “adverse action” within the meaning of s 342 of the FW Act. Again, in the context of considering facts relevant to those issues, his Honour made findings including many findings about the nature of Mr Keenan’s relations with Ms Baldota and the failure of senior management to have addressed it by dealing with Ms Baldota.
99 In a section headed “The relevant decision maker”, the primary judge considered who it was who had decided to take the adverse actions alleged as well as the reliability of Ms Beaulieu’s evidence. It is in this section of his Honour’s reasons where deliberative consideration is given to the reasons for the adverse action taken against Mr Keenan and to whether the s 361 statutory presumption had been rebutted.
100 The primary judge found Ms Beaulieu not to be a particularly impressive witness ([308]). He found that she had given evidence which revealed an attitude to Mr Keenan “that was both unreasonable and irrational” and that that attitude indicated that Ms Beaulieu “was hostile towards Mr Keenan and that certain of her actions towards him were not objectively maintainable as being properly grounded” ([318]). The primary judge said of some of the demands made by Ms Beaulieu in relation to Mr Keenan improving his performance that those demands were really demands limited to improving his interactions with Ms Baldota and that Ms Beaulieu had entirely sidestepped her responsibility to quell the controversy between Mr Keenan and Ms Baldota ([320]). His Honour found that Ms Beaulieu had formed an adverse opinion about Mr Keenan (at [321]) and that “she took a protective and partisan view towards Ms Baldota and a correspondingly hostile view towards Mr Keenan” ([322]).
101 His Honour then turned to consider Ms Beaulieu’s evidence about whether she had received any negative feedback about Mr Keenan from Ms Baldota. At [323] his Honour recorded that Ms Beaulieu had initially deposed that she did not remember receiving any negative feedback from Ms Baldota about Mr Keenan, but then later conceded that she could have. The primary judge considered that to have been a change in Ms Beaulieu’s evidence and thought that it was “very telling” ([324]). His Honour thought what he regarded as a “slide” in the evidence to be important, because Ms Beaulieu had earlier maintained that her “adverse views about Mr Keenan were premised essentially exclusively, on his demonstrated poor performance and that they were not connected in any way to the toxic relationship that existed between Mr Keenan and Ms Baldota” ([324]). The primary judge said that that “slide” in evidence caused him to doubt the reliability of Ms Beaulieu’s evidence “in the overall” ([325]). He then said at [326]:
Further, I took the view that Ms Beaulieu took a personal dislike to Mr Keenan for reasons unconnected with Mr Keenan’s performance at work, preferring to adopt a protective approach towards Ms Baldota rather than exercising proper control over a conflict-riddled protracted period where Ms Baldota exhibited highly inappropriate disobedience towards Mr Keenan and a generally uncooperative attitude, thereby undermining Mr Keenan’s capacity to properly and efficiently do his job.
102 That observation was then immediately followed by the following critical holding (at [327]):
I reject the respondent’s contention that it dismissed Mr Keenan by reason of Mr Keenan’s poor performance.
103 Although that holding dealt only with the sixth adverse action of dismissal, following a short further discussion about the performance issues that had been raised with Mr Keenan, the primary judge said that he did not accept “that performance issues were generally the reason or reasons for Mr Keenan’s termination” (at [330]). That holding was immediately followed at [331] with the critical holding that:
Insofar as Ms Beaulieu was the relevant decision maker, I find that [Cummins] did not discharge the reverse onus it fell to it to discharge.
104 In the following two paragraphs, the primary judge dealt with a controversy as to who was the decision-maker at Cummins for the second adverse action (the making of an ethics complaint about Mr Keenan). The primary judge determined that Ms Beaulieu was also the decision-maker in relation to that adverse action and at [333] held that for the same reasons as earlier given:
... I reject the contention that she was properly actuated by performance issues pertaining to Mr Keenan. The fact that Mr Keenan commenced an investigation in relation to Ms Beaulieu was the exercise of a workplace right in respect of which the respondent took adverse action against Mr Keenan. In my view, the respondent did not discharge the relevant onus that fell to it to discharge in respect of the ethics investigation.
105 It seems apparent from his Honour’s reasons, that the rejection of performance as a reason for each of the adverse actions taken was the basis for his Honour’s holding that the s 361 statutory presumption had not been rebutted. In other words, the analysis of why each adverse action was taken seems to have stopped on the primary judge being satisfied that Mr Keenan’s performance was not a reason for the adverse action.
106 Senior Counsel for Mr Keenan accepted that having rejected poor performance as a reason for the adverse actions, the primary judge stopped. It was contended that it was permissible for the primary judge to have done that. It was contended for Mr Keenan that the primary judge was required to determine whether the statutory presumption was rebutted and that where the decision-maker puts forward the reason for the adverse action and is disbelieved, the primary judge was entitled to go no further in determining that the statutory presumption had not been rebutted. All of that was said to follow as a matter of logic from the operation of the statutory presumption. Senior Counsel contended that the statutory presumption necessarily applies where the decision-maker is disbelieved as to the asserted reason for the adverse action.
107 Senior Counsel for Mr Keenan accepted that the reasons of the primary judge do not reveal that the primary judge expressly grappled with the evidence of Ms Beaulieu denying that Mr Keenan’s complaints were a reason for any of the adverse actions taken against him but contended that it followed from his Honour’s rejection of Ms Beaulieu’s evidence that performance was the reason, that the primary judge had rejected her denials.
108 The global approach taken by the primary judge was defended on the basis that, in seeking to rebut the s 361 presumption in relation to each adverse action, Cummins had put the same positive case that the adverse action was taken “purely due to performance issues”. Factually, that contention was incorrect as at least the first adverse action taken against Mr Keenan was not defended on the basis of Mr Keenan’s performance. However, the primary judge seems to have preceded on that erroneous view in taking the global approach that his Honour took. In any event, the submission made was that because the positive case of Cummins was the same in relation to each adverse action, the primary judge was entitled to reject that case globally and therefore make a global finding as to what had actuated each of the adverse actions taken.
109 Senior Counsel’s acceptance that the primary judge’s analysis of whether the statutory presumption had been rebutted essentially stopped once the primary judge disbelieved Ms Beaulieu’s assertion that poor performance was the reason for the adverse actions taken against Mr Keenan, was made despite the primary judge having said in his reasons that the entirety of the evidence had to be considered and despite the primary judge having stated that that had been done. In a separate and earlier discussion (at [270]-[271]) to that where the critical holdings were made, the primary judge considered “the nature of the evidence that was required in order to displace the statutory presumption in s 361”. On the one hand, as Cummins contended, that discussion may be said to evince a misunderstanding by the primary judge of what was said in Barclay about the need for “direct evidence from the decision-maker” (see Barclay at [44]-[45] and the discussion at [84] above) which led the primary judge to the view that he was required to confine his assessment of why adverse action was taken to the evidence of Ms Beaulieu. On the other hand, in that discussion (at [271]), the primary judge stated that he had examined the statutory question of whether Mr Keenan’s employment had been terminated because he had exercised a workplace right, by reference to “the whole of the evidence”. Later at [305] (citing the Full Court in Anglo Coal) the primary judge correctly stated that:
In the end, whether or not the respondent has discharged the reverse onus is a matter to be determined upon a consideration of the entirety of the evidence that was adduced in this case.
110 However, the fact of the matter is that the reasons given by the primary judge which accompanied his holding that the s 361 presumption (or presumptions) had not been rebutted, do not address any evidence beyond the evidence of Ms Beaulieu. In that respect it is to be recalled that the direct evidence given by Ms Beaulieu did two things. First, in relation to each of the second to sixth adverse actions, Ms Beaulieu denied that a reason for her taking that action was a complaint made by Mr Keenan. Second, in relation to those adverse actions, Ms Beaulieu put a positive case asserting that the reason for the taking of that action was Mr Keenan’s performance in his role at Cummins. As to the first adverse action, Ms Beaulieu’s evidence did not deny that a complaint was a reason for that action. Nor did she proffer any alternative reason. Her evidence was that she had nothing to do with that adverse action. The position of Cummins (see [306]) was that the action alleged had not occurred and neither Ms Beaulieu nor any other person was identified as the decision-maker. That contention was not expressly addressed. It is probable, but not clear, that the contention was impliedly rejected at [278]-[279] where the primary judge determined that the action was “adverse action” within the meaning of s 342 of the FW Act. The global approach taken by the primary judge seems to have treated Ms Beaulieu as the decision-maker and that the reason given by her for taking that action was Mr Keenan’s performance.
111 As earlier stated, Senior Counsel for Mr Keenan contended that the primary judge’s rejection of Ms Beaulieu’s denials followed from the primary judge’s rejection of her evidence that performance was the reason for the adverse actions. In my view, that contention is correct and it was the primary judge’s rejection of Ms Beaulieu’s evidence that satisfied his Honour that Cummins had failed to “discharge the reverse onus that fell upon it to discharge”.
112 The problem with the approach taken by the primary judge is that it does not necessarily follow from the rejection of Ms Beaulieu’s evidence that performance was not the reason for the adverse actions taken, that any one or more of the reasons asserted by Mr Keenan was a reason. The credibility of Ms Beaulieu’s denial in relation to each asserted reason needed to be assessed but not merely by reference to whether her evidence as to the positive reason she gave was to be believed. The credibility of her denial in relation to each asserted reason had to be assessed by reference to all of the facts and circumstances available on the evidence which were probative of whether each particular asserted reason was a substantial and operative reason for the taking of the particular adverse action in question. It is in that respect that the primary judge failed to take into account all of the relevant facts and circumstances that should have been taken into account.
113 The nature of the inquiries that should have been made and of the facts and circumstances that should have been taken into account in relation to each of the denials made by Ms Beaulieu, is best illustrated by taking one of the adverse actions in question as an example. The adverse action of Mr Keenan’s dismissal, was asserted by him to have been motivated by each of five complaints, the first of which was a complaint made on 17 July 2014 in which Mr Keenan complained that he was having issues with Ms Baldota. There was evidence of a broad range of facts and circumstances, beyond the reliability of Ms Beaulieu’s evidence about her asserted reason for the dismissal, that needed to be taken into account in assessing whether the first complaint was a substantial and operative reason for the dismissal. The nature of that complaint and the circumstances in which it was made needed to be taken into account. What is it about Mr Keenan’s complaint that he was having issues with Ms Baldota would likely have motivated the severe action of dismissing a senior employee from his employment of some 34 years standing? Was it the act of complaining itself or something said by the complaint? The timing of the complaint relative to the act of dismissal needed to be considered. Was a complaint made over 16 months prior to the dismissal a substantial and operative reason at the time of the dismissal? Had any motivational effect that the complaint may have initially had upon Ms Beaulieu dissipated by the effluxion of time? Or, alternatively or perhaps relatedly, had any such effect been overtaken by other circumstances, for instance the making of the second or the third or the fourth or the fifth complaints or a combination of some or all of them? Whether the earliest complaint was overtaken by later complaints required the likely significance upon Ms Beaulieu of each complaint to be considered. For instance, the fifth complaint was a personal and serious complaint made directly against Ms Beaulieu. If that was a substantial and operative reason for Mr Keenan’s dismissal was, in that circumstance, a complaint made over 16 months prior to the dismissal about another employee also a substantial and operative reason for the dismissal?
114 Then, for each of the complaints including the fifth complaint which, at least prima facie may be regarded as likely to have been the most potent, there are the highly relevant facts and circumstances found by the primary judge which had to be considered. The primary judge found that there was insoluble tension between Mr Keenan and Ms Baldota and that the relationship was unworkable and toxic. On the primary judge’s findings, whilst Ms Baldota’s disobedience and uncooperative attitude was the cause of those difficulties, it was Mr Keenan whom Ms Beaulieu blamed. The primary judge relatedly held that Ms Beaulieu took a personal dislike to Mr Keenan and that she was hostile to him.
115 Each of those considerations – the existence of a toxic relationship between two senior employees; that in Ms Beaulieu’s mind Mr Keenan bore responsibility for it; and that Ms Beaulieu personally disliked and was hostile to Mr Keenan – provided a potentially plausible reason for Mr Keenan’s dismissal. The inquiry that had to be made but which was not made, was whether in those circumstances a complaint made 16 months prior to the dismissal was a substantial and operative reason for it? Each of those circumstances was capable of wholly explaining Mr Keenan’s dismissal and negating any other reason, including the making of each of the complaints, as a reason for the dismissal. Those circumstances had to be considered and considered not just in relation to the first complaint asserted by Mr Keenan as a reason for the dismissal but in relation to each complaint put forward for that adverse action and for each of the six adverse actions held to have been taken against Mr Keenan.
116 True it is that the disbelief of the decision-maker as to the reason given for the taking of adverse action will ordinarily be a weighty consideration and often a determinative consideration as to whether a reason asserted by an applicant is a substantial and operative reason for adverse action. However, neither that observation nor the s 361 statutory presumption itself, relieves a court of the need to make all of the necessary inquiries and consider all of the evidence probative of whether the reason asserted has been negated by that evidence. Whilst the statutory presumption casts an onus on the respondent to satisfy the court on the evidence before it that the asserted reason has been negated, it does not require that finding to be based solely on the evidence of the decision-maker or to be based solely on the evidence called or otherwise put before the court by a respondent.
117 Whether any particular circumstance actuated Ms Beaulieu’s conduct as a substantial and operative reason could only have been properly assessed by reference to whether other actuating circumstances existed and the relative significance of those other circumstances in the mind of Ms Beaulieu. In enquiring whether Ms Beaulieu took action responsive to or in retribution for one or more of the multiple circumstances that were potentially at play, the primary judge needed to weigh up the significance of each. Was the circumstance likely to have been motivationally significant because of its subject matter? Was its significance spent because the circumstance was temporally distant from the action taken by Ms Beaulieu? Had the circumstance been paled into insignificance because it was overtaken by another actuating circumstance?
118 Those and like enquiries needed to have been made and all of the facts and circumstances relevant to them needed to been taken into account before the primary judge could have properly come to the view that any one of the 22 s 360 statutory presumptions that were in issue had not been rebutted. It was erroneous for the primary judge to have arrived at the view that all of those statutory presumptions were not rebutted simply on the basis of his satisfaction that Mr Keenan’s performance was of no significance to the adverse action taken by Ms Beaulieu.
119 Furthermore, the relevant enquiries that needed to be made and the facts and circumstances that needed to be taken into account could not have been properly made or taken into account on a global basis. That is so because the relevant facts and circumstances were different for each of the six adverse actions in question. The number of the possible actuating circumstances at play was different, the circumstances were themselves different even if many were similar and, I think tellingly, the temporal nexus between the occurrence of each of those circumstances and the taking of each of the adverse actions was different and in many cases significantly so. Furthermore, each of the adverse actions themselves were different and the nature and severity of the adverse actions taken was likely to be probative of whether or not that adverse action was motivated by a particular circumstance. The global approach to fact finding adopted by the primary judge was thus also erroneous.
120 My conclusions that the fact-finding task required of the primary judge miscarried do not trespass upon the advantages enjoyed by the primary judge as the judge who saw and heard Ms Beaulieu give her evidence and make the denials made by her. They are findings of error based upon the erroneous fact-finding processes adopted by the primary judge.
121 Although other grounds were relied upon by Cummins, the errors identified to this point suffice to allow the appeal in relation to each of the six contraventions of s 340(1) found by the primary judge. It is not necessary, at this stage, to determine the challenge by Cummins to the finding made by the primary judge that performance was not the reason for the adverse actions taken against Mr Keenan. It may become necessary to do so should the Court determine that it should redetermine the matter rather than remit the matter to the Federal Circuit Court. It is nevertheless appropriate to observe that the miscarriage in the fact-finding process to which I have referred may well have extended to taint all of the findings made by the primary judge as to the reason or reasons for the adverse actions taken against Mr Keenan.
122 One of the other grounds raised by Cummins should also be mentioned. Cummins contended by appeal ground 8 that instead of focusing on whether adverse action was taken for the reason or reasons alleged, the primary judge conducted an inquiry into the fairness of the treatment of Mr Keenan by Cummins during his employment.
123 The submission made in support of that contention was as follows:
[26] His Honour erroneously treated the proceeding as an inquiry into the merits of Cummins' treatment of Keenan. This Court has counselled against treating a general protections claim as an opportunity to conduct a broad enquiry as to whether the applicant has been subjected to a procedurally or substantively unfair outcome.
[27] His Honour was critical of all the Cummins' witnesses, including in relation to their competence, management style, communications and decision-making. As is noted above at paragraph 23 above, Beaulieu was the subject of stinging criticism from his Honour. Elderbrandt was also criticised for describing Baldota as a “business partner,” for sending emails in imprecise “corporate language,” for using “roundabout corporate jargon,” for being critical of Keenan's management, for not properly controlling Baldota, for not being even-handed and for not having an open mind. The trial judge described aspects of her management as “highly inappropriate”. He said she exhibited poor behaviour. He said she put her head in the sand, her supervision of Baldota was “dismal,” she bore responsibility for the festering situation between Keenan and Baldota, she did nothing and her toleration of the situation reflected very badly on senior management.
[28] His Honour described Cummins' senior management as “mercurial and highly subjective.” He was unimpressed by what he considered to be their “shabby treatment” of Keenan. His Honour devotes more than 20 paragraphs to criticisms of the Ethics unit's investigation of Keenan's complaint, describing Ms Gard's investigation as woefully deficient and defective, substandard, hopelessly confused and erroneous, superficial, shallow and borderline trivial. But the fairness of the investigation into Keenan's complaint was not relevant to assessing Beaulieu's state of mind.
