FEDERAL COURT OF AUSTRALIA

Dorsch v HEAD Oceania Pty Ltd [2024] FCA 162

ORDERS

THE COURT ORDERS THAT:

1.    The parties confer with a view to agreeing upon the form of the orders to be made by the Court to give effect to the reasons published today, and in the event of agreement, submit the orders to the Court, by 7 March 2024, where they will be made in their absence.

2.    In the absence of agreement on the form of the appropriate orders by 7 March 2024:

(a)    the applicant file and serve by 4:00 pm on 7 March 2024 the form of orders it proposes to give effect to the Court’s judgment today;

(b)    the respondent file and serve by 4:00 pm on 7 March 2024 the form of orders it proposes to give effect to the Court’s judgment today.

3.    The matter be adjourned until 13 March 2024 at 9:30 am for consideration of the orders to be made (if there is no agreement) and the subsequent timetabling of the remainder of the matter.

4.    There be liberty to the parties to apply.

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

REASONS FOR JUDGMENT

RAPER J:

Introduction

1    Mr Dorsch has worked the majority of his adult life, from apprenticeship in 1996 until 2021 (with a break between 2000 and 2008) for various entities within the HEAD Group. Initially he worked in Germany until 2000. Mr Dorsch was approached 8 years later by Mr Stefan Michl and Mr Gerald Skrobanek, about undertaking a role for MARES Asia Pacific (Mares AP), the HEAD Group’s Hong Kong subsidiary. Mr Dorsch relocated to Hong Kong in around May 2008. In 2010 Mr Dorsch relocated to Queensland to work in the Australian subsidiary. Since then, Mr Dorsch has resided and worked primarily in Australia. However, importantly, Mr Dorsch did not become employed by the respondent (HEAD Oceania) until 2018. Also critically, he remained employed simultaneously by Mares AP, undertook Hong Kong-related work and derived a separate income from that entity.

2    Mr Dorsch’s employment with both entities was terminated on 10 December 2021, on the basis of his inappropriate conduct towards his subordinates (which had led to a number of them making complaints about him and/or resigning from their positions). However, Mr Dorsch only brought proceedings against HEAD Oceania and not Mares AP.

3    In this proceeding, Mr Dorsch maintains that he was in fact dismissed because of a number of exercises of his “workplace rights” within the meaning of s 341 of the Fair Work Act 2009 (Cth). Those purported exercises included the making of complaints, asking for salary increases and asserting and querying his bonus and annual leave entitlements. Mr Dorsch also claimed that HEAD Oceania breached s 62 by requesting or requiring him to work more than 38 hours a week where the additional hours were not reasonable and s 90(2) by failing to pay him his accrued annual leave when the employment ended. Mr Dorsch also claims numerous breaches of his employment contract, including failing to pay his annual leave entitlements upon termination, dismissing him summarily and not providing him with 12 weeks’ notice or payment in lieu of notice and breaching a term of the 2017 employment contract and the 2018 employment contract by failing to “take reasonably practicable steps” to protect the applicant from a risk to his health and safety at the workplace. Mr Dorsch no longer presses his claim regarding the failure to pay a redundancy payment under the 15 October 2018 employment contract (2018 Employment Contract).

4    At this stage in the proceeding, the question of liability and damages are the only issues to be determined, and not the question as to penalty.

5    For the reasons which follow, Mr Dorsch has only been successful with respect to one undisputed aspect of his claim, namely that HEAD Oceania failed to pay his accrued annual leave when the employment ended, as required pursuant to s 90(2) of the FW Act. HEAD Oceania paid the entitlement three months after they were required to pay this entitlement. Accordingly, a consequential issue was what, if any, damages arose from this breach. For the reasons which follow, Mr Dorsch is entitled to $10,000 in general damages for this breach. In all other respects his claim fails.

The evidence

6    Mr Dorsch relied upon the following affidavit evidence in support of his application:

(a)    Matthias Florian Dorsch affirmed on 4 November 2022, 24 February, 3 May and 11 October 2023.

(b)    Patrick Thomas Peter Hegarty affirmed on 4 November 2022.

(c)    Michelle Marie Caldwell sworn on 4 November 2022.

(d)    Jeanny Vale Terry affirmed on 7 November 2022.

(e)    Dr Owen Samuels affirmed on 27 February 2023.

(f)    Chris Katehos affirmed on 28 February 2023.

7    Only Mr Dorsch, his former partner Ms Terry and his psychiatric expert Dr Samuels were required for cross-examination. Mr Dorsch relied on no aspect of the evidence of Ms Caldwell or Mr Hegarty in his closing submissions.

8    HEAD Oceania relied on the following affidavit evidence in support of its claim:

(a)    Robert Stephen Montgomery affirmed on 2 December 2022.

(a)    Karen Elizabeth Andersen affirmed on 5 December 2022.

(b)    Joanne Elizabeth Borden affirmed on 6 December 2022.

(c)    Rex Arthur Butler affirmed on 9 December 2022.

(d)    Mark Darren Wilson affirmed on 13 December 2022.

(e)    Penelope Jane Hawes affirmed on 15 December 2022.

(f)    Robert Davies sworn on 19 December 2022.

(g)    Siobhan Patricia Fookes affirmed on 19 December 2022.

(h)    Gerald Skrobanek affirmed on 21 December 2022.

(i)    Stefan Michl affirmed on 21 December 2022.

(j)    Fabrizio Prete affirmed on 21 December 2022.

(k)    Dr Hugh Daniel affirmed on 11 April 2023.

(l)    Susan Esther Haydon affirmed on 25 August 2023.

9    All of the above deponents, save for Ms Haydon, were required for cross-examination.

Structure of reasoning

10    As will be evident, Mr Dorsch’s claims can be broadly described as relating to alleged unlawful conduct arising during his employment (from which both statutory and contractual claims arise) and upon termination (from which again statutory and contractual claims arise).

11    Given the same, it is appropriate to consider the relevant evidence and make findings in the context of this temporal demarcation. Accordingly, the reasoning is structured such that consideration is first given the events between 2017 and 2021 as they relate to the claims during employment and, with some overlap thereafter, to the claims as they relate to the termination of Mr Dorsch’s employment.

Chronology of Events

12    Most of the relevant facts are not disputed. The following chronological history records my factual findings regarding the relevant facts. An assessment is undertaken of each of the relevant witnesses before I, thereafter, detail specific factual matters about which there was contest and which require resolution.

13    HEAD Oceania was not created until 2017 (when it was initially known as Mares Oceania Pty Ltd). Its corporate origins arise from a group of companies, with the parent being HEAD International Holding GmbH in Germany (HEAD International). The HEAD Group is a global provider of high-performance sports equipment and apparel. The business operates under five separate divisions: Winter Sports, Racquet Sports, Water Sports, Sportswear and Licensing.

14    Between 1996 and 1998, Mr Dorsch completed an apprenticeship with HEAD International. Within the HEAD Group, there was a Mares Division. Mares is an Italian brand specialising in the development, manufacture and distribution of scuba diving, snorkelling, swimming and spearfishing equipment. Upon Mr Dorsch’s completion of his apprenticeship, he worked initially as a Sales Promoter for the Mares Division, then as Product Manager until he resigned in November 2000.

15    In 2008, Mr Dorsch commenced employment with Mares AP as Sales and Marketing Manager based in Hong Kong. Thereafter Mr Dorsch became involved in Mares’ operations in Australia and relocated to Queensland, Australia in August 2010. Mr Dorsch became a director of Mares AP in March 2010.

16    The relevant contractual history commences in 2016.

17    On 21 March 2016, Mr Dorsch entered into a contract with Mares AP, which contained the following relevant terms:

(a)    The position was entitled Sales & Marketing Manager MARES AUSTRALIA.

(b)    Mr Dorsch reported to the Director of Mares AP and CEO of Mares Italy.

(c)    The remuneration comprised an annual base salary of AUD 82,000.

(d)    Mr Dorsch was entitled to four weeks’ annual leave per year with no loading.

(e)    The employment could be terminated in the following way (the relevant term is extracted):

TERMINATION ON NOTICE

Other than as provided for in the Probationary Period Mares may terminate your employment by giving you 3 month’s written notice or paying you in lieu. Mares may also direct that you perform lesser or no duties during the notice period. In the event of termination, Mares will only be obliged to pay you for any outstanding wages or accrued but unused annual leave. You will not be entitled to any other payment from the company.

If you wish to resign from your employment you must give 3 month’s written notice to Mares.

TERMINATION WITHOUT NOTICE FOR SERIOUS MISCONDUCT

Mares may terminate your employment immediately and without notice if you commit an act of serious misconduct. Serious misconduct may include:

(a)     not following a reasonable and lawful direction given to you by Mares;

(b)     wilfully or deliberately doing something that is inconsistent with your terms and conditions of employment or inconsistent with your ongoing employment; or

(c)     conduct that causes imminent and serious risk to the health and safety of a person, or the reputation, viability or profitability of Mares.

Other examples of serious misconduct Include theft, fraud, assault, intoxication while at work or performing work duties and the commission of a crime in the course of your employment.

18    On 18 May 2016, Mr Dorsch instructed, in an email to Mr Prete, the manner in which his Australian salary would be split from his Hong Kong salary:

Hi Fabrizio,

Please arrange that the 82k AUD /12 (6.833,33) will paid [sic] with either monthly or by fortnightly payroll to my Australian bank account. The equivalent amount in EUR should be deducted from my HK salary.

The Australian super should be borne by the company as this [sic] are employers costs.

We should start with 1 July.

With best regards

Matthias Dorsch

19    From July 2016, Mr Dorsch received payments from Mares AP in Australian dollars to his Australian bank account and payments in Euros to his Hong Kong bank account. It was Mr Dorsch’s evidence that the payments received in Australian dollars to his Australian bank account satisfied the requirements of his Australian 457 working visa and that these payments were deducted from his total remuneration package administered by Mares AP in Hong Kong.

20    On 2 February 2017, it was agreed as between Mares AP and Mr Dorsch that Mr Dorsch’s Hong Kong income increase by €10,000.

21    On 7 June 2017, Mares Oceania Pty Ltd was incorporated and Mr Dorsch was appointed Director.

22    On 15 October 2018, Mr Dorsch and Mares Oceania entered into the 2018 Employment Contract, which contained the following terms:

(a)    Mr Dorsch’s position was of Sales & Marketing Manager.

(b)    The contract commenced on 1 November 2018.

(c)    The remuneration, paid monthly, comprised the following components:

(i)    An annual salary of $82,000;

(ii)    Car allowance of $19,800; and

(iii)    Superannuation of $7,790 per annum (9.5%);

but was subject to cl 5, which provided:

5.    Remuneration

(a)    We will pay you the Remuneration as set out in item 6 of the Schedule. If your Status is indicated as Part Time, this will be pro-rated based on the hours you work.

(b)    We will deduct taxation instalments (including HECS/FEE-HELP if applicable) from your Remuneration as required by law.

(c)     Your net Remuneration will be deposited into your nominated bank account at the Pay Frequency set out in item 6 of the Schedule.

(d)     Your Remuneration will be reviewed in line with our annual performance and salary review process.

5.2    Discretionary bonus

You may be eligible to receive a bonus for your services during your employment with us. Your eligibility to receive a bonus, any determination to award you such a bonus, and if awarded, the amount of the bonus and whether it is to be paid in a lump-sum or in instalments is at our absolute discretion. Any company policy effected in relation to bonuses is subject to this clause 5.2.

(d)    Hours of work were 8:30am to 4:30pm Monday to Friday with an hour lunch break to be taken between 12:00pm and 2:00pm where:

4.3     Hours of work

(a)     You must attend at the Location (subject to clause 4.4) during the Hours and carry out the Duties as set out in Item 7, Item 8, and Item 9 of the Schedule (or as otherwise reasonably required by us from time to time).

(b)     You may request flexible working arrangements in accordance with the Act. We will consider your request and may grant or refuse the request on reasonable business grounds.

(e)    In addition, the contract required that Mr Dorsch also work, on occasion, reasonable additional hours, as contained in cl 7:

7.    Overtime

(a)    The nature of our business may on occasion require you to work reasonable additional hours in excess of your Hours set out in Item 7 of the Schedule. As a result, your Remuneration is calculated to incorporate payment for small amounts of daily overtime up to 60 minutes per day. Should you be required to work outside of these reasonable additional hours, you will be entitled to paid overtime, provided that the overtime has been approved in advance by your Employer Contact.

(b)    Overtime outside of reasonable additional hours will be paid at overtime rates in accordance with the Applicable Award.

(c)    You may elect, with our consent, to take time off instead of payment for overtime, at a time agreed to by us.

(f)    It contained the termination provision at cl 17.2 in the following form:

17.2     Termination

(a)     Despite any shorter term provided for in the Applicable Award or Act, if you wish to terminate your employment with us, you must give us at least 12 weeks’ written notice.

(b)     Subject to the provisions of any applicable law, we may terminate this agreement at any time by giving you at least 12 weeks’ notice.

(c)    If you are over 45 years of age and have been employed by us for at least two years at the time of termination, we will give you an additional one week’s notice, or a longer period required by law.

(d)     After either party has given notice of termination (whether during or after the probationary period, and including notice due to redundancy under clause 17.3) we may terminate your employment at any time by paying you a sum equal to your full rate of payment in lieu of the remainder of the notice period.

(e)     If notice is given to terminate your employment (including redundancy under clause 17.3), then we may:

(i)     direct you not to perform any duties for part or all of the notice period;

(ii)     direct you to perform duties which are different to your Duties for part or all of the notice period, provided that you have the necessary skills and competencies to perform those duties;

(iii)     direct you to assist with the training of any new employee replacing you (including a complete handover);

(iv)     require you to remain away from our premises, the Location, or any other location we have directed you to under clause 4.4;

(v)     remove your access to our network or servers, and/or require you to log out and remain logged out of our network or servers;

(vi)     change your title.

However, in these circumstances, you will remain an employee of ours until completion of the notice period.

(f)     During any period of notice (including a period of notice due to redundancy under clause 17.3):

(i)     you must continue to comply with all of your obligations under this agreement and you may not commence new employment or have any business relationships with a new employer prior to the termination of your employment;

(ii)    you may request to take any accrued annual leave in accordance with our ordinary policies, but we are under no obligation to approve the request if it is not reasonable in the circumstances; and

(iii)     you may request to take personal leave in accordance with our ordinary policies (expressly including our policy to provide sufficient evidence of the need to take such leave).

(g)     Your employment may be terminated by us at any time without notice if you: [Formatting error in original.]

(i)     engage in wilful or deliberate behaviour which is inconsistent with the continuation of this agreement;

(ii)     engage in serious misconduct, including dishonesty, theft, or misrepresentation (whether or not connected with your employment with us);

(iii)     disobey without proper legal reason a lawful direction of ours;

(iv)     commit a serious breach of this agreement;

(v)     misrepresent your qualifications, employment history, or any other factor which led to your employment;

(vi)     materially fail to perform your Duties;

(vii)     knowingly or with reckless disregard engage in conduct which causes imminent or serious risk to the health and safety of a person;

(viii)    harass, discriminate against, assault or abuse another person (sexually or otherwise);

(ix)     seriously or persistently undermine our good standing, integrity, or reputation, or the good standing, integrity, or reputation of our clients;

(x)     are charged with a serious criminal offence.

(h)     If your employment is terminated for any reason (including redundancy under clause 17.3), then:

(i)     we may set off any amounts you owe us against any amounts we owe-you at the date of termination, except for amounts we are not entitled by law to set off; and

(ii)     you must return our property (including property leased by us), including any equipment or software provided to you under clause 11, all written or machine readable material, Confidential Information, software, computers, credit and charge cards, keys, security passes, mobile telephones, and sim cards.

(g)    Finally, the 2018 Contract contained an entire agreement clause at cl 19.4:

19.4     Entire agreement

This agreement contains the entire agreement between the parties and supersedes all previous negotiations or agreements, contracts, arrangements, and representations in relation to your employment.

23    Mares Oceania Pty Ltd changed its name to HEAD Oceania in 2020.

24    In the period between April 2018 and November 2021 a number of events occurred which form the basis for Mr Dorsch’s contractual, adverse action, and FW Act claims.

Assessment of witnesses

25    The parties both relied upon the expert medical evidence of Drs Samuels and Daniel. A joint expert report was filed and the experts have concurrent evidence. For the reasons which will become apparent, given their evidence related to the damages claims, and Mr Dorsch has been successful in one narrow respect, it is not necessary to provide any detailed assessment of their evidence.

26    Drs Samuels and Daniel prepared separate reports and then a joint report. No submission was raised against either of them on the issue of credit. To the extent that there was reliance on their evidence, it was on the basis of their joint report. Given the same, there is no need to separately assess their evidence.

The applicant’s evidence

27    It is only necessary to refer to the evidence of Mr Dorsch and Ms Terry. Ms Caldwell and Mr Hegarty were not required for cross-examination and neither party relied upon their evidence in their closing submissions. Mr Katehos’ evidence was read, on a redacted basis, by agreement and without cross-examination being required.

Mr Dorsch’s evidence

28    Mr Dorsch had devoted the most significant portion of his adult working life to HEAD Oceania and other companies within the HEAD Group. He is a person that had worked exceedingly hard, and to be terminated without warning by telephone has caused him significant distress and anguish.

29    It was my impression that over time he had become increasingly worn down by work. It was his perception that the employees were not working to the standard needed to be performed in order to ensure that the Australian entity performed at the level required of the German demands. The workplace at Yatala, Queensland was a robust one. It was my observation that he did not enjoy the respect of employees and similarly he did not respect the employees who worked for him.

30    Ultimately, for the reasons set out below, and where I give specific examples of why his evidence should not be accepted, I did not find him to be a reliable historian. These reasons will reveal that Mr Dorsch’s evidence responsive to the claims of numerous employees regarding his conduct is perplexing. It was the evidence of his subordinates that Mr Dorsch routinely swore at them, was a hard task-master, would bang his fist on the table when dealing with them, and was critical and insensitive to their personal concerns. A difficulty with his evidence is that he routinely recollects his conduct in a sanitised, as Mr Montgomery described it “PG”, (meaning in a less explicit, palatable for a young audience), way. I acknowledge his concessions that he swore, on occasion, but he led evidence to the effect or submitted that swearing was not directed at employees themselves, but rather at the situation. I found his evidence entirely unreliable in the face of the evidence of the employees. His persistent denial suggested to me (at best) a remarkable lack of insight and self-awareness on his part as to how he behaved for which he was not a reliable historian.

31    In addition, he lacked insight as to the effect his behaviour had on others: Mr Dorsch is an imposing figure. He is extremely tall and wiry. He speaks directly. Employees appealed directly to him regarding his conduct; however, he did not take such appeals on board.

32    By way of illustration, numerous employees recounted that Mr Dorsch would bang his fists on the table when he was agitated and angry whilst speaking to them. Mr Dorsch denied the same. During Mr Dorsch’s cross-examination on 16 October 2023, Mr Dorsch was questioned regarding HEAD Oceania’s allegation that he had not been honest with the Australian Taxation Office (ATO) regarding his income. On two occasions during this cross-examination, the sound of him thumping the desk in front of him with his hand when he became agitated was audible. It was my observation that such conduct was entirely consistent with what the employees observed.

33    I accept HEAD Oceania’s submission that the fact of Mr Dorsch’s dishonesty to the ATO has bearing on his credibility. However, for the reasons which will be apparent from the above and below, it is my view that Mr Dorsch was an unreliable witness. First, the evidence regarding his conduct towards his staff reveals that his perception of events and his behaviour was entirely different from a number of current and former employees, for whom their evidence cannot be impugned and where their evidence was consistent. Specific examples of why his evidence should not be accepted are set out below. Secondly, Mr Dorsch’s own evidence regarding his perception of his outstanding entitlement to annual leave suggests that he shoots from the hip (having not undertaken the requisite due diligence) when he considers he is being treated unfairly and confirms he is an inaccurate historian. Specific examples of this are evident from my findings below regarding Mr Dorsch’s inflated, incorrect and ultimately unsupported claims regarding his accrued annual leave entitlements in 2018. Thirdly, it is my view that he is consumed by his perceived unfairness of treatment and, in those circumstances, is not objective in his description of past events and his role within them.

34    For these reasons, I have significant reservations about the reliability of his evidence in respect of any controversial factual matter for which there is no supporting contemporaneous documentation or corroboration from a reliable witness.

Ms Terry’s evidence

35    Ms Terry had worked for Mares AP between approximately May 2015 and July 2017, and then for a two-month period for the respondent in 2020. Her evidence concerned, primarily, the effect that the termination had had on Mr Dorsch. Ms Terry had been Mr Dorsch’s partner and resided with him. However, at the time of cross-examination, she was no longer in a relationship with Mr Dorsch, and no longer lived with him. She gave her evidence from New Zealand remotely. However, her evidence palpably described, without challenge, the extent of the pressures arising from the termination had had on Mr Dorsch. She described his demeanour as being “broken”, and that he had sacrificed fifteen years of his life to the company, for all of that to be taken away in a phone call. She was visibly upset whilst giving her evidence as to the effect that the termination and the proceedings had had on him and their relationship. It was my observation that she was a witness of truth.

HEAD Oceania’s witnesses

36    Neither party relied upon the evidence of Mr Wilson in their closing submissions and as such there is no need to consider his evidence.

Mr Skrobanek

37    Mr Skrobanek is director of approximately 20 HEAD Group entities globally, including HEAD International. By reason of this role, it was his evidence that he oversees the operations of Mares AP and also HEAD Oceania.

38    Mr Skrobanek’s evidence was given in two parts. He first gave evidence on 16 June 2023 (via video-link from Austria) and then on 13 October 2023 in person.