[29] The Liability Reasons as a whole reflect an adoption of Keenan's narrative that he had been unfairly undermined by an “underling” (Baldota) and by an unsympathetic group of senior female executives (Beaulieu, Kirsch and Elderbrandt) who (in his Honour's view) wrongly supported Baldota over Keenan. His Honour appears not to have appreciated that a termination of employment which is unfair, or even capricious, does not constitute unlawful adverse action, unless motivated by a prohibited reason.
124 Other than for its final sentence, that submission should be accepted. With respect to the primary judge, his Honour did unnecessarily delve into questions about the competence and management style of senior executives at Cummins and, in doing so, expressed adverse opinions which were unnecessary and irrelevant to his statutory task. In doing so, at times, the primary judge employed language that was inappropriate, in the sense that it was capable of unnecessarily offending others, although, as I am sure, no offence was intended.
125 All of that does, I think, reveal that the primary judge was over-invested in an issue that was not really his to deal with. It may well be the case that Cummins had no valid reason for dismissing Mr Keenan and that, as a result, Mr Keenan was unfairly treated including by being unfairly dismissed. However Mr Keenan, no doubt assisted by the legal advice he received, did not bring a proceeding for unfair dismissal. He brought a ‘general protections’ application under the FW Act in which the relevant question was not whether he had been unfairly dismissed because there was no valid reason for his dismissal or because his dismissal was procedurally unfair. As I said in Ermel v Duluxgroup (Australia) Pty Ltd (No 2) [2015] FCA 17 at [48] by reference to the observations made by Gray, Cowdroy and Reeves JJ in Khiani v Australian Bureau of Statistics [2011] FCAFC 109 at [31] “[a] general protections proceeding is not a broad inquiry as to whether the applicant has been subjected to a procedurally or substantively unfair outcome”.
126 Having said all that, I do not accept the contention made by Cummins that the primary judge did not appreciate “that a termination of employment which is unfair, or even capricious, does not constitute unlawful adverse action, unless motivated by a prohibited reason”. The reasons given by the primary judge sufficiently reveal that appreciation. It may be, as the ground of appeal contends, that the primary judge’s over-investment in the fairness of Mr Keenan’s termination distracted his Honour from the question of whether the s 360 statutory presumptions had been rebutted. I do not however need to determine what it was or what it is that explains the errors made in relation to that question. It is sufficient for current purposes that those errors have been made out.
The s 352 Contravention
127 The primary judge held that Cummins had also contravened s 352 of the FW Act which provides:
Temporary absence-illness or injury
An employer must not dismiss an employee because the employee is temporarily absent from work because of illness or injury of a kind prescribed by the regulations.
128 The actuating circumstance provided for by that provision in relation to which a dismissal is prohibited, is that the employee “is temporarily absent from work because of illness or injury”. Section 360 and the statutory presumption in s 361 apply in relation to conduct in contravention of s 352 in the same way as those provisions apply for s 340(1).
129 The relevant facts here were that between the date of the fifth adverse action by which Mr Keenan’s employment was suspended and the date 23 days later of his dismissal from employment with Cummins, Mr Keenan was absent from work because of illness or injury (“absence”). Mr Keenan asserted, relying on s 360 and seeking to take the benefit of the s 361 statutory presumption, that a reason for his dismissal was his absence. Just as she had done in relation to Mr Keenan’s dismissal as an adverse action for the purposes of s 340(1), Ms Beaulieu denied that the absence was a reason for Mr Keenan’s dismissal and asserted that the reason for Mr Keenan’s dismissal was his poor performance.
130 The trial judge accepted Mr Keenan’s submission that the s 361 statutory presumption operates in relation to s 352 in the same way as it operates in relation to s 340. His Honour also accepted Mr Keenan’s submission that Cummins was required to demonstrate that Mr Keenan’s absence was not a reason for his termination and that Cummins had failed to so demonstrate. Relevantly, his Honour then said this at [350]:
I agree that the respondent did not discharge the onus that fell to be discharged. In other words, I find that the respondent did in fact terminate Mr Keenan’s employment – not for poor performance reasons as it asserted – but rather, by reason of a reason or reasons which included the exercise of one or more workplace rights. It follows that s 352 of the FWA was infringed.
131 Read literally, the finding made in the penultimate sentence makes little sense. The actuating circumstance of an employee being absent from work upon which s 352 operates, is not a “workplace right”. It is not clear why that actuating circumstance was not included with those in s 341(1) and given the label “workplace right”. That it was not, serves to reinforce the point made earlier that the proper construction of s 341(1) does not turn on the label given to the actuating circumstances there listed.
132 Read literally, the penultimate sentence of [350] does not include a finding that the absence was a reason for Mr Keenan’s termination.
133 It seems to me, with respect to the primary judge, that he misunderstood that the actuating circumstance in s 352 is not a “workplace right” and that by the penultimate sentence of [350] his Honour meant to say that he had found that Mr Keenan’s employment was not terminated for poor performance as Cummins had asserted, but rather by reason of “one or more” of the complaints made by Mr Keenan or by reason of his absence.
134 However, even when read in that manner, the penultimate sentence still does not contain the finding that a reason for Mr Keenan’s termination was his absence. The use of the qualifying phrase “one or more” means that all that his Honour found was that Mr Keenan’s absence may have been a reason for his termination. Such a finding cannot sustain the primary judge’s holding that s 352 was contravened.
135 In any event, even if [350] is to be understood as including a finding that the absence was a reason for Mr Keenan’s dismissal, that finding is erroneous. It is a finding made on the basis that by reason of the primary judge’s rejection of Ms Beaulieu’s evidence that poor performance was the reason for the dismissal, it followed that the s 361 statutory presumption had not been rebutted and that the absence was a reason for the dismissal. That reasoning is affected by the same fact-finding error as that which affected the holdings made that s 340(1) had been contravened.
136 Appeal ground 12, which challenges the holding that s 352 was contravened by Cummins, should also be allowed.
long service leave entitlements
137 Mr Keenan claimed that when his employment was terminated by Cummins he was underpaid his monetary entitlement to long service leave due and payable under the Long Service Leave Act 1992 (Vic) (“LSL Act”). The basis for the claimed underpayment was that Mr Keenan’s service in the United Kingdom for a corporation related to Cummins between 1 September 1981 and February 1995 (“UK employment”), was not recognised by Cummins for the purpose of calculating the entitlement owed.
138 The primary judge held that the UK employment should have been recognised. As his Honour made an order that Mr Keenan be reinstated in his employment with Cummins, there was no order for the claimed underpayment be rectified but a declaration was made that Mr Keenan’s period of continuous employment with Cummins for the purposes of s 58(2) of the LSL Act was the period since 1 September 1981. The effect of the declaration was that Cummins is required to recognise the UK employment for the purposes of Mr Keenan’s entitlement to long service leave under the LSL Act. The primary judge’s finding is challenged by appeal ground 13.
139 The relevant facts may be shortly stated. As already indicated, between 1 September 1981 and February 1995, Mr Cummins was employed in the United Kingdom by a corporation related to Cummins (“Cummins Darlington”). In February 1995 he commenced employment with Cummins at its premises in Scoresby, Victoria. From May 2007 to December 2013 whilst still employed by Cummins, Mr Keenan was seconded to work for a related corporation of Cummins in the United States. From March 2014 until the termination of his employment in November 2015, Mr Keenan continued to be employed by Cummins, working at their premises in Box Hill, Victoria. That history of employment constitutes approximately 20 years of direct employment by Cummins (of which 12 of those years were spent in Victoria) and 14 years of employment by Cummins Darlington in the UK.
140 Section 56 of the LSL Act (as applicable at the relevant time) was headed “Basic entitlement to long service leave” and provided as follows:
An employee is entitled to—
(a) 13 weeks of long service leave on ordinary pay on completing 15 years of continuous employment with one employer; and
(b) 4 1/3 weeks of long service leave on ordinary pay on completing each period of 5 years of continuous employment with that employer after the first 15 years of continuous employment with that employer.
141 In circumstances where Mr Keenan’s service with Cummins (not including the UK employment) extended beyond 15 years and was terminated, s 57 of the LSL Act also must be applicable. It provided:
Additional entitlement to long service leave if employment stops after 15 years
(1) This section only applies if an employee stops working for an employer after completing 15 years of continuous employment with that employer.
(2) The employee is entitled to an amount of long service leave equal to 1/60th of the period of his or her continuous employment with that employer since he or she last became entitled to long service leave under section 56.
(3) The period of an employee's long service leave that relates to a period of employment before 1 January 1965 and that had not been taken before the commencement of this Division is to be reduced by one quarter.
142 Both of those provisions are found in Div 6 of Pt 5 of the LSL Act (“Div 6”). Other provisions in that Division also provide long service leave entitlements. Section 56A provides entitlements in relation to an employee who has completed at least 10 but less than 15 years of service. Section 58 applies to an employee whose employment is terminated where at least seven but less than 15 years of service have been completed.
143 The qualifying period and the extent of the entitlement referred to in each of those provisions is referrable to the employee’s “years of continuous employment with one employer” (ss 56, 56A and 58) or the equivalent expression “years of continuous employment with that employer” (ss 56, 56A and 57).
144 By appeal ground 13, Cummins contended that the primary judge erred in making the declaration that he did, in essence, because in identifying Mr Keenan’s period of continuous employment with Cummins his Honour included the period of the UK employment. Cummins made two arguments in support of its position. In its initial written submissions it contended that the phrase “continuous employment” should be interpreted to mean continuous employment in Victoria. In that respect reliance was placed on both the definition of continuous employment in s 62 of the LSL Act and s 48(b) of the Interpretation of Legislation Act 1984 (Vic) (“Interpretation Act”).
145 Cummins contended that an employee’s period of employment should be construed as commencing to run only from the time at which an employee first performs work with some connection to Victoria. It contended that a sufficient connection might be established because the work is performed in Victoria or because the work is performed for a company with a presence in Victoria. It would follow that unless the period of employment in question had a connection with Victoria it is not to be counted as part of the period of “continuous employment” to which the relevant provisions of the LSL Act refer.
146 By its written submission in reply, and by its oral submission, Cummins also made a different argument. It referred to Australian Timken Pty Ltd v Stone (No 2) [1971] AR (NSW) 246 (McKeon, Sheldon and Sheppard JJ) and Cohen v iSoft Group [2012] FCA 1071 (Flick J) for the proposition that a “substantial connection” needed to be established between the UK employment and Victoria and that such a connection only commenced in 1995 when Mr Keenan commenced to work in Victoria.
147 The submission made by Cummins asserting a requirement that the UK employment have some connection with Victoria was disputed by Mr Keenan. He contended that no such requirement is expressly made by the LSL Act. Alternatively, he contended that if a “substantial connection” requirement is to be implied, as had been done in relation to the equivalent legislation in New South Wales, both Timken and International Computers (Australia) Pty Ltd v Weaving [1981] 2 NSWLR 64 (Watson, Dey and Macken JJ) support the conclusion that the entirety of Mr Keenan’s employment relevantly had a substantial connection to Victoria.
148 Mr Keenan’s claim that his UK employment should be recognised for the purpose of calculating his entitlements to long service leave turns on the proper construction of the phrase “years of continuous employment with one employer”. That phrase must be construed by reference to s 60 of the LSL Act which provides the meaning of “one employer” and s 62 which provides the meaning of “continuous employment”.
149 Sub-section 60(1) explains that s 60:
…sets out several situations in which an employee is to be regarded, for the purposes of this Division, as having been employed by the one employer, even though the employee may have worked over the relevant period of time for more than one employer in a strict legal sense.
150 A number of “situations” are then set out, including most relevantly s 60(2)(a) which provides:
(2) If an employee is employed by a corporation, he or she is to be regarded as having been employed by that corporation during any period that—
(a) he or she was employed by a related body corporate of that corporation (within the meaning of the Corporations Act)
151 Other “situations” where the employee is to be regarded as having been the employee of the employer liable to provide the long service leave entitlement (“the liable employer”) are set out in s 60(3) to (9). Those “situations” include where the ownership of the business in which an employee works has transferred to the liable employer and that employer continues the employee’s employment (s 60(3)-(5)) and where the assets of a business in connection with which an employee performs duties are transferred to the liable employer and where that employer continues the employment of the employee (s 60(6)-(8)).
152 It is not in contest that the UK employment constituted employment of Mr Keenan by a “related body corporate” of Cummins within the meaning of s 60(2)(a). Mr Keenan contended that the UK employment must be regarded for the purposes of Div 6, as employment by Cummins, because pursuant to s 60(2)(a) Mr Keenan must be regarded as having been employed by Cummins “during any period that [he] ...was employed by a related body corporate” of Cummins – the UK employment being such a period of employment.
153 The language of s 60(2)(a) plainly supports Mr Keenan’s contention. That provision is a deeming provision. Its effect is to deem any period of employment of an employee with a related corporation to be employment by the liable employer. On that basis, although Mr Keenan was actually employed by Cummins Darlington, the UK employment is deemed to be the employment of Mr Keenan by Cummins and Mr Keenan’s employment with Cummins is therefore deemed to have commenced on 1 September 1981.
154 The submissions made by Cummins only obliquely referred to s 60 of the LSL Act and contended that the provisions of that Act (presumably including s 60) were not directed to the situation which confronted the primary judge in this case. Why that was so was not developed. However, the two submissions made by Cummins should be understood as intending to support the proposition that the deeming effect of s 60(2)(a) is inoperative in relation to the UK employment.
155 The first submission of Cummins, which relied upon the meaning of “continuous employment”, was also left largely undeveloped and was seemingly overtaken by the second submission made by Cummins reliant upon the proposition that a “substantial connection” was required between the UK employment and Victoria. However, I proceed on the basis that both submissions were pressed and, for the reasons which follow, conclude that both of those submissions should be rejected.
156 It is plain that s 56 and s 57 of the LSL Act (as well as the other entitling provisions in Div 6) require, in terms of both the eligibility of an employee for an entitlement and the extent or quantum of the entitlement, that the applicable period of the employment in question be one continuous period of employment, with the word “continuous” in the expression “continuous employment” being given its defined meaning.
157 The meaning of “continuous employment” is given by s 62. The intent of that provision is explained in s 62(1) as follows:
This section sets out several situations in which an employee is to be regarded, for the purposes of this Division, as having been continuously employed even though in a strict legal sense it could be said that the employee's employment was interrupted.
158 There then follows in s 62(2) a wide range of identified “situations” in which, despite the existence of one or other of those situations “[a]n employee’s employment is to be regarded as being continuous”. The “situations” there listed include absences from work for various reasons (s 62(2)(b) and (c)) and certain breaks in the employment of the employee including where the employee’s employment ends but the employee is re-employed within 3 months (s 62(2)(g)).
159 The obvious intent of s 62, understood in the context of the scheme of which it forms part, is that for the purpose of calculating the period of an employee’s employment to which Div 6 refers, the period of employment of an employee is to be regarded as a single continuous period of employment despite the occurrence of those interruptions or breaks in service which, as s 62(1) acknowledges, may “in a strict legal sense” cause it to constitute more than one period of employment. That is the work of the expression “continuous employment”.
160 Essentially the same function is served by s 60 which provides the meaning of “one employer” where, what “in a strict legal sense” (s 60(1)) may be regarded as two or more employments by various employers is required to be regarded as a single period of employment by the one employer.
161 The two expressions in truth comprise a composite expression which, for the purpose of calculating the period of continuous employment of an employee, operate to provide that certain multiple or broken periods of employments are to be regarded as a single continuous period of employment by a single employer.
162 The expression “continuing employment” is not intended to override or qualify the deeming effect of the expression “one employer”. If it did that or, in other words, if the “situations” described in s 60 were to be regarded as situations of discontinuity of employment rather than their obvious purpose of deeming two or more employments to be a continuous whole, s 60 would be rendered otiose. The requirement of “continuous employment” cannot be so construed.
163 That service provided to a related corporation of the liable employer is deemed to be part of the employee’s single continuous employment with the liable employer is also apparent from the predecessor provision to s 60(2), (s 65(2) of the Industrial Relations Act 1979 (Vic)) which provided that:
In respect of a worker employed by a corporation any period of employment with a corporation which by virtue of section 6 (5) of the Companies Act 1961 is deemed to be related to the first-mentioned corporation shall, for the purpose of calculating the period of continuous employment of that worker, be deemed to be employment with that first-mentioned corporation.
164 Furthermore, the Long Service Leave Act 1955 (NSW) (“LSLA NSW”) is not relevantly distinguishable from the LSL Act in relation to the provisions of relevance to the issues here raised. No party contended to the contrary. In International Computers, Watson, Dey and Macken JJ at 74 considered the effect of the “deeming provisions” (a reference to s 4(13)(c) of the LSLA NSW, which is the counterpart to s 60(2) of the LSL Act ) and stated as follows:
As Mr Meagher submitted, we are not called upon to consider a continued attachment to one employer but a series of separate employments which, as a result of the “deeming” provisions, are treated as notionally creating a continuity of service between the worker and his employer dating back to the commencement of the employment with the related corporations which have successively been his previous employers. Once the fiction has been created by the section, however, we do not consider that there are grounds for concluding that broken parts, which are to be treated as a notional whole, are to be regarded differently from an original unity
165 Further, their Honours at 75 referred to the reason for the enactment of s 4(13) and again to its purpose:
A break in continuity involving an interruption in service did however occur where a worker moved from one employer to another even though the employers were companies which were closely associated: see Re Long Service Leave—Shell Co of Australia Ltd [1965] AR (NSW) 121. This situation was mitigated by the insertion of s 4(13) by the Long Service Leave (Amendment) Act, 1967. As previously set out that provision purports to preserve the continuity of the contract of a worker who has been transferred from the service of one employer corporation to the service of a related employer corporation. This preservation of continuity is directed to the problem of ascertaining whether service of the worker has been under an unbroken contract of employment for the purpose of determining the amount of long service leave to which the worker is entitled pursuant to s 4(2)(a).