39    It was my impression, from his evidence, that Mr Skrobanek is personable, but direct and efficient in his verbal and written communications with others, seeking to achieve the best outcomes for the corporate entities for which he is responsible.

40    When giving his evidence, he gave his evidence in forthright manner. He was only prone to agitation when questioned about the issue of his authority with respect to HEAD Oceania and Mares AP. The agitation appeared to arise from frustration as to the non-acceptance of his authority rather than any question of unreliability.

41    Mr Skrobanek has had a long professional and personal relationship with Mr Dorsch. I observed him become quite crestfallen and melancholic when he was questioned about his decision to terminate Mr Dorsch’s employment. This is a matter to which I will return.

42    Mr Dorsch challenged Mr Skrobanek’s credibility, largely by either bald assertion without reference to the evidence or, to the extent that any evidence was referred to, without deigning to descend to provide specific evidence or transcript references, with which no engagement with is necessary.

43    To the extent that Mr Dorsch provided specific evidentiary references, I will deal with them as follows. Mr Dorsch submitted that there was an inconsistency between Mr Skrobanek stating in early June 2018 that Mr Dorsch showed no signs of stress and the fact that Mr Dorsch had sent him an email on 5 June 2018. However, as is set out below, the evidence revealed that the email was not addressed to Mr Skrobanek but rather he was copied to the communication. It was Mr Skrobanek’s evidence that this email was sent some weeks after they had finished a holiday together in the Philippines where he had showed no sign of stress and that Mr Dorsch had the ability to take leave when he needed it. Mr Dorsch’s submission is rejected, it is contrary to my impression of Mr Skrobanek.

44    Mr Dorsch submitted that Mr Skrobanek’s credit ought be impugned by reason of Mr Skrobanek conceding he would have liked to have offered Mr Dorsch an alternative position elsewhere in the HEAD Group. For the reasons set out below I accept Mr Skrobanek’s evidence and am of the opposite view: This evidence was compelling and was illustrative of why Mr Skrobanek’s evidence should be accepted.

45    It was my impression that Mr Skrobanek was a credible and reliable witness.

Mr Michl

46    Mr Michl was composed and direct during his testimony. When one looks at his emails to Mr Dorsch, they were often very direct.

47    Contrary to Mr Dorsch’s submission, I found him to be a reliable witness. Mr Dorsch’s contention was based largely on unsubstantiated assertions with respect to Mr Michl’s evidence. To the extent that there was disagreement about whether he “supervised” Mr Dorsch, ultimately it is my view it was a question of semantics. There was no true exploration of what he understood supervision to be. Mr Dorsch also asserted that there was an inconsistency regarding whether Mr Michl was asked by Mr Skrobanek or it was his decision to look at Mr Dorsch’s personal experiences. However, a review of the evidence reveals an evolution of his evidence about this issue, based on recall. Mr Michl firstly speculated “it would have been” Mr Skrobanek’s decision, and then, when asked about whether Mr Skrobanek told him to do it, he could not recall. Mr Michl’s evidence was then persuasive. He then reflected that given the issue arose in the context of him looking at the annual leave issue, travel expenses are a related reference point and therefore he said he thought the decision was his. I accept that the evidence reveals that they had robust discussions and did not always get on. However, it was my impression that Mr Michl gave forthright, plausible explanations, consistent with the contemporaneous records.

Mr Prete

48    It was my impression of Mr Prete that he largely attempted to be truthful in his testimony. Mr Prete’s first language is Italian. His proficiency in English is greater in written rather than oral form. He was assisted by, and appeared to need, an interpreter during his evidence. Care needs to be taken about the extent to which a literal interpretation is taken with respect to certain of the things that he wrote and said in English. However, ultimately, nothing appears to turn on this. Ultimately, it is my view that his evidence should be accepted over Mr Dorsch, for the reasons set out below.

49    It was my observation that Mr Prete did spend longer than would ordinarily be expected for a witness to read his, and the communications of others, in English, where those documents were within his knowledge. That suggested to me that it could be inferred that he would take longer when dealing with correspondence in English that another person wrote purely by virtue of English not being his first language. Further, in his evidence he did often say that his primary communications (for example with employees within Australia), and even with his superiors (for example, with Mr Skrobanek) were often by email. Where such a course might appear to be surprising in other circumstances from which a negative inference might be drawn, it appeared, by virtue of the fact that he was based in Hong Kong, that his primary responsibilities were with respect to accounting tasks; where he was a person who sought to avoid confrontation which he described in the following way: “Generally, I don’t like to create the controversies between the staff”; and where it appears from his demeanour that he is a person that would be loath to become involved in an argument; and by reason of his lack of confidence when conversing in English, I will infer that his preferred mode of communication was in written form by reason of language skill, general preference and his personality.

Ms Borden

50    Ms Borden commenced employment with Mares AP in or around April 2017. Her employment was transferred to HEAD Oceania thereafter and she worked with HEAD Oceania in the position of Financial Accountant until the cessation of her employment in February 2020.

51    Ms Borden came across as a highly articulate and capable woman with distinct recollections of Mr Dorsch’s behaviour. There was no serious challenge to her evidence in that respect, and I accept it. I accept that she was very friendly with and maintains a friendship with Mr Butler and Ms Andersen, but I do not accept that their past and continued friendship was such that her evidence would not otherwise be truthful.

Mr Bramich

52    Mr Bramich gave his evidence under subpoena and has not been employed by HEAD Oceania since mid-September 2022. There was no suggestion by Mr Dorsch that he had any motivation to give the evidence that he gave other than truthfully. It was my impression that he did not seek to embellish his evidence, nor appeared to be in any way partisan.

Ms Andersen

53    Ms Andersen was employed by Mares AP in the position of Accounts Receivable Officer on a part time basis from 1 June 2016. She was thereafter employed by HEAD Oceania in 2018. She resigned on 27 August 2021. The most significant aspects of her testimony were corroborated by others. It was my impression that Ms Andersen was a truthful witness.

Ms Hawes

54    Ms Hawes was employed in the position of Graphic Design and Marketing Manager, initially by Mares AP from March 2014, and later HEAD Oceania until she resigned on 1 April 2019. At the time of her resignation, she gave a detailed account to Mr Michl.

55    It was my observation of her that she was a reliable and credible witness. Ms Hawes, unlike others, respected Mr Dorsch by and large. She described herself as having “a good working relationship with [him]…”. However, she recounted, vividly, certain of Mr Dorsch’s behaviours, and did not resile from her recollection, upon challenge.

Mr Butler

56    Mr Butler commenced his employment with Mares AP on or around 2 June 2014 in the role of Sales Manager Queensland/Manager Warranty, Technical Department, in which he was responsible for the Queensland and northern New South Wales sales territory. He resigned from his employment on 3 September 2021, and commenced employment on 5 October 2021 with a customer of the respondent, but returned to work for HEAD Oceania on 4 January 2022 and remains employed there.

57    He gave his evidence in a straightforward, logical manner. I found his evidence reliable and more credible than Mr Dorsch’s evidence.

58    Mr Butler described his relationship with Mr Dorsch as being one where he was routinely sworn at and berated over the phone. Ultimately, he resigned in September 2021 he says by reason of Mr Dorsch’s conduct. He describes speaking to Mr Davies before he did this in July and August 2021, but ultimately made the decision to resign. I preferred his account of the conversations as between himself and Mr Dorsch in July and August 2021 for the reasons set out below. I also accept that the reason why he resigned was because of Mr Dorsch’s conduct towards him. His resignation was in circumstances where he took another position at a HEAD Oceania client which paid $50,000 less per annum.

Mr Montgomery

59    Mr Montgomery commenced employment with HEAD Oceania in around April 2018 as a Customer Service Manager, and later became the Operations and Logistics Manager. Mr Montgomery remains employed by HEAD Oceania.

60    Mr Montgomery is a softly spoken individual who gave consistent testimony in the same manner. He struck me as a person who would hesitate before speaking and would not be a person who would easily call out behaviour of his superior, given his mild-mannered demeanour. Mr Montgomery came across as a reserved, quietly spoken person who stood up to his boss on two occasions where he spoke inappropriately to him, but had no ill will or animus toward him, nor did he want any formal complaint to be made.

Mr Davies

61    Mr Davies responded directly to questions asked of him without elaboration. It was my impression that he had a good recollection of the events that had occurred. The lack of elaboration is consistent with his personality, rather than attempting to avoid questions or not answer questions in a fulsome way. It was my impression of him that he found it difficult to work with Mr Dorsch. They had different business interests, different experience and different management styles.

Ms Fookes

62    Ms Fookes was employed by HEAD Oceania for a period of two years between June 2020 and June 2022 in the position of Financial Accountant. Ms Fookes had over 11 years’ experience as an accountant prior to leaving HEAD Oceania, and has been certified since 2009.

63    Ms Fookes gave her evidence in a forthright and direct manner. No challenge was made to her credibility. It was my impression that Ms Fookes, as did others during the pandemic, worked very hard in this small organisation and that the long hours took their toll on her. Having had previous experience, Ms Fookes sought to engage Mr Dorsch in discussions and initiatives to improve the efficiency of the organisation, her workload and the workload of others. Those discussions and initiatives included reducing the use of multiple systems, and engaging different (human resources) and additional staff.

64    Ms Fookes made a number of concessions in her evidence as to whether she was able to give direct evidence about other employees’ interactions with Mr Dorsch, the extent to which she knew whether Mr Dorsch was working on other matters outside the office when he was not there (for example taking conference calls, attending to emails or undertaking work involving New Zealand).

65    To the extent that HEAD Oceania sought to rely on Ms Fookes’ note which she prepared in anticipation of speaking to Mr Dorsch, the file note was provisionally allowed but where I invited the parties to make submissions about it in closing. Neither party did. For reasons which will be outlined below, I accepted Ms Fookes’ evidence as being truthful but I accept that there are limitations with respect her ability to give evidence as to events she did not witness and assumptions she made about Mr Dorsch’s workload. However, to the extent that she gives an account of a conversation which is different from the recollection of Mr Dorsch, I am inclined to accept her account.

Evidence regarding each of the claimed inquiries/complaints and forms of adverse action

66    The facts of Mr Dorsch making the inquiries or complaints and the conduct said to give rise to the different forms of adverse action are largely undisputed. I make the following findings.

30 April 2018 – the annual leave enquiry

67    Between April and May 2018, Mr Dorsch had a number of discussions and exchanged email correspondence with Mr Michl about his accrued annual leave.

68    On 30 April 2018, Mr Dorsch sent an email to Mr Michl, described in his pleading as the annual leave enquiry, in the following form, asserting an entitlement to 87 days’ accrued annual leave:

It’s about more than “just” my 2018 bonus agreement. There are 87 days of unused annual leave on my account and withheld bonus payments from the past years. We talking ~40k EUR, which cannot simply be ignored. There is also a legislation which also Mares must adhere to. I am aware that given the current business situation, this will be a rough topic, but I am concerned about my entitlements.

Hope we can find an agreement here without escalation.

30 April 2018 – notification that annual leave entitlements would expire (first adverse action)

69    Mr Michl responded on the same day in the following way (translated from German):

Bonus payments that you would have been entitled to according to your statement is certainly an issue and I also told you that I would support you there. Decision because in the past is final with Gerald.

In my view, the argument for holiday entitlement is not a basis for discussion in our job with an annual agreement. We all have complete freedom in our job and certainly work more than the “legal basis” both in daily business and over the annual working hours. Holiday entitlement expires by March 31st. of the following year. So, let’s get out of the discussion about vacation days, otherwise that only creates useless emotions with Gerald. You decide for yourself whether and when you take your leave.

70    This communication is the first pleaded form of adverse action (first adverse action).

71    Mr Dorsch’s email caused Mr Michl to review Mares AP’s annual leave records in order to determine whether Mr Dorsch’s claim about the number of untaken annual leave days was correct. Mr Michl did not review the annual leave records of HEAD Oceania.

1 May 2018 – the first complaint

72    On 1 May 2018, Mr Dorsch sent Mr Michl another email re-asserting the existence of this purported annual leave entitlement, pleaded as the first complaint, in the following form:

I see this differently and we certainly can’t simply ignore this. My contract does not regulate any forfeiture of holiday entitlement. I have a HK contract. You must be aware that as of today I have 6 months’ notice (both sides) against the 4.5 months of AL that I am entitled to by law and according to my contract. We certainly won’t sweep that under the table. Should either I or the Company resign, it would be rather damaging to the business, and we must resolve this situation in mutual interest and amicably. This is also about the relevant legal guidelines regarding Australia, which the company cannot ignore.

After a solution for the 87 days, I will certainly not make the mistake again of putting my self-interests on the back burner and will use all y [sic] AL accordingly. It should be clear that this is not possible with 87 days. That would not be in the interest of the company either.

Circa 5 May 2018 – the annual leave request and unreasonable work hours complaint

73    On or around 5 May 2018, Mr Dorsch had a dinner and meeting with Mr Michl in Italy. During that meeting Mr Dorsch claimed to have complained about the need to take annual leave due to stress-related symptoms including burnout, fatigue and anxiety, pleaded as comprising the annual leave request. Also at that dinner, on or around 5 May 2018, Mr Dorsch claims that he raised concerns regarding his “unreasonable hours of work” (unreasonable work hours complaint).

74    Mr Dorsch’s evidence of conversation was as follows:

During our dinner, I had a discussion with Mr Michl to the following effect:

Me:     I am very disappointed and disagree with the decision to not recognise my accrued annual leave. I have worked very hard with very little support over many years. I have also worked very long work hours. This are my legit [legitimate] earned benefits. I do expect the company to honour its legal obligations. Since it won’t be realistic to consume so much annual leave, I suggest to payout a part and I use the other part, since I really need a break. I feel rundown, exhausted, burned-out, and tired. The last 8 years were very stressful and 2017/2018 was very demanding and exhausting. Particular 2017/2018 with the incorporation of HEAD Oceania. You know very well about the excessive workload also caused by the delays from Fabrizio Prete.

Stefan Michl:     I am sorry to hear you are not feeling well, you may need to seek professional help. I will discuss your matter about annual leave with Gerald Skrobanek but have here in principle the same opinion as already explained by email. Like I wrote you, any unused annual leave will legally expire by March of the subsequent year. Also we don’t payout unused annual leave.

Me:     Thank you but please understand that neither under Hong Kong nor Australian legislation, is unused annual leave subject to expiry. We need to find here an acceptable solution. Just waving 87 days of unused annual leave isn’t acceptable for me.

Stefan Michl:     Let me speak to Gerald during the week and I’ll get back to you.

This conversation was in German. I have translated the conversation into English.

75    Mr Michl’s evidence of this conversation was as follows:

…I do not agree with the Applicant’s recount of our discussion at dinner in or around the beginning of May 2018. I do not recall the Applicant telling me that his workload working with the Respondent was ‘excessive’ or that he was working ‘very long’ hours. I also do not recall the Applicant crying or otherwise ‘breaking into tears’. I do recall that we discussed the Applicant’s annual leave accruals from previous years.

76    Mr Michl recalled under cross-examination that they “were discussing whether [Mr Dorsch] has a right on all these days that he was mentioning”, where Mr Dorsch asserted that he expected the company to honour its legal obligations. Mr Michl did not recall Mr Dorsch referring in that meeting to needing a break, being run-down, exhausted, burnt out and tired and that the last years were very stressful. It was his recollection that this meeting was about his leave days not otherwise. However, it is notable, in Mr Michl’s email of 18 May 2018 (described below) that he refers to Mr Dorsch’s claim of “burnout”.

77    I prefer Mr Michl’s account and do not accept Mr Dorsch’s recollection of what occurred. It is my view that Mr Michl’s evidence is consistent with the contemporaneous record. At that time Mr Dorsch was agitating for inflated leave accruals. His focus was to obtain recognition for them. I do not accept that he cried or broke down. Such behaviour is at odds with the content of the contemporaneous communications as between them, how Mr Dorsch behaved generally and where Mr Michl had no such recollection, and given how out of character it would have been, it would be likely that he would have recalled it if it had occurred.

18 May 2018 – purported refusal to acknowledge accrued but untaken annual leave (third adverse action)

78    On 18 May 2018, Mr Dorsch claims that HEAD Oceania refused to acknowledge his accrued but untaken annual leave, and directed him to take annual leave before 31 December of that year and, in exceptional circumstances, before 31 March of the following year (third adverse action).

79    The pleaded adverse action was as contained in an email from Mr Michl, which I accept was sent and is set out as follows:

I’m back and therefore my feedback as promised. I exchanged ideas with Gerald as a mediator for our conversation, as requested.

In essence, Gerald’s opinion is like what we discussed earlier in the evening. This means the following:

Gerald sees no basis for holiday entitlement from previous years. As already discussed, the responsibility for taking or not taking the holiday rests entirely with you as the manager. We handle it to the same extent worldwide. This has Gerald already discussed it with you in the past (no idea what details). However, it should be handled in the same way in the future. What is not used until 31.12. of the year expires or can be taken in exceptional cases until 30.03. but expires then at the latest. I support this approach because, as already mentioned in the conversation, we handle it here in the same way.

The topic of bonuses from the past has now been communicated by you as no longer relevant. Equally regards Gerald as the correct course of action.

Since you, as an employee, always do a decent job for us and we want to promote it accordingly, we would be prepared to adjust the target for AU/NZ for the bonus for 2018 based on the previous calculation. (We must look together at what is still an achievable goal as REV and HQ Cont.) However, the base should not be set at 100% but at 80% (corresponds to a 10.4% bonus instead of 13%) of the maximum monetary value. I think it’s more than fair because the company earns less here. Of course, MAP Target remains unaffected.

On our evening you also mentioned that you think you need to distance yourself from the company at the moment and that you may be facing burnout. I therefore suggest that you might take a few days off your 2018 entitlement and seek medical/professional advice on how to avoid burnout at the same time. Let me know if we can help you with this somehow, professionally, or privately.

I would like to talk to you again on the phone about all points. Don’t know if it’s already too late for you, otherwise I'd be happy to do so tomorrow and then when it suits you best.

80    I accept Mr Michl’s evidence that his reference, in this communication, to being the “mediator”, being that he was “the mediator in the discussion between Mr Skrobanek and … Mr Dorsch”. Importantly, I find that Mr Michl understood this to be his role because Mr Dorsch had asked him to help him.

81    Further dialogue ensued between them.

From June 2018 – unfair scrutinisation and false allegations (sixth adverse action)

82    Mr Dorsch alleges from around June 2018, HEAD Oceania subjected Mr Dorsch to “repeated unfair scrutinisation and false allegations” (sixth adverse action).

83    On 5 June 2018, Mr Michl sent an email regarding their discussion the previous evening which was as follows:

Dear Matthias,

Thanks for the talk last night related to open vacation days from the past.

As expressed I have various doubts that vacation days for 2018 are correct [sic] calculated and registered. I have similar findings for travel expenses in the same period.

You mentioned in the call that you are not up-to-date with registering vacation days for 2018 and you have to file with Bruce still days for 2018. Former years had been according to you closed correctly. Please provide the missing days information 2018 till end of this week.

I had pointed out that I found an air travel receipt for your private vacation travel upcoming in June to Spain that got reimbursed from the company. You had doubts about it and wanted to check this with your documentation. Please provide your findings also till end of the week.

Check also your travel expenses related to the Tubbataha/PHP trip and provide details since this had been a fully private trip and there should not be any travel related cost for the company.

As first consequence of the above I will come up with some guidelines for the future on how to register vacation and to do travel expense reports in the next days. Please be aware that due to the findings so far I must have a doubt on the correctness of vacation days registration and travel expense reports from the past in principle. In order to check this further please provide your travel and vacation overview not only for the above but also for the last years back to 2011 (you mentioned this is simple to provide since you are preparing this for the AU authorities). Not sure whether this is still easy and simple to control from our side afterwards but given the findings so far makes it necessary to give this a try.

We also talked about your plans to take a longer period of vacation after the FCT09/BUD Meeting process. Please provide your plans as well since you are expecting also that this might go along with days of sick leave du [sic] to your health conditions.

Thx and Br,

Stefan Michl

VP Mares Diving

84    As is apparent from the above, in part of this communication, Mr Michl raises his concern regarding Mr Dorsch claiming a personal flight as a business travel expense. I find that the evidence establishes that in or around June 2018, Mr Michl reviewed and scrutinised Mr Dorsch’s monthly expense reports and that the undisputed evidence was that Mr Michl ultimately did not press the issue.

June 2018 – the second complaint

85    In response to that email, on the same day, 5 June 2018, Mr Dorsch complained about HEAD Oceania’s failure to recognise his untaken leave and his need to take some time off, in an email to Mr Michl (the second complaint). The relevant email comprised the following:

Hi Stefan,

Well noted on below and requested information’s. Due to being on sales tour and customer meetings this week, I will try to collate and provide details hopefully by end of next week. There is quite a bit of work involved to go through all emails. Will get to the bottom of it and be able to trace back leave days, at least based on my travel/flight schedules from OUTLOOK calendar (back to around mid/late 2011, +/- 1 or 2 days). This I am in the process and have the pleasure to prepare also for VISA purposes. As you can imagine, detailing ALL travels for the last 10Y is not a completely trivial task, particular when ~4Y of calendar history has disappeared from OUTLOOK. Related expenses would have to be provided by Fabrizio/Bruce, as I don’t have copies of single receipts.

Please also and as per our today telephone call, could I get an official statement about that MARES doesn’t consider my unused annual leave any longer valid, neither for pay in lieu nor for consumption. If I understood this correct from today’s phone call.

I like to highlight, that I have hopped and still wish to find an amicable solution that is acceptable for both MARES and myself. There is too much passion for our business and the company, that I don’t like to see this issue causing an irreversible damage. This probably requires some compromise from both sides. You surely can recall that already during our Rapallo meeting, I was agreeing to wave 10+ days.

As discussed during the various phone calls, there was/is obviously a different understanding and interpretation of my leave agreement (ref my work contract) that lead us, to this rather unpleasant argument and discussion. Whilst I understood on 2 different occasion in the past, MARES won’t consider pay out in lieu, I was at no stage aware about that my leave days would expire if not used by March of the subsequent year. This truly came at a surprise as this is neither regulated in my HK work contract and as far as I am aware also Fabrizio leave days are not subject to expiry. As a logic consequence of having this part not differently agreed upon in my HK employment contract, I was/am believing in that the local legislation would be relevant, respectively that unused leave days wouldn’t expire at any time. Simply deleting and not honoring all unused leave from the past, is not what I’d consider a satisfying and amicable forward solution. However, I agree that this should have been clarified in much earlier discussions about annual leave. But it wasn’t!

I do appreciate and respect the strict take on “no pay out in lieu”. I did propose this solution in the best believe and in-order to reduce the unused leave and to bring us to a close to ZERO situation from which forward, we could have agreed on a new contractual regulation as per HQ standards. Certainly this was based on my understanding and believe that my unused leave doesn’t expire as per my work contract and that consuming the high number of unused days wasn’t even remotely possible nor in the best interest of the business. Besides and as per previous discussion, the plan was to consume a reasonable amount of leave within the 2nd half of 2018 for the named reasons.

Fully understand you, challenging some details of registered leave days and travel expenses which I’ll fully clarify and should there be any mistake/wrong doing happened (both ways) certainly rectify. However, I truly wish we are not mixing up the 2 different topics and rather try to find together a reasonable solution that lead to a healthy and motivating future. Keeping in mind that all of this is a result of me taking my responsibilities for the company, my duties and our business performance and results very serious and personal, to an extend that has reached its limits and has taken its toll on me.

Rest assured, that I stay fully committed and loyal to my duties and the company, although there is the strong need of some serious recovery/recharge/reboot/rewiring time. This simply is as a consequence of my last year’s 24/7 commitment and certainly a year 2017 that besides the ”standard” business, held a lot of surprises, stress and extra workload. I will schedule this certainly in a sensitive way, trying to keep negative business impacts as little as possible. Until today morning, I was believing to have enough leave days accrued, which I could have partially used. Obviously this has changed and I am afraid that my 2018 regular annual leave days only, won’t be sufficient for the needed break. Please understand that I do need some real time “off”, which we can probably discuss also in detail during the Elba meeting. And I hope to experience the company support and commitment to me, same as I have committed myself to the company.

Like shared with you very openly during our evening meeting in Rapallo, I had to realize that this has become a MUST for my personal health and wellbeing and is also needed to remain an long term asset for the company, being able to continue to perform to the levels I used to and that are back up to my own expectations.

Best

Matthias

86    I find that Mr Michl responded to that portion of this correspondence where Mr Dorsch said he needed time off, in the way he testified, as follows:

And having been told that he needs this time off as a result of his workload and stresses, what did you do?---I think I recommended – don’t know whether I did it here – but I recall that I recommend him to take some days off, like I said already, half an hour ago, that he should seek for some – some days off, and, you know, medical help, in case he is stressed out and – and needs some help. That’s all what I can say. He’s not reporting to me. I’m just giving him, you know, kind of an advice what he should do.

He told you, “I need some real time off,” didn’t he?---That’s what he is writing there, yes, please understand that I do need real – some – some real time off. Yes.

And did you, at this stage, discuss with Mr Skrobanek the applicant being burnt out?---Can’t recall.

And he told you – if I can take you to the top of page 3978?---But can I – can I make a comment?

Yes, sir?---Mr Skrobanek is copied on that, so - - -

So because he was copied on it, you didn’t feel the need to discuss it with Mr Skrobanek?---I can’t recall whether I did. I’m just seeing that he was copied, so - - -

And he’s telling you that taking some time off is a must for his personal health and wellbeing?---Yes.

And having been told that, all you can recall doing is telling him to take some time off and get some professional help?---Yes.

Did you tell him that following this email, either in writing or in a discussion?---I think I did it also in writing, but maybe not in the direct context of this email. I remember I wrote an email – I think still in the same year, asking for his health – his health situation, and recommending again, you know, that he should – should seek for medical help. So I think I said it, and I also wrote it somewhere.

87    Between 5 and 13 June 2018, Mr Dorsch worked with Mr Bruce Ma (who worked in the Accounts Department of Mares AP) to obtain the underlying records to support his claimed entitlement to 87 days’ of accrued annual leave.

88    Notably, as a result of this process, on 6 June 2018, Mr Dorsch conceded that his annual leave entitlement was “over 30 days”, namely 53 days less than he had previously asserted, and where he accepted with respect to a large proportion of his claimed accrued leave, being in “Y2017”, the following:

Y2017; that’s the “black spot” with no records. I’ve checked with my AU colleagues whom I always inform by email when taking days off, but never included Bruce. Jo didn’t took any record against the leave days accrued in AU either (we have to show this as part of the AU work Visa obligations. This short emails (attached the only one we could still locate for 1 day 17.11.2017) everybody just files in the bin, so am I. Sorry but this has been a complete oversight from all of us. Grace was requesting and sending records on a quarterly base to and from me, which obviously Bruce wasn’t informed about either. As you can see on all leave records attached there is a reference to my email submissions. I haven’t received any separate leave records for and during 2017. Assuming because of the change of payslip format. Frankly I simply didn’t check this for leave records also because of the large amount of accrued days. As recent as end of April 2018, I was asking Bruce and Fabrizio for current leave records when on my way to Italy. Fabrizio was able to provide 2016, the last records from Grace. It looks like Bruce has not got a complete handover and detailed instructions of how to handle this from Grace. Not excusing my mistake of not following up proactive also from myside.

Checking my calendar I am able to come up with below best assumption:

16.01-18.01.: 3 days, Jeanny family visit from NZ

12./17./18.04.: 3 days, friend visit from Sydney

06./07./10.07.: 3 days, stopover MUC after DM 2017

14./15./18.09.: 3 days, stopover MUC after BUD/FCT meetings 17

17.11.: 1 day

Further to above, and this is a best guess, there are probably 2-3 days in addition that were used locally like mentioned earlier and informed to the AU team. I have taken several half days Fridays off. Let’s call it 5 days.

Summary: there should be a total adjustment of -25 days against previous years as per above summary. This should bring the number of total unused days and after the 2018 adjustments to ~53 days. Upside, this looks much better than previously ~77days.

(my emphasis)

89    Accordingly, I find that his claim of accrued annual leave was based not on contemporaneous records and, in part, was based on assumption.

90    After further review, Mr Dorsch sent an email on 13 June 2018, to the following effect:

Hi Fabrizio, Bruce,

Please find attached AU annual leave accrual. Please deduct 39 days accordingly of my HONG KONG records so we don’t have a double accrual. Moving forward, I’d suggest to:

a.) Accrual 20 days under AU and 5 days in HK

b.) I’ll specifically inform of which accrual I’ll consume

@ Bruce, after deleting 39 days in HK, there should be still 13 days, correct. Please note that I will take leave before and after the upcoming distributor meeting in Elba. I will advise dates and details via separate email. This should be taken off the remaining 13 days HK leave record.

@ Jo, please deduct upcoming 15th Friday as annual leave of my records.

91    Under cross-examination, Mr Dorsch then accepted that his leave balance was as follows:

MR MEEHAN: In terms of your annual leave, in January 2018 you had three days of leave in Japan, correct?---I can’t recall off the top of my head, but I would - - -

All right. Three days in Germany in January ’18?---Oslo?

Yes. That was after you attended the boot show?---Yes.

And you received approval to take – and you took – the leave after the Elba conference and that was just Spain and Germany, am I right?---Yes.

And prior to you taking that leave, that is to say, the leave of the 10 days before and after Elba, the proposition that Mr Michl was advancing, that you only had 12 days accrued, was correct, was it not?---Yes.

Isn’t one of your criticisms of Mr Michl that he was only acceding to the proposition that, in 2018, you had 12 days of leave outstanding with Mares Asia Pacific?---Yes, because he denied the 53 days where these 12 days were part of, to recognise from previous years.

You told Mr Ma to remove that from your leave record?---Yes, but there is a lot of - - -

Having done that, Mr Michl was correct about your entitlement, wasn’t he?---There’s a reason why I instructed Mr Ma to delete the 39 days of records, because it was - - -

No doubt you have dealt with that in your evidence.

MR BRITT: Well, can the witness be allowed to answer the question?

MR MEEHAN: We’re moving to an unresponsive territory, your Honour.

HER HONOUR: It’s true. But, I think, in a sense it – it would be – there would be capacity to ask questions of it in re-examination, so, in a sense, it’s beneficial to, please.

THE WITNESS: I was pressed by Mr Michl to delete those 39 days.

92    I make specific further findings below that Mr Dorsch did not establish that he had an entitlement to 39 days of accrued annual leave which were “deleted”.

19 June 2018 communication (fifth adverse action)

93    Mr Dorsch alleges that, by reason of an email sent from Mr Michl on 19 June 2018, HEAD Oceania informed Mr Dorsch to end his discussion about untaken leave, the only leave that would be recognised was the remaining entitlement of 12 days for 2018, and that HEAD Oceania was considering taking disciplinary action against Mr Dorsch (fifth adverse action).

94    There was no dispute that an email was sent by Mr Michl on that date. I accept the email was in the following form:

I have now received and viewed the emails you provided with improvements and corrections to your holiday records and travel expenses. A detailed review of the entire 2008-2017 period regarding holiday entitlement can only be carried out with further detailed checks on your travel expenses. The effort for this should be several days, since your claims principle, especially with the flight, is not precise to the month and is therefore relatively complex. This must also be changed for the future to be able to better control your presence, travel activity and AL taken.

Below is my assessment of the information you have provided so far:

-     The list you originally sent to me of unused AL days up to December 31, 2017 contained an entitlement of 85.5 days. This list as a basis is and was completely wrong. Based on my initial research and inquiries, you reduced this alleged claim by the first 25 days and additional days over the years. All this is and remains vague because many of your statements are made from your memory without providing direct evidence. Supposedly there are still 51 days to book.

-     According to your email of June 6th, 2018, you have no Outlook records from 2008-2011. (Quote from your email: I don’t have any travel details in my OUTLOOK calendar from before 2012 nor do I have email records. However, it looks like 2008 – 2011 are correct). From your point of view, the essential claims also come from these times in a significant way.

-     Holidays have not been reported by you properly in advance, but mostly registered afterwards if necessary. The mail exchange in the past few days with Bruce/Fabrizio confirms this. 2017 as a full year is a good example of this. The complete annual leave as well as half days taken, and possibly other days not listed were missing.

-     The same scenario in 2018, where vacation for Japan/Hochfuegen/PHP was only entered through my inquiries and to this day, even after your corrections, the calculation with 3 days for the PHP is wrong. You need 4 days for this. So, you have taken 13 days AL for 2018 so far. There are still 12 vacation days left for 2018. This is the only provable and valid claim for me so far.

In summary, it can be said about AL that your alleged claim against the company is unfounded, since we have to assume that recording was incorrect not only from 2012-2017, but also in the years before 2011. Even with inquiries in 2018 for PHP the correct AL days have not been entered independently. Whether this happened consciously or unconsciously because of a lack of accuracy or just because of a missing time recording system I leave uncommented. The fact is that this requires an appropriate adjustment, since based on the knowledge gained so far it can be assumed that your information was/is incorrect.

As in my mail from 05.06. also reminded, were private travel expenses settled by you via the company/or charged to the company. This applied both to the PHP holiday and to your girlfriend's flight bookings to Mallorca. This has now been corrected. If I had not carried out an examination, this would have been to the financial loss of the company. Unfortunately, it must be assumed that such a misconduct on your part also exists or has existed in the past. Here, too, I spare myself whether this happened consciously or unconsciously.

…

Therefore, please be aware that the above facts would be reason enough to think about disciplinary consequences in your case.

After you expressly wish for an “amicable” solution with the company despite the considerable misconduct on your part, I suggest that we end the unfounded discussion about vacation not taken and that you confirm your remaining entitlement of 12 days for 2018.

For the future, I would ask you to keep a “shared calendar” in Outlook, in which you document your presence and absence in the office. Please share the calendar with me Paola and Bruce. Please enter there exactly what you do in the morning and afternoon and when you are in the office. I will consider missing entries as vacation. The principle can be carried out daily and thus controlled for all those involved. So, there should be in the future no “guessing” when you may have taken vacation and it should be controllable. I think it is in our mutual interest as our current situation shows.

I would also ask you to submit or send me your travel expense reports for national and international trips by the 15th of the following month at the latest for approval. All costs including flight costs that were carried out in the month must be accounted for and listed. After you buy some flights months in advance, I ask you to pay for them with Company CC so that you do not suffer any interest disadvantages. Please enclose all receipts as a copy of the statement as a scan. I have attached a fictitious statement of mine as an Excel table so that you have a template for it. This means that trips in connection with the directly assignable costs can also be better controlled. You do vehicle/KM billing in AU, so you can either enter it there or do it separately.

Please get back with the confirmation of your AL and let me know when the calendar is set up. I would like to inform Paola and Bruce at the same time as well as put Fabrizio in the loop as far as the travel expense is concerned.

(Emphasis added.)

95    Mr Michl was cross-examined about emphasised portion of this email and described what he meant to convey by the sentence:

…Yes, it’s a recommendation. If somebody register things which are incorrect – I found travel expenses that were incorrect which had been – or would have led actually to a disadvantage of the company, and I – I feel among colleagues it’s very appropriate to say, you know, “Please be careful with this for the future”.

96    I accept this evidence and find that this is what he intended. There was no serious challenge to this evidence.

97    It was Mr Michl’s evidence, which I accept, that he understood, the statement that Mr Dorsch’s annual leave entitlement “would be 12 days for 2018” was the conclusion both he and Mr Dorsch had come to after checking all his annual leave documentation. There was no challenge to this evidence.

98    Regarding the statement that annual leave would expire on 31 March of the following year, Mr Michl accepted, under cross-examination, that this was his decision based on how they handled it in Germany and Italy and that Mr Skrobanek was not a party to that decision. Further, it was Mr Michl’s decision to inform Mr Dorsch that he had to take annual leave before 31 December in the year it expires and only in exceptional cases prior to 31 March in the following year (which again was not Mr Skrobanek’s decision).

Late 2020 – first request for a salary increase

99    Mr Dorsch claims that, in or about late 2020, he made a request for a salary increase in a conversation with Mr Skrobanek.

100    Mr Dorsch claimed that the conversation was as follows:

In or around October 2020, I had a phone conversation with Mr Skrobanek in relation to a salary increase to the following effect:

Me:     Now that the integration of Zoggs is over, I would also like to discuss with you my salary because of the increased workload and responsibilities. It also doesn’t correspond with the salary of the other directors of HEAD Oceania, particularly Robert Davies.

Gerald Skrobanek:     We will discuss your salary during the performance review early next year. I agree to review your salary and to adjust it.

Me:     Ok, I was also not expecting a salary increase mid-year but I wanted to raise it in due time.

This conversation was in German. I have translated the conversation into English.

101    No challenge was made of this evidence, either in Mr Skrobanek’s evidence or under cross-examination. I find that the conversation occurred as Mr Dorsch recollects.

102    It was Mr Dorsch’s evidence that he was notified in February or March 2021, that he would not receive a salary increase until 2022 due to the COVID-19 pandemic, during his annual performance review meeting in which the following was said:

In or around March 2021, I had my annual performance review virtual meeting with Mr Michl and Mr Skrobanek. During that meeting, we had a discussion to the following effect:

Gerald Skrobanek:     I know you were promised and expecting a salary increase but given the ongoing COVID impacts, there are no salary increases approved for 2022. You will receive one in 2023.

Me:     This is very disappointing since my workload and responsibilities have substantially increased. Also, we have finished 2020 despite, or because of COVID, with a record result. The first quarter of 2021 is looking also very good with substantial increase of sales versus the same period of 2020.

Gerald Skrobanek:     I appreciate your efforts and the good results but there will be no salary increase approved for 2021. Many staff within the HEAD/MARES group have experienced more workload due to the Zoggs integration but we cannot increase everybody’s salary.

Me:     I cannot speak for others but think if one gets a substantially higher workload and responsibilities, this should be also rewarded and reflected in the salary. Okay, let’s discuss salary increases in due time for 2022.

This conversation was in German. I have translated the conversation into English.

103    Again, there was no challenge to this evidence and I find that this conversation occurred.

The lack of support complaint

104    Mr Dorsch pleaded the following:

48.     The Applicant notified Mr Skrobanek that the ongoing work demands of the accounting team and the lack of support in the accounting department caused staff in the accounting department and himself to be overworked (Lack of Support Complaint).

Particulars

i.     Telephone Conversation in Mid-November between the Appellant Mr Skrobanek, Mr Michl and Francesco LaRocca (CFO, Mares Spa Italy).

105    Accordingly, he relied on a telephone conversation said to have arisen in mid-November (year unspecified) between himself, Mr Skrobanek, Mr Michl and Mr La Rocca. In his closing submissions he identified it as being a conversation in mid-November 2020, which Mr Dorsch attested to being as follows:

In or around mid-November 2020, I had a telephone conversation with Mr Skrobanek, Mr Michl and Francesco LaRocca (CFO, Mares Spa Italy) in which I stated:

Me:    Staff in the accounting department are being overworked due to the ongoing work demands of the accounting team and the lack of support in the accounting department. I also feel overworked.

106    It was Mr Skrobanek’s evidence that he did not “particularly” recall the conversation. It was his impression that Mr Dorsch had talked about the quality issues within the accounting department rather than overwork, but he did accept that Mr Dorsch had raised that the accounting department lacked support. Ultimately, for the reasons set out below, I do not think, it is necessary to make a factual finding about the content of this conversation.

15 October 2021 – second request for a salary increase and low salary increase (eighth adverse action)

107    Mr Dorsch claims that he made a second request on or around 15 October 2021 in a conversation with Mr Michl and by email. I find that this request was made. Mr Dorsch claims that he made a second request on or around 15 October 2021 in a conversation with Mr Michl and by email. I find that this request was made.

108    Later on the same day, Mr Michl sent Mr Dorsch an email in the following terms (relied upon as said to comprise the eighth adverse action):

As promised, I explored the salary options with Gerald that are possible within the salary framework of the HEAD Group:

I understood your wishes as follows:

‐ From 2022 salary increase by 20% to the current annual salary of €121k (plus €24.2k) i.e. €145,200.00

‐ From 2023 salary increase by 5% to an annual salary of €145.2k (plus €7.26k) i.e. €152,605.00

‐ Bonus 20%

‐ Takeover of pension funds, payment in AU with approx. 5k€ annual costs

We cannot accept these requests, but we would like to show you what is possible:

‐ From 2022 salary increase by €10k to a total of €131k ‐ Bonus 20% as usual with criteria from the new HEAD Group Policy with a split across the brand areas (weighting 70% MARES/20% ZOGGS/10% HEAD)

‐ Takeover of pension funds, payment in AU with approx. 5k€ annual costs if this is a general benefit that the other colleagues also get ‐ No further increases in this function in subsequent years (except for index adjustments)

I suggest we discuss the rest by phone, but there is little room for negotiation here. If you are not satisfied with the offer, we should reach an amicable exit agreement in the coming weeks.

November 2021 – the purported third request for a salary increase

109    Mr Dorsch claims that, in early November 2021, he made his third request for a salary increase to Mr Skrobanek by telephone. However, Mr Dorsch relied upon no evidence in support of this allegation. Mr Dorsch made no reference to this so-called third request in his closing submissions. I find that no such request was made.

Failure to pay Mr Dorsch’s annual leave in full (ninth adverse action)

110    HEAD Oceania did not pay Mr Dorsch’s annual leave in full in accordance with the 2018 Employment Contract and the FW Act (ninth adverse action). It was not disputed that Mr Dorsch was terminated on 9 December 2021 but was not paid his accrued annual leave entitlements until 30 March 2022. I find that this is what occurred.

Discrete factual matters requiring determination

111    There are a number of factual matters that require determination, relevant to a number of Mr Dorsch’s causes of action.

Mr Skrobanek’s authority

112    Mr Dorsch contends that HEAD Oceania has not discharged its onus under s 361 because he submits that Mr Skrobanek could not be the decision-maker of HEAD Oceania by the combined operation of s 361 and s 793 of the FW Act as he was not an employee or officer of HEAD Oceania at the relevant time. For the following reasons, the evidence establishes that Mr Skrobanek was acting as agent for HEAD Oceania, and so it may be inferred had authority to so act when he made the decision to terminate Mr Dorsch’s employment.

113    It is not in dispute that Mr Skrobanek was not an employee or office-holder of HEAD Oceania in December 2021. However, Mr Skrobanek is the Chief Operating Officer of HEAD International Holding GmbH (HEAD International), a position which he has held since 2019. He is also director of approximately 20 HEAD Group entities globally, including HEAD International, HTM Sport GmbH and HEAD Sport GmbH. In addition, he has held the position since 2005 of Executive Vice President of HEAD’s Watersport Division and President of Mares S.p.A, a member of the HEAD Group registered in Rapallo, Italy. It was his evidence that by virtue of his role as a director of HEAD International, he oversees the operations of Mares AP and also HEAD Oceania. Mr Skrobanek deposed he is authorised to make his affidavit “on behalf of” HEAD Oceania. Mares AP wholly owns HEAD Oceania.