166 The reliance placed by Cummins upon s 48(b) of the Interpretation Act should also be rejected. That provision relevantly provides:
References to officers, localities etc.
In an Act or subordinate instrument, unless the contrary intention appears—
…
(b) a reference to a locality, jurisdiction or other matter or thing shall be construed as a reference to such locality, jurisdiction or other matter or thing in and of Victoria.
167 I presume that the “matter” that Cummins contends should be construed as “in and of Victoria” is the employment or period of employment to which Div 6 variously refers for the purpose of the calculation of the entitlement to long service leave there provided. Although again left largely undeveloped, I presume the contention put is that s 48(b) of the Interpretation Act has the effect of requiring that only the period of an employee’s employment worked in Victoria counts for the purposes of Div 6. The submission confronts the immediate problem that Cummins conceded that Mr Keenan’s employment in the United States should be counted but contended that his employment in the United Kingdom should not. How that apparent inconsistency is to be reconciled by reference to s 48(b) was not explained. In any event, the contention should be rejected for largely the same reasons that a similar argument, made largely by reference to s 17 of the Interpretation Act 1897 (NSW), was rejected in Timken on the basis that a contrary intention appears in the legislation. At 252 of Timken, McKeon, Sheldon and Sheppard JJ said this (references omitted):
Such an approach would give effect to the appellant's submission that the entirety of the service subject to temporary absences must be performed in New South Wales. We must say that we find it difficult to think that this was the intention of the legislature. The subject matter of the legislation is most material: Mynott v. Barnard, per Latham C.J. The Commission in Court Session in Kennedy v. Board of Fire Commissioners described “the basic social purpose of the Act” as “reward for long service”. So regarded, the locality of the service appears irrelevant. The nature of a continued attachment to an employer for a given period of time remains the same wherever the service is given. The provision of leave or payment in lieu thereof is an incident of employment in New South Wales. It is not a question of importing something into the contract of service. Like workers' compensation or annual holidays it is one of the incidents which arise in relation to employment in this State. At the time the Act was passed – and the problem we are considering bas existed since them: see Long Service Leave Exemptions Case – there were many companies in New South Wales with interstate and overseas ramifications. Likewise there were companies employing persons in the State which themselves were headquartered either in other States or overseas. It would seem to us strange if the Act were intended to apply only to those employees who had in fact performed the whole of their service in New South Wales subject to temporary absences.
168 Turning then to the second submission of Cummins, it is not clear whether Cummins contended that the requirement of “substantial connection” was founded upon a territorial limitation upon legislative power or, alternatively, upon the proper construction of the LSL Act and an implication to be drawn from the intended scheme of that Act. If the former, the contention may be readily rejected.
169 If there is “any real connection – even a remote or general connection” between the subject of the legislation of a State and the State, the legislation of the State will be valid. That principle was expressed by Gummow J (with whom Hayne J agreed) in the following passage of APLA Ltd v Legal Services Commissioner (NSW) (2005) 224 CLR 322 at [158] (references omitted):
In any event, as Gleeson CJ pointed out in Mobil Oil Australia Pty Ltd v Victoria:
“There is nothing either uncommon, or antithetical to the federal structure, about legislation of one State that has legal consequences for persons or conduct in another State or Territory.”
In the same case, Gaudron, Gummow and Hayne JJ said:
It is clear that legislation of a State parliament ‘should be held valid if there is any real connection – even a remote or general connection – between the subject matter of the legislation and the State’. This proposition has now twice been adopted in unanimous judgments of the Court and should be regarded as settled. That is not to say, however, that there may not remain some questions first, about what is meant in a particular case by ‘real connection’ and, secondly, about the resolution of conflict if two States make inconsistent laws.
See further Gleeson CJ and Hayne J at [40] and Callinan J at [465].
170 In what has been described as a “more precise” expression to the limitation (Union Steamship Co of Australia Pty Ltd v King (1988) 166 CLR 1 at [13] (Mason CJ, Wilson, Brennan, Deane, Dawson, Toohey and Gaudron JJ)), Dixon J stated the relevant principle in the particular context of the imposition by legislation of a liability on a person in Broken Hill South Ltd (Public Officer) v Commissioner of Taxation (NSW) (1937) 56 CLR 337. At 375 his Honour said:
The power to make for the peace, order and good government of a State does not enable the State Parliament to impose by reference to some act, matter or thing occurring outside the State a liability upon a person unconnected with the State whether by domicil, residence or otherwise. But it is within the competence of the State legislature to make any fact, circumstance, occurrence or thing in or connected with the territory the occasion of the imposition upon any person concerned therein of a liability to taxation or of any other liability. It is also within the competence of the legislature to base the imposition of liability on no more than the relation of the person to the territory. The relation may consist in presence within the territory, residence, domicil, carrying on business there, or even remoter connections. If a connection exists, it is for the legislature to decide how far it should go in the exercise of its powers. As in other matters of jurisdiction or authority courts must be exact in distinguishing between ascertaining that the circumstances over which the power extends exist and examining the mode in which the power has been exercised. No doubt there must be some relevance to the circumstances in the exercise of the power. But it is of no importance upon the question of validity that the liability imposed is, or may be, altogether disproportionate to the territorial connection or that it includes many cases that cannot have been foreseen.
171 The observations of Dixon J were recently referred to in DRJ v Commissioner of Victims Rights (No 2) [2020] NSWCA 242 where at [20] Bell P said this:
It is now well established that state legislatures may pass laws with extraterritorial operation and effect at least so long as there is a sufficient territorial nexus with the state enacting the relevant legislation: Mobil Oil Australia Pty Ltd v Victoria (2002) 211 CLR 1; [2002] HCA 27; Union Steamship Co of Australia Pty Ltd v King (1988) 166 CLR 1; [1988] HCA 55. The nexus may be relatively slight and a state legislature is competent to “make any fact, circumstance, occurrence or thing in or connected with the territory the occasion of the imposition upon any person concerned therein of [any liability]”: Broken Hill South Ltd (Public Officer) v Commissioner of Taxation (NSW); (1937) 56 CLR 337 at 375; [1937] HCA 4 (Broken Hill South). In the same case, Dixon J said (at 375) that “[i]f a connection exists, it is for the legislature to decide how far it should go in the exercise of its powers”.
See further Leeming JA (with whom Meagher JA agreed) at [136].
172 Division 6 of the LSL Act imposes a liability on an employer to either provide an employee with leave or, on the termination of an employment, pay monies in lieu of untaken leave. The subject matter of that legislation is the imposition of a liability upon employers in respect of entitlements owed to their employees. The imposition of such a liability would only be valid where there exists a “relation of the person to the territory” and as Dixon J further stated that relation may consist of “presence within the territory, residence, domicil, carrying on business there, or even remoter connections”. It is those characteristics which may be regarded providing a real, even if a remote or general connection, between the State and the subject matter of the legislation.
173 The LSL Act should be construed as intended to have a valid operation.
174 Accordingly, by reference to the territorial limitation upon the legislative power of the Victorian Parliament, the provisions of Div 6 must be read as only imposing a liability upon an employer with a relation to or real connection with Victoria. Here, there can be no issue that the imposition of liability upon Cummins in respect of long service leave entitlements owed to Mr Keenan is founded upon the requisite relation or connection between the imposition of liability upon Cummins and Victoria. Cummins has operated its business from premises in Victoria since 1995 at the latest. The name of the corporation suggests that it is an Australian corporation. Whether it is a Victorian corporation and when its presence in Victoria commenced is not apparent from the findings made by the primary judge or the evidence placed before the Court on appeal. However at the time that Mr Keenan’s employment was terminated, Cummins had had a presence in Victoria for over 20 years and as an incident of that presence had employed Mr Keenan for over 20 years. That is more than sufficient to found a territorial connection between the liability imposed upon Cummins as an employer by the LSL Act and Victoria.
175 On the issue of territorial connection, it is important to note the passage from Dixon J’s reasons in Broken Hill South quoted in Timken at 251 and endorsed in International Computers at 68, that “it is of no importance upon the question of validity that the liability imposed is, or may be, all together disproportionate to the territorial connection or that it includes many cases that cannot have been foreseen”. In other words, where the requisite territorial connection with the person upon whom a liability is imposed exists, the extent of the liability imposed by Parliament is a matter for the Parliament.
176 Section 60 provides for several “situations” in which liability upon an employer is enlivened and the quantum of that liability extended by reference to service by an employee provided to a person or persons other than the person upon whom the liability is imposed. In every situation there identified, a territorial connection between the imposition of liability and Victoria must exist. However, it was open to Parliament to set the criteria for determining the extent of that liability and to do so irrespective of whether the criteria chosen imposed a liability which was proportionate to the territorial connection or not. As Dixon J said “if a connection exists, it is for the legislature to decide how far it should go…”.
177 Insofar as the LSL Act seeks to impose liability which is disproportionate to the requisite territorial connection it would, in my view, operate validly. Although validity was not really in issue, the existence of a territorial connection was accepted in both Timken (at 251) and International Computers (at 73).
178 Insofar as Cummins relied upon a “substantial connection” as a requirement sourced from the proper construction of the LSL Act, Cummins made no submissions as to why the LSL Act should be so construed other than by reference to the construction adopted in relation to the LSLA NSW in Timken and Cohen.
179 In Cohen, Flick J did not undertake his own analysis of the LSLA NSW to discern how it ought to be construed. His Honour dealt with the requirement of “substantial connection” briefly and by reference to what he identified as the test applied in Timken. His Honour relevantly said (at [172]):
The territorial limitation which it has been accepted applies in respect to the Long Service Leave Act is that it is necessary to find some nexus between the Act and the State of New South Wales: Australian Timken Pty Ltd v Stone (No 2) [1971] AR (NSW) 246 at 253. The test which was there applied was whether the there was a “substantial connection” with New South Wales. McKeon, Sheldon and Sheppard JJ there concluded:
… We are, therefore, in agreement with the appellant’s approach to the problem to the extent that it contends that the service involved must be connected with New South Wales. We think, however, that its submission go too far when they involve the proposition that the service (subject to temporary absences) which is to be rewarded must be performed entirely in New South Wales. We think that the benefits provided for in the Act accrue if at the time the relevant event occurs (that is, completion, termination or cessation) the service which was being performed up to that time has a substantial connection with this State. This interpretation seems to us to accord with the purpose and policy of the Act without being in any way inconsistent with its language. It is to be assumed that the legislature intended the statute to bear a meaning which would have regard to the practical situation in industry and would leave as few anomalies as possible. We believe that the interpretation we favour achieves this result. This view does not make it necessary, as in the case of workers’ compensation legislation, that the relevant event must occur within the State but it is essential that, at the time of its occurrence, the service, looked at as a whole, may fairly be said to be to a substantial extent New South Wales service. Whether it is or not must be a question of fact and degree in each case. If, however, the service is actually being performed here at the time when the relevant event occurs, this is strong although not conclusive evidence that the service has a substantial connection with New South Wales. While we realize, on this pragmatic test, that there will be some cases close to the border, we see no difficulty in the present case. …
This decision was subsequently applied in International Computers (Australia) Pty Ltd v Weaving [1981] 2 NSWLR 64 at 74 per Watson, Dey and Maclean [sic] JJ.
180 It may be observed, although nothing much turns upon it, that Flick J seems to have treated the test of “substantial connection” as a criteria directed to the territorial limitation imposed on the New South Wales legislature. It is clear, however, that in formulating the test of “substantial connection” in Timken, McKeon, Sheldon and Sheppard JJ were not addressing power but were dealing with how the LSLA NSW should be construed by reference to its policy or purpose. So much is apparent from the extract quoted from Timken in Cohen as set out above as well as express statements to that effect at [250] and [251] of Timken.
181 Further it is also necessary to note, although again nothing much turns upon it, that the finding made by Flick J in Cohen that Dr Cohen was not entitled to long service leave entitlements was overturned on appeal (Cohen v iSOFT Group Pty Limited [2013] FCAFC 49). Whilst Flick J seems to have treated Dr Cohen’s claim for long service leave as a statutory claim (see at [169]), the Full Court (Rares, Cowdroy and Kerr JJ) at [50] seemed to have allowed the claim as a contractual claim. The Full Court accepted that the entitlements provided by the LSLA NSW applied “as a matter of agreement”. On that basis, it would appear that the Full Court thought it unnecessary to consider whether the LSLA NSW was directly applicable. That may explain why there is no discussion by the Full Court as to the proper construction of the LSLA NSW or otherwise any consideration of the “substantial connection” test.
182 I turn then to consider the nature of the “substantial connection” test and its justification.
183 The implication of a requirement of “substantial connection” as stated in Timken was justified on the basis that the legislature intended the statute to bear a meaning which would have regard to “the practical situation in industry” and did not provide anomalous results (at 253). The same justification was given in International Computers at 75-76. The reference made to the “practical situation in industry” seems to have been an intended reference to the reality that modern day employment arrangements are often not confined by territorial borders in circumstances where many corporations based within a State require their employees to service their interstate or overseas operations and the presence of many employees within the State servicing the needs of corporations foreign to the State (see International Computers at 76). The presence in New South Wales of multinational corporations operating their businesses, as they typically do, through multiple related corporations across multiple territories must also have been in contemplation when s 4(13)(c) of the LSLA NSW was enacted.
184 It may be accepted that the LSL Act should also be construed by reference to context and that extra-territorial business and employment arrangements of the kind just discussed are part of the landscape which the framers of the Act must have had in mind. It may also be accepted that anomalous or bizarre results were not intended in relation to the operation of Div 6. However, it must be very firmly borne in mind that what is to be regarded as anomalous is not at large. It is the terms, purpose and policy of the LSL Act which must inform the conclusion that a particular result is anomalous or bizarre and therefore unintended. Further, in construing how Div 6 was intended to operate in relation to employment arrangements or histories with an extra-territorial feature, the territorial limitation on legislative power must also be taken into account because it must be assumed that it was intended that Div 6 would operate validly. In relation to such employment arrangements, the constructional exercise ought to consider whether by reason of the existence of extra-territorial characteristics, the operation of Div 6 was intended to be narrowed or more limited than the limitations imposed by the territorial connection that its valid operation requires.
185 It is that last mentioned enquiry that raises some doubt in my mind about the correctness of the “substantial connection” test. When the test for territorial connection (“any real connection – even a remote or general connection”) would permit a broader operation for Div 6, what is it that arises from context which justifies a narrower operation for Div 6 based upon the requirement for a “substantial connection” between the service provided by the employee and the State where that service has an extra-territorial feature? Was a second or supplementary limitation intended in relation to service with an extra-territorial feature? Those questions are not addressed in either Timken or International Computers. Nor were they addressed by the parties. They are questions that are perhaps best left to another day including because, even if the broader “substantial connection” test is applied to Mr Keenan’s history of service, there is no error demonstrated in the conclusion arrived at by the primary judge.
186 Before explaining why that is so, it is necessary to make some observations about the scheme of Div 6 and in particular the contribution made to it by s 60 which, in the three “situations” there addressed, deems employment by various employers to have been employment by the single employer upon whom liability to provide long service leave entitlements is imposed. I do so including because one of the driving forces behind the “substantial connection test” is that anomalous results should be avoided and what is to be regarded as anomalous must be considered in the context of what the scheme of Div 6 provides.
187 The fact that an employer should be liable to provide for long service leave entitlements referable to service provided by the employee to a prior employer or a series of prior employers in the course of prior employments is in no respect anomalous to the scheme of Div 6 so long as the “situations” specified in s 60 exist. Those situations reveal a policy or purpose of permitting an employee who has continued to work in what is essentially, although not strictly, the same operation, enterprise or business, the capacity to take the benefit of the whole of the service provided by the employee to that operation, enterprise or business for long service leave purposes. In that respect because of their common ownership and likely common endeavour, related corporations are essentially treated in s 60(2) as in the same operation, enterprise or business.
188 In the context of that policy or purpose there is nothing anomalous about service provided by an employee in one corporation being counted for long service leave purposes where the employee has been transferred into the employment of a related corporation. So much more so because which of the related corporations should bear liability for long service leave entitlements of an employee who has worked across the corporate group is unlikely to be of great significance and, if important, inter-group adjustments may readily be made.
189 The position is similar where the ownership of a business changes. In the context of what s 60(3) provides, there is nothing anomalous about the last employer bearing liability even if it be the case that the employee has only been employed by that employer for a very short period. That is what s 60(3) requires. It must be borne in mind that employee entitlements to various kinds of leave are commonly carried over from one employer to the next where an employee has transferred from one related corporation to another or where a transmission of business has occurred. That may be done under the FW Act (see s 22 and in particular s 22(7)) as well as by the operation of s 60(3) of the LSL Act. Employers are astute or, perhaps more accurately, expected to be astute about the obligations to employees acquired upon taking an employee from a related corporation or when taking over a business. Where the employments of existing employees are continued, adjustments to the price of the business or other accommodations in relation to the employee entitlements of the transferring employees are commonly made.
190 The other observation necessary to be made in relation to the extra-territorial operation of a scheme which seeks to provide a reward for service, is that service may have a nexus to two territories at the same time. Service may be provided in one territory but received in another. An employee employed by a Victorian employer working in Japan will be providing services in Japan, the benefit of which will be received in Victoria. Accordingly, there is nothing necessarily anomalous about service provided outside of Victoria being recognised as Victorian service.
191 Both Timken and International Computers strongly emphasise that whether a “substantial connection” exists, is to be assessed at the time that the liability to provide the long service leave entitlement arises. Those authorities also emphasise that it is the service provided by the employee as a whole, rather than each component of that service assessed individually, that must have a “substantial connection” with the territory. In Timken at 253-254 their Honours said, referring to the “event” as the event of liability arising (emphasis added):
It is to be assumed that the legislature intended the statute to bear a meaning which would have regard to the practical situation in industry and would leave as few anomalies as possible. We believe that the interpretation we favour achieves this result. This view does not make it necessary, as in the case of workers' compensation legislation, that the relevant event must occur within the State but it is essential that, at the time of its occurence [sic], the service, looked at as a whole, may fairly be said to be to a substantial extent New South Wales service. Whether it is or not must be a question of fact and degree in each case. If, however, the service is actually being performed here at the time when the relevant event occurs, this is strong although not conclusive evidence that the service has a substantial connection with New South Wales.
192 In International Computers at 74, again referring to the point at which liability arises as the “event”, their Honours said this:
In the light of the decision in Timken's case [1971] AR (NSW) 246 we consider that it is not necessary that all service should be substantially connected with New South Wales, but that it is essential that, at the time when the relevant event occurred, the worker's service may be fairly said to be New South Wales service. There is no doubt that at the relevant time in this case the worker's service had a substantial connection with New South Wales.
193 At 75 the approach taken by their Honours is encapsulated in the following paragraph:
We have already said with respect to aggregation under s 4(13) that, as artificial as it may seem, the aggregated service must be regarded no differently from that of service with one employer instead of a number of related employers. It is of little importance that the original employer or for that matter the last employer may be a foreign corporation (although in the latter case, in particular, this may be relevant to the question whether or not at the crucial time there was a substantial connection with New South Wales). Despite the fictional situation created we see no basis for reading down the section in the way contended for by the appellant so as to exclude in the aggregation any service which did not have in each instance “a substantial connection with New South Wales” so as to make it service under what Mr Meagher described as “New South Wales contracts”.
194 What emerges from those critical observations made in each of Timken and International Computers is that the substantial connection test as applied in New South Wales is a characterisation test which essentially asks whether the service provided by the employee may be fairly characterised as “New South Wales service”. It seems to me that both Timken and International Computers emphasise, although that emphasis may be said to be more strongly made in International Computers than Timken, that the primary focus of the characterisation process should be on the years of service closest to the time at which liability to provide the long service leave entitlements in question arose. In International Computers, what I consider to be a matter of emphasis, was regarded as a possible point of difference in the following passage at 76:
One further aspect which could be said to affect this appeal arises from Timken's case [1971] AR (NSW) 246, at p 253. In our view, it would put the position too highly if it were to be said that service did not fall within the purview of the Act unless the total service was to a substantial extent New South Wales service. In this regard we would differ, with respect, from a view which one conclusion in Timken's case [1971] AR (NSW) 246 may suggest in the reference to it being essential that, at the time of the occurrence of the relevant event, “the service, looked at as a whole, may fairly be said to be to a substantial extent New South Wales service”. Any requirement dependent on some proportion of what can be termed New South Wales service relative to the worker's total service, would introduce, by judicial interpolation, a factor for which we see no basis in the terms of the statute. There can be no question that the employment relationship and circumstances overall need to be considered in determining whether or not the service, at the relevant time, was New South Wales service. We see no room, however, for a test which is based on the length of service of itself.
195 Each of the services assessed in those cases was held to have had a substantial connection with New South Wales. In Timken, the employee in question was employed in Victoria by an employer incorporated in Victoria and commenced his service by working his initial two years of employment from the premises of a related corporation in the United States. The employee was then transferred to work in New South Wales where he worked for eight years and seven months of the total employment period of ten years and seven months.
196 In International Computers, the employee in question commenced work in 1963 with an employer incorporated in New South Wales. His work was performed in Victoria for the first year and then, as an employee of a related corporation, performed in Victoria for the next two years. He was then transferred to New South Wales where he worked for about a year before being transferred to work with related corporations in South Africa and in the United Kingdom for some 8.5 years. In December 1975, the employee returned to New South Wales and worked there for slightly short of three years.
197 What appears to have satisfied their Honours in Timken that the service provided by the employee there in question should be characterised as New South Wales service was that “[t]he [employee], when he terminated his employment (the relevant event), had been working for a substantial period in New South Wales, indeed, for far longer than would have been sufficient to meet the test which we have formulated”. That characterisation was made despite the fact that some 20% of the overall service performed at the commencement of that service, was service performed in the United States for a corporation foreign to New South Wales.
198 International Computers contains no express statement to this effect, but given the particular emphasis there given to the years of service closest to when liability arises, it would seem that the slightly less than three years the employee worked in New South Wales at the end of his employment, was decisive in the overall service being characterised as New South Wales service. That characterisation was made despite some two thirds of the overall service having been performed outside of New South Wales, at least two thirds of which, was performed for a non-NSW corporation which was related to the employer ultimately held liable.
199 The service of Mr Keenan in question was service of some 34 years. Approximately 20 years or 60% of that service was provided to Cummins, a Victorian based employer. Of that service provided to Cummins, some 12 years was provided in Victoria including the last 1.75 years. Those features of Mr Keenan’s overall service demonstrate a substantial connection between Mr Keenan’s service and Victoria sufficient to characterise that service as Victorian service.
200 Although I have come to the same conclusion for different reasons, the conclusion reached by the primary judge, that the entirety of Mr Keenan’s 34 years of service including the UK employment should be counted for long service leave purposes, has not been shown to be erroneous. For those reasons appeal ground 13 must be rejected.
disposition
201 The appeal must be allowed in part. Insofar as appeal grounds 3-9 raise error in the approach taken by the primary judge to the assessment of the evidence (as discussed at [75]-[136] above), those grounds should be allowed as well as appeal ground 12. That has the result that the orders and declarations made by the primary judge dependent upon the erroneous findings of contraventions of ss 340 and 352 of the FW Act (paragraphs 1, 2, 4, 5, 6 and 7 of the primary judge’s order of 8 March 2019) must be set aside. Appeal ground 13 dealing with Mr Keenan’s long service leave entitlements should be rejected, with the result that the declaration made in paragraph 3 of the primary judge’s order should stand.
202 Given that outcome, those grounds of appeal addressed at [7]-[74] (grounds of appeal 1 and 2) need not be determined and it is not necessary to consider the remaining grounds.
203 There has been an unfortunate delay in the delivery of the judgment of the Court for which the parties are not responsible. If the matter is remitted to the Federal Circuit Court, given the well-known pressures upon that Court and particularly in circumstances where the primary judge is no longer a judge of that Court, there is likely to be a very long delay in the final determination of the matter should it be remitted to the Federal Circuit Court. In those circumstances the preliminary view I have reached is that Mr Keenan’s claims made pursuant to ss 340 and 352 of the FW Act should be redetermined by this Court. However, before hearing the parties on that question, it would seem to me that the reasons for judgment of the Court may assist the parties to arrive at a mediated resolution of Mr Keenan’s claims, which would not only finally resolve those claims more quickly but would also avoid the parties incurring further substantial legal costs.
204 Accordingly, as well as allowing the appeal in part and setting aside the orders and declarations made by the primary judge referred to above, the only further orders I would make are as follows:
(1) The proceeding be referred for urgent mediation before a Registrar of this Court to be held on a date to be fixed; and
(2) Should the proceeding not be resolved at mediation, the proceeding be listed for a Case Management Hearing before the presiding judge on a date to be fixed.
I certify that the preceding two hundred and four (204) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Bromberg. |
Associate:
REASONS FOR JUDGMENT
MORTIMER J:
205 I have had the advantage of reading the reasons for judgment of Bromberg and Anastassiou JJ.
206 I concur with the orders proposed by Bromberg J, allowing the appeal in part, in relation to appeal grounds 3-9, and 12. I agree also with Bromberg J’s rejection of appeal ground 13, dealing with long service leave. I agree the remainder of the grounds of appeal do not need to be determined. In the particular circumstances of this appeal, I agree it may be appropriate, subject to hearing from the parties, that this Court should itself re-determine Mr Keenan’s claims made pursuant to ss 340 and 352 of the Fair Work Act 2009 (Cth), but that the matter should first be referred to mediation.
207 I generally concur with the reasons given by Bromberg J for upholding the appeal in part, and for rejecting appeal ground 13.
208 I mention two matters in particular. First, I respectfully agree with his Honour’s observations at [124] of his reasons.
209 Second, I respectfully agree with his Honour’s reasons concerning the proper construction of s 341(1)(c)(ii) of the Fair Work Act. I note that in Milardovic v Vemco Services Pty Ltd (Administrators Appointed) [2016] FCA 19 at [65], I referred to the reasons of Dodds-Streeton J in Shea v TRUenergy Services Pty Ltd (No 6) [2014] FCA 271; 314 ALR 346 at [618]-[620] with apparent approval. The issues raised by the construction and application of s 341(1)(c)(ii) of the Fair Work Act to Mr Keenan’s complaints in this appeal were not canvassed in Milardovic. Nor had there been the development after Shea, in the series of the decisions to which Bromberg J refers, of a firm dichotomy between complaints an employee had a “right or entitlement” to make (because of the terms of a contract, an industrial instrument or a statute), and those an employee did not. That is a dichotomy which, for the reasons given by Bromberg J, has no support in the text, context or purpose of s 341(1)(c)(ii).
I certify that the preceding five (5) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Mortimer. |
Associate:
Dated: 24 November 2020
REASONS FOR JUDGMENT
ANASTASSIOU J:
Introduction
210 The primary judge found that the appellant, Cummins South Pacific Pty Ltd, took six adverse actions against the respondent, Mr Keenan, including his dismissal, because he made certain complaints about his employment. The primary judge decided the principal proceeding in two stages, first considering the question of liability in Keenan v Cummins South Pacific [2018] FCCA 2600 (liability reasons) and next remedies and penalties in Keenan v Cummins South Pacific (No 2) [2019] FCCA 523 (quantum judgment).
211 The primary judge found Mr Keenan made five ‘complaints’, and that each constituted a workplace right within the meaning of s 341(1)(c)(ii) of the Fair Work Act 2009 (Cth) (FW Act). His Honour found Cummins was improperly motivated by Mr Keenan’s complaints when taking the six adverse actions against Mr Keenan, culminating in his ultimate dismissal. Accordingly, the primary found Cummins had contravened s 340(1) of the FW Act in respect of each adverse action. The primary judge further found that Cummins breached s 352 of the FW Act for dismissing Mr Keenan by reason of him taking sick leave (liability reasons at [347]-[350]).
212 Cummins relies upon 13 grounds of appeal in relation to the liability reasons. These grounds may be grouped as follows:
Grounds 1 to 3: that Mr Keenan’s complaints did not meet the test for workplace rights in s 341(1)(c)(ii) of the FW Act;
Grounds 4 to 9: that the primary judge erred in fact and law in finding that the relevant decision maker on behalf of Cummins, Ms Beaulieu, had taken the alleged adverse actions for a proscribed reason;
Grounds 10 and 11: that the primary judge erred in drawing an inference in accordance with the principles in Jones v Dunkel (1959) 101 CLR 298 in relation to his finding of a breach of s 352 of the FW Act; and
Grounds 12 and 13: that the primary judge erred in finding that Mr Keenan’s termination was made because he was temporarily absent from work due to illness and took leave in November 2015, and that his Honour erred in finding that Mr Keenan had been ‘continuously employed’ for the purposes of the Long Service Leave Act 1992 (Vic) (LSL Act).
213 Cummins relies upon a further six grounds of appeal in relation to the quantum judgment.
Grounds 14 and 15: that the primary judge erred in ordering reinstatement;
Grounds 16 to 18: that the primary judge should not have granted Mr Keenan “back-pay”, nor compensation for pain and suffering; and
Ground 19: that the primary judge should not have imposed a penalty on Cummins of 83% of the maximum, being $45,000.
214 I have had the advantage of reading in draft the Reasons for Judgment of Bromberg J, with whom Mortimer J agrees. I respectfully disagree with their Honours in three respects. First, I disagree with the majority’s construction of s 341(1)(c)(ii) of the FW Act. Second, and relatedly, in my view only one of the four contested complaints by Mr Keenan (the third complaint) constituted a complaint within the meaning of s 341(1)(c)(ii) of the FW Act. It was common ground that the fifth complaint was a complaint within the meaning of s 341(1)(c)(ii). It follows from this conclusion that although I agree with the orders for disposition of the appeal, I would exclude from any redetermination of Mr Keenan’s claims pursuant to s 340 of the FW Act, his claims founded upon the first, second and fourth complaints. Third, I disagree with the majority’s construction of the relevant provisions of the LSL Act and would allow appeal ground 13, such that Mr Keenan’s period of continuous employment with Cummins is limited to the period 18 February 1995 to 25 November 2015.
Factual Background
215 Before turning to the relevant events, I note that there was some dispute between the parties during the hearing of the appeal as to the chronology of events between Mr Keenan commencing employment in September 1981 and his dismissal on 25 November 2015. At the hearing, Cummins provided a chronology of events dated 8 July 2019 (Cummins chronology). The Cummins chronology referred to the evidence for the event in question and to the corresponding references to that event in the liability reasons. Counsel for Mr Keenan disputed the accuracy of some of the events identified in the Cummins chronology as a matter of fact and or characterisation. Counsel for Mr Keenan provided a document entitled ‘Examples of factual errors and argument …’ (Keenan chronology). The Keenan chronology is not an alternative chronology to the Cummins chronology. Rather, it is a critique of the Cummins chronology, containing selected items from the Cummins chronology and a summary of suggested errors of fact or characterisation in that chronology.
216 The factual summary below has been taken from the findings of the primary judge. It is not necessary to resolve any dispute between the parties concerning the relevant facts or the findings of the primary judge concerning those facts. This is for two reasons. First, for the reasons explained by Bromberg J, with which I respectfully agree, the learned primary judge took an erroneous approach to the consideration of the evidence relevant to whether Cummins was actuated by a proscribed reason contrary to s 340(1) of the FW Act. Accordingly, this question will need to be redetermined. Second, the dispute between the parties on appeal primarily concerned the characterisation to be given to the evidence, rather than a dispute as to the occurrence of the events concerned.
217 I set out below a summary of the relevant background facts by reference to the relevant time periods.
March to November 2014 – Mr Keenan appointed to leadership position and tensions between him and Ms Baldota begin
218 Mr Keenan commenced employment with Cummins in September 1981. He began his career in Cummins Business Services (CBS), a division responsible for internal back of house services. He held a number of positions in CBS in Australia and overseas before being appointed CBS Regional Leader effective from March 2014, based in Melbourne. As CBS Regional Leader, approximately 60 employees reported to Mr Keenan (liability reasons at [30]). In this role Mr Keenan reported to Ms Kirsch, the Executive Director of CBS, who was based in the United States. From 1 January 2015, Mr Keenan began reporting to Ms Beaulieu, the CBS Global Operations Leader, who held a position in the corporate hierarchy between Mr Keenan and Ms Kirsch. The primary judge found that Ms Beaulieu was the relevant decision maker for the purpose of the adverse action claim. Ms Beaulieu was based in the United States of America.
219 Within the first week of Mr Keenan’s appointment as CBS Regional Leader, ‘complications’ arose between him and Ms Baldota. Ms Baldota held a position which involved responsibilities for human resources (liability reasons at [17] and [42]). Ms Baldota was based in Melbourne. She did not give evidence at the trial of the proceeding. Her absence from the proceeding is the basis of the Jones v Dunkel inference which is challenged by grounds 10 and 11 on appeal.
220 The primary judge’s characterisation of the professional relationship between Ms Baldota and Mr Keenan is challenged on appeal under ground 3. The primary judge noted that there was little evidence of the content of Ms Baldota’s role (liability reasons at [39], see also [82]). His Honour referred to her as Mr Keenan’s “underling”, and “inferior” (liability reasons at [31], [51], [59] and [254]). However, his Honour expressly accepted Ms Beaulieu’s evidence that Ms Baldota did not report directly to Mr Keenan, but rather to Ms Elderbrant, the CBS Global HR Director based in the United Kingdom (liability reasons at [91]). Mr Keenan’s written submissions accept that Ms Beaulieu reported to Ms Elderbrant. His written submissions also state that Ms Baldota was to provide “HR support” to Mr Keenan.
221 The primary judge did not refer to any specific evidence concerning the relative seniority of Ms Baldota and Mr Keenan in terms of their respective remuneration levels, or other indications of their relative seniority. However, it is clear that Ms Baldota and Mr Keenan occupied parallel positions, as their reporting lines did not intersect. It may be accepted that Ms Baldota’s responsibilities in relation to human resources would include oversight responsibility for human resources policies and procedures.
222 Returning to the narrative, the primary judge found that tensions between Mr Keenan and Ms Baldota initially arose out of a dispute about the accuracy and authorship of an organisational chart (liability reasons at [32]-[37]). This occurred in early March 2014. The chart was produced in response to a request directed to Mr Keenan by the Human Resources Director for a different region, Ms Alison. Mr Keenan redirected the request to Ms Baldota, who provided the chart directly to Ms Alison. The chart was later used by Mr Keenan in a presentation he circulated to his staff.
223 On 7 March 2014, Ms Elderbrant provided initial feedback (said to be with ‘absolute positive intent’) to Mr Keenan about the presentation, including pointing out several inaccuracies in the chart. This email was copied to Ms Baldota. It appears that Ms Baldota did not acknowledge responsibility for the errors in the chart at that time (liability reasons at [37]). On 11 March 2014, Mr Keenan emailed Ms Baldota requesting she make contact with Ms Elderbrant and Ms Alison regarding the concerns with the chart. The primary judge found it was uncertain whether Ms Baldota complied with this request (liability reasons at [38]).