114    Mr Skrobanek was a signatory to Mr Dorsch’s 2008 Contract, approved Mr Dorsch’s 2021 bonus, approved Mr Dorsch’s 2016 Contract with Mares AP, was the person to whom Mr Dorsch reported to under that contract as CEO of Mares Italy together with Mr Prete as director of Mares AP and was the person at whose direction Mr Dorsch’s salary was split. It was Mr Skrobanek’s evidence, to which there was no challenge under cross-examination, that he “was always the one approving salaries and salary increases to Mr Dorsch”. As to salary increases from 2018 onwards, it was Mr Skrobanek’s understanding that Mr Dorsch wanted the Australian salary to remain unchanged, with any increase being paid into his Hong Kong bank account.

115    According to Mr Skrobanek:

…The – the salary paid by the respondent, as per my collection, remained unchanged since 2016, which were this $82,000. So we always negotiated, you know, a compensation over all of his responsibilities and the entities, which was the – the relevant amount in my eyes, and – and the payment split between – or, the split between the various legal entities was then another topic. But as per my collection, he kept the Australian salary the same. And so the increases affected both on the base salary side and on the bonus side I think only the Hong Kong portion.

And that was to reflect, as you said – sorry, that was to reflect the work he was performing both in Australia and in Hong Kong?---I mean, in Hong Kong he not only performed work for Hong Kong. So till end of 2019 he was responsible for the entire Asia Pacific business, which was run under the Hong Kong portion of the business which, in pure numbers, was bigger than the Australian one.

116    It was Mr Skrobanek’s evidence, which I accept, that the salary increases which he approved were to reflect the work Mr Skrobanek had performed in both Australia and Hong Kong. It was his evidence that he was the Executive Director of Head International Holdings, which is “the 100 per cent mother company of Mares Asia Pacific”.

117    It was his evidence regarding the ultimate structure of the Group that:

Yes, in a group of companies, there you have around 50 entities all owned by the same group. There is a lot of legal formalities between the entities. In reality, there is an informal organisation over the entire – over the entire group so. The – the formal board meetings in such a structure with one shareholder are more to satisfy the legal formalities than really taking - - -

And when you say, “the legal formalities”, you mean the law?---Yes. I mean, we – we – we have legal entities which are incorporated in various jurisdictions, and you have filing obligations, board meetings, as usual

118    And later, when Mr Prete, for example, approved the 15 March 2008 contract, Mr Skrobanek described his overarching role:

Well, it’s also the case, is it not, that Mr Prete also approved it, because he signed it?---I will repeat what I said before. Mr Prete signed it as the statutory officer of Mares Asia Pacific, which I – which I wasn’t at the time, but I was the supervising manager of Mares Asia Pacific, who has entered into that agreement with Dorsch, which then gets – gets formalised into this agreement and signed by the second director at that time, which was Mr Prete.

What do you mean by the expression “supervising manager”?---In – in a – a group like ours – I mean, you have legal entities, and then you have a corporate organisation. And, you know, a corporate organisation – I’m the chief operating officer supervising all distribution units and all general managers of – of distribution units, and, as such, I have a – a – an authority to – and, as such – enter into the agreements with Mr Dorsch and all other general managers of our group, even though I might not be a formal director of each legal entity in which they operate.

119    Regarding the 2021 salary increase, Mr Skrobanek agreed that Mr Michl would have discussed the increase with him before it was sent and that he “repeatedly discussed with Mr Michl” the various exchanges with Mr Dorsch about the bonus.

120    A great deal of the cross-examination concerned the purported lack of the requisite authority under s 793 of the FW Act. Mr Skrobanek gave evidence, which I accept, that whilst each of the entities in each country that sit underneath HEAD International had appointed directors, ultimately they were all reportable to him, and he had a supervisory function. Furthermore, it was his evidence, which I accept, that when questioned as to the basis upon which he had the authority to make the affidavit on behalf of HEAD Oceania, Mr Skrobanek responded:

I think as it’s written herein, I’m the director of HEAD International, so the – the entity in the direct line, being the shareholder of both entities, the respondent and Mares Asia Pacific.

121    And whilst not an employee or director of HEAD Oceania, nor having an appointed role from the Board of Directors, Mr Skrobanek’s evidence was that the directors were not required to delegate to him the role of giving an affidavit with that authority, as he was the one who appointed those directors. In addition, it was his evidence that, given ultimately all these entities are answerable to him, he does make and has made decisions to terminate the employment of personnel within these entities every year.

122    For these reasons, I find that Mr Skrobanek acted as HEAD Oceania’s agent, and was authorised to do so, when he made the decision to terminate Mr Dorsch’s employment.

What was Mr Prete’s role in Australia?

123    Mr Dorsch claims that Mr Prete had specific responsibility for the finance and accounting activities of Mares Oceania and that Mr Dorsch was responsible for all sales and marketing activities for HEAD Oceania.

124    The evidence revealed the following. Mr Prete was, at the relevant time, a director of HEAD Oceania (he was appointed as a director of Mares Oceania, as the respondent was then known, on 7 June 2017). However, he was based in Hong Kong, he had primary responsibilities for a tennis ball factory in China, and other roles which meant that the extent of his responsibility and time spent with respect to the Australian entity was not great. From his evidence, and during cross-examination, it was evident that his primary role with respect to HEAD Oceania was with respect to the financial reporting aspect of the business. As a consequence, he worked closely with the accountants in HEAD Oceania, and particularly where there were delays in reporting to the German HEAD Group. He was rarely present in Australia. It was his evidence, pre-COVID, that the maximum he would be in Australia was five days in a year. Further, to the extent that he communicated with employees within Australia it was primarily via email. As a consequence, he had never physically worked face-to-face with the majority of employees who had complained about Mr Dorsch, and accordingly gave no evidence at all regarding the Yatala office working environment nor the working relationship, by observation, as between Mr Dorsch and employees at that office.

125    However, his evidence, which I accept, is clear as to the demarcation of work as between Mr Dorsch and himself in the following way. First, in circumstances where an accounting employee was recruited and needed assistance, he may be involved in the reallocation of tasks to accounting employees in the Hong Kong office, the recruitment of assistance in Hong Kong to lighten the load of the Australian staff and to undertake certain of the tasks himself. This was the case with Ms Ho and Ms Fookes. Secondly, he was involved in the recruitment of a person to fill the position of “Financial Controller” in Australia in 2017. Thirdly, he was involved in the determination of bonuses for certain Australian staff in 2021. Fourthly, he was involved, in consultation with Mr Dorsch, in the setting of the Australian salaries for accounting staff.

126    The simplicity of Mr Dorsch’s thesis, that Mr Prete was responsible for supervising the HEAD Oceania accountant and not Mr Dorsch, was resisted by Mr Skrobanek. It was his evidence, which I accept, that HEAD Oceania’s payroll function in 2018 was undertaken by local accountants, supervised by Mr Prete and Mr Dorsch. When challenged in this respect, Mr Skrobanek gave the following evidence:

I want to suggest to you that in fact Mr Prete was responsible for supervising the accountant. That’s right, isn’t it?---This question can’t be simply replied with yes or no. We – we run in our organisation a ..... structure where in every legal entity there is a main reporting line to the general manager, or sales and marketing manager, or director, whatever we call him, and there are dotted reporting lines either into global business line responsibilities or into certain functions. A business line could be winter sports or dive equipment for Michl, and a functional reporting line could be that the local accountant reports into the global finance manager, or a logistic manager reports to the global supply chain manager. So there are always dual reporting lines, but the main one – so the disciplinary one for the local supervision goes into local general manager, and functionally in order to ..... synergies and best practices, there are dotted lines into – into – into the function. When you now ask about Prete and Australia, Prete was the director of four or five entities in Asia-Pacific. His main duty was to supervise a tennis ball factory with 700 people two hours driving distance from Hong Kong and the Hong Kong entities, and, in addition, he was supervising a couple of other remote entities, such as Australia, Mares Philippines – he gave support to Japan – as he was the regional officer. But – but that’s not a day-to-day responsibility; that’s a responsibility to – to assist to make sure that the global reportings are done in a proper way, but not in the sense that he is directing the staff there on a day-to-day basis. It would be impossible.

127    Accordingly, consistently with the evidence of Mr Prete, Mr Michl and Ms Fookes, described below, Mr Dorsch was the day-to-day supervisor of those undertaking accounting tasks for HEAD Oceania in Australia.

Additional events prior to the termination of Mr Dorsch

Mr Davies’ visit to the Yatala office and meeting with employees in June 2021

128    It is Mr Dorsch’s case that he was terminated by reason of his agitation of or simply because of various workplace rights he had. It is HEAD Oceania’s case that Mr Dorsch was terminated by reason of various subordinate employee complaints about his conduct. Prior to making any such findings as to the purported reason(s), or dealing with the evidence of those employees, it is worthwhile making findings as to the specific circumstances leading up to Mr Dorsch’s termination.

129    Mr Davies, by reason of the tyranny of distance (being located in Sydney) accentuated by COVID-19 lockdowns, did not attend the Yatala office until June 2021 and, from then on, attended one day a month.

130    It was Mr Davies’ evidence that, between June and December 2021, he received separate reports from Mr Leigh Bramich (Operations and Logistics Manager), Mr Rex Butler (Sales Representative (Technical Trading and Warranties)) and Ms Fookes (Financial Accountant) about Mr Dorsch’s (mis)conduct.

131    Between 22 and 24 June 2021, Mr Davies travelled to the Yatala office to meet with staff and to give a presentation about Zoggs swimwear. This was the first time that Mr Davies had visited the Yatala office since the completion of the Zoggs acquisition due to COVID-19 travel restrictions.

132    Ahead of Mr Davies’ visit to the Yatala office, on 16 June 2021, Mr Davies emailed Mr Dorsch with a proposed agenda for his visit to the Yatala office (which is described immediately below). Mr Davies suggested that a team dinner be organised, as it was the first time that he would meet most of the HEAD Oceania employees. Mr Dorsch replied to Mr Davies and noted that team dinners only happened once a year at Christmas, and he would rather organise a barbeque for lunch at the office.

133    On or around 22 June 2021, Mr Davies told Mr Dorsch that a dinner had been organised by the team at the Yatala office, and invited Mr Dorsch to attend. However, Mr Dorsch did not attend that dinner. The dinner was held at Ioesco Café Cucina, Sanctuary Cove, with Mr Bramich, Mr Montgomery, Ms Roche, Ms Baker, Ms Mulligan and Ms Blyth.

134    At the team dinner, Mr Dorsch was discussed. Mr Davies could not recall who initially brought up the subject of Mr Dorsch, however he recalled that Mr Bramich was the most vocal when discussing Mr Dorsch. Mr Davies recalled Mr Bramich saying words to the following effect:

Ever since I’ve worked for HEAD I’ve been threatened and bullied my [sic] Matthias. It’s like I’ve been putting up with him for so long that I’m used to it now even though my life’s hell at work.

He bangs his fist on the desk sometimes and shouts and swears. There’s a lot of shouting and swearing that goes on in the office. It happens frequently. I’d say there’s almost not a week that goes by without it happening. I just ignore him now.

135    Mr Montgomery also said that he had heard Mr Dorsch “shout and swear down the phone and at people in the office”.

136    Mr Davies gave evidence that he was concerned by what Messrs Bramich and Montgomery said at the dinner about Mr Dorsch. Mr Davies believed what Messrs Bramich and Montgomery said, as Mr Dorsch had sworn at Mr Davies numerous times when he phoned Mr Montgomery in or around early July 2020.

137    Mr Davies then met with Mr Hammersley over a Teams call on 28 June 2021 to discuss his Yatala visit and the concerns he had. It was Mr Hammersley’s response that they should give some thought as to how to raise it with Gerald in a professional way.

138    Thereafter, Mr Davies was approached by Mr Butler on 21 July 2021 to raise concerns regarding the Gold Coast team and that they were being bullied, in response to which he asked Mr Butler to put his concerns in writing, which he did not do because he said he was “scared” that Mr Dorsch was looking at his emails.

139    Mr Davies then sent an email to Mr Hammersley and spoke with him by telephone on the same day:

Hi Mark,

I was called out of the blue by a Mares agent this morning, based out of Brisbane who covers from Port Douglas down to Coffs Harbour - Rex Butler OLD and Northern NSW Sales Manager.

He explained that he was reaching out to me as a last resort about the behaviour of Matthias, as he is very close to walking out of the business which he has been involved with since 1987 and latterly full time for the past 7 years.

He commented that he and the Gold Coast team are always being berated by Matthias and they are being bullied all of the time, without ever any words of thanks.

He stated that Mares is going backwards and is losing business constantly due to Matthias’ confrontational interactions with customers, and he has witnessed screaming matches in retailers stores by Matthias and the retailer in front of staff and customers.

One customer is Tackle World which is an independent franchise group which has 20 stores and only 3 currently stock Mares due to Matthias.

One comment from Rex that really concerns me is that the SSI rep Claire Nettleoff is taking anti-anxiety medication due to the way Matthias deals with her, and she is too frightened to raise this or mention it to anybody.

I know some of this could be “he said, she said” but due to the seriousness of the allegations and as a Director of HEAD Oceania I feel obligated to raise this with you as my line manager.

I would appreciate a discussion around how to raise this issue with Gerald as Rex also commented that the same grievances had been raised before regarding Matthias' behaviour with the Mares HO in Italy, but nothing had ever been done about it unfortunately.

Kind Regards

Rob

140    I note reference to there being prior employee complaints about Mr Dorsch’s conduct. The evidence established that there had been three complaints about Mr Dorsch prior to those being made in 2021.

141    In July and August 2021, Mr Davies variously wrote to Mr Hammersley regarding further complaints he had received from employees, including from Ms Fookes, and seeking his assistance in speaking to Mr Skrobanek and Mr Michl about Mr Dorsch’s conduct. Mr Hammersley told Mr Davies that he had decided to speak to Mr Michl about the issue first. Mr Hammersley’s description of Mr Michl’s response was telling:

His main feedback was that you are either in or out with Matthias and they were aware there had been issues.

I then said I would follow up in writing to him on some specifics with names excluded.

142    On 11 August 2021, Mr Davies informed Mr Hammersley, by email, that he had been informed that Ms Andersen had resigned as she “had had enough of how [Mr Dorsch] treated her” and he went on to state “That’s 43 people in 9 years who have resigned” which was “staggering”, given the team numbered no more than nine or 10, including sales agents.

143    In September 2021, Mr Butler resigned from his employment.

144    Shortly thereafter on 8 November 2021, Ms Fookes resigned from her employment. It was Mr Davies’ evidence that Ms Fookes told him that the main reason for her resignation was her not being able to take Mr Dorsch’s conduct any more. This was corroborated by Ms Fookes’ evidence. Ms Fookes did not tell Mr Dorsch that her resignation had anything to do with him nor set out the same in her resignation email. However, I accept her evidence that she did not want to confront Mr Dorsch directly when she spoke to him alone for the following reasons, including those at [179]–[183]. She gave evidence that she was extremely nervous and visibly shaking. Whilst this evidence was the subject of challenge, I accept it. First, her evidence is corroborated by what she told Mr Davies at this time. Secondly, her evidence set out the extent to which Mr Dorsch’s behaviour to her in the preceding months had affected her health and her own behaviour (she had sworn at him). Thirdly, her evidence was plausible – it is unsurprising that she did not want to challenge him directly given her comparative position to his and the fact that he was a person who did not take kindly to any form of criticism. Further, the fact that she wanted Mr Davies on the call and had tried to arrange it (and Mr Dorsch refused to allow it) is consistent with her being hesitant in her dealings with him absent someone else. I accept that some doubt may be placed on this by what was contained in her written communication. However, ultimately I accept her account. Ms Fookes had to give notice and continue to work with Mr Dorsch for a period of time. It was entirely believable in the circumstances that she would not want to be candid, in front of him, as to her reasons.

145    Also relevantly, it was Mr Skrobanek’s evidence that Mr Skrobanek was forwarded, on 9 November 2021, a copy of Ms Fookes’ letter of resignation.

146    Later in the month, on 19 November 2021, Mr Montgomery received a telephone call from Mr Dorsch during which he attests to being sworn at and spoken to in an aggressive manner. Mr Dorsch admitted that he spoke loudly but said it was because he was speaking to him on the phone whilst driving. Mr Dorsch’s account of the substance of the conversation is different to that of Mr Montgomery. However, Mr Montgomery recorded a contemporaneous note of its substance and emailed it to Ms Fookes that day. Mr Dorsch had no corresponding notation of his own. I do not accept Mr Dorsch’s account. I do not accept that Mr Dorsch explained that he was shouting because of the car. I accept the evidence of Mr Montgomery and others that he was prone to shouting and swearing when he was agitated. It was Mr Montgomery’s evidence that he wrote the note because he wanted to a record on his file, evidently for self-preservatory purposes (in the event that Mr Dorsch made some allegation against him), not because he intended to make a complaint. It was Mr Montgomery’s evidence that he did not want to make a complaint, nor did he want Mr Dorsch to lose his job. I accept his evidence. For the reasons set out above, and below at [184]–[189], his evidence was logical, consistent and reliable.

147    On the same day, Ms Fookes informed Mr Davies of Mr Montgomery’s allegation that Mr Dorsch had just shouted and sworn at him.

Mr Michl’s email of 18 November 2021

148    On 18 November 2021, Mr Michl sent Mr Dorsch an email, copying in Mr Skrobanek, regarding Mr Dorsch’s annual salary increase and bonus, in the following terms (in German, but where the translation is agreed):

We can agree on the following:

‐     Increase your annual salary by 10%, i.e. € 12,100 from January 1st, 2022 to € 133,100.

‐     Bonus from 2022 30% with split as already discussed 70% MARES/SSI, 20%ZOGGS, 10% HEAD.

‐     No further pension adjustments on top of the existing ones in HKG and AU.

No further increases for the coming years regardless of the business development of the above brands or any further brand additions.

If ok for you, please confirm. If not, as already written , please discuss an exit scenario in the coming weeks.

Thank you in advance.

149    It was Mr Skrobanek’s evidence, which I accept, that Mr Michl did not discuss sending the email in those terms before sending it. It was Mr Skrobanek’s evidence that he does not always read the emails he receives, as he receives “around 150 emails per day”, and particularly does not tend to if he is copied on the email”, but he does tend to read the email when it is addressed to him. Further, he stated that he did not see this email at the time Mr Michl wrote it but has later, in these proceedings.

150    Mr Skrobanek’s evidence was he had a conversation with Mr Dorsch about this issue because the “climate” between Mr Dorsch and Mr Michl was “already not the best” and he used to have a “a good relationship with Mr Dorsch”.

151    In noting that the “climate between them was not the best”, Mr Skrobanek went on to say, under cross-examination:

HER HONOUR: Did you say that the climate between them was not the best? I couldn’t quite hear?---Yes. So Mr Michl and Mr Dorsch had, sometimes, a bit of a – how shall I call it – a conflicting relationship which was related to business interests. You know, the one sitting on the headquarters side and ..... drive the business has interest A and – and Mr Dorsch had interest B, so they had – they had, in many occasions, you know, discussions which then sometimes heated up, and whenever they didn’t get – get to an agreement, you know, I stepped in and – and was then kind of the arbiter to keep things going. Yes.

Meeting 24 November 2021

152    Mr Davies met with Mr Skrobanek, Mr Hammersley and Mr Michl for dinner. Mr Davies gave evidence that, over the course of the dinner, he had a discussion with Messrs Skrobanek, Hammersley and Michl about Mr Dorsch to the following effect:

Skrobanek:    What’s going on at HEAD Oceania? Can you give me an update?

Davies:        Do you want the political answer or the truth?

Skrobanek:    The truth.

Davies:    I’ve received separate reports from a number of employees about bullying by Matthias...

Michl:        ...that’s just how Matthias is...

Davies:    Stefan, with the greatest respect you haven’t been there. Would you please allow me to talk to Gerald?

Skrobanek:    Be quiet Stefan.

Davies:    I got reports from Rex Butler and Siobhan Fookes, the accountant. Both of them told me they feel scared and intimidated by Matthias. Rex already left last month and Siobhan has resigned. Matthias was the reason for that. I’ve also had calls with Leigh and he’s told me about shouting and abuse in the office.

Skrobanek:    But Leigh’s his friend. Leigh’s his lieutenant ...

Davies:    Leigh has also been bullied and abused. He’s spoken about it. I feel I have a duty as a director of the company to make you aware of this behaviour.

Skrobanek:    Ok. We need to look at this.

153    It is my view that the meeting transpired in the way Mr Davies recollects. Mr Skrobanek recalled that the decision included complaints received from Mr Butler, Ms Fookes and Mr Bramich. Mr Michl did not think he would have phrased his response in the way Mr Davies recollects him saying “that’s just how Matthias is”. However, he did not dispute it outright and it is my view that it is likely that he did say something to that effect. The evidence reveals that there had been a number of employee complaints about Mr Dorsch previously about which Mr Michl was aware.

154    Thereafter, Mr Skrobanek set about speaking to the employees who had made complaints and trying to control the damage by seeking recruit staff to replace those who were leaving. Mr Skrobanek spoke to Ms Fookes about Mr Dorsch’s conduct and instructed Mr Prete to contact Ms Borden, who had formerly held Ms Fookes’ position, to see if she would come back and work at HEAD Oceania. On 26 November 2021, it was Mr Skrobanek’s unchallenged evidence, that Ms Fookes told him that she had decided to resign due to the way she was treated by Mr Dorsch, that Mr Dorsch created “an environment of discomfort and fear”, he shouted and swore at her, the workload was high, Mr Montgomery had told her to archive a written complaint about Mr Dorsch, Mr Butler had left because he could no longer work for Mr Dorsch and most of the office felt the same way.

155    In addition, Mr Skrobanek contacted Mr Wilson, on 27 November 2021, to see if he would be interested in Mr Dorsch’s role. Mr Davies met with Mr Mark Wilson (at the request of Mr Skrobanek) informally to discuss “the role the Applicant was performing”. Mr Wilson was a Mares sales agent for NSW.