224 Over the course of March and April 2014, there was an exacerbation to the friction between Mr Keenan and Ms Baldota. Mr Keenan and the then “financial controller” of Cummins South Pacific, Mr Sharma, were to visit Singapore. Mr Sharma was later found to have been involved in financial misconduct in circumstances that will be discussed below. On several occasions Ms Baldota asked to join the trip to Singapore but was refused by Mr Keenan. Following Mr Keenan’s refusal, Ms Baldota emailed Ms Elderbrant directly raising the matter (liability reasons at [41]). After this exchange, Mr Keenan requested a copy from Ms Elderbrant of Ms Baldota’s performance review from the previous year (liability reasons at [44]). Ms Elderbrant replied that Ms Baldota had “excellent stakeholder feedback”, and that Mr Keenan should contact Ms Baldota as she could “coach and support [Mr Keenan] through his leadership journey” (liability reasons at [44]). It does not appear Mr Keenan made direct contact with Ms Baldota as suggested by Ms Elderbrant.
225 From the end of April 2014 until early July 2014, after Ms Baldota had returned from a holiday, both she and Mr Keenan reported to Ms Elderbrant that their relationship had improved (liability reasons at [46]). Despite the improvement, Ms Elderbrant remained concerned about Mr Keenan’s leadership style, and informed Mr Keenan that he needed to reflect and improve on it (liability reasons at [47] and [48]).
226 In July 2014, however, the relationship again deteriorated, apparently triggered by Mr Keenan siding against Ms Baldota in relation to a human resources decision. On 7 July 2014, Ms Baldota exchanged emails concerning a temporary replacement in Singapore for Mr Sharma by a Ms See, the human resources leader for that region (liability reasons at [53]). Mr Sharma’s replacement was to start on 9 July 2014. It appears Ms See disputed certain information provided by Ms Baldota. A conference call was convened by Mr Keenan, which included Ms See and Ms Baldota, to discuss the issue. The conference call became “heated”. Mr Keenan’s evidence was that he then called a third party and asked the third party, without disclosing the positions of Ms Baldota and Ms See about the disputed information, to provide “subject matter expert advice”. The third party sided with Ms See, and Mr Keenan decided on this basis to do so also. Mr Keenan’s evidence was that Ms Baldota then became “extremely upset” and left the room. As noted above, the primary judge had only Mr Keenan’s evidence concerning these events as Ms Baldota was not called to give evidence (liability reasons at [54]).
227 After the conference call it appears Ms Baldota raised her concerns with Mr Keenan about their working relationship. This led to a series of meetings, emails, and progressively, the reinvolvement of Ms Elderbrant (liability reasons at [55] and [57]). On 17 July 2014, a teleconference occurred between Mr Keenan and Ms Elderbrant, to which I shall return shortly.
228 Pausing the background narrative, it is important to note that nothing in the foregoing was alleged to constitute the exercise of workplace rights or the taking of adverse actions. Looking forward in the narrative, however, starting at the 17 July 2014 teleconference and ending on the date of Mr Keenan’s ultimate dismissal on 25 November 2015, the primary judge found that Mr Keenan made five ‘complaints’ within the meaning of s 341(1)(c)(ii) of the FW Act regarding Ms Baldota and that six adverse actions were taken against him (liability reasons at [226] and [227], [240], [249], [255] and [264], respectively).
First Complaint
229 The primary judge found the first complaint was made during the teleconference between Mr Keenan and Ms Elderbrant on 17 July 2014 (liability reasons at [217]). What was said during this call was contested. The primary judge paraphrased Mr Keenan’s opening submissions on this conversation as being “in respect of difficulties he had been experiencing with Ms Baldota based mainly on the quality of her work and her interaction with, and attitude towards, other employees” (liability reasons at [198]). The primary judge referred to the evidence of the first complaint in more detail (liability reasons at [217]):
Mr Keenan’s evidence at paragraph 48 of his affidavit was to the effect that on or about 17 July 2014 he had a telephone conference with Ms Elderbrant after she had cancelled several times. Mr Keenan said he had raised with her several times the fact that Mr Keenan was experiencing difficulties with Ms Baldota. Mr Keenan swore in paragraph 48 of his affidavit that Ms Elderbrant told Mr Keenan words the effect that Ms Baldota was “just more touchy-feely”. When cross-examined on the issue, Mr Keenan denied the suggestion put to him that when he was speaking with Ms Elderbrant he was merely expressing his frustration with Ms Baldota. He said –
…
No. I had some legitimate complaints about false accusations she had made against me.
…
She was putting to you that it wasn’t part of her role to solve an interpersonal dispute between you and your HR manager. That’s why she was short with you then. Do you accept that?--- No. Because my problems were false allegations and false accusations that I wanted to bring up with Ms Elderbrant that Ms Baldota had made against me and she wouldn’t let me – she wouldn’t listen to me.
230 The primary judge further stated that Ms Elderbrant’s affidavit did not depose to the 17 July 2014 call (liability reasons at [218]), and concluded that Mr Keenan “communicated, as a matter of substance, a grievance about the difficulty he had in working with Ms Baldota” (liability reasons at [221]).
231 From the end of July to the start of December 2014 it appears the discord again simmered down.
December 2014 to 21 May 2015 – concerns raised over Mr Keenan’s and Mr Sharma’s performance
232 On 8 December 2014, Ms Kirsch visited Australia. During her visit she communicated to Mr Keenan concerns and complaints regarding Mr Sharma (liability reasons at [62]). She told Mr Keenan that other staff were not sharing their complaints with Mr Keenan as there was a perception that he and Mr Sharma were personal friends. She told Mr Keenan to place Mr Sharma on a performance improvement plan. It appears Mr Keenan did not agree at that time to do so in the absence of further information.
233 There were two areas of contention between Mr Keenan and Ms Kirsch and others at Cummins regarding the performance improvement plan for Mr Sharma. First, there was disagreement between Mr Keenan and Ms Kirsch as to the appropriate “score” to be included in the plan. Mr Keenan’s view was that Mr Sharma deserved a score signifying that he exceeded expectations, being a 2 plus or a 1 on the scale used by Cummins (liability reasons at [62]). Ms Elderbrant, apparently on the basis of a survey of others, proposed a score signifying that Mr Sharma was performing below expectations, being a 2 minus (liability reasons at [63]). Ms Baldota also considered a 2 minus to be appropriate (liability reasons at [75]).
234 Second, Mr Keenan appears to have been concerned about the basis for the imposition of the performance improvement plan. Mr Keenan requested details about the specific areas in which Mr Sharma was perceived to be in need of improvement (liability reasons at [69], [70] and [76]).
235 On 1 January 2015, as noted above, Mr Keenan began reporting to Ms Beaulieu (liability reasons at [76]). Ms Beaulieu’s evidence was that she assumed reporting responsibilities for seven of Ms Kirsch’s direct reports, including Mr Keenan. Ms Beaulieu deposed to a conversation with Ms Kirsch (also deposed to in Ms Kirsch’s affidavit) concerning performance issues regarding Mr Keenan and one other of the seven reports. Ms Kirsch’s evidence is that she told Ms Beaulieu at that time that Mr Keenan was not suited to his role.
236 On 13 January 2015, Mr Keenan learned that an ethics case had been commenced against Mr Sharma (liability reasons at [66]).
237 On 16 January 2015, Mr Keenan received formal feedback from Ms Kirsch about his performance (liability reasons at [74]). Although including positive general statements such as Ms Kirsch “enjoyed working with” Mr Keenan, negative feedback was provided regarding his leadership.
238 In early February 2015, Ms Beaulieu telephoned Mr Keenan to “reprimand him for not having placed Mr Sharma on a performance improvement plan” (liability reasons at [76]). Mr Keenan replied that he was still unsure of the details of the complaints made against Mr Sharma. In any event, on 5 February 2015 a call occurred between Mr Keenan, Mr Sharma and Ms Baldota and a performance improvement plan for Mr Sharma was developed (liability reasons at [76]).
Second Complaint
239 The primary judge found the second complaint to have occurred in a conversation in person between Mr Keenan, Ms Beaulieu and Ms Elderbrant on 26 February 2015, while Mr Keenan was in the United States (liability reasons at [230]). The conversation took place in a bar after a dinner (liability reasons at [237]). The parties were in general agreement that the conversation concerned Mr Keenan’s relationship breakdown with Ms Baldota. More specifically, Mr Keenan’s evidence was that he told Ms Beaulieu and Ms Elderbrant that Ms Baldota was making false accusations about him (liability reasons at [231]). As with the first complaint, the evidence of exactly what was said is unclear (see liability reasons at [86]-[91]). Ms Elderbrant deposed to this conversation in her affidavit evidence (liability reasons at [228]-[240]). The extent of the parties’ dispute (concerning, for example, whether Mr Keenan ‘convened’ the conversation, and whether it could be characterised as a ‘meeting’ at [232]), is not material for present purposes.
240 On 16 March 2015, Mr Keenan was interviewed during the ongoing ethics investigation of Mr Sharma (liability reasons at [97]-[108] and [278]-[279]). The interview was conducted by Mr McClelland, the Cummins employee in charge of the investigation (liability reasons at [69]). Four allegations were made against Mr Sharma about which Mr Keenan was questioned (liability reasons at [100]). In summary, the allegations were that Mr Sharma had purchased personal travel using his company travel card, had breached the Cummins code of business conduct in misleading Cummins concerning his need to be accompanied on a trip to Singapore in May 2014, had submitted personal expenses to Cummins for reimbursement, and had travelled business class when not permitted to do so (liability reasons at [100]). Mr Keenan was asked to explain his involvement in, or approval of, various aspects of the alleged misconduct (liability reasons at [101]-[108]). This was found to be the first adverse action at trial.
241 On 1 April 2015, Ms Beaulieu told Mr Keenan that she, Ms Kirsch and Ms Elderbrant “did not consider [Mr Keenan to be] good enough for the job, that his 2014 performance was 2 minus and that he had six months to find another job within Cummins” (as summarised by the primary judge in the liability reasons at [109]).
242 The primary judge held that by the end of April 2015, Ms Baldota was actively “gathering information against” Mr Keenan at the behest of Ms Elderbrant or Ms Beaulieu (liability reasons at [327]). Further, by this time Ms Beaulieu had sought legal advice in connection with the termination of Mr Keenan’s employment (liability reasons at [329]).
243 On 18 May 2015, Ms Beaulieu and Ms Elderbrant initiated an ethics case against Mr Keenan (liability reasons at [111]). The primary judge found this to be the second adverse action (liability reasons at [272](c)). Mr McClelland conducted the investigations and interviewed Mr Keenan on 20 May 2015. The ethics case appears to have alleged that Mr Keenan had failed in his responsibilities as a leader, breached the Cummins travel policy, code of business conduct and purchasing card policy. The primary judge described the case as having made two “specific” allegations, both concerning Mr Keenan’s authorisation of Mr Sharma’s misuse of company funds as alleged in the ethics investigation against Mr Sharma (liability reasons at [112]-[114]). The ethics complaint against Mr Keenan was finalised on 22 July 2015, though the findings were not discussed by the primary judge (liability reasons at [148]).
244 On 21 May 2015, Ms Beaulieu provided Mr Keenan with an unsigned show cause letter addressed to Mr Sharma, to be given under Mr Keenan’s signature (liability reasons at [122]). Mr Keenan was asked by Ms Beaulieu to sign it, but he refused. Mr Keenan communicated with Ms Sharp (described by the primary judge earlier in the liability reasons at [110] as being “a former master ethics investigator”) and Ms Teixeira, Cummins’ internal solicitor, about whether he was obligated to sign the letter (liability reasons at [126]). He was told he did not have to. The letter was ultimately signed by Ms Beaulieu (liability reasons at [125]). Mr Keenan requested a copy of the letter from Ms Baldota (liability reasons at [126]).
27 May to 25 November 2015 - the Performance Improvement Plan to Mr Keenan’s dismissal
245 On 27 May 2015, Mr Keenan was placed on a performance improvement plan (the PIP) (liability reasons at [131]). The primary judge found this to be the third adverse action (liability reasons at [131]-[141], [171], [280] - [288], [320](a)-(c)). The PIP was provided to Mr Keenan in a meeting with Ms Beaulieu and Ms Mayer (liability reasons at [247]). The primary judge did not refer to the terms of the PIP, but to Mr Keenan’s affidavit evidence, which contained ‘the essence’ of the plan (liability reasons at [138]-[139]).
246 The PIP itself was in evidence before his Honour as an exhibit to Ms Beaulieu’s affidavit. The PIP contains two tables. The first table lists on its vertical axis seven areas in which Mr Keenan’s performance required improvement, as follows:
1 – Ensure our workplace is inclusive and welcoming. Treat all people, but especially people that you do not agree with respectfully and without hostility
2 – Demonstrate the Cummins personality of “Agile” – having the adaptability to demonstrate the skills effectively across cultures and in various business situations. Learn how to live in the ‘gray’, learn to deal with ambiguity and competing priorities.
3 – Actively promote two-way interaction in discussions. Listen actively to others’ opinions, issues and concerns. Improve the manner in which you respond to constructive feedback and different opinions. Utilize the principle to seek first to understand, then to be understood, consider other’s opinions prior to determining the best solution
4 – Demonstrate the Cummins Value of Delivery Superior Results. Insure that every Red metric for CBS South Pac has an owner and an action plan for improvement, including all SLA for each service area and compliance metrics
5 – Demonstrate effectiveness and confidence in dealing with obstacles to implementation. Instead of commenting on how things should be done within CBS and improvements that are needed that are outside of your control, proactively work to take initiative to make positive changes within your region.
6 – Understand the impact of global trends on the organisation’s plans and growth. Learn to accept decisions and approaches that you may not personally agree with, understanding that most decisions have pros and cons.
7 – Self reflection and development and improvement of oneself through the preparation of a personal self development plan
247 Along the horizontal axis of the first table are columns with the following headings: ‘due date’, ‘completion date’, ‘level of required performance’, ‘potential barriers raised by employee’, ‘manager’s action taken to remove barriers raised by employee’, and ‘comments’. Each cell under those headings was populated with information apparently catered to Mr Keenan.
248 The second table contained records of comments made from ‘feedback sessions’ concerning the PIP. Comments for feedback sessions on 25 August 2015, 20 October 2015 and 18 October 2015 are recorded. One row without comments states that “weekly meetings were held from 25th Aug 2015 as well”. The PIP provides a ‘timeframe for plan’ of 90 days.
249 Mr Keenan’s notes of the 27 May 2015 meeting recorded concerns raised with him about his performance. The primary judge considered those concerns and found each of them to lack a proper basis (liability reasons at [133]-[137]).
Third Complaint
250 Mr Keenan also raised concerns during the 27 May 2015 meeting. Specifically, he complained that the PIP was ‘subjective’ and ‘ambiguous’ in some parts, and that he wanted Ms Baldota removed from the process (liability reasons at [131], [242] and [247]). These complaints were found to be the third complaint (liability reasons at [249]). Mr Keenan’s criticisms of the PIP appears to have been accepted by the primary judge (liability reasons at [140]-[141]).
Fourth Complaint
251 On 29 July 2015, the fourth complaint occurred in the course of Mr Keenan’s ‘mid-year performance appraisal’ (liability reasons at [250], referred to at [150]-[154], and [250]-[255]). The meeting in part concerned the PIP and asserted that Mr Keenan’s performance did not meet expectations and showed he lacked the ability to deal with ambiguity or resolve conflicts. Mr Keenan stated his poor performance was due to his being “extremely stressed given the events that had occurred between [him], Ms Elderbrant and Ms Baldota” (liability reasons at [250]). In the view of the primary judge, the feedback “traversed matters that had been dealt with by the ethics investigation” into Mr Keenan (liability reasons at [150]).
252 On 21 October 2015, Mr Keenan, Ms Beaulieu and Ms Kirsch again discussed the PIP (liability reasons at [156]). The review notes record Ms Beaulieu’s comments dated 20 October 2015. The date discrepancy is explained in Ms Beaulieu’s affidavit due to the time zone difference between the United States and Australia. The notes record that Ms Beaulieu considered several of the items for improvement on the PIP to have not been met. The notes also record Mr Keenan’s concerns that the PIP process is not intended to stay open for more than 90 days. The notes record that Mr Keenan and Ms Beaulieu agreed to “conclude the PIP discussion next Tuesday”, referred to below.
Fifth Complaint
253 On 25 October 2015, Mr Keenan lodged a formal complaint against Ms Beaulieu and Ms Baldota (liability reasons at [159]). This was found to be the fifth complaint (liability reasons at [264]). The time at which Ms Beaulieu became aware of the ethics complaint against her was in issue on appeal and will be discussed below. The complaint contained five allegations against Ms Beaulieu and Ms Baldota. The substance of the five allegations were as follows (liability reasons at [160]):
Allegation 1 It is alleged by Andrew Keenan that Sharmili Baldota has made false allegations against Andrew Keenan in his 2014 Stakeholder Feedback.
Allegation 2 It is alleged by Andrew Keenan that Chris Beaulieu was not telling the truth when she told him he was rated a 2- for his 2014 performance as his % increase reflected a solid 2.
Allegation 3 It is alleged by Andrew Keenan that Chris Beaulieu that (sic) Andrew was placed on a PIP as retaliation for not signing a legal letter (show cause for Rakesh Sharma).
Allegation 4 It is alleged by Andrew that Chris Beaulieu was using the Performance Management process to blame and threaten him versus improve and develop.
Allegation 5 It is alleged by Andrew Keenan that Chris Beaulieu was not following the correct process to manage Andrew on a PIP.
254 These allegations were investigated by Ms Gard, an employee of Cummins (liability reasons at [161]). Breaking briefly from the chronology, on 4 November 2015, Ms Gard found all five allegations to be unsubstantiated (not stated expressly by the primary judge but to be inferred from the liability reasons at [159]-[181]). The primary judge considered each of the findings and the evidence in some detail and did not agree (liability reasons at [162]-[180]). The primary judge concluded that “Ms Gard’s investigation and consideration of the ethics case brought by Mr Keenan against Ms Beaulieu and Ms Baldota was substandard” (liability reasons at [181]).