156    Mr Skrobanek contacted Mr Montgomery regarding what he regarded as Mr Montgomery’s “written complaint” (the email of 19 November 2021) and informed him that his complaint was being taken seriously. On 3 December 2021, Mr Skrobanek spoke to Mr Bramich about the lay of the land at Yatala. During the call Mr Bramich informed him that he had accepted a role with a new employer, stating he was leaving solely due to Mr Dorsch. In addition, Mr Bramich confirmed the truth of Mr Skrobanek’s understanding of Mr Dorsch creating an “atmosphere of fear, shouting and swearing at people” leading to a high staff turnover.

157    On 6 December 2021, Mr Prete informed Mr Skrobanek that Ms Borden had declined to return and work for HEAD Oceania. Mr Prete forwarded Ms Borden’s communication which was, in part, in the following terms:

I am very happy in my current job. I have fantastic support from my management and the team is collaborative and the team culture is amazing.

Unfortunately the same could not be said about working for Mares. Whilst I appreciate the support from you, the management style from Matthias in the Yatala office was toxic and demotivating. He created a culture of bullying and intimidation that made working there intolerable, evidenced by the high turnover of staff.

I do wish you well, but unless things were to change I could not consider working for Mares again.

158    It was Mr Skrobanek’s evidence that he found Ms Borden’s comments concerning and had no reason to doubt the veracity of what she said given the circumstances in which she sent them.

The termination meeting

159    Both Mr Michl and Mr Dorsch gave accounts of what transpired at the termination meeting. There was no serious dispute between the parties about the differences nor did anything arise in their submissions suggesting any need to prefer one account over the other. I note that Mr Skrobanek did not dispute the accuracy of Mr Dorsch’s account.

160    Both accounts describe Mr Skrobanek as telling Mr Dorsch that his employment was being terminated with immediate effect because of staff complaints about his conduct. Reference was made to the complaints of Ms Fookes, Mr Montgomery, Mr Butler and Mr Bramich and to Ms Fookes, Mr Butler having stated that Mr Dorsch was the reason for him resigning and Mr Bramich having proposed to resign unless Mr Dorsch left. In addition, in Mr Dorsch’s account, Mr Skrobanek referred to Mr Dorsch not cooperating with the Zoggs integration and said that he was not willing to take the risk that Zoggs would go down when Mr Davies’ retired. Whilst Mr Skrobanek did not have a specific recollection of the Zoggs meeting being discussed, given that Mr Hammersley and Mr Davies had had discussions with him recently and Mr Skrobanek was aware of the friction between Mr Dorsch and Mr Davies, I am prepared to accept that it was discussed. Mr Skrobanek reiterated that the decision was due to Mr Dorsch’s conduct not performance and that he would like to offer him a position somewhere else in the HEAD Group, which they could discuss in the coming days.

161    Mr Dorsch was provided with a letter of termination, on 10 December 2021, which stated:

Further to our discussion on 9 December 2021, reference is made to your employment contracts with Mares Asia Pacific Ltd from March 15th 2008 and with Head Oceania Ltd from October 15th 2018 regarding your services rendered for Head Oceania Ltd.

On behalf of the above mentioned parties and their shareholder, we confirm the decision to summarily terminate your employment due to your inappropriate and unacceptable conduct in the workplace. That conduct includes, but is not limited to, acting in an aggressive manner and swearing at your work colleagues.

This means your employment ends today. We will arrange for any final termination payments that may be due to you to be paid in to your bank account in the next 7 days and will email you the final payment amounts.

Post-termination opportunities

162    On 11 and 12 December 2021, Mr Skrobanek and Mr Dorsch spoke about a number of matters including other employment opportunities within the HEAD Group. The discussed opportunities included opportunities in the diving headquarters in Rapallo in Italy, in Thailand, and in the HEAD winter sports business. The last portion of the conversation was as follows:

Gerald Skrobanek:     So, the winter sport option is subject to whether or not they already have other plans. I will only ask them about it if you’re really interested. I would have to discuss that with Klaus Hotter in January. But if you say you don't want to go back to Germany, then I'll save it.

Me:    At the moment it’s no longer about what I want, but about weighing up what the best possible option is. The best possible option is the one that doesn’t ruin me financially. It’s not just about me here either. As you know, my financing is linked to the property of my mother and therefore also her life circumstances depend on me.

Gerald Skrobanek:     I do believe that as a foreigner with your professional experience you can find a job in Australia again. Maybe not in Brisbane or the same place in Australia now because it's not the economic hub. But somewhere else in Australia. Houses are bought and sold much more easily there than here. If staying in Australia is your preferred option assuming you can find a job there, I would look there first. If you say you don't really want to stay in Australia anyway, then you look into alternatives.

Me:     The topic is new for me and I’m still in the processing phase trying to understand the options.

Gerald Skrobanek:     Then take the options that we have now discussed and build them into your thought process. That's all we can do for now anyway.

Me:     Okay, thanks.

163    Ultimately, I find that it was Mr Skrobanek’s understanding of the effect of these discussions that it was for Mr Dorsch to decide whether he was willing to leave Australia because the employment opportunities were outside Australia. Mr Skrobanek understood it was for Mr Dorsch to come back to him and he did not.

The announcement of Mr Dorsch’s termination

164    On 13 December 2021, Mr Skrobanek informed staff of Mr Dorsch’s departure by video conference. Given Mr Skrobanek’s state of mind is important, it is worthwhile extracting the entire script of what Mr Skrobanek said to staff proximate to Mr Dorsch’s termination:

Dear colleagues,

The reason we are having this call today is a material change in the management team of Australia and New Zealand following feedback from 5 staff members, present and past, about behavioral [sic] misconduct of Matthias in the Yatala office. As per the reports we received his behavior [sic] over a longer period of time was aggressive and bullish, which included shouting and swearing at people. Most of those we interviewed described the resulting office climate as “toxic”.

These testimonies were made independently, consistent and with no recognizable other motive that raise doubts of correctness of these allegations.

Dear colleagues this is not only inacceptable [sic] and unlawful under Australian law but is in particular not us, it is not HEAD, it is not MARES.

We are a leading Sporting Group with high performance products in a high performance organization. We look for the best professionals and talents that work hard and develop the passion for our brands and our business. There are industries paying better than the Sporting good [sic] industry, but in most of our locations it is also more exciting and more fun, so even more important it is to be in a comfortable work environment and getting treated with respect. On behalf of the Head management team I therefore apologize for what had happened.

In my role as COO of HEAD and director of HEAD International the shareholder of Head Oceania, this left me no other choice than taking Matthias out of his responsibility with immediate effect.

Believe me, this was a difficult decision, I was the one having mentored him the last 14 yrs with ups, we had considerable success in business, I was the one having brought him to Australia. Despite being his boss I developed a friendly relationship with him, I appreciated his hard work and professionality. And while some of you will take it as a relief, I know that some others appreciated the collaboration with him and his expertise as well, some of you even wrote me to reconsider, which I appreciate.

What happened was probably not done intentionally, it was rather a result of his character, maybe the too autonomous remote organization in Yatala giving him that freedom, the difficult Covid-19 environment, stress arising from the new ZOGGS acquisition or the recent WSP integration.

But we cannot accept these arguments as an excuse to tolerate the described bullying attitude on expense of dependent staff, here a red line got crossed. Managers are paid better, are consequently expected to handle exceptional stress situations and to better control their temper.

Moving forward we will make the following organizational changes:

- Mark Wilson will return to the company and oversee the MARES and SSI business reporting into Rob and Stefan Michl, all Sales and Marketing staff outside the Yatala office will report to Mark who will join Feb 1st

- Leigh Bramich will be appointed Head of Operations reporting into Rob

- Sue Haydon, former financial Controller of ZOGGS will return to the Company effective Feb 1st and oversee Finance & Controlling of Head Oceania

- the HEAD WSP business is still to be discussed and sorted, we will have a call with Matt Brown tmw.

- Rob Davies will continue to concentrate on ZOGGS but oversee all functions and businesses and make sue [sic] we become the previously managed performance organization, heading all in one direction.

- We will send out later this week a release to customers announcing this change. We won't state anything negative about Matthias in this release rather thank him for his service and I urge you to do so as well.

- This change in the short term will certainly trigger various new challenges, which l ask you to support best possible with the aim to become a stronger and particular one team vs what we had before.

Rob Davies will come to Yatala tomorrow for discussions in more detail.

I do not think that this Teams call today is the proper environment for a continued in depth discussion of what happened and therefore suggest, that after some statement of Rob, you continue talking in smaller groups with Mark and Rob both about the past and the future as necessary. Feel free to write me if there is anything you wanna release.

Thank you

Post-termination discussions regarding entitlements

165    Shortly after Mr Dorsch’s employment was terminated, he received an email confirming his termination entitlements. In a communication from Mr Skrobanek, on 20 December 2021, it was asserted that he had no accrued entitlements to “holiday” (namely, annual leave) by reason of the following:

Holiday:

Your holiday records are incomplete and not credible. In principle any absence from office other than business travel or approved home office will be treated as annual leave.

No home office approval was ever granted to you. Despite this, it appears you came and left office at your personal discretion, which renders all holiday records “ad absurdum”, e.g. you have not been in offices on Fridays. The unapproved absence days by far exceed the claimed accrued annual leave.

166    However, subsequently HEAD Oceania changed its position. By letter dated 29 March 2022, Mr Davies stated that their records indicated that Mr Dorsch was entitled to 205.2277 hours of accrued but untaken annual leave. Whilst it maintained that Mr Dorsch was not able to claim for work performed when he worked from home because he had not sought approval, without admission or concession, it had decided to make the payment in respect to accrued annual leave hours.

Mr Davies – additional evidence re Termination

167    Mr Hammersley was aware that Mr Davies had issues with Mr Dorsch and he had told him that he was not interested in Mr Dorsch’s position.

Employee resignations purportedly due to Mr Dorsch’s conduct

168    There was evidence of a number of employees resigning prior to 2021, purportedly on the basis of Mr Dorsch’s conduct. The evidence establishes that upon Ms Ho resigning in 2016 she sent Mr Prete an email in which she stated she would not work with Mr Dorsch anymore. It was Mr Skrobanek’s evidence that he recalled being forwarded at least some of the email communications regarding Ms Ho’s resignation, probably in the same year, but he does not recall when.

169    On 11 April 2019, Ms Hawes wrote to Mr Michl, in the following terms upon her resignation:

Hi Stefan,

My name is Penny Hawes, I have just resigned from my position as Graphics and Marketing Manager for Mares Australia, a position I have held for the past 5 years. I’m coming to you as the Mares Australia office has reached crisis point and I think it’s about time someone knew about it.

I've met you on a couple of occasions, and I hope that I've presented myself as a hardworking, dedicated and loyal employee. I hate to be coming to you under these circumstances, but I feel I have no other choice as our office in Australia in very serious trouble, and I don't know who else to come to for help as, and I still feel a sense of duty and responsibility to my colleagues here to try and do something about what has become an impossible environment to work in.

At our Australian Mares HQ, my desk was right outside Matthias’ office. I have had to endure a lot, and though Matthias has been a sometimes difficult man to work for, over the past 2 or 3 years I have watched things decline to a point where I personally can’t continue to work with him. I have personally had a good working relationship, even a working friendship with Matthias. He has given me some great opportunities, at times been a good boss to work for, I am very aware that he is a good man underneath his gruff exterior. I know that his personal health has taken some very serious knocks in the last few years, and I personally believe that it is affecting every area of his life, but that is not for me to have an opinion on.

All of this makes it more difficult to come to you for help, there is certainly the feeling that I am betraying Matthias, and also undoubtably a huge feeling of intimidation at being the whistleblower in all of this. I hope you understand that I’m coming to you in the strictest of confidence, writing this letter is extremely daunting, and I’m very aware that Matthias will come out with guns blazing, and that he will find any way possible of discrediting anything I have to say here.

My intention here Stefan is to alert you that we have a huge problem, one that you need to personally investigate so you can see for yourself the type of boss that Matthias has become. I thought about listing all of the various different inappropriate things that he has done and said to his employees, but firstly the list would be exhaustive, and secondly it’s not each individual incident, but the combination of them that has turned our work place into what I hate to say is a toxic hell to work in.

We have a fantastic team of employees here. They are great at their job, they work really hard with little supervision, as you’re aware, Matthias is very often away for work. They don’t get time for lunch breaks, or any type of break in fact, they do countless hours of unpaid and completely unappreciated overtime. The saddest part is that we all love our jobs at Mares, and none of us want to leave as we do feel like a close knit, effective and hardworking family and team. I feel it’s my responsibility to stand up for these people as they need their jobs and you need them working for you.

Our staff turnover is out of control. We’ve gone through at least 10 staff in the last 2 years, in an office that only has around 6 staff, I’d consider that to be pretty significant to say the least. I can promise you that more resignations will follow and Mares Australia will have a revolving door of employees until something is done here.

It has now gotten to a point where the mental health of our office as a whole is dismal - several of our key staff are having to seek psychological help and use any anti-anxiety and depression medications to survive here. The vast majority of our staff are looking for other positions and I know that in the week and a half since I have left (I finished last Tuesday), there has already been another resignation of one of our key SSI staff, Clair Nederloff.

I have not been as badly treated as some of the other staff here, but in a day it is nothing for Matthias to yell at, completely berate and scold the people here as though they were 5 years old. He takes no responsibility for the times that he makes mistakes, and will find a way to blame the people here for things that he has done. He constantly tells us all that we don’t work hard enough, that we don't even know what hard work is, and that our efforts are not good enough, and any suggestion that we are unhappy is met with a response that we are ungrateful and that we have bad attitudes. He rules our workplace with intimidation, bullying and belittlement. Some of the things he’s said and done to our past and present staff, including myself, are morally and ethically reprehensible.

Please don’t think I'm coming to you motivated by vengeance or personal gain, it’s not my intention. I don’t pretend that I am personally so important to Mares that it matters whether or not I leave, and my replacement at Mares is highly qualified for the role, has a great attitude and I’m sure will be a great new member of the team. But I do know that several staff who are on the brink of leaving, who it may even be too late for, are extremely important to Mares Australia.

We have absolutely no process to report what is going on here - Matthias is the boss and that is it. Our only option is to come to you, or to lodge a complaint with our Australian authorities, as what he is doing definitely comprises workplace bullying. But Mares, as a company, have been good to work for and for whom I feel a sense of loyalty, especially to my Australian colleagues. I’m also aware that you’ve been approached by Adrian Hogg from our NZ office with the same story, so I suspect you have an idea that what I speak is the truth, and I know Adrian will back up anything I have to say here.

Stefan, I’m not suggesting that you to take my word for any of this. The only thing I’m suggesting is that you very much need to visit the Australian office and conduct your own investigation. I’d prefer to be left out of the matter from this point onwards, I no longer work for the company and I assure you that you can find out anything you need to know by talking to the Australian and New Zealand staff. But for the sake of Mares Australia I think you should seriously consider looking into this sooner rather than later.

Yours faithfully,

Penny Hawes

170    Mr Michl’s response to Mr Dorsch regarding Mr Hawes’ email is telling. On 15 April 2019, Mr Michl wrote to Mr Dorsch in the following terms (where the translation is agreed):

Hi Matthias,

The email below reached me from Penny. It's not written as a “revenge- mail: but is certainly also personally motivated.

I think we can reasonably agree that you’re doing a good job. I am also aware that the Aussies/NZsies are on a completely different level culturally and in terms of their work ethic than we are.

But I think such emails always help to reflect and to see where you stand and who you are doing things.

Don’t have to justify yourself because of the e-mail, but maybe we’ll talk on the phone in the course of the week, especially if you also know what's up with Claire.

Please do not approach them directly or discuss this with the rest of the team.

Wouldn’t be good and would only do harm instead of benefit.

(Emphasis in original.)

171    It was Mr Skrobanek’s unchallenged evidence that he was not aware of these allegations having been discussed with him, and he noted that they are “quite some allegations”.

172    Then, on 1 May 2020, Mr Lardner tendered his resignation and wrote to Mr Prete in the following terms:

Hello Fabrizio

In case I get too busy and I don’t get to say it properly next week, I just want to thank you in advance for all your help.

I have enjoyed working with you and I wish you all the very best for the future.

(private and confidential) Between you & me:

I cannot say the same for Matthias – He is not someone that I want to work for, or with, any longer!!!

He is impossible to deal with and he is only in it for himself.

He doesn’t give a shit about anyone else, even though he tries to make out that he does.

I am happy to be leaving, and I may be the first of a few soon at this office as many of the staff here are unhappy with Matthias.

They have put up with him because he travels for 6 months of the year but now that he is in the office full-time he panics, he stresses, he micro-manages, he meddles in things he doesn’t fully understand, and he drives everybody crazy!

Thank you

(Emphasis in original.)

173    Mr Prete’s recollection was that he sent an email to Mr Skrobanek or Mr Michl. However, no email was produced as a result of the call for the email. It was Mr Prete’s recollection that he had no discussion with Mr Skrobanek about Mr Lardner’s email but “simply sent the email”. There was no evidence that Mr Skrobanek was aware of the email and nor was he cross-examined with respect to it.

The subordinate employee evidence and findings

174    Relevant to the determination of many of the claims in this matter is whether the conduct forming the basis for the reasons for termination alleged by Mr Bramich, Ms Fookes, Mr Montgomery, Mr Butler, Ms Andersen and Ms Borden occurred. My findings with respect to each of their evidence are largely contained in this part, though I note I have made additional findings above.

175    HEAD Oceania claims that part of the reason for Mr Dorsch’s termination were the allegations made by Ms Fookes as to the excessive work demands placed on her by Mr Dorsch.

176    It was Ms Fookes’ evidence that she reported to both Mr Dorsch and Mr Prete. However, it was her evidence that Mr Dorsch was her “unit manager” who bore primary responsibility for her supervision and relevantly her workload. It was her evidence that in or around August 2020 she was directed by Mr Dorsch to undertake a number of responsibilities that she believed were not within the scope of her role. Mr Dorsch disputed this. It was variously his evidence that he denied directing Ms Fookes to under the tasks she says she was required by him to undertake. I do not accept his evidence over hers.

177    Mr Dorsch repeatedly had a propensity to suggest that work supervision or allocation was Mr Prete’s responsibility and to seek to diminish the role he had within the Australian office. His attempted self-infantilisation is not accepted. Whilst I accept that there were limits to his ability to obtain additional staff, he did not have infinite resources (as with any business) and he did not have responsibility for the Zoggs business, to the extent that his staff in the Yatala office had to deal with conflicting priorities and systems arising from the integration, it was his responsibility.

178    I accept Ms Fookes’ evidence that she dealt with a number of complaints regarding the process of blocking deliveries, sought Mr Dorsch’s assistance to arrange a meeting with staff and Mr Dorsch refused. Ms Fookes’ workload increased as a result of the Zoggs integration and she sought Mr Dorsch’s assistance in engaging external human resources assistance, which Mr Dorsch refused. Whilst I accept that Ms Fookes conceded that her workload pressures arose from a number of events including the Zoggs integration, communications issues arising from the Hong Kong office and staff shortages, she maintained that her workload pressures were also the result of the sheer volume of the work. Contrary to the submission of Mr Dorsch that “at no point did Ms Fookes state that the Applicant was a cause of her excessive workload”, Ms Fookes stated directly when questioned that Mr Dorsch caused the additional work because he was directing her to do it. To the extent that there is a dispute between the evidence of Ms Fookes and Mr Dorsch, I accept Ms Fookes’ evidence for the reasons identified above and also by reason of the following.

179    Ms Fookes resolved to resign in early April 2021 because of her work hours but did not follow through because Mr Dorsch agreed to employ another person to assist her. Thereafter, however, Ms Fookes recounted working excessive hours whilst she was on holiday, which it was her view that Mr Dorsch did not take action to alleviate. As a manager, it was his responsibility to manage employee perceptions (and even misperceptions) about his demands and ability to manage workloads.

180    Ms Fookes complained, in July 2021, to Mr Davies about Mr Dorsch’s behaviour towards her and other staff members and the lack of support she perceived she was receiving. She also recalled speaking to Mr Davies about Mr Dorsch’s intimidating and condescending behaviour towards her. Ms Fookes gave no direct evidence of the conversation with Mr Davies nor the conduct giving rise to discussion. Whilst Mr Davies gave evidence of the conversation, it was admitted on a non-hearsay purpose basis. Accordingly, I make no finding as to the allegation of intimidation or condescension.

181    In mid-September 2021, Ms Fookes sought to discuss the leave process with Mr Dorsch. It was part of Ms Fookes’ remit to deal with the employee leave recording during the fortnightly payroll for Australia and New Zealand. Ms Fookes had to undertake two different processes by reason of the Zoggs integration. Ms Fookes recalled that Mr Dorsch had said that he did not care about the Zoggs process, to which she responded that she worked for HEAD, which included Zoggs, and that the current process was very time consuming. She also said that she could not see if leave is approved by him or not. It was her recollection that Mr Dorsch rebuffed making any changes and said that implementing a new system should not take priority over all other jobs. In response, she swore and asked him to get out of her office.

182    Mr Dorsch disputed that aspects of this conversation occurred, including that he had said he did not care what Zoggs did. Whilst I do not think ultimately there is a necessity to resolve the difference between them, if there is, I would prefer Ms Fookes’ account over Mr Dorsch’s. Even if I were to accept his account, the substance reveals that Ms Fookes was trying (as she had tried for a long time) to suggest initiatives that would improve systems and processes, as well as reduce her workload and that of others. She felt Mr Dorsch would not assist her with this. His inaction increased her workload.

183    I accept her evidence that she resigned, in part, because of his conduct. I do not accept Mr Dorsch’s submission that Ms Fookes conceded that the “true reason” for her resignation was her excessive workload only. No significant challenge was made to her evidence and, to the extent that she was pressed as to the reason, under cross-examination, contrary to Mr Dorsch’s submission, Mr Fookes stated that “part” of the reason for her resignation was working excessive hours, but this was not the sole reason.

184    As already alluded to above, Mr Montgomery gave evidence regarding two conversations in August and November 2021 with Mr Dorsch where Mr Dorsch was rude to him and swore. Such was the conduct that Mr Montgomery called Mr Dorsch out on his behaviour, saying in the first conversation, “Matthias, your tone is rude, and I don’t appreciate the incessant criticism. You cannot speak to people that way” and, in the second conversation, “I don’t appreciate you speaking to me like that.”. The second conversation response was provoked by Mr Dorsch asking for documents, in response to which Mr Montgomery said he did not have them and that what he was asking for was outside his expertise, to which Mr Dorsch responded “How fucking ridiculous. This is not how things should be done”. It was Mr Montgomery’s evidence that, after he called Mr Dorsch’s behaviour out, Mr Dorsch continued to say “fuck” multiple times and words to the effect “if I say something. I expect it to be done”.

185    Mr Dorsch’s account of the conversation in August 2021 was that he was bringing to Mr Montgomery’s attention that he was not working consistently through an open order report and that Mr Montgomery was not accepting of his feedback, that he challenged Mr Montgomery’s belief that he was on top of it and that Mr Montgomery stated that he did not appreciate being talked down to. I note that Mr Montgomery accepted that certain details of the conversation were as Mr Dorsch had described. Further, I am of the view that, given Mr Montgomery does not set out what Mr Dorsch had said that gave rise to his perception of him being rude, this means that little can be made by HEAD Oceania of this conversation in August 2021.

186    However, for the reasons set out above, and as follows, I prefer Mr Montgomery’s version of the conversation in November 2021. Mr Dorsch disputed this conversation. Mr Dorsch suggested that the conversation did not involve him asking about purpose order processes nor that Mr Montgomery had said that he was not able to answer his questions because he was not qualified to do so. When Mr Dorsch’s version was put to Mr Montgomery he maintained his own account and said, as part of his cross-examination in this respect “[t]hat would be a PG version”. I accept his evidence. Further, his version is consistent with his contemporaneous record of what occurred.

187    Mr Dorsch accepted that he was yelling when he spoke to Mr Montgomery, but says it was because he was in his car, on speaker phone and that he told Mr Montgomery this as part of the conversation. Mr Montgomery denied that he told him this. For the reasons set out above, given that Mr Montgomery bore no ill-will towards Mr Dorsch, it is my view that, if Mr Dorsch had explained to Mr Montgomery why he was yelling, he would have taken that on board. I do not accept that Mr Dorsch in this respect is a reliable witness at all.

188    It was Mr Montgomery’s evidence that, throughout the conversation, Mr Dorsch spoke to him in a raised voice, which made him feel uncomfortable. I accept this evidence because of what happened next. Mr Montgomery went and spoke to Ms Fookes and later, at her suggestion, sent her an email regarding what had transpired. In that email, he stated:

I did not appreciate the way I was spoken to today. I told Matthias I didn’t appreciate the swearing and tried to explain that I wasn’t able to answer his questions and was not qualified to answer Purchase Order Processes and logic on behalf of Matt the winter sport rep and Jess from Logistics. Despite this Matthias continued to speak at me in an aggressive manner to which I gave no response.

189    I find that the conversation transpired in the way that Mr Montgomery recalled that it did. Mr Montgomery was contacted by Mr Skrobanek, on 2 December 2021, in relation to this complaint. Mr Montgomery had asked that it not be provided to Mr Skrobanek, and his response affirms my view of him. Mr Montgomery explains in the email that he did not intend to file a formal complaint about Mr Dorsch but rather sent the email on the basis that it be filed on his record for this reason:

I did file a written (email) complaint about the way I was spoken to as I feel it is not an acceptable way to speak to staff.

However this was meant to be for my record so would have examples of such behaviour. In the past if I have confronted Matthias about behaviour issues I’ve been told what I’m saying is not true and to provide examples.

190    Mr Bramich gave evidence regarding Mr Dorsch’s treatment of him and others, both of him being abused by Mr Dorsch, and witnessing Mr Dorsch abuse others. By way of example, Mr Dorsch said to him “you clearly don’t understand how to do your fucking job”, but Mr Bramich also said there would be screaming matches between them and, where there was an altercation, Mr Dorsch would hit his hands or hand on the table, and would become very agitated. There was no direct challenge to this evidence. I reject Mr Dorsch’s submission that Mr Bramich stated that Mr Dorsch did not direct swear words at him personally. This submission is contrary to the evidence as Mr Dorsch sought to deploy one answer in the transcript to a question where Counsel was clarifying what being sworn at meant. However, Mr Bramich did concede that numerous employees swore within the workplace, Mr Dorsch swore either at the situation or directly at him, as did he and that Mr Bramich did not confront him about his behaviour.

191    Mr Bramich gave unchallenged evidence about a meeting with Mr Dorsch and Ms Andersen, where he was her support person in mid-2021. The meeting arose with respect to invoices Ms Andersen had prepared and GST. Mr Bramich observed Mr Dorsch berating her with his hands in the air, yelling and hitting the table, and where Mr Dorsch was visibly shaking at the same time. This meeting was, on his recall, in mid-2021. I find that it occurred as he described.

192    He also referred to an occasion where Ms Hawes was distressed by reason of unsuccessful IVF treatments, that when she was asked by Mr Dorsch what was wrong with her, and she explained it to him, he told her to “just get over it, there’s nothing you can do”. This, according to Mr Bramich, made Ms Hawes very upset. Again his evidence was unchallenged and may be accepted.

193    He also recalled an occasion where there had been an issue in the warehouse with respect to a stocktake that he was undertaking, where, by reason of Mr Dorsch being visibly upset (hitting the table, swearing and yelling), Mr Bramich had sent the warehouse manager home. Again, his evidence as to Mr Dorsch hitting the table, swearing and yelling was not challenged and may be accepted.

194    It was Mr Bramich’s evidence that part of his reason for considering alternative employment in late-2021 was because he was “sick of the culture” at HEAD Oceania and the “general way” he was being treated by Mr Dorsch. In relation to the culture, he described there being “extreme culture clashes” between the directors, where the parties had to pick sides. This was by reason of the directors being responsible for different brands, whereas employees such as himself were required to work across different brands, and there was, as a consequence, constant pressure to perform work for one director over another.

195    In addition, Mr Bramich’s evidence, under cross-examination, as to what it was like when Mr Dorsch came to the office was as follows:

Did you discuss the applicant’s conduct with Mr Davies between June 2021 and December 2021? … Yes

…

And what did you tell Mr Davies? …I recall Mr Davies saying that he observed the staff within the office putting their heads down and acting like dogs that had been kicked too many times, what’s the deal? And I said, “That’s what it’s like when Mattias (sic) turns up to the office”.

196    Whilst Mr Dorsch did not give any evidence responsive to Mr Bramich’s evidence, Mr Dorsch disputed the accounts made by Ms Hawes and Ms Andersen regarding conversations he was privy to.

197    Consistent with the evidence of other employees, Ms Hawes recounted instances where Mr Dorsch had sworn in her presence. She recalled overhearing him swearing on the phone during a telephone call with Mr Butler about the state of items in a trailer, he thereafter yelled at others at the OZTek Advanced Dive Conference during the day, which Mr Dorsch did not dispute in his evidence. It was Mr Butler’s evidence that, during the conversation, Mr Dorsch said “you have fucked this up!” and that Mr Dorsch did not greet him when he called but immediately said this. Mr Dorsch’s evidence was that he did not say “you have fucked this up!” but rather “[t]he mannequins and some of the displays are really fucked up because of not being secured and correctly loaded”. Mr Butler said that he apologised to Mr Dorsch “as an attempt to de-escalate the conversation, because [he] could sense by [Mr Dorsch’s] raised voice, swearing and tone in which he was speaking to me that he was angry with me. My apology made no difference, because [Mr Dorsch] continued yelling at me and then hung up the phone without saying goodbye”. Ms Hawes recalled, based on what she heard Mr Dorsch say, that the conversation was “incredibly aggressive and intimidating and that it included many profanities that were directed at whoever was on the other end of the phone”. It is my view that the evidence of Mr Butler is to be preferred over that of Mr Dorsch. Consistent with my other observations, and as suggested by Mr Montgomery, Mr Dorsch had a tendency to recall events in a sanitised form (and in a more favourable way to himself) than as recalled by the employees. Further, this is consistent with what Ms Hawes had observed about his continued state of agitation and conduct towards others after the call.

198    Also consistent with others, she described the effect of his behaviour on her. She recalled retreating to the car to get away from him and noticing that her “heart was racing and [she] was shaking”.

199    Ms Hawes also recalled Mr Dorsch say to Ms Andersen “are you fucking stupid, Karen?” and strike his fist on the desk while speaking to Ms Andersen. Whilst Mr Dorsch denied that evidence, I am of the view that Ms Hawes’ evidence should be accepted. The evidence reveals a pattern of behaviour by Mr Dorsch to which his response was a bald denial. I have no reason to disbelieve Ms Hawes, it was evident she bore no animus towards Mr Dorsch and was sympathetic to certain of his circumstances.

200    In addition, like others, Ms Hawes recalled a conversation with Mr Dorsch where she had made a mistake in a marketing document. She deposed to the conversation transpiring in the following way:

28.    In or around December 2017, the Applicant informed me there was a mistake in one of the documents I reviewed, and we had a conversation in his office that included words to the following effect:

The Applicant:    There's a mistake in this! Penny, you've made us look like idiots, this is not good enough. Get your head on the job!

Me:        Matthias, I don't think reviewing contracts is actually my job.

The Applicant:    It is your job. You get to design the paperwork!

29.    The Applicant banged his fist on his desk as he was speaking to me during our conversation which made me feel very uncomfortable and threatened. After the conversation, I went back to my desk and tried to continue reviewing the contracts, however I became upset and began crying. At this point, the Applicant asked me to come back into his office and we had a further conversation that included words to the following effect:

The Applicant:    You’re getting upset over nothing. Why are you upset? You’re being stupid. It’s extremely unprofessional.

Me:    Well, I think it’s unprofessional when you yell at people in our office and over the phone and bang your fist on the desk.

The Applicant:    You clearly have an attitude problem penny.

Me:        Ok Matthias. You’re my boss. I’ll take a look at my attitude.

30.    At the time of this conversation, I was hoping to receive a yearly bonus in approximately two weeks’ time. I told the Applicant I would ‘take a look at my attitude’ as a means of ending our conversation and because I was worried the Applicant would use our conversation as a reason to refuse to pay me a bonus. Mr Dorsch took no issue with second part of the conversation in paragraph 29. In any event, for the reasons already given, I prefer Ms Hawes’ evidence to any denial of Mr Dorsch.

201    Ms Hawes recounted a conversation with Mr Dorsch as occurring between October 2018 and February 2019, where Mr Dorsch had returned to the office at Yatala after a flight from Europe. Ms Hawes had found out that an in-vitro fertilisation procedure had been unsuccessful. During the conversation, she called Mr Dorsch saying “I don’t really know why you’re upset. I’ve just gotten off a 12-hour flight and had to listen to a brat screaming the whole time. Don’t know why you’d want to have kids!”. Mr Bramich was present during the conversation and recalled Mr Dorsch saying “just get over it, there is nothing you can do”. Mr Butler’s recollection was very similar to that of Ms Hawes. Mr Dorsch denied saying what Mr Hawes and Mr Bramich recall him saying but rather suggested an entirely different conversation in which he said nothing at all about Ms Hawes’ circumstances but rather spoke about crying babies on the flight. Accordingly, three parties to the conversation recall (albeit differently) Mr Dorsch speaking about Ms Hawes’ predicament. It is my view that Ms Hawes’ and Mr Butler’s recollection should be preferred.

202    Ms Hawes’ evidence as to her reasons for resigning are telling. They describe her view as to the acute effect Mr Dorsch’s conduct had on her. Ms Hawes deposed to the following:

39.     In February 2019, I had a conversation with Mr Bramich in the office. At the time of our conversation, the Applicant was still in Germany. The Applicant had not responded to my repeated requests for his input and approval for the OZTek paperwork and by this point, I had become incredibly distressed. I worried I would be reprimanded by the Applicant if the paperwork was not lodged in time and the Respondent was not permitted to exhibit a stand. I was in a state of panic. Mr Bramich and I had a conversation that included words to the following effect:

Me:    I don’t feel right Leigh. I actually feel like I’m dying. I’m scared. I can’t believe how anxious I’ve been feeling in my job lately. I can’t take this anymore.

Mr Bramich:    Seriously Penny, nothing is worth feeling like that over. Go to your computer and quit right now. This isn’t worth it.

40.    On the day of my conversation with Mr Bramich, I sent an email to the Applicant notifying him of my resignation. I no longer hold a copy of that email.

41.    I chose to resign because I could not continue working for the Applicant any longer. I did not have another job to go to. At the time of my resignation, my partner's position had recently been made redundant and I was providing financial support to my mother who was living with me.

203    It was Ms Hawes’ evidence that she did not tell Mr Dorsch the real reason for her resignation. Ms Hawes’ emailed Mr Michl on 11 April 2019, to inform him of the circumstances, which she described as including: “in a day it is nothing for Matthias to yell at, completely berate and scold the people here as though they were 5 years old … He rules our workplace with intimidation, bullying and belittlement”.

204    Similarly, Mr Butler gave evidence of specific occasions where Mr Dorsch shouted at him and swore including the incident involving the trailer, which is dealt with above. I accept Mr Butler’s evidence that on this occasion Mr Dorsch swore and yelled at him and also of what he observed Mr Dorsch say to Ms Hawes regarding the failure of an IVF procedure.

205    The evidence revealed friction as between Mr Dorsch and Mr Butler regarding Mr Butler’s timeliness in completing tasks that were asked of him and disputes between them as to discount structures for clients. Mr Butler deposed to a conversation with Mr Dorsch in early June 2021 in which Mr Dorsch said the following:

72.    I eventually answered the Applicant’s sixth phone call to me that day, and we had a conversation that included words to the following effect:

The Applicant:    Why the fuck aren’t you picking up your phone?

Me:        Because I’m on leave!

The Applicant:    You should be checking your fucking emails and checking in with the office for any phone messages. You should be finding out if there’s anything urgent you need to fucking deal with!

Me:    Matthias, I’ve been working with you for about 7 years now. Never once have I been required to check emails or check in with the office when I’m on leave.

206    It was Mr Dorsch’s evidence that as soon as Mr Butler indicated to him that he was on annual leave, he apologised for the call and said he had forgotten he was on leave. I am inclined to accept Mr Butler’s evidence over Mr Dorsch’s evidence. It appeared that Mr Dorsch did not have the capacity to control his anger, had little insight into his behaviour and was an unreliable historian. I have no reason to disbelieve Mr Butler in this regard. Furthermore, a short time afterwards, in July 2021, Mr Butler called Mr Davies and informed him of the effect Mr Dorsch was having on his health and his relationships. He referred Mr Dorsch being aggressive on the phone.

207    A short time later, in late August 2021, Mr Butler again recalled Mr Dorsch speaking to him on the phone about the content of Mr Butler’s voicemail message to which he said it was “fucked” and “unprofessional”. Mr Dorsch again denied that he swore at Mr Butler. Mr Butler recalled that he pulled over to the side of the road and took the call off speakerphone because his wife was in the car and he did not want her to hear the swearing. I find that the conversation was as Mr Butler described.

208    It is without dispute that Mr Butler thereafter resigned. It was his evidence that he resigned because of Mr Dorsch’s conduct towards him. Mr Butler recalled that when he informed Mr Dorsch that he was resigning, Mr Dorsch replied “Well, you’ve fucked this company. You have fucked this company” and “you have fucked our summer season and you have absolutely fucked this company”. Mr Dorsch did not dispute in his evidence that he had said this. I find that this conversation occurred in the manner Mr Butler alleged.

209    To the extent that Mr Dorsch sought to dispute the credibility of Mr Butler, I reject that submission. Mr Dorsch was ultimately the Sales Manager and needed sales to achieve their highest revenues. Mr Butler was responsible for the largest territory by way of, as I understand it, revenue, and was under scrutiny from Mr Dorsch. It was my observation that Mr Butler initially did not challenge Mr Dorsch’s behaviour, being new in the business, but increasingly over time, did. He tried to work around Mr Dorsch by establishing clients and otherwise working around him, but there definitely were clashes between them based on differences of opinion as to the terms upon which clients were engaged. It is not necessary for me to rely on the aspects of Mr Butler’s evidence relating to what he perceived to be inappropriate behaviour by Mr Dorsch towards clients. In the absence of evidence from those client witnesses, it was difficult for Mr Dorsch to test that evidence and I ultimately do not think it is necessary to make any decision with respect to them. What I will accept of Mr Butler’s evidence is that, consistent with the evidence of the other employees, Mr Dorsch had high standards and found a number of the employees within HEAD Oceania’s business who did not perform to the level that he required and that, on occasion, his response to that, out of frustration or otherwise, was to yell and swear at them.

210    It was Ms Andersen’s evidence that Mr Dorsch would on occasion yell and swear at her, as well as saying that she was “stupid” and “fucking stupid” (as was Ms Hawes’ recall referred to above). Again, Mr Dorsch denied this evidence. However, it was Ms Borden’s evidence that in or around early 2018, she observed Mr Dorsch approach Ms Andersen’s desk, stand over her desk and say to her, “How can you be so stupid? How do you not know? … Why are you so stupid?”. Ms Borden observed that Ms Andersen had tears in her eyes when Mr Dorsch spoke to her. In addition, Ms Hawes gave evidence as to recalling Mr Dorsch asking Ms Andersen if she was “fucking stupid”. Again, Mr Dorsch denied this evidence. I do not accept his denial and I accept the evidence of Ms Andersen, Ms Hawes and Ms Borden.

211    It was Ms Borden’s evidence that, by observing Mr Dorsch criticise, raise his voice, and swear at employees, it led to her being uncomfortable and anxious he would raise his voice at, swear at, insult or criticise someone around her or herself. She described felling anxious when his car pulled up outside the office, which echoes the description of Mr Davies and Mr Bramich as to the effect Mr Dorsch’s conduct had on the workplace. I accept her evidence.

212    Ms Andersen recalled receiving a phone call from Mr Dorsch on 27 July 2021 seeking information regarding Adreno bonuses. The following day Ms Andersen was summoned by Mr Dorsch to attend the board room, in which he said to her that she was so stupid, he could not believe what had happened the previous day and that she did not know what she was doing whilst banging his fist on the table and yelling at her. Mr Dorsch led no evidence disputing that this occurred. Despite this, Ms Andersen was the subject of cross-examination in this regard and it was suggested to her that she had not recorded anything in her diary notes regarding what had happened in this meeting because nothing remarkable had occurred. Ms Andersen disagreed and gave an entirely plausible explanation, namely that she was very emotional at the time and her notes were not written with the intention of showing anyone but for her to express her feelings. I accept Ms Andersen’s evidence that Mr Dorsch did say the things she recalls him saying and yelled and banged his fist on the table. Furthermore, her evidence was corroborated, in part, by Mr Bramich’s evidence in which he recalled Mr Dorsch berating her with his hands in the air, yelling and hitting the table.

Adverse action - Legal principles

213    There was limited dispute between the parties as to the applicable principles governing adverse action claims, save as they related to the necessity for an applicant to identify the alleged “decision-maker” and whether HEAD Oceania’s onus could be discharged where purportedly “no person who had the actual authority to dismiss” gave evidence. These contentions are dealt with specifically below.

214    Section 340 provides:

340 Protection

(1)    A person must not take adverse action against another person:

(a)    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; or

(b)    to prevent the exercise of a workplace right by the other person.

Note:          This subsection is a civil remedy provision (see Part 4-1).

(2)    A person must not take adverse action against another person (the second person) because a third person has exercised, or proposes or has at any time proposed to exercise, a workplace right for the second person’s benefit, or for the benefit of a class of persons to which the second person belongs.

Note:          This subsection is a civil remedy provision (see Part 4-1).

215    The Court’s attention is directed to the following:

(a)    whether the applicant has a “workplace right” within the meaning of s 341;

(b)    whether the applicant “has, or has not, exercised”, “proposes or proposes not to, or has at any time proposed or proposed not to, exercise a workplace right”: s 340(1)(a);

(c)    whether the applicant has been subjected to “adverse action”, within the meaning s 342;

(d)    whether the respondent has taken “adverse action” against another person because the person falls within one of the categories under s 340(1)(a) or to prevent the exercise of a workplace right by the other person.

216    As to (d), attention is given to who comprises the relevant actor and to the exercise of the statutory presumption under s 361. Section 361 provides:

361 Reason for action to be presumed unless proved otherwise

(1)    If:

(a)     in an application in relation to a contravention of this Part, it is alleged that a person took, or is taking, action for a particular reason or with a particular intent; and

(b)     taking that action for that reason or with that intent would constitute a contravention of this Part;

it is presumed that the action was, or is being, taken for that reason or with that intent, unless the person proves otherwise.

(2)     Subsection (1) does not apply in relation to orders for an interim injunction.