255 Returning to the chronology, on 28 October 2015, Mr Keenan, Ms Beaulieu and Ms Kirsch again discussed the PIP (liability reasons at [157]). The notes of this meeting in the second table in the PIP record that several further items were marked as not meeting requirements. Ms Beaulieu’s evidence was that it was after this meeting that she determined to dismiss Mr Keenan. I note, however, that counsel for Mr Keenan contended for a contrary view of the evidence as discussed below.
256 On 2 November 2015, Mr Keenan was issued a “show cause” notice by Ms Beaulieu. That letter indicated Cummins was considering dismissing Mr Keenan (the fourth adverse action) and that Mr Keenan was suspended from his employment (the fifth adverse action) (liability reasons at [292]-[300]). The liability reasons do not record any reply by Mr Keenan to the show cause notice and no evidence of any reply was referred to on appeal.
257 On 5 November 2015, Mr Keenan went on leave, providing a medical certificate for 4 to 11 November 2015 inclusive. On 11 November 2015, he provided a further medical certificate for the period 12 to 25 November 2015 inclusive, as noted by the primary judge (liability reasons at [183]). This period of leave was the subject of Mr Keenan’s claim pursuant to s 352 of the FW Act. During the period Mr Keenan was on sick leave, on 9 November 2015, he filed a General Protections Claim in the Fair Work Commission.
258 On 25 November 2015, Mr Keenan was issued a notice of termination by letter signed by Ms Beaulieu (liability reasons at [184]). The notice stated relevantly:
I refer to the show cause letter dated 2 November 2015. During the show cause process you were offered an opportunity to respond to the preliminary conclusion that your employment should be terminated on the grounds of poor performance. You have not provided any further information or response that has altered the preliminary finding.
As a result and after considering all available information and reviewing your performance history, please be advised that Cummins has decided to terminate your employment effective 25th November 2015.
You will be paid five weeks in lieu of Notice. Your Notice payment, plus all entitlements owing to you, less any overpayments made, will be deposited directly into your bank account on or about 4 December 2015.
…
259 This was found to be the sixth adverse action at trial (liability reasons at [265]; see also [273]).
The case advanced below
260 The primary judge described Mr Keenan’s statement of claim at [186]-[193] of the liability reasons. As detailed above, Mr Keenan’s case at trial was that he exercised five workplace rights, and six adverse actions were taken in response. The relevant events and their characterisation as complaints or adverse actions (greyed cells) were:
Date | Event | Allegation |
17 July 2014 | Mr Keenan tells Ms Elderbrant that he is having “issues” with Ms Baldota | First complaint |
26 February 2015 | Mr Keenan tells Ms Beaulieu and Ms Elderbrant that Ms Baldota is making false accusations about him | Second complaint |
16 March 2015 | Mr Keenan is interviewed in the ethics investigation into Mr Sharma | First adverse action |
30 April 2015 | An ethics complaint is made about Mr Keenan | Second adverse action |
27 May 2015 | Mr Keenan is placed on the PIP | Third adverse action |
Mr Keenan makes complaints about the terms of the PIP | Third complaint | |
29 July 2015 | Mr Keenan tells Ms Beaulieu that he is “extremely stressed” in a meeting regarding his performance | Fourth complaint |
25 October 2015 | Mr Keenan commences an ethics case against Ms Beaulieu and Ms Baldota | Fifth complaint |
2 November 2015 | Mr Keenan is issued the show cause notice | Fourth adverse action |
2 November 2015 | Mr Keenan is suspended from his employment | Fifth adverse action |
25 November 2015 | Mr Keenan is dismissed | Sixth adverse action |
261 Mr Keenan’s case was that each adverse action was motivated by his exercise of the workplace rights, considered jointly or severally, that preceded the adverse action in question. For example, the 16 March 2015 interview in relation to the ethics case concerning Mr Sharma was said to be motivated in part by the prohibited reason of Mr Keenan’s two prior exercises of workplace rights: the 17 July 2014 complaint that he was having issues with Ms Baldota (first complaint), and the 26 February 2015 complaint that Ms Baldota was making false accusations about him (second complaint).
262 Cummins’ case was that all of the actions taken were motivated solely by Mr Keenan’s poor performance in his role (liability reasons at [197]). This too was Cummins’ defence to the breach of s 352 of the FW Act (liability reasons at [347]).
263 Cummins disputed that the complaints made by Mr Keenan constituted the exercise of workplace rights (liability reasons at [213]), and, that the actions taken by Cummins were adverse actions for the purpose of s 342(1) (liability reasons at [274]).
264 A factual dispute at trial was whether Ms Beaulieu was the decision maker for the instigation of the ethics case, being the second adverse action. The primary judge found that she was (liability reasons at [333]). That finding was not challenged on appeal.
Were the first to fourth complaints “complaints” within the meaning of s 341(1)(c)(ii) of the FW Act?
265 Under grounds 1 and 2 of the Notice of Appeal, Cummins contends that the first to fourth complaints did not constitute the exercise of workplace rights within the meaning of s 341(1)(c)(ii) of the FW Act. Before turning to those four complaints, it is convenient to mention at this point that Cummins contends for timing reasons the fifth complaint was not relevantly causative, and accordingly, though it does not dispute that the complaint comes within the meaning of s 341(1)(c)(ii) of the FW Act, it says it was not capable of being causative of any alleged adverse action. I shall return to the question of the timing of the fifth complaint after considering the proper characterisation of the first to fourth complaints.
Were the first to fourth complaints “complaints” as defined?
266 Section 341 provides:
341 Meaning of workplace right
Meaning of workplace right
(1) A person has a workplace right if the person:
…
(c) is able to make a complaint or inquiry:
…
(ii) if the person is an employee—in relation to his or her employment.
267 There were essentially two elements concerning the construction of s 341(1)(c)(ii) in dispute between the parties:
(1) Whether a complaint must concern something to which an employee has an entitlement; and / or
(2) Whether there must be some source of entitlement or right to make the complaint.
268 Cummins submitted that the first to fourth complaints satisfy neither of the above elements. Mr Keenan submitted that neither element is a requirement of the definition . He submitted that the complaint need only be ‘in relation to’ employment, being simply the language of the subsection.
269 The appellant’s contention draws primarily on the interpretation of s 341(1)(c)(ii) in Shea v TRUenergy Services Pty Ltd (No 6) [2014] FCA 271; 314 ALR 346; 242 IR 1. The primary judge appears to have adopted the Shea test, referring to the complaints in this case as meeting the test in Shea at [29] (liability reasons at [211]).
270 In Shea, Dodds-Streeton J enumerated seven criteria for a complaint to meet the statutory definition in s 341(1)(c)(ii) of the FW Act (at [29]):
(a) a complaint is a communication which, whether expressly or implicitly, as a matter of substance, irrespective of the words used, conveys a grievance, a finding of fault or accusation;
(b) the grievance, finding of fault or accusation must be genuinely held or considered valid by the complainant;
(c) the grievance, finding of fault or accusation need not be substantiated, proved or ultimately established, but the exercise of the workplace right constituted by the making of the complaint must be in good faith and for a proper purpose;
(d) the proper purpose of making a complaint is giving notification of the grievance, accusation or finding of fault so that it may be, at least, received and, where appropriate, investigated or redressed. If a grievance or accusation is communicated in order to achieve some extraneous purpose unrelated to its notification, investigation or redress, it is not a complaint made in good faith for a proper purpose and is not within the ambit of s 341(1)(c)(ii);
(e) a complaint may be made not only to an external authority or party with the power to enforce or require compliance or redress, but may be made to persons including an employer, or to an investigator appointed by the employer;
(f) 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; and
(g) a complaint is limited to a grievance, finding of fault or accusation that satisfies the criteria in s 341(1)(c)(ii) and does not extend to other grievances merely because they are communicated contemporaneously or in association with the complaint. Nor does a complaint comprehend contemporaneous or associated conduct which is beyond what is reasonable for the communication of the grievance or accusation.
(emphasis added)
271 Dodds-Streeton J at [625] said further:
In my opinion, the requirement that the complaint be one that the employee “is able to make” in relation to his or her employment suggests that there are complaints which the employee is not able to make in relation to his or her employment. The ability to make a complaint does not arise simply because the complainant is an employee of the employer. Rather, it must be underpinned by an entitlement or right. The source of such entitlement would include, even if it is not limited to, an instrument, such as a contract of employment, award or legislation.
(emphasis added)
272 Cummins contended on appeal, as it did at trial, that the first to fourth complaints did not meet the test in s 341(1)(c)(ii) as they were not ‘founded on a source of entitlement’ in accordance with criterion (f) of the Shea test. I note that this element of the test in Shea was not referred to explicitly by the primary judge.
273 In his written submissions, Mr Keenan said “an examination of the authorities said to have approved criterion (f) of the test in Shea discloses no such support”. Mr Keenan submits that it would be inappropriate to add any judicial gloss to the operative words of s 341(1)(c)(ii), namely a ‘complaint’ which is ‘in relation to’ employment. Support for this approach is drawn from the Full Court dismissing an appeal from Shea (Shea v EnergyAustralia Services Pty Ltd [2014] FCAFC 167; 242 IR 159, per Rares, Flick and Jagot JJ) where their Honours said (at [12]):
Considerable care needs to be exercised before implying into s 341 any constraint that would inhibit an employee’s ability to freely exercise the important statutory right to make a “complaint”. …
274 Support is also drawn from Bromberg J’s decision in Walsh v Greater Metropolitan Cemeteries Trust (No 2) [2014] FCA 456; 243 IR 468, where his Honour said (at [42]):
Where the subject matter of the complaint raises an issue with potential implications for the complainant’s employment, it is likely that the requisite nexus will be satisfied …
275 This statement was cited with approval by Mortimer J in Milardovic v Vemco Services Pty Ltd (Administrators Appointed) [2016] FCA 19 at [69].
276 In Cigarette & Gift Warehouse Pty Ltd v Whelan [2019] FCAFC 16; 268 FCR 46, the Full Court of this Court affirmed the Shea test. Specifically, the Court at [28] cited with approval the discussion of the primary judge applying Shea to the question of whether the complaint was the exercise of a workplace right. Relevantly, the primary judge in Whelan v Cigarette & Gift Warehouse Pty Ltd [2017] FCA 1534; 275 IR 285 cited criterion (f) at [33], and concluded at [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) [sic] of the FW Act.
277 In The Environmental Group Ltd v Bowd [2019] FCA 951; 288 IR 396, Steward J considered Cigarette & Gift. Bowd concerned an adverse action claim brought by the CEO of a listed company arising from his termination. Mr Bowd was appointed in September 2016 and dismissed in March 2017. Mr Bowd alleged that he exercised several workplace rights which actuated his dismissal. Of relevance to the present appeal was his claim that submitting a “CEO Report” to the Board fell within s 341(1)(c)(ii). The CEO Report concerned financial irregularities in connection with one of the subsidiary companies under Mr Bowd’s supervision.
278 Steward J considered himself bound by the Shea test as applied in Cigarette & Gift, stating (at [128]):
In any event, I am not satisfied that in making the CEO Report Mr Bowd was relevantly exercising a workplace right; he was instead performing his obligations as CEO. In Shea, Dodds-Streeton J said at [625] about s 341(1)(c)(ii):
In my opinion, the requirement that the complaint be one that the employee “is able to make” in relation to his or her employment suggests that there are complaints which the employee is not able to make in relation to his or her employment. The ability to make a complaint does not arise simply because the complainant is an employee of the employer. Rather, it must be underpinned by an entitlement or right. The source of such entitlement would include, even if it is not limited to, an instrument, such as a contract of employment, award or legislation.
That the “right” to complain must be found in some entitlement or right contained, for example, in a contract, has more recently been confirmed by the Full Court of this Court in Cigarette & Gift Warehouse Pty Ltd v Whelan [2019] FCAFC 16 where Greenwood, Logan and Derrington JJ said at [28] that the primary judge, in that case, was correct to observe that:
… 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.
I am bound to follow this decision notwithstanding the observations of Jessup J at [141] in Murrihy v Betezy.com.au Pty Ltd [2013] FCA 908; (2013) 238 IR 307.
279 His Honour concluded that the CEO Report did not qualify as a complaint because there was no relevant entitlement or right to make the report (at [129]):
Mr Bowd held no “entitlement” or “right” to make his CEO Report. Rather, consistently with the letter of offer which he accepted, it was his responsibility to report from time to time to the board. That duty or obligation is not a “right” which Mr Bowd was “able” to exercise. For these reasons, I reject Mr Bowd’s contention that the giving of the CEO Report was an exercise of a “workplace right”.
280 After the hearing of this appeal, the Full Court of this Court handed down its decision in PIA Mortgage Services Pty Ltd v King [2020] FCAFC 15; 292 IR 317. Counsel for Mr Keenan properly notified the Court of that decision, for which I am grateful.
281 The relevant analysis of the majority, Rangiah and Charlesworth JJ, in PIA Mortgage commences with the issue they identify at [10], namely the extent of limitation upon the protection afforded by s 340 of the FW Act. Their Honours accept that the protection “has its limits, including by the definition in s 341 of “workplace right”. Their analysis of this issue proceeds as follows:
(1) They expressly accept that the phrase “is able to make a complaint or inquiry” in the definition of “workplace right” in s 341(1)(c)(ii) of the FW Act “operates to limit the scope of the protection provided” (at [11]).
(2) Referring to what Dodds-Streeton J said in Shea (at [625]) they agree that not every complaint that an employee makes in relation to his or her employment is one the employee is “able to make” (at [12]).
(3) They then consider “how the provision distinguishes complaints that come within its [s 341(1)(c)(ii)] reach from those that do not” (at [12]).
(4) They return to Dodds-Streeton J’s consideration of the word “able” in Shea, noting that her Honour considered the word refers to an entitlement or a right. They expressly agree (at [13]).
(5) They opine that the statement by Dodds-Streeton J that a complaint “must be underpinned by an entitlement or right” is ambiguous. They posit two constructions:
(a) that the complaint must be underpinned by an entitlement or right to make a complaint; or
(b) that the provision (s 341(1)(c)(ii)) captures any complaint by an employee concerning an entitlement or right related to his or her employment (at [13]).
(6) They conclude at [13] that (i) above is the correct construction of Dodds-Streeton J’s statement in Shea:
In our opinion, the former view [(i) above] is consistent with the succeeding sentence in the passage and with s 341(1) of the FW Act as a whole.
(emphasis added)
The “succeeding sentence” is clearly a reference to the last sentence from the passage in Shea quoted at [11]:
The source of such entitlement would include, even if it is not limited to, an instrument such as a contract of employment, award or legislation.
This is the first reason given by their Honours in support of their resolution of the ambiguity they perceived in the statement by Dodds-Streeton J referred to above.
(7) The second reason given by their Honours in support of their resolution of the posited ambiguity is the terms of s 341(1) of the FW Act “as a whole”. Their Honours observe that the phase “is able to” is applicable to s 341(1)(b) and (c). They note that s 341(1)(b) indicates an entitlement or right to initiate, or participate in, a relevant process of proceeding and s 341(1)(c)(i) indicates an entitlement or right to make a complaint or inquiry to a person or body. Their Honours conclude their discussion of the positive ambiguity saying at [13]:
Consonantly, in s 341(1)(c)(ii), the phrase [able to make] describes a right or entitlement to make a complaint or inquiry in relation to the employee’s employment.
(emphasis added)
282 I pause for the moment from the summary of the majority’s reasoning in PIA Mortgage to note that by the above point in their Honour’s reasoning it is clear that they have not rejected the requirement that the ability to make an inquiry or complaint must be underpinned by a right or entitlement to do so. Rather, their analysis between [10] and [13] is directed to two topics. First, the principal issue concerning the extent of limitation on the protection under s 340, accepting that such limitation exists. Second, the resolution of their perceived ambiguity in the limitation posited by Dodds-Streeton J in Shea based upon the requirement that there exists an anterior right or entitlement to complain. As noted above, their Honours concluded (at [13]) that the ambiguity be resolved in favour of the requirement that there be such anterior right or entitlement for the two reasons discussed above. For those reasons, in my opinion there is no warrant to conclude, at least at this point in their Honour’s reasoning, that an anterior right or entitlement to make a complaint is not required upon a proper construction of s 341(1)(c)(ii). Indeed, such a construction would not be consistent with the second reason given to resolve the posited ambiguity, namely s 341(1) as a whole. It could not be said that s 341(1)(c)(ii) is “consonant” with s 341(1)(b)(c) or (c)(i), unless s 341(1)(c)(ii) is also taken to require a right or entitlement to make a complaint or inquiry in relation to the employee’s employment.
283 Further, there is nothing in the reasons given by the majority in PIA Mortgage between paragraphs [10] and [13] which would suggest that the second posited meaning to be given to what was said by Dodds-Streeton J in Shea was adopted – namely “any complaint by an employee concerning an entitlement or right related to his or her employment”.
284 I return to the majority’s reasoning in PIA Mortgage, continuing the numbering of the sub-paragraphs from paragraph [281] above:
(8) Their Honours said (at [14]) that “on the understanding” (which I take to mean “on the assumption”) that s 341(1)(c)(ii) requires an entitlement or right to make a complaint, there must be an identifiable source of that entitlement or right. The source of that entitlement or right is not limited to one arising under an instrument such as legislation, an industrial instrument or a contract of employment (at [14]).
(9) Their Honours discuss the breadth of rights and of the sources of rights upon which a complaint may be founded (at [15]).
(10) Their Honours note (at [16]) that in contrast to s 341(1)(a)(b) and (c)(i), s 341(1)(c)(ii) is not confined by the meaning of workplace laws and workplace instruments. They note that there are “potential sources of an employee’s ability to make complaints which fall outside s 341(1)(a), (b) and (c)(i), but within (c)(ii)”, those sources being “legislative provisions that are not workplace laws, contractual terms providing a right to make complaints and the general law”.