217    A person has a “workplace right” in specified circumstances under s 341. The plurality in Qantas Airways Ltd v Transport Workers Union of Australia [2023] HCA 27; 97 ALJR 711 noted: (a) that the circumstance in s 341(1)(a) was sufficiently broad to encompass “a present entitlement under a workplace law or workplace instrument to receive a benefit at some future stage of the employment relationship” (having a forward-looking dimension, which includes a right which may accrue over time or on the occurrence of a future event or contingency) (at [34]–[35]); (b) the words “is able to” in ss 341(1)(b) and (c), while not words of limitation (citing Cummins South Pacific Pty Ltd v Keenan [2020] FCAFC 204; 281 FCR 421 at [34]; Alam v National Australia Bank Ltd [2021] FCAFC 178; 288 FCR 301 at [85]), “necessarily indicate that circumstances have come into existence in which the person has a present capacity to exercise a relevant power or freedom” (at [36]); (c) there is no principled reason why a workplace right that a person has under s 341(1)(a) “cannot overlap with a workplace right that the person has or might have in the future under s 341(1)(b) or (c)” (at [37]); and (d) a person does not “have” a workplace right at all where the exercise of the purported right is prohibited or would expose the person to a legal process to prevent its exercise (at [38]): See also Shea v TRUenergy Services Pty Ltd (No 6) [2014] FCA 271; 314 ALR 346 at [29(f)], [579]–[581], [625]; PIA Mortgage Services Pty Ltd v King [2020] FCAFC 15; 274 FCR 225 at [10]–[12]; cf Cummins (notably obiter dicta).

218    As observed in Qantas, the evident object of s 340(1) is to protect persons from adverse action for specified reasons connected with their holding or exercise of workplace rights: at [41]. Where adverse action is taken with “mere awareness” of an effect on another person’s workplace rights, that will be insufficient:

[41]     …Instead, adverse action will only offend the section if it is taken for a proscribed reason: “because” the person against whom it is taken has a workplace right or has (or has not) done something in relation to the exercise of a workplace right within the scope of s 340(1)(a), or “to prevent” the exercise of a workplace right by that person within the scope of s 340(1)(b). As already noted, the proscribed reason must be a substantial and operative reason for taking the adverse action against the other person.

219    In Board of Bendigo Regional Institute of Technical and Further Education v Barclay [2012] HCA 32; 248 CLR 500 (cited in Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd [2014] HCA 41; 253 CLR 243), French CJ and Crennan J observed (footnotes omitted), at [44]–[45]:

[44]    There is no warrant to be derived from the text of the relevant provisions of the Fair Work Act for treating the statutory expression “because” in s 346, or the statutory presumption in s 361, as requiring only an objective inquiry into a defendant employer’s reason, including any unconscious reason, for taking adverse action. The imposition of the statutory presumption in s 361, and the correlative onus on employers, naturally and ordinarily mean that direct evidence of a decision-maker as to state of mind, intent or purpose will bear upon the question of why adverse action was taken, although the central question remains “why was the adverse action taken?”.

[45]    This question is one of fact, which must be answered in the light of all the facts established in the proceeding. Generally, it will be extremely difficult to displace the statutory presumption in s 361 if no direct testimony is given by the decision-maker acting on behalf of the employer. Direct evidence of the reason why a decision-maker took adverse action, which may include positive evidence that the action was not taken for a prohibited reason, may be unreliable because of other contradictory evidence given by the decision-maker or because other objective facts are proven which contradict the decision-maker’s evidence. However, direct testimony from the decision-maker which is accepted as reliable is capable of discharging the burden upon an employer even though an employee may be an officer or member of an industrial association and engage in industrial activity.

220    In a similar way, Gummow and Hayne JJ at [127] observed:

[127]    In determining an application under s 346 the Federal Court was to assess whether the engagement of an employee in an industrial activity was a “substantial and operative factor” as to constitute a “reason”, potentially amongst many reasons, for adverse action to be taken against that employee. In assessing the evidence led to discharge the onus upon the employer under s 361(1), the reliability and weight of such evidence was to be balanced against evidence adduced by the employee and the overall facts and circumstances of each case; but it was the reasons of the decision-maker at the time the adverse action was taken which was the focus of the inquiry.

221    The question of whether adverse action was taken for a prohibited reason is a factual one, answered by a consideration of all the facts and circumstances in the proceedings. The prohibited reason may be one of a number of reasons, but must be a “substantial and operative reason” for the employer’s adverse action: Barclay at [104] per Gummow and Hayne JJ, citing General Motors Holden Pty Ltd v Bowling (1976) 12 ALR 605 at 616 per Mason J.

222    The focus is on the reasons of the decision-maker and where the inquiry is into the reasons of a corporate entity, there needs to be an examination of the states of mind of the human actors beyond the individual having authority to bind the corporation: see respectively Barclay at [101], [127] and [140] and Wong v National Australia Bank [2022] FCAFC 155; 318 IR 148 at [80]. The impugned decision may be a collective one or one arising from the influence of another or a number of actors: Roberts v General Motors-Holden’s Employees’ Canteen Society (1975) 172 CAR 1073 at 1079. The corporate mind may comprise not only the general manager who made the decision but also the mind of the supervisor who made an “indispensable contribution”: Elliott v Kodak Australasia Pty Ltd [2001] FCA 1804; 129 IR 251 at [37].

223    Recently in Wong, the Full Court opined on this issue and found that it is necessary for the Court, when determining the person’s reasons for taking the adverse action, to consider whether persons involved (but without the requisite authority to decide) had more than “a mere contextual influence” (at [32]). The fact that the involved person did not have authority to take impugned adverse action might be relevant to, but not determinative of, that inquiry.

224    A good way to describe the rebuttable presumption is as elucidated by Gordon and Edelman JJ in Qantas at [63]–[64]:

[63]    Section 361 of the Act establishes a rebuttable presumption that the adverse action was taken for the reason alleged, or with the intent alleged, if taking action for that reason or with that intent would constitute a contravention of Pt 3-1 of the Act (which includes s 340). A person takes action for a particular reason if the reasons for the action include that reason. The presumption in s 361 recognises that the decision-maker is uniquely placed to know the reasons for their action and should thus be made to prove them. An employer can discharge that onus by proving that none of its substantial and operative reasons for the adverse action was to prevent the exercise of workplace rights.

[64]    Qantas failed to rebut the presumption because its witness evidence on this point was not accepted. Accordingly, Qantas failed to prove that its outsourcing decision was made for reasons not including the substantial and operative reason of preventing the exercise of a workplace right within the meaning of s 341(1)(b) of the Act, which was relevantly the entitlement of the employees affected by the outsourcing decision to engage in enterprise bargaining following the expiry of the enterprise agreements and to organise and engage in protected industrial action and a protected action ballot (in short, “the entitlement to engage in protected industrial action”). On appeal to this Court, Qantas did not challenge the conclusion that it had failed to rebut the presumption that its outsourcing decision was made for reasons that included the prevention of its employees’ exercise of an entitlement, in the future, to engage in protected industrial action.

(Footnotes omitted.)

Alleged non-dismissal adverse action

225    The alleged non-dismissal adverse action comprised alleged action taken relating to Mr Dorsch’s annual leave entitlements (the alleged first, second, third and fifth adverse actions), unfair scrutiny and false allegations (the alleged sixth adverse action), the offering of a lower salary increase and threat of termination (the alleged eighth adverse action), alleged omissions in failing to provide support, training, address concerns and complaints, not overwork Mr Dorsch and failing to ensure his health and safety and comply with contractual obligations (alleged adverse action by omission) and lastly failure to pay Mr Dorsch’s annual leave in full when it fell due upon termination (the alleged ninth adverse action).

226    HEAD Oceania’s response to the adverse action claims may be summarised as follows. First, with respect to the first to the eighth adverse action claims, to the extent that there was any decision or conduct engaged in to constitute the adverse action, that conduct was of Mr Michl, and no officer, employee or agent of HEAD Oceania. Accordingly, even if the adverse action had been taken, it was not undertaken by HEAD Oceania.

227    Secondly, it is claimed that, with respect to the ninth form of adverse action, that HEAD Oceania did not pay Mr Dorsch’s annual leave in full in accordance with the employment contract and the FW Act, there is a partial admission on the basis that the annual leave was not paid immediately upon termination, for which there is an admission of a contravention. However, otherwise the claim is denied to be actuated by any prohibited reason.

228    Accordingly, two preliminary matters that emerge as relevant to the determination of these matters are when Mr Dorsch, in fact, commenced employment with HEAD Oceania and whether HEAD Oceania (under contract or by operation of the FW Act) became liable for any accrued annual leave entitlements Mr Dorsch had with Mares AP. Those issues will be dealt with first as follows.

The commencement date of Mr Dorsch’s employment at HEAD Oceania

229    A factual matter requiring resolution is whether Mr Dorsch’s employment with HEAD Oceania commenced on 7 June 2017, 7 March 2018 or some other time.

230    Mr Dorsch claimed that he was employed by HEAD Oceania from 7 June 2017 until his termination on 9 December 2021. HEAD Oceania denied this and said that he commenced employment with them on or from 7 March 2018. In closing submissions, Mr Dorsch submitted that his employment with HEAD Oceania commenced on 1 January 2018 by reason of the following: Mares AP employees in Australia transferred to Mares Oceania on that date, and the March 2016 Contract remained in place until it was subsequently replaced and Mr Dorsch’s employment service was deemed continuous by virtue of ss 22(5) and (7) of the FW Act.

231    The evidence establishes that Mr Dorsch commenced employment with HEAD Oceania on or after 7 March 2018, by reason of the following: Mr Dorsch did not have approval from the Federal Government to work for Mares Oceania or HEAD Oceania under his visa arrangements until that date. Mr Dorsch produced no contract indicating that he had entered employment before that date. Mr Dorsch remained simultaneously employed by Mares AP until December 2021. Mr Dorsch continued to perform duties for Mares AP and was paid by Mares AP for the work he performed for Mares AP until December 2021. The only contract Mr Dorsch entered with HEAD Oceania was executed in October 2018.

Whether Mr Dorsch’s employment with Mares AP and HEAD Oceania was continuous since 1 May 2008

232    Given the above, to the extent that Mr Dorsch had any accrued annual leave entitlements in mid-2018, all but a fraction arose from when he was employed by Mares AP as opposed to the short period he become employed by HEAD Oceania. The question was then whether, despite this, HEAD Oceania became nonetheless liable for that accrued entitlement by operation of the FW Act. A “new” employer may become liable for entitlements accrued with a former employer where the employee’s prior service is deemed “continuous” under s 22 of the FW Act.

233    Mr Dorsch claimed that his employment with Mares AP and HEAD Oceania was deemed continuous for the purposes of the FW Act from 1 May 2008. This question is not without complexity. Ordinarily the question arises where there has been the termination of employment with one employer and employment with another. Here, however, it is accepted that Mr Dorsch’s employment with Mares AP did not end when he became employed by Mares Oceania and then HEAD Oceania.

234    Mr Dorsch also claimed that his employment with Mares AP and HEAD Oceania was continuous for the purposes of the FW Act since 1 May 2008. However, “continuous” in what sense? Expressed in this way, it would ordinarily mean that his employment with Mares AP ended upon him becoming employed by the later entity. HEAD Oceania admitted that Mr Dorsch’s period of service with it between 7 March 2018 and 9 December 2021 was continuous, but otherwise did not admit his claim regarding continuity of service.

235    Mr Dorsch submitted that he commenced employment with Mares AP on or around May 2008, that it employed him when he relocated to Queensland in August 2010 and that, prior to 2018, Mares AP was a national system employer. He contended that, due to Australian employees of Mares AP (including Mr Dorsch) being “transferred” to HEAD Oceania on 1 January 2018 on the same terms and conditions and with leave entitlements also transferring, his employment with Mares AP and HEAD Oceania was continuous by virtue of s 22(5) and (7) of the FW Act. Mr Dorsch specifically relies by bald assertion on s 22(7)(b) and on the recognition of his service by HEAD Oceania.

236    Subsections 22(5) and (7) provide:

22  Meanings of service and continuous service

…

When service with one employer counts as service with another employer

(5)    If there is a transfer of employment (see subsection (7)) in relation to a national system employee:

(a)    any period of service of the employee with the first employer counts as service of the employee with the second employer; and

(b)    the period between the termination of the employment with the first employer and the start of the employment with the second employer does not break the employee’s continuous service with the second employer (taking account of the effect of paragraph (a)), but does not count towards the length of the employee’s continuous service with the second employer.

Note: This subsection does not apply to a transfer of employment between non-associated entities, for the purpose of Division 6 of Part 2-2 (which deals with annual leave) or Subdivision B of Division 11 of Part 2-2 (which deals with redundancy pay), if the second employer decides not to recognise the employee’s service with the first employer for the purpose of that Division or Subdivision (see subsections 91(1) and 122(1)).

…

Meaning of transfer of employment etc.

(7)    There is a transfer of employment of a national system employee from one national system employer (the first employer) to another national system employer (the second employer) if:

(a)    the following conditions are satisfied:

(i)    the employee becomes employed by the second employer not more than 3 months after the termination of the employee’s employment with the first employer;

(ii)    the first employer and the second employer are associated entities when the employee becomes employed by the second employer; or

(b)    the following conditions are satisfied:

(i)    the employee is a transferring employee in relation to a transfer of business from the first employer to the second employer;

(ii)    the first employer and the second employer are not associated entities when the employee becomes employed by the second employer.

Note: Paragraph (a) applies whether or not there is a transfer of business from the first employer to the second employer.

237    I do not accept this submission.

238    As HEAD Oceania submitted, the issue of continuous employment does not arise. Mr Dorsch is not capable of claiming that there was a transfer of employment for which his service would be deemed continuous by satisfying the conditions in s 22(7)(a): On Mr Dorsch’s own evidence, he was employed by Mares AP from 1 May 2008 to 10 December 2021. Mr Dorsch was paid an income into a Hong Kong bank account and paid tax on that income in Hong Kong. Mr Dorsch’s employment with Mares AP did not, unlike other employees of Mares AP in Australia, cease when he commenced employment with HEAD Oceania. Rather the employment continued, and accordingly s 22(7)(a) of the FW Act was not engaged in this case. Indeed, Mr Dorsch pleaded that whilst he worked in the position of full time Sales and Marketing Manager for HEAD Oceania, he continued to work in the positions of full time Director of HEAD Oceania, full time Director of Mares AP and full time Head of Sales and Marketing for Mares AP.

239    Further, I do not understand how Mr Dorsch is able to make out his claim on the basis of s 22(7)(b). There was no such pleaded claim. The first time it was articulated in this way was in Mr Dorsch’s closing submissions in reply and by bald assertion. No submission or evidence elucidated how the circumstances fell within the strictures of s 22(7)(b). To the extent that any submission was made orally, it was made in reply to which HEAD Oceania had no opportunity for reply. Counsel for Mr Dorsch, again baldly, submitted that this case was one of “two non-associated entities”. No evidence was relied upon in support of this submission and I reject it.

240    In addition, s 22(7) does not apply to annual leave if there has been a transfer of employment between non-associated entities in relation to an employee and the second employer decides not to recognise the employee’s service with the first employer: s 91. I do not accept that a letter sent by Mr Dorsch to himself asserting transfer is indicative of the contrary.

241    In any event, a transfer of employment between non-associated entities only arises if the conditions of s 22(7)(b) are met: s 22(8)(b). Mr Dorsch’s 2018 Contract with the HEAD Oceania constituted an entire agreement (clause 19.4) and the only recognition of past service was as per clause 2.1(b) : “Any service you completed with us prior to this agreement will be counted as part of your period of continuous service with use for the purpose of all service-related benefits” (my emphasis). Counsel for Mr Dorsch made no submission with respect to the relevant clauses of Mr Dorsch’s contract. I accept, as submitted by HEAD Oceania, that “service you completed with us” is the service Mr Dorsch had completed in the period between when his visa was approved in March 2018 and he commenced employment with HEAD Oceania and when he entered into this contract in October 2018. In any event, for Mr Dorsch to make out his claim under s 22(5) by operation of s 22(7)(b) there still needed to be a “transfer of business” under s 311. No submission was made as to how this could be satisfied.

242    These two issues — (a) the commencement date of Mr Dorsch’s employment with HEAD Oceania; and (b) whether Mr Dorsch’s employment in Australia was continuous from the period he was engaged to work in Australia by Mares AP to when he was employed by Mares Oceania which became HEAD Oceania — are rejected and I find that the commencement date of Mr Dorsch’s employment with HEAD Oceania was on or after 7 March 2018, and that Mr Dorsch’s employment was not continuous for the purposes of s 22(7)(b).

Whether any of the alleged conduct by Mr Michl was engaged in on behalf of HEAD Oceania as an officer, employee or agent, for the purposes of s 793 of the FW Act?

243    HEAD Oceania contended that Mr Michl is the Vice President of Mares Diving, Mares S.p.A, which is a company headquartered in Italy. Mr Michl gave unchallenged evidence that he has never been an officer of HEAD Oceania, nor was he an employee. Mr Michl was not representative of HEAD Oceania, nor did he have any authority from HEAD Oceania to discuss bonus arrangements with Mr Dorsch on its behalf. As a consequence, HEAD Oceania submitted that there is no evidence that Mr Michl was an agent for HEAD Oceania. Given the same, HEAD Oceania submitted that the Court should conclude that none of Mr Michl’s conduct (relied upon by Mr Dorsch regarding the non-dismissal adverse action) was conduct engaged in by HEAD Oceania pursuant to s 793 of the FW Act.

244    It is worthwhile setting out the alleged conduct of by Mr Michl which was in issue:

(a)    Mr Michl’s notification, by email dated 30 April 2018 to Mr Dorsch, that his annual leave entitlements would expire (the first adverse action);

(b)    Mr Michl informing Mr Dorsch in a telephone conversation that Mr Dorsch only had 40 days accrued annual leave when Mr Dorsch informed him that he had around 70 days’ accrued annual leave (the second adverse action);

(c)    Mr Michl refusing, by email on 18 May 2018, to recognise Mr Dorsch’s accrued but untaken annual leave (the third adverse action);

(d)    Mr Michl’s requirement, as part of an email communication, on 19 June 2018, that Mr Dorsch “end his discussion about untaken leave” and that the only leave that would be recognised was the remaining 12 days for 2018 and that HEAD Oceania was considering disciplinary action against Mr Dorsch (the fifth adverse action);

(e)    Mr Michl’s purportedly unfair scrutinisation of and making false accusations about Mr Dorsch from around June 2018 (the sixth adverse action);

(f)    Mr Michl’s offering of a low salary increase and indication that his employment would be terminated if he sought to engage in higher salary increases (the eighth adverse action);

245    For the following reasons, all of the conduct, save for the alleged eighth adverse action, was action taken by Mr Michl on behalf of Mares AP not HEAD Oceania.

246    Section 793 of the FW Act provides:

793 Liability of bodies corporate

Conduct of a body corporate

(1)    Any conduct engaged in on behalf of a body corporate:

(a)     by an officer, employee or agent (an official) of the body within the scope of his or her actual or apparent authority; or

(b)     by any other person at the direction or with the consent or agreement (whether express or implied) of an official of the body, if the giving of the direction, consent or agreement is within the scope of the actual or apparent authority of the official;

is taken, for the purposes of this Act and the procedural rules, to have been engaged in also by the body.

State of mind of a body corporate

(2)     If, for the purposes of this Act or the procedural rules, it is necessary to establish the state of mind of a body corporate in relation to particular conduct, it is enough to show:

(a)     that the conduct was engaged in by a person referred to in paragraph (1)(a) or (b); and

(b)     that the person had that state of mind.

Meaning of state of mind

(3)     The state of mind of a person includes:

(a)     the knowledge, intention, opinion, belief or purpose of the person; and

(b)     the person’s reasons for the intention, opinion, belief or purpose.

Disapplication of Part 2.5 of the Criminal Code

(4)     Part 2.5 of Chapter 2 of the Criminal Code does not apply to an offence against this Act.

Note:    Part 2.5 of the Criminal Code deals with corporate criminal responsibility.

(5)     In this section, employee has its ordinary meaning.

247    By contrast, Mr Dorsch submitted that Mr Michl’s conduct was in, effect, that of HEAD Oceania. Mr Dorsch’s pleadings do not expose how such an assertion can be made out. His submissions assert that such an allegation may be accepted by the unhelpful, argumentative assertion that all of the matters relied upon by HEAD Oceania to assert that Mr Michl was not acting on behalf of it apply with the same force to Mr Skrobanek in respect of his decision to dismiss Mr Dorsch.

248    Mr Dorsch relied upon the 2016 Contract, which stated that he was to report to the Director of Mares AP and the CEO of Mares Italy (the company of which Mr Skrobanek is the President).

249    Further, Mr Dorsch submitted that the evidence supported the fact that Mr Michl was Mr Dorsch’s supervisor. Mr Michl was one of Mr Dorsch’s line managers, he would enter into an agreement with Mr Dorsch about his bonus payments, Mr Skrobanek delegated certain negotiations on salary to Mr Michl and Mr Skrobanek delegated some of his own functions to Mr Michl with respect to Mr Dorsch.

250    Mr Dorsch did not submit that, prior to the Contract entered into in 2018, Mr Skrobanek had no role in his employment due to the express terms of the March 2016 Contract. Given the same, Mr Skrobanek could, and did, delegate his role to Mr Michl.

251    As can be seen from this summary, Mr Dorsch’s submissions lacked precision and detail. As is evident from the facts, Mr Dorsch was variously employed by a number of entities including two at the same time. In that context, the determination of whether the conduct of Mr Michl may be found to constitute the conduct of a particular legal entity will depend on all the surrounding circumstances: Mr Michl’s position and responsibilities relative to others including Mr Dorsch and Mr Skrobanek.

252    The evidence revealed the following. Mr Michl and Mr Dorsch have known each other professionally for a very long time. They first met in 1998, Mr Dorsch was Mr Michl’s direct report between April and November 2000 and it was Mr Michl who introduced Mr Dorsch to Mr Skrobanek in 2008, after which Mr Dorsch worked for Mares AP in Hong Kong.