(11) In [17]-[20] their Honours discuss the potential sources of rights that would make the employee able to complain in relation to his or her employment. In relation to contractual rights, their Honours say that s 341(1)(c)(ii) must at least apply to a contractual right to raise a grievance or otherwise complain. In relation to a statutory provision relating to the employment, their Honours conclude that the employee is able to make a complaint within the meaning of s 341(1)(c)(ii) (at [20]).
(12) Importantly, in relation to statutory provisions, their Honours conclude (at [20]) that:
The ability encompasses making a complaint to the employer or an appropriate authority about the alleged contravention, whether or not the statute directly provides a right to sue or make a complaint.
In other words, the right or entitlement under the statute does not need to provide for a private right of action, or even complaint, to found a right or entitlement to complain in relation to the employment.
(13) Their Honours explain this construction by reference to the statutory context, providing three specific reasons in [22], [23] and [24]. The first and second reasons draw upon the protective purpose of s 340 and its intended wide operation. The third reason explained in [24] is that there would be “incongruous results” if a contrary construction were taken. The “construction” is a reference to the construction referred to in [20], namely that a contravention of a statutory provision relating to the employment will be sufficient for the employee to be able to complain within the meaning of s 341(1)(c)(ii), “whether or not the statute directly provides a right to sue or make a complaint”. The majority opine (at [24]) that if the ability to complain were limited to the “contrary construction”, implicitly a construction that would afford an ability to complain only where the statute provided a right to do so, that would lead to incongruous results depending upon whether the breach was prescribed under legislation or was purely contractual. The incongruity is said to arise:
…from employees being protected from adverse action upon complaining of an employer’s breach of some conditions of employment but not others.
(14) Their Honours rely upon Cigarette & Gift in support of their view that an employee’s ability to complain may be founded in the general law arising from an employer’s breach of contract (at [25]).
(15) Finally, their Honours’ summary of their conclusions (at [26]) reiterate that the source of the entitlement or right to complain may be derived from the general law governing contracts of employment or from a statutory provision alleged to have been contravened, noting that the statute need not expressly or directly confer a right to bring proceedings or complain.
285 In my opinion, it is plain from the reasoning of the majority in PIA Mortgage that the ability to complain within the meaning of s 341(1)(c)(ii) remains dependent upon the identification of an anterior right or entitlement to complain. The source of such right may be founded in an express right under or pursuant to the contract, in the general law or pursuant to statute. But there is nothing in their Honours’ reasoning which rejects the requirement that an anterior right or entitlement is a necessary element to satisfy the meaning of “able to” in s 341(1)(c)(ii).
286 On the contrary, their analysis proceeds from an acceptance that there are limits to the protection afforded by s 340, accepts that Dodds-Streeton J in Shea identified the requirement that there be some anterior right or entitlement upon which the complaint is to be founded and then examines the potential sources of such rights or entitlements. For these reasons I respectfully disagree with Bromberg and Mortimer JJ that the majority in PIA Mortgage “significantly relaxed” the requirement in s 341(1)(c)(ii) that an ability to make an inquiry or complaint must be underpinned by a right or entitlement to do so.
287 PIA Mortgage was considered by Steward J in Maric v Ericsson Australia Pty Ltd [2020] FCA 452; 293 IR 442 at [46]-[55]. His Honour (at [48]-[50]) set out [19] and [20] of the majority’s reasons and made the following observations:
… I do not read the reasons of Rangiah and Charlesworth JJ. to mean that any complaint made about a contract, or any complaint made about the contravention of a statute, must always constitute a complaint that is “able to be made” by reason of that contract or that statutory provision. The reasons at [19]-[20] must be read in context. At [16], their Honours observed that the legal sources for an ability to make a complaint could include legislative provisions that are not workplace laws, contractual terms “providing a right to make complaints” and the “general law” (or the common law of Australia, including in that expression the doctrines of equity). ...
288 His Honour goes on at [52]-[54] to consider the examples given by the majority in PIA Mortgage as set out in [17] and [18], and describes the legislative and contractual provisions being referred to as those conferring or providing an ability to make a complaint.
289 Ultimately his Honour found that three categories of inquiries did not constitute the exercise of workplace rights within the meaning of s 341(1)(c)(ii), consistent with the construction of that sub section by the authorities referred to above. The first category concerned requesting drafting changes to a contract. The source of the ability to make such an inquiry was said to be the yet ‘to-be-agreed’ contract itself. Steward J held that as the contract had not yet been entered into it could not be the source of legal rights and therefore not the source of an ability to inquire (at [56(1)]). The second category concerned requests by the employee that her work station be set up ergonomically. The source of entitlement for this inquiry was said to be s 20 of the Equal Opportunity Act 2010 (Vic) and ss 5 and 15 Disability Discrimination Act 1992 (Cth). Those sections in effect oblige an employer to make reasonable ergonomic adjustments in certain circumstances, and provide that a failure to do so may constitute a form of discrimination. His Honour held that such a regime did not confer on the employee an “additional legal ability to make an inquiry about an ergonomic workstation” (at [56(2)]). The third category concerned an inquiry made by the employee about whether her employment would be covered by an award or enterprise agreement. The source for the right to inquire was said to be the FW Act. His Honour held that there was no provision of the FW Act which conferred an ability to make such an inquiry, and therefore, that it was not relevantly the exercise of a workplace right for the purpose of s 341(1)(c)(ii) (at [56(3)]).
290 I note for completeness that in the recent decision of Flageul v WeDrive Pty Ltd [2020] FCA 1666 at [273]-[274], Steward J again reiterated that for a person to be “able to make” a complaint, that capacity must be anchored in a legal entitlement of some kind. His Honour, correctly in my view, referred to his remarks in Maric at [55] and observed that such a legal entitlement may arise in statute, contract law, the common law of Australia, or some other instrument or thing that confers legal rights, following the majority in PIA Mortgage.
291 In my view, this Court should follow Cigarette & Gift and PIA Mortgage in relation to the application of criterion (f) from Shea unless shown to be clearly wrong. I respectfully disagree with the view expressed by Bromberg J, with whom Mortimer J agrees, that were it necessary for the disposition of this appeal to do so, they would decline to follow PIA Mortgage as to the proper construction of s 341(1)(c)(ii) on the basis that it was plainly wrong.
292 I turn now to the question of whether the first to fourth complaints are complaints within the meaning of s 341(1)(c)(ii). It is convenient to summarise the complaints again at this point:
First complaint: made on 17 July 2014 during a telephone call between Mr Keenan and Ms Elderbrant. In substance, Mr Keenan informed Ms Elderbrant he was having difficulties with Ms Baldota, specifically that she was making false accusations about him.
Second complaint: made on 26 February 2015 during a conversation in a bar in the United States between Mr Keenan, Ms Beaulieu and Ms Elderbrant. In substance, Mr Keenan reiterated his complaint concerning Ms Baldota.
Third complaint: made during the 27 May 2015 meeting about the PIP. Mr Keenan stated that certain aspects of it were ‘ambiguous’ and ‘subjective’.
Fourth complaint: made during the 29 July 2015 mid-year performance review. Mr Keenan stated that his poor performance was due to his stress and the breakdown of his relationship with Ms Elderbrant and Ms Baldota.
293 I shall consider the first and second complaints together, and then the third and fourth complaints separately in turn.
First and second complaints
294 The first and second complaints concerned the deteriorating relationship between Ms Baldota and Mr Keenan. The precise expression of these complaints is not entirely clear from the primary judge’s findings. However, it is clear that the essence of the complaints was that Ms Baldota had been making false accusations about Mr Keenan. It was that conduct on Ms Baldota’s part which Mr Keenan claimed had caused their relationship to become strained and to deteriorate.
295 In my view, Mr Keenan’s ‘complaints’ concerning his relationship with Ms Baldota was the voicing of dissatisfaction about the interpersonal relationship between Mr Keenan and Ms Baldota and conflict between them. Such deteriorating relationships may mature into formal complaints, complaints or claims pursuant to grievance procedures or other processes, where such procedures are available. However, in the present case, the first and second complaints had not matured into a complaint made through the procedure available to Mr Keenan to make a formal complaint had he chosen to do so. I do not suggest that there is any requirement of formality for a complaint to meet the definition in s 341(1)(c)(ii); there is not. Rather, the point is that had Mr Keenan at this time invoked the procedures available to him, for example to make an ethics complaint against Ms Baldota, as he later did and is the subject of the fifth complaint, his complaint would then have been plainly ‘underpinned’ by a right or entitlement. Indeed, as I have said above, Cummins does not dispute that the fifth complaint falls within s 341(1)(c)(ii).
296 While Mr Keenan was ‘able to complain’ in a literal sense about his unsatisfactory relationship with Ms Baldota and accuse Ms Baldota of fault in this regard, his ability to do so was not founded upon, or made pursuant to, any right or entitlement to make those complaints. Rather, Mr Keenan availed himself of the opportunity on two occasions to express his dissatisfaction with the conduct of a colleague. For the reasons discussed above, these complaints were not underpinned by any right or entitlement to complain and accordingly fall outside the meaning of complaint in s 341(1)(c)(ii).
Third complaint
297 The third complaint is of a different character to the first and second complaints for a number of reasons. First, the third complaint concerned a formal process instigated by Cummins, namely, the placing of Mr Keenan on the PIP. Second, that formal process was mandated by the employment contract between Cummins and Mr Keenan. The contract required Mr Keenan to “comply with all Cummins Policies, procedures and requirements”, relevantly including the Performance Management Policy which incorporated the PIP process. In essence, Mr Keenan complained that aspects of the PIP were extremely subjective and / or ambiguous. He also asked that Ms Baldota not be involved in the PIP process.
298 Cummins submitted that the third complaint was a “mere criticism, with no redress sought.” I do not agree. Such characterisation is devoid of context, specifically, it ignores that Mr Keenan was contractually obliged to participate in the PIP process. From Mr Keenan’s perspective, the PIP was not consensual, but rather a process which Cummins was entitled to invoke and which Mr Keenan was subject to under his employment contract. Having regard to this context, it is perhaps unsurprising that Mr Keenan’s express complaint fell short of making any specific demand for redress.
299 During cross examination of Mr Keenan concerning his complaint about the PIP, he said: “We discussed the PIP and we discussed each of the seven items and I said, ‘How do I measure success?’ and some of them are a bit ambiguous…” Mr Keenan explained that some of the criteria in the PIP did not have metrics. It was put to Mr Keenan that he did not ask for the PIP to be redrafted, to which he replied “I don’t think so”. It was also put to Mr Keenan that he was cavilling with Ms Beaulieu “over technicalities, metrics and things like that, avoiding the nub of the feedback that she was giving you”. He was asked whether he accepted that was what he was doing. In response, Mr Keenan said: “No. I was following the process, which is objectives in a PIP should be specific, measureable, achievable, realistic and with a time”.
300 Though Mr Keenan may have expressed his complaint timorously so far as identifying any redress sought, his criticism of the PIP implicitly called for consideration to be given to his critique of the PIP process as it was applied to him and, potentially at least, for some modification to it or other redress.
301 In my view, Mr Keenan was entitled, and thus “able to” in the relevant sense, to voice his complaint. He was entitled to do so because an employer may only exercise a contractual right, here invoking the PIP process, bona fide for the purpose for which it was conferred. Mr Keenan was entitled to expect that such a right would not be exercised capriciously or in a manner which would deprive him of the benefit of his contractual bargain with the employer.
302 The implied obligation of cooperation in the sense identified in Mackay v Dick (1881) 6 App Cas 251 and followed in many cases thereafter, see in particular Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd [1979] HCA 51; 144 CLR 596 and Commonwealth Bank of Australia v Barker [2014] HCA 32; 253 CLR 169 at [30], required that Cummins should not exercise its right to instigate its PIP policy in a way that would deprive the employee of the right to fairly respond to the matters raised by the employer. Mr Keenan’s complaint about the matters raised by Cummins being ambiguous and or subjective, implicitly raised a complaint to the effect that he was being deprived of an opportunity to respond to the PIP investigation because of a lack of clarity about matters concerning his performance. In substance, Mr Keenan’s complaint was that he did not know the case he was to meet.
303 Mr Keenan’s complaint about the subjectiveness or ambiguity of the PIP process may or may not have been well founded. But that is not the point. Rather, the point is that because he was entitled, at the least, to expect that Cummins would not deprive him of the benefit of his contractual bargain, which included the right to respond to matters raised under the PIP process, he was contractually entitled to raise his ‘complaint’ that the PIP was subjective and / or ambiguous.
304 Mr Keenan’s right or entitlement to complain about the PIP process falls within the sources of such rights or entitlements identified by the majority in PIA Mortgage (at [18] and [19]). The majority referred (at [18]) to a contractual right to ‘raise a grievance or otherwise complain’, but did not confine the right to an express contractual right to complain, saying rather that s 341(1)(c)(ii) “must at least apply” where there is such a contractual right. Although Mr Keenan’s contract of employment did not contain an express right to complain about the PIP process, for the reasons given above, his complaint concerned his contractual entitlements. Accordingly, under the ‘general laws’ in the sense referred to in PIA Mortgage at [19], Mr Keenan was entitled to raise a complaint about the implementation of the PIP process in relation to him. Accordingly, in my view the third complaint constituted a complaint within the meaning of s 341(1)(c)(ii).
Fourth complaint
305 The fourth complaint was made by Mr Keenan in a meeting with Ms Beaulieu on 29 July 2015. Mr Keenan said he felt stressed over events that had occurred between him and Ms Elderbrant and Ms Baldota. Mr Keenan also said that he was stressed over the ethics investigation in relation to him. Cummins submitted at the trial and on appeal that Mr Keenan’s statements were no more than the expression of frustration. The primary judge rejected Cummins’ characterisation and found that Mr Keenan had brought complaints about the cause of the stress to the knowledge of Ms Beaulieu and Ms Elderbrant (liability reasons at [254] and [255]).
306 I disagree with the primary judge’s acceptance of the fourth complaint as a complaint within the meaning of s 341(1)(c)(ii). The primary judge does not explain his reasons for reaching his conclusions in relation to the fourth complaint. In my view, while it may not be correct to characterise the fourth complaint only as the expression of frustration, Mr Keenan’s statement was plainly an expression of his feelings or his emotional reaction to the interactions between him and Ms Baldota and Ms Elderbrant. Mr Keenan communicated those feelings but did not expressly, or impliedly, request any redress. Mr Keenan’s communication did not convey as a matter of substance “a grievance, a finding of fault or accusation”, as Dodds-Streeton J at [29(a)] characterised a ‘complaint’ in Shea.
307 Further, the primary judge did not identify an entitlement in the relevant sense for Mr Keenan to express this “complaint’, if it be one. Accordingly for the above reasons, if it was otherwise a complaint, it was not a complaint within the meaning of s 341(1)(c)(ii).
Fifth complaint
308 The fifth complaint was the ethics complaint made by Mr Keenan on 25 October 2015. As noted above, it was common ground that this complaint came within the meaning of s 341(1)(c)(ii).
309 Cummins submitted that it had satisfied the reverse onus in relation to the fifth complaint as the decision to terminate Mr Keenan had been made by Ms Beaulieu immediately after the meeting on 28 October 2015 between her and Mr Keenan, and that at this time Ms Beaulieu did not know about the ethics case instigated by Mr Keenan. By reason of this disparity in timing between Ms Beaulieu becoming aware of the fifth complaint and the fourth, fifth and sixth adverse actions, Cummins submitted that the fifth complaint could not be causative of the fourth, fifth and sixth adverse actions. For the reasons given by Bromberg J, the question of whether any adverse action was actuated by the fifth complaint may need to be re-determined.
Disposition – Appeal Grounds 3 to 9 and 12
310 As I have noted above, I have had the advantage of reading in draft the Reasons for Judgment of Bromberg J, with whom Mortimer J agrees. I respectfully agree with, and gratefully adopt, the Reasons of Bromberg J for the disposition of this appeal, subject to what I have said concerning the construction of s 341(1)(c)(ii) and the characterisation of the first, second and fourth complaints. I agree with the reasons of Bromberg J regarding appeal grounds 3-9 and 12. I also agree with their Honours’ suggested disposition of the appeal in relation to these grounds, save that if any re-determination should be required in relation to the contravention of s 340(1) of the FW Act, any such determination should be limited to the consideration of adverse actions actuated by the third and fifth complaints. Further, for the reasons set out by Bromberg J at [121], with which I agree, it is unnecessary to decide grounds 10 and 11 of the appeal.
Entitlement to long service leave
311 Under ground 13 of the appeal, Cummins challenges the calculation of Mr Keenan’s long service leave entitlements under the LSL Act. For convenience, I briefly set out the facts relevant to this ground before referring to the relevant legislative provisions.
Factual background
312 In September 1981, Mr Keenan commenced employment with Cummins Darlington, a UK subsidiary of the USA-based Cummins Inc., and remained an employee until February 1995 (a period of approximately 13 years). In February 1995, he accepted a position with Cummins Australia Pty Ltd and moved to Victoria. He remained an employee of Cummins and lived and worked in Victoria until May 2007, a period of approximately 12 years. From May 2007 until December 2013, Mr Keenan worked as an employee of Cummins on “secondment”, at the head office of Cummins Inc. in Indiana, a period of approximately 6 years. In March 2014, Mr Keenan returned to Victoria and worked for Cummins in the role of CBS Regional Leader. His employment was terminated on 25 November 2015.
Overview of LSL Act
313 The provisions concerning an employee’s entitlement to long service leave were, at the relevant time of Mr Keenan’s employment, located in Division 6 of Part 5 of the LSL Act.