253    Mr Michl is the Vice-President of Mares Diving, Mares S.p.A. When Mr Dorsch moved to Hong Kong, Mares AP was a legal entity which managed the business of Mares S.p.A in Asia.

254    Mr Michl described his role at Mares S.p.A in the following way, which assists in understanding how his role and Mr Dorsch’s role interact:

21.     In my role as VP of Mares S.p.A, I was responsible for the sales of Mares products, which included the sales of Mares products by the Respondent. So, from time to time, the Applicant asked me to review and approve the terms and conditions the Respondent offered customers for Mares products, and Mares’ product price lists. The Applicant also asked me to review and approve budgets and sale forecasts for Mares products by the Respondents.

255    In addition, the evidence revealed that given their long professional history, Mr Michl’s comparative seniority, Mr Michl being based in Italy in the same office as Mr Skobanek and the fact that their work goals overlapped, Mr Michl was involved in discussions and negotiations regarding Mr Dorsch’s entitlements to bonuses leave and salary increases.

256    As to whether he thereafter made decisions on behalf of one or other entity with respect to them is an issue, the evidence in this regard is disputed.

257    It is also clear that, despite Mr Skrobanek not having any formal directorship of or employment with each of the entities that employed Mr Dorsch, Mr Skrobanek had ultimate say regarding the approval of leave, bonuses and salary increases of Mr Dorsch.

258    Where did that leave Mr Michl? It is clear that Mr Michl operated as a sounding board and intermediary as between Mr Dorsch and Mr Skrobanek. Mr Michl described their relationship in his evidence, and repeated the substance of the same in his oral testimony:

22.     From time to time, the Applicant also consulted me about operational matters relating to the Respondent, including his employment, before he had interactions with Mr Skrobanek in relation to those matters. For example, the Applicant asked for my advice in relation to decisions to increase employees’ salaries, to recruit new employees, or to dismiss employees of the Respondent.

259    Indeed, the evidence reveals regarding the annual leave claims that Mr Dorsch sought out Mr Michl’s assistance. However, asking for assistance from a more senior employee, with whom you have longstanding rapport, in order to resolve an employment issue, does not mean, in and of itself, that whatever that more senior colleague does is conduct of a particular entity.

260    It is my view that when Mr Michl undertook any of the conduct giving rise to any of the alleged adverse action save for the eighth adverse action, to the extent that his conduct could be said to be engaged in as agent for or on behalf of a particular entity, it was for Mares AP not HEAD Oceania for the following reasons. First, as can be seen above, Mr Michl was the Vice President of Mares S.p.A and there was an overlap between the interests of that company and Mares AP. Secondly, the annual leave dispute related to entitlements which had accrued while Mr Dorsch was employed by Mares AP and where Mr Dorsch remained employed by Mares AP at the time he raised the dispute and where HEAD Oceania had no obligation with respect to those entitlements. Thirdly, Mr Dorsch did not become employed by HEAD Oceania until after March 2018. Fourthly, it was Mr Michl’s evidence that Mr Dorsch’s email of 30 April 2018 caused him to “commence a review of Mares AP’s annual leave records” and he did not review HEAD Oceania’s records. Fifthly¸ it was Mr Michl’s evidence that he understood at the time that Mr Dorsch’s complaint regarding the annual leave was with respect to Mares AP, not HEAD Oceania, and the emails he sent were “on behalf of Mares AP” not HEAD Oceania.

261    I rely on these same reasons for why, to the extent that Mr Dorsch relies upon conduct of Mr Michl with respect to the unfair scrutiny claim, again to the extent that Mr Michl was undertaking that role on behalf of any entity, it was Mares AP not HEAD Oceania.

262    Whilst I accept that Mr Michl was never an employee, officer or consultant of HEAD Oceania, I do accept Mr Dorsch’s argument that Mr Michl did have a role in determining his salary increases in 2020 and 2021. As with their previous interactions regarding annual leave, Mr Michl remained a person who acted as intermediary or “mediator” as between Mr Dorsch and Mr Skrobanek.

263    For the reasons which are set out below, to the extent that there was any purported adverse action regarding the salary discussions in 2021, it is apparent from the evidence, and it does not ultimately appear to be in contest, that it was Mr Skrobanek that determined Mr Dorsch’s salary increases. Mr Skrobanek had the discussions with Mr Dorsch in 2020 and in 2021. To the extent that there is an allegation of Mr Michl being involved, reliance is placed on an email exchange on 15 October 2021, between Mr Michl and Mr Dorsch. However, it is clear that this was an exchange in the context of a continuing dialogue as between Mr Dorsch and Mr Skrobanek. Mr Michl places the communication in context, “[a]s promised, I explored the salary options with Gerald that are possible within the salary framework of the Head Group”, again consistent with Mr Skrobanek being the decision-maker, and to the extent that he provides any response to Mr Dorsch’s requests it is by use of the collective “we” (which must be inferred to include Mr Skrobanek). Despite this communication, the discussion did not end there and Mr Dorsch pleaded that he had a further conversation with Mr Skrobanek in this regard. [See [109]].

264    Accordingly, I do not accept that any issue arises with respect to Mr Michl’s involvement in the salary increase discussions in 2021 regarding whether he was undertaking those discussions on behalf of HEAD Oceania. However, to the extent that it is necessary to so decide, I accept Mr Dorsch’s argument that, with respect to Mr Michl’s later involvement in the salary increase discussions, those discussions were undertaken by him as agent for HEAD Oceania given he was acting in a manner consistent with how he had previously acted as intermediary as between Mr Dorsch and Mr Skrobanek but where the ultimate decision was being made and/or action taken by Mr Skrobanek.

265    Given my findings in relation to these matters, they are relevant to the following issues that arise with respect to the adverse action claims associated with the annual leave entitlements:

(a)    if, as I have found, Mr Dorsch’s accrued unused annual leave entitlement was not an entitlement for which HEAD Oceania had any obligation, then Mr Dorsch is deprived of bringing any claim of an assertion of a “workplace right” as against HEAD Oceania (s 341(1)) with respect to it; and

(b)    Mr Dorsch is unable to claim that he was subjected to adverse action by HEAD Oceania by reason of that claim: (s 342(1)).

Whether the alleged complaints or inquiries fell within s 341?

266    Therefore, it is not necessary to decide this issue save with respect to the alleged complaints or inquiries that are asserted by Mr Dorsch to have given rise to the eighth adverse action.

267    It was difficult to decipher from Mr Dorsch’s pleading and HEAD Oceania’s pleading and submissions the precise parameters of the dispute as to between the parties regarding whether Mr Dorsch had purportedly exercised of any of his rights under s 341.

268    Mr Dorsch claims that he made the following complaints or inquiries:

(a)    on or about 30 April 2018, the annual leave enquiry (referred to at [67]–[68] above);

(b)    in or around May 2018, the annual leave request (referred to at [73] above);

(c)    on 1 May 2018, the first complaint (referred to at [72] above);

(d)    on 5 June 2018, the second complaint (referred to at [85] above);

(e)    in or around May 2018, the unreasonable work hours complaint (referred to at [73] above);

(f)    on an unspecified date the Lack of Support Complaint; (extracted at [104] above);

(g)    in or around late 2020, the First Request for a Salary Increase (referred to at [99] above);

(h)    on or around 15 October 2021, the Second Request for a Salary Increase (referred to at [107] above); and

(i)    in early November 2021, the Third Request for a Salary Increase (referred to at [109] above).

269    It is for Mr Dorsch to establish that he possessed and exercised a right or workplace rights (s 341(1)(a), (b) or (c)).

270    Mr Dorsch’s ambiguous Amended Statement of Claim pleaded with respect to each of the alleged nine adverse actions that he had multifarious protections arising from numerous workplace rights.

271    There was no dispute that Mr Dorsch was able to initiate or participate in a process under the FW Act within the meaning of s 341(1)(b). However, Mr Dorsch provided me with no real assistance as to how he had established that he was able to initiate or participate in a process under Pt 6, div 1 of the Work Health and Safety Act 2011 (Cth) (WHS Act).

272    As to Mr Dorsch’s assertions that he had workplace rights “in relation to his … employment”, under s 341(1)(c), for the reasons set out above, it is my view that the annual leave enquiry, the Annual Leave Request, the first complaint, the second complaint, the Unreasonable Work Hours Complaint and the Lack of Support Complaint all concerned his employment with Mares AP and not HEAD Oceania. HEAD Oceania concedes correctly that the First and Second Salary Increase Requests, were inquiries in relation to his employment. There is no need to consider the purported Third Salary Increase Request as Mr Dorsch has not established that there was one.

273    For the purpose of s 341(1)(a), HEAD Oceania accepted that under s 19(2) of the WHS Act, on and from 7 March 2018, it had a duty to ensure, so far as is reasonably practicable, the health and safety of Dorsch, while at work. It further accepts, as it had to, that the WHS Act is a “workplace law” within the meaning of s 341(1)(a) of the FW Act. The s 19 duty is a criminal law duty, the contravention of which is an offence under the WHS Act: s 33. Mr Dorsch alleges that HEAD Oceania’s duty is properly characterised as a “benefit to which he was entitled” under the WHS Act: s 341(1)(a) of the FW Act. HEAD Oceania accepts that there is some Federal Court authority supportive of this proposition, citing Ermel v Duluxgroup (Australia) Pty Ltd (No 2) [2015] FCA 17 at [52]–[56], Milardovic v Vemco Services Pty Ltd (Administrators Appointed) [2016] FCA 19 at [72]–[73], Lamont v University of Queensland (No 2) [2020] FCA 720 at [131].

274    However, HEAD Oceania notes the issue of the benefit contemplating some ascertainable right, entitlement (or benefit) referable to the person does not appear to have been fully argued. The duty imposed under s 19 is directed to workers at large for which the regulator has standing. An employee has no corelative, independent right to bring proceedings. By reason of this absence, it appears that HEAD Oceania is submitting, contrary to the authorities referred to above, that Mr Dorsch has no “benefit” under the WHS Act under s 341(1)(a). HEAD Oceania cited no authority supportive of this proposition. In the circumstances, it is not apparent to me why, if it had been necessary, Mr Dorsch would not have been able to rely on this purported benefit under the WHS Act.

275    However, none of the communications (the annual leave enquiry, the Annual Leave Request, the Unreasonable Work Hours Complaint or the Lack of Support Complaint), constituted an “exercise or proposed exercise of the benefit of a safe workplace” but rather a complaint about its denial. As a consequence, Mr Dorsch did not exercise or propose to exercise a workplace right as alleged.

Did the alleged conduct comprise adverse action?

276    For the reasons set out above, all of the alleged adverse action, save for the eighth adverse action, was not taken by HEAD Oceania so the only live issue is whether the eighth adverse action comprised ‘adverse action’ within the meaning of the FW Act. However, for completeness, I will consider all the alleged action, and for the following reasons find that the none of the alleged adverse action could, in any event, comprise “adverse action” within the meaning of the FW Act.

277    As reasoned above, an essential indicium Mr Dorsch is required to prove, as the nomenclature of the claim suggests, is that the purported action taken against him by his employer is “adverse” to him, namely, as he pleads, it injured him in his employment with HEAD Oceania or altered his position to his prejudice.

278    It may be recalled that the alleged “adverse action” comprised:

(a)    Mr Michl’s notification, by email dated 30 April 2018 to Mr Dorsch, that his annual leave entitlements would expire (the first adverse action);

(b)    Mr Michl informing Mr Dorsch in a telephone conversation that Mr Dorsch only had 40 days accrued annual leave when Mr Dorsch informed him that he had around 70 days’ accrued annual leave (the second adverse action);

(c)    Mr Michl refusing, by email on 18 May 2018, to recognise Mr Dorsch’s accrued but untaken annual leave (the third adverse action);

(d)    Mr Michl’s requirement, as part of an email communication, on 19 June 2018, that Mr Dorsch “end his discussion about untaken leave” and that the only leave that would be recognised was the remaining 12 days for 2018 and that HEAD Oceania was considering disciplinary action against Mr Dorsch (the fifth adverse action);

(e)    Mr Michl’s purportedly unfair scrutinisation of and making false accusations about Mr Dorsch from around June 2018 (the sixth adverse action);

(f)    Mr Michl’s offering of a low salary increase and indication that his employment would be terminated if he sought to engage in higher salary increases (the eighth adverse action);

(g)    HEAD Oceania not paying Mr Dorsch his annual leave in full in accordance with the 2018 Employment Contract and the FW Act (the ninth adverse action); and

(h)    the alleged adverse action by omission (the adverse action by omission claim).

279    Mr Dorsch pleaded that each of the above purported forms of adverse action (not involving dismissal), came within the meaning of s 342(1) (items 1(b) and (c)) of the FW Act, because they “injured [him] in his employment” or altered his position to his prejudice.

280    For the reasons outlined above, it is my view that, with respect to each of the first, second, third, fifth and sixth claims of purported adverse action, they were not action taken by HEAD Oceania and therefore could not fall within the meaning of the pleaded adverse action.

281    Further, even if I were wrong about this, I would not accept that they could comprise the pleaded adverse action for the following reasons. Mr Dorsch’s multifarious claims with respect to his dispute about annual leave in 2018 are problematic. One has to consider the entirety of the interactions as between Mr Dorsch, Mr Michl and others over the three-month period in order to assess, in context, the existence of adverse action. Those interactions are detailed above. The fact of discussion, and the assertion of a purported position within the context of that discussion, does not necessarily equate to an injury or an alteration of position unless it could be said that Mr Dorsch was in fact deprived of his entitlement. As to the first purported adverse action, Mr Michl told Mr Dorsch that his leave entitlements would expire. I am not satisfied that, in fact, that policy was applied to Mr Dorsch’s leave entitlements. Mr Dorsch has not established, for the reasons set out below, that he in fact had accrued entitlements that were not recognised. Similarly, for these reasons, I am not satisfied that Mr Dorsch has established that his position was injured or altered, as a result of the communication on 18 May 2018.

282    In addition, with respect to the alleged second adverse action, I do not accept that the evidence establishes that there was such a conversation in which Mr Michl informed him that he only had 40 days accrued annual leave. Mr Dorsch pleads an unparticularised telephone conversation. Mr Dorsch led no evidence to this effect. Mr Dorsch relied in his closing submission on a purported conversation at paragraph 179 of Mr Dorsch’s affidavit evidence. Paragraph 179 describes the discussion between Mr Michl and Mr Dorsch at a dinner around 5 May 2018 in which there is no suggestion that Mr Michl informed Mr Dorsch that he only had 40 days accrued annual leave. In addition, Mr Dorsch conceded under cross-examination that he did not have 70 days’ accrued annual leave when he says he had that discussion.

283    Further, the evidence above reveals that Mr Dorsch asserted a grossly inflated claim with respect to accrued annual leave, said to have accrued prior to his employment with HEAD Oceania. On Mr Dorsch’s own evidence, as represented to others during this period, he accepted the claim of 87 days was inaccurate, and within a short period of its assertion, dropped the claim to 53 days but asserted a significant amount of that claim arose not from records as there was a “black spot” but by assumption. He thereafter asserted a lower claim. Therefore, claimed assertions of injury caused by a failure to recognise Mr Dorsch’s asserted, inflated claim with respect to the second adverse action claim would assume an entitlement which he did not have to more than 40 days’ accrued annual leave. Similarly, his claimed assertion underlying the third and fifth forms of adverse action assumes that he had an entitlement. I am not satisfied that he has proven he had such a claim on three bases: first, I am not satisfied that he has established that he had such an entitlement which HEAD Oceania was required to recognise, secondly, even if he did, I am not satisfied that he made such a claim to HEAD Oceania (as he made the claim to Mr Michl) and thirdly, I am not satisfied, based on the evidence, that he has established that he had a claim to more accrued annual leave than he received.

284    In addition, I do not accept that Mr Dorsch has established that he suffered any injury by reason of the purportedly unfair scrutinization as claimed by the alleged sixth adverse action.

285    I accept that an “injury” within the meaning of Item 1, para (b) of the table in s 342 of the FW Act is of broad import: Transport Workers Union of Australia v Premier Motor Service Pty Ltd [2015] FCA 650 at [33]–[37] per Perry J; Sabapathy v Jetstar Airways [2021] FCAFC 25; 283 FCR 348 at [70] per Logan and Katzmann JJ; Qantas Airways Ltd v Australian Licensed Aircraft Engineers Association [2012] FCAFC 63; 202 FCR 244 at [32] per Gray, North and Besanko JJ; Maritime Union of Australia v Geraldton Port Authority [1999] FCA 899; 93 FCR 34 at [225]–[233] per Nicholson J. Further, I accept that alteration of a person’s position is a “broad additional category which covers not only legal inquiry but any adverse affectation of, or deterioration in, the advantages enjoyed by the employee before the conduct in question”: Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia [1998] HCA 30; 195 CLR 1 at [4].

286    However, I do not accept that the mere questioning of an employee in these circumstances is sufficient. I maintain the view that to the extent that Mr Michl’s conduct is impugned, it was not conduct undertaken by HEAD Oceania. Further, the evidence established that Mr Michl accepted after reviewing Mr Dorsch’s leave records and discovering invoices for the two flights that he had formed an incorrect view. After realising the mistake, Mr Michl no longer pressed Mr Dorsch about the travel expense claims and no further action was taken. Mr Dorsch conceded in cross-examination that that was the end of the matter. Accordingly, there was no evidence of any adverse impact (whether by injury in employment or prejudicial alteration to his position).

287    As to the alleged eighth adverse action, I note the parties incorrectly referred to the email as being sent on 18 and not 15 October 2021, repeating an apparent error in the pleading. However, it was clear from the parties’ closing submissions that the correct communication was that of 15 October 2021.

288    Mr Dorsch contends that around October or November 2021, HEAD Oceania offered a low salary increase and indicated to Mr Dorsch that his employment would be terminated if he sought to engage in negotiations regarding a higher salary increase. The evidence relating to this issue is dealt with at [107]–[108] above.

289    Mr Michl’s email to Mr Dorsch on 15 October 2021 explains that Mr Michl explored salary options with Mr Skrobanek. After Mr Michl set out what he understood Mr Dorsch’s proposed pay increase to be (which was concerned with Mr Dorsch’s total pay from both HEAD Oceania and Mares AP), Mr Michl rejected Mr Dorsch’s proposal and made an alternative pay offer. Mr Michl told Mr Dorsch that there could be a discussion over the phone, but there would be “little room for negotiation”. There are two material aspects to this communication: first, the communication of there being little room for (further) negotiation and secondly, the comment “[i]f you are not satisfied with the offer, we should reach an amicable exit agreement in the coming weeks”. As to the former, Mr Dorsch pleads that there was a “low salary offer”. I do not accept that this constitutes some injury or prejudicial alteration of position. Mr Dorsch provided no authority to support his submission that offering a pay increase where there is no entitlement to one is capable of constituting adverse action. As to the latter, I accept if the effect of what was communicated was that Mr Dorsch’s employment would be terminated if he sought to engage in negotiations of a higher salary increase, then this could constitute adverse action. However, when read in context, and on the basis of the evidence of both Mr Michl and Mr Skrobanek, what Mr Michl was communicating was that, if Mr Dorsch remained unhappy at the end of the negotiation, it was a matter for him to accept their terms or to seek out alternative employment. When cross-examined, Mr Michl was asked to explain what he meant when he wrote the abovementioned email, he made the following remarks:

I’m just underlining that this is what the company can do at this moment. And if he is not satisfied, he needs to take his own decisions whether he wants to work for this money or want to leave the company.

290    I accept this evidence. Accordingly, if it were necessary to so find, it would be my view that Mr Dorsch has not established that the alleged eighth adverse action constituted adverse action within the meaning of the FW Act.

291    It is also my view that HEAD Oceania’s failure to pay Mr Dorsch’s annual leave in full upon termination in accordance with the 2018 Employment Contract and the FW Act (ie, the alleged ninth adverse action) is not capable of constituting adverse action.

292    HEAD Oceania’s obligation to pay accrued annual leave crystallised upon the termination of the employment relationship between it and Mr Dorsch. HEAD Oceania’s failure to pay the entitlement at the time the employment relationship ended did not injure Mr Dorsch in his employment, or prejudicially alter his position as an employee or discriminate between him and employees of HEAD Oceania, because he was no longer employed. I note this obligation constitutes a breach of s 90(2) of the FW Act, which is dealt with below.

Adverse action by omission

293    Mr Dorsch’s novel adverse action by omission claim fails for the following reasons. Mr Dorsch boldly asserted, absent consideration and reference to any authority, that, by omission, conduct could form adverse action within the meaning of the FW Act. I do not think it would be of any assistance in the circumstances to speculate, at a general level, whether such a claim is theoretically permissible. The concept of adverse action by omission is conceptually difficult, particularly given these are civil remedy provisions that carry a penalty. This is particularly so where the allegation is a mere failure to take steps rather than a decision not to. Further, for the following reasons, Mr Dorsch’s claim would fail in any event.

294    Mr Dorsch’s pleaded claim is predicated on the purported failure of Mr Prete to provide adequate support and training to the accounting department, which, in turn, allegedly caused an increase in Mr Dorsch’s workload.

295    First, I do not accept that Mr Prete was required to provide such support and training and by his purported failure, HEAD Oceania failed to provide that support and training. Mr Prete was a director of HEAD Oceania, Mares AP and Head Sports China. During Mr Dorsch’s employment with HEAD Oceania, Mr Prete worked in Hong Kong. Whilst HEAD Oceania accepts that Mr Prete had a supervisory role for HEAD Oceania’s financial activities, he was not responsible for managing its accounting department. An issue arises here again. Mr Dorsch sought to infantilise his position relative to others. The evidence establishes that the accounting staff reported to Mr Dorsch, and Mr Prete provided functional direction to the Financial Accountant if required, and the Financial Accountant reported informally to him.