314 Section 56 of the LSL Act provided for the basic entitlement to long service leave:
56 Basic entitlement to long service leave
An employee is entitled to—
(a) 13 weeks of long service leave on ordinary pay on completing 15 years of continuous employment with one employer; and
(b) 4 1/3 weeks of long service leave on ordinary pay on completing each period of 5 years of continuous employment with that employer after the first 15 years of continuous employment with that employer.
315 Section 57 of the LSL Act was also relevant in circumstances where Mr Keenan’s employment was terminated after more than 15 years continuous employment in Victoria (on any argument):
57 Additional entitlement to long service leave if employment stops after 15 years
(1) This section only applies if an employee stops working for an employer after completing 15 years of continuous employment with that employer.
(2) The employee is entitled to an amount of long service leave equal to 1/60th of the period of his or her continuous employment with that employer since he or she last became entitled to long service leave under section 56.
(3) The period of an employee's long service leave that relates to a period of employment before 1 January 1965 and that had not been taken before the commencement of this Division is to be reduced by one quarter.
316 The interpretation of these sections is informed by the surrounding provisions in Division 6 of Part 5. In particular, s 60 of the LSL Act relevantly provides for a number of situations in which an employee is regarded as having been employed by “one employer”, despite having worked over the relevant period for more than one employer in a strict legal sense:
60 Meaning of one employer
(1) This section sets out several situations in which an employee is to be regarded, for the purposes of this Division, as having been employed by the one employer, even though the employee may have worked over the relevant period of time for more than one employer in a strict legal sense.
(2) If an employee is employed by a corporation, he or she is to be regarded as having been employed by that corporation during any period that—
(a) he or she was employed by a related body corporate of that corporation (within the meaning of the Corporations Act); or
…
317 The meaning of s 4(13) in the Long Service Leave Act 1955 (NSW) (NSW LSA) – an analogous provision – was considered in International Computers (Australia) Pty Ltd v Weaving [1981] 2 NSWLR 64; AR (NSW) 548. Sitting as the Industrial Commission of New South Wales in Court, Watson, Dey and Maclean JJ observed (at 74):
Much of the worker's aggregated service, assuming s 4(13) enables all to be included, occurred under various separate contracts not remotely connected with New South Wales.
As Mr Meagher submitted, we are not called upon to consider a continued attachment to one employer but a series of separate employments which, as a result of the “deeming” provisions, are treated as notionally creating a continuity of service between the worker and his employer dating back to the commencement of the employment with the related corporations which have successively been his previous employers. Once the fiction has been created by the section, however, we do not consider that there are grounds for concluding that broken parts, which are to be treated as a notional whole, are to be regarded differently from an original unity.
(emphasis added)
318 Supplementing this provision in the LSL Act is s 62, which elucidates the meaning of the phrase “continuous employment”:
62 Meaning of continuous employment
(1) This section sets out several situations in which an employee is to be regarded, for the purposes of this Division, as having been continuously employed even though in a strict legal sense it could be said that the employee's employment was interrupted.
(2) An employee's employment is to be regarded as being continuous despite—
(a) the taking of any annual leave or long service leave;
(b) any absence from work on account of illness or injury;
(c) any other absence from work approved by his or her employer (paid or unpaid), including carer's leave but not including adoption, maternity or paternity leave;
…
(d) any interruption or ending of the employment by the employer if the interruption or ending is made with the intention of avoiding obligations in respect of long service leave or annual leave;
(e) in the case of an employee performing duties in relation to assets of a particular kind, any absence from work arising solely because of a transfer to which section 60(6) applies of those assets from one employer to another employer;
(f) any interruption arising directly or indirectly from an industrial dispute;
(g) the dismissal of the employee, but only if he or she is re-employed within a period not exceeding 3 months after his or her dismissal;
(h) the standing-down of the employee on account of slackness of trade;
…
(emphasis added)
319 Implicit in the non-exhaustive definition of “continuous employment” is an assumption that continuous employment has commenced and subsequently been interrupted or disrupted. That concept does not envisage a situation in which an employee, such as Mr Keenan, has never had a relevant connection to the jurisdiction for a period anterior to being employed in Victoria. Further, in my view, the concept of “one employer” does not entirely override, or render otiose, the requirement that there must be “continuous employment”. This interpretation is supported by the fact that s 60 does not expressly disavow of the concept of “continuous employment” in such circumstances. I return to this issue after briefly canvassing the primary judge’s reasons.
320 The primary judge found that Mr Keenan was entitled to long service leave calculated in accordance with the LSL Act for the entirety of his employment with CBS, including the period between September 1981 and February 1995 prior to his employment with Cummins in Victoria. After construing the relevant statutory provisions, the primary judge held (liability reasons at [381]):
It seemed to me that the provisions of the Long Service Leave Act were enacted so as to provide for long service leave to be conferred on employees who had served their employer (as defined) for prescribed periods. Here Mr Keenan did just that. He therefore became entitled to payment in accordance with s 56 of that Act. It did not lie in the hands of a trial judge such as me to fail to apply that which Parliament enacted…
321 The contest before the primary judge on the question of whether Mr Keenan was entitled to long service leave calculated from the commencement of his employment in the UK in 1981 is described in the liability reasons at [357]-[359]. Mr Keenan submitted to the primary judge that the question was whether he was entitled to leave calculated from September 1981 or limited to his service with Cummins from 18 February 1995. By posing the question in those terms, the submissions on behalf of Mr Keenan conflated the meaning of “one employer” with the starting point for the purposes of calculating Mr Keenan’s entitlement to long service leave. Indeed, the submission elided the question of whether the period of employment by a related entity outside the jurisdiction of Victoria should be regarded as “continuous employment” within the meaning of ss 56(1), 57(1) and 62(1) of the LSL Act.
322 Cummins’ submissions to the primary judge are referred to in the liability reasons at [359]. First, Cummins submitted that it was unlikely that parliament intended that an employee should obtain a windfall, estimated at 26 weeks’ pay, where the employee’s former peers (presumably his cohort in the UK) working for the same period of time overseas would have no entitlement. Second, it was submitted that the so-called “Golden Rule” of statutory construction requires that legislation be construed in a manner which avoids absurd outcomes where the ordinary meaning would have that effect. Third, Cummins submitted that where patently unfair or absurd outcomes arise, a purposive approach to the legislation should be adopted.
323 The primary judge expressed a view that the submissions did not accurately summarise the legislative principles (liability reasons at [360]-[370]). The primary judge then set out the relevant provisions of the LSL Act, noting in particular the breadth of s 60 (liability reasons at [378]-[380]). However, his Honour did not expressly consider whether an entitlement to long service leave was predicated upon the employee having a “substantial connection” to Victoria.
324 His Honour ultimately rejected the contention that taking into account Mr Keenan’s earlier period of employment in the UK, prior to commencing employment with Cummins in Victoria in February 1995, would lead to any absurdity, repugnance or patent unfairness. In particular, the primary judge said (liability reasons at [380]):
It seemed to me that on several bases set out in s 60, the respondent was “one employer” for the purposes of s 57 of the Long Service Leave Act. I reject the respondent’s submissions to the contrary.
Consideration
325 On its proper construction, the LSL Act provides for an entitlement to long service leave where: (a) there have been 15 years of “continuous employment”; and (b) that employment is with “one employer”.
326 There can be no doubt that Mr Keenan’s employment was with “one employer”, as the various Cummins entities were related bodies corporate within the meaning contemplated in s 60(2)(a) of the LSL Act. Indeed, in the written submissions on this appeal, Mr Keenan submitted at [32] that: “It was not disputed at trial (or on this appeal) that all of Mr Keenan’s employment from 1981 to 2015 was with the appellant Cummins or a related body corporate.” Accordingly, the primary judge’s reasons at [380] seem to reject Cummins’ submissions on the basis of a matter not in dispute.
327 The real matter of controversy was whether Mr Keenan was “continuously employed” by Cummins, when that phrase is properly understood. I consider that continuous employment should be construed to mean continuous employment in Victoria, having regard to s 48(b) of the Interpretation of Legislation Act 1984 (Vic) (Interpretation Act). That subsection of the Interpretation Act provides that, unless the contrary intention appears, a reference to a matter or thing should be construed as a reference to such matter or thing in and of Victoria.
328 While submissions were not advanced on this issue, I do not accept that any contrary intention appears in the LSL Act, such as to preclude s 48(b) of the Interpretation Act from applying. I do not agree with the observation in Australian Timken Pty Ltd v Stone (No 2) [1971] AR (NSW) 246 at 252 that such an approach would have the effect that the entirety of the service would need to be performed in Victoria. The LSL Act clearly contemplates that there may be many companies in Victoria with employees that spend time interstate or overseas. Reading in the words ‘in Victoria’ would not have the effect of imposing an absolute territorial limitation.
329 Once the phrase “continuous employment” is understood in these terms, I am satisfied that the employee’s period of employment should be construed as commencing to run only from the time at which an employee first performs work with some connection to Victoria, and that on any view, Mr Keenan’s employment possessed no connection with Victoria prior to 1995. I also regard this construction as consistent with the authorities that have considered equivalent provisions in the NSW LSA, including Timken at 253 and Cohen v iSoft Group Pty Limited [2012] FCA 1071 at [171]-[172].
330 Those authorities make it plain that there is a territorial limitation to the entitlement to long service leave. That is to say, there must be a “substantial connection” between the relevant jurisdiction and the employee’s performance of their duties. The NSW LSA is not relevantly distinguishable from the LSL Act, at least in respect of the requirement for “continuous employment”. Accordingly, I respectfully adopt what was said by Flick J in Cohen at [172], citing Timken at 253:
The territorial limitation which it has been accepted applies in respect to the Long Service Leave Act is that it is necessary to find some nexus between the Act and the State of New South Wales: Australian Timken Pty Ltd v Stone (No 2) [1971] AR (NSW) 246 at 253. The test which was there applied was whether the there was a “substantial connection” with New South Wales. McKeon, Sheldon and Sheppard JJ there concluded:
… We are, therefore, in agreement with the appellant’s approach to the problem to the extent that it contends that the service involved must be connected with New South Wales. We think, however, that its submission go too far when they involve the proposition that the service (subject to temporary absences) which is to be rewarded must be performed entirely in New South Wales. We think that the benefits provided for in the Act accrue if at the time the relevant event occurs (that is, completion, termination or cessation) the service which was being performed up to that time has a substantial connection with this State. This interpretation seems to us to accord with the purpose and policy of the Act without being in any way inconsistent with its language. It is to be assumed that the legislature intended the statute to bear a meaning which would have regard to the practical situation in industry and would leave as few anomalies as possible. We believe that the interpretation we favour achieves this result. This view does not make it necessary, as in the case of workers’ compensation legislation, that the relevant event must occur within the State but it is essential that, at the time of its occurrence, the service, looked at as a whole, may fairly be said to be to a substantial extent New South Wales service. Whether it is or not must be a question of fact and degree in each case. If, however, the service is actually being performed here at the time when the relevant event occurs, this is strong although not conclusive evidence that the service has a substantial connection with New South Wales. While we realize, on this pragmatic test, that there will be some cases close to the border, we see no difficulty in the present case. …
331 The reasoning in International Computers at 74 is also apposite in the present circumstances:
In the light of the decision in Timken's case [1971] AR (NSW) 246 we consider that it is not necessary that all service should be substantially connected with New South Wales, but that it is essential that, at the time when the relevant event occurred, the worker's service may be fairly said to be New South Wales service. There is no doubt that at the relevant time in this case the worker's service had a substantial connection with New South Wales.
Upon the basis that at the relevant time the operation of the Act would be attracted provided there had been the necessary qualifying service, it becomes necessary to consider whether or not the earlier service is to be taken into consideration consequent upon the “deeming” provisions of s 4(13).
….
We have already said with respect to aggregation under s 4(13) that, as artificial as it may seem, the aggregated service must be regarded no differently from that of service with one employer instead of a number of related employers. It is of little importance that the original employer or for that matter the last employer may be a foreign corporation (although in the latter case, in particular, this may be relevant to the question whether or not at the crucial time there was a substantial connection with New South Wales). Despite the fictional situation created we see no basis for reading down the section in the way contended for by the appellant so as to exclude in the aggregation any service which did not have in each instance “a substantial connection with New South Wales” so as to make it service under what Mr Meagher described as “New South Wales contracts”.
332 To the extent that International Computers is to be understood as focusing narrowly on the time at which the crystallising event occurs, at the expense of considering the question of whether there is a substantial connection to Victoria, I respectfully disagree with that approach. Such an approach would be quite unsatisfactory given that the predicate to the entitlement to long service leave is continuous service over an extended period of time.
333 Accepting that there must be a sufficient nexus to Victoria, the issue which arises is whether that connection existed in respect of Mr Keenan’s tenure at Cummins Darlington from September 1981 to February 1995. In this regard, I consider the present circumstances are distinguishable from those in International Computers. At a high level of comparison, International Computers may appear factually similar to the present case, in that the relevant employee commenced employment outside the jurisdiction in question and had periods of employment overseas. However, when examined more closely, the comparison is less compelling.
334 The employee in International Computers commenced employment in Victoria in August 1963, for a company incorporated in New South Wales. In November 1964, he was advised that another company, also incorporated in New South Wales, had taken over the activities of his former employer. The employee was invited to continue his employment in Victoria, to which he agreed. In January 1966, he moved to Sydney to continue working with the company. From January 1967, the employee then spent two and half years working for a related body corporate in South Africa. In or around August 1969, the employee went to the United Kingdom and worked for another related company. He accepted a position to return to New South Wales in December 1975 and continued his employment in Sydney until September 1978. Crucially, there was an anterior period of employment in New South Wales in International Computers, and a substantial connection across the period assessed at the time the employee left in 1978. Unlike in the present case, that period of employment had merely been interrupted in a sense similar to that contemplated by s 62 of the LSL Act.
335 While I accept that the difference between the present circumstances and those in International Computers is a matter only as to degree, the greater nexus to New South Wales in that case and the period of time spent overseas are also plainly relevant to the question of whether there was a substantial connection to the jurisdiction for the whole of the period of employment. Where, as here, there is a significant portion of the service outside Victoria, anterior to any period of employment within Victoria, in my view the substantial connection to Victoria for that anterior period is not established.
336 I accept the proposition that the benefits provided for in the LSL Act are to be assessed, and accrue, at the time the crystallising event occurs. I also accept that the statute specifically and clearly defines “one employer” in such a way as to capture related entities. But that analysis does not foreclose proper consideration of whether an employee has been “continuously employed” and whether there has been a substantial connection to the relevant jurisdiction. Indeed, it does not mean that an extended period of employment prior to there being any connection with Victoria may be amalgamated with an earlier period in which there was no connection, save that the employee was engaged by an entity related to the Victorian based employer. The conclusion might be different if the factual matrix were otherwise, but here there was no continuous employment in Victoria, in the sense contemplated by the LSL Act, given the absence of any connection to Victoria at all prior to 1995.
337 Further, and relatedly, the primary judge at [380] rejected Cummins’ contentions invoking the so called “Golden Rule” of statutory construction and found that in any event, no such absurdity arose on the facts. However, his Honour did not explain why he considered that no absurdity or patent unfairness arose on the facts. With respect, the analogy, or worked example, posited by the primary judge at [382] begs the question. The example given of an employee who is engaged by related entities for offshore and onshore work is not analogous. In that example, it is implied that the hypothetical employee lives and works in Melbourne, save in so far as he is undertaking offshore work. It is not express in the example but it may be inferred that the employee departs from Melbourne for offshore work. It is common place for employees engaged in work in remote locations to “fly in – fly out”, to other states in Australia or to overseas locations.
338 That example is not analogous to the circumstances presented by Mr Keenan’s claim for long service leave to be calculated by including the time he served with Cummins Darlington in the United Kingdom. It was only upon Mr Keenan’s employment by Cummins in Victoria, from February 1995, that his employment acquired a connection with Victoria.
339 In my view, the absurdity of a construction of the LSL Act which would result in Mr Keenan having his entitlements calculated back to 1981 is plain. The example given by Cummins is of an employee of a company who serves 29 years outside Australia and only one year for a related entity in Victoria, resulting in the employee becoming entitled to long service leave calculated on the basis of 30 years continuous service. This is not a fanciful scenario and is patently absurd and unfair.
340 Cummins did not contend that the period post-1995, during which Mr Keenan was working on “secondment” at Cummins’ head office in Indiana, should be excluded. It is therefore unnecessary for me to decide whether this period should be included in the calculation of Mr Keenan’s continuous employment with Cummins. However, were it necessary to do so, I would find that that period should be included. The concept of an employee being “seconded” involves an arrangement under which the employee is retained as an employee of the entity arranging, or consenting, to the employee working for another, usually but not necessarily a related entity, his or her position being reserved or kept available for him or her to return to. The premise of the arrangement is that the employee remains an employee of the consenting employer or that the employee will have a right to return to his or her position at the conclusion of the secondment. For completeness, and as outlined above, s 62 of the LSL Act contemplates several situations in which an employee is to be regarded, for the purposes of this Division, as having been continuously employed even though in a strict legal sense it could be said that the employee's employment was interrupted. While a secondment is not one of those situations, if a Victorian employer consents to a secondment arrangement, there remains a substantial connection to Victoria.
Disposition – Appeal Ground 13
341 For the above reasons, I respectfully disagree with Bromberg J, with whom Mortimer J agrees, in relation to the disposition of the long service leave issue raised on appeal. In my view, appeal ground 13 should be upheld, such that Mr Keenan would only be entitled to long service leave in respect of his continuous employment with Cummins from February 1995.
I certify that the preceding one hundred and thirty-two (132) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Anastassiou. |
Associate:
Dated: 24 November 2020
