FEDERAL COURT OF AUSTRALIA

Nuttall v Hatch Pty Ltd [2024] FCA 339

ORDERS

THE COURT ORDERS THAT:

1.    The application be dismissed.

2.    The cross-claim be allowed.

3.    The applicant deliver the share certificates for the shares the subject of the Exercise Notice to Hatchcos Holdings Share Registry Office.

4.    There is no order as to costs.

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

REASONS FOR JUDGMENT

HESPE J:

PART 1: OVERVIEW

1    The applicant, Mr Timothy Nuttall is employed by the first respondent, Hatch Pty Ltd, in the role of Manager Infrastructure – Southern Region. In his role, Mr Nuttall is required to report to the Director Infrastructure – Australia. At the relevant times, this role was held by Mr Nathan Wild. Mr Wild in turn reported to the Managing Director Infrastructure – Australia-Asia, Mr David Moran.

2    Prior to Mr Nuttall’s employment with Hatch, a company controlled (indirectly) by Mr Nuttall conducted an engineering consulting business. From about 1 July 2017, Hatch acquired this business and Mr Nuttall became an employee of Hatch. Pursuant to a shareholder agreement dated 10 July 2017 between Hatch’s parent company, Hatchcos Holdings Pty Ltd (second respondent) and Motus Company Ltd (third respondent), Mr Nuttall, as trustee of the Nuttall Family Trust, became a holder of 2,050 shares in Hatchcos Holdings.

3    Mr Nuttall has not attended work at Hatch following a meeting on 4 September 2018 with Mr Moran and Mr Wild (4 September Meeting). Mr Nuttall suffers from a psychiatric condition and remained an employee on unpaid leave as at the date of the hearing.

4    In around September 2019, Motus purported to acquire the 2,050 shares registered to Mr Nuttall as trustee of the Nuttall Family Trust pursuant to the terms of the shareholder agreement. The sum of $1,475,000 was deposited in Mr Nuttall’s bank account as the purchase price for those shares on or around 3 October 2019.

5    By his amended originating application, Mr Nuttall claims that:

(1)    Hatch contravened s 340 of the Fair Work Act 2009 (Cth) (the FW Act) by taking adverse action against him. Mr Nuttall seeks declarations, compensation (pursuant to s 545 of the FW Act), pecuniary penalties (pursuant to s 546 of the FW Act) and interest (pursuant to s 547 of the FW Act).

(2)    The purported acquisition of the Hatchcos Holdings shares that were held by him as trustee of the Nuttall Family Trust was of no effect because Motus had no contractual right to acquire those shares and Mr Nuttall (as trustee) remains the holder of those shares. Mr Nuttall, as trustee, seeks orders pursuant to s 175(2) of the Corporations Act 2001 (Cth) requiring the correction of Hatchcos Holdings register of shareholders and compensation.

6    Mr Nuttall alleges the direction to attend the 4 September Meeting without notice, the conduct of Mr Moran at that meeting and the communication to Mr Nuttall at that meeting that he was to cease performing his role as Manager Infrastructure – Southern Region (which was to be reassigned to Mr Wild) and instead perform the role of Structures Team Lead, constitute adverse action. Mr Nuttall contends that those actions occurred because, or partially because, Mr Nuttall had made various complaints or inquiries about various matters.

7    Hatch denies that Mr Nuttall was unlawfully subjected to any form of adverse action. Hatch denies that any of the actions taken constituted adverse action and maintains that none of the actions taken was actuated by complaints or inquiries made by Mr Nuttall in relation to his employment.

8    By cross-claim, Motus seeks specific performance of the shareholder agreement, claiming that it had validly exercised its rights under that agreement to acquire the 2,050 shares and requiring that Mr Nuttall deliver up the share certificate. In the alternative, Motus seeks restitution by the repayment of the sum deposited to Mr Nuttall’s account.

9    Mr Nuttall accepts that if he is to remain the registered shareholder of the 2,050 Hatchcos Holdings shares, he is to repay the proceeds he received as the purchase price of those shares. In so far as the cross-claim is concerned, the issue is whether Motus validly exercised a contractual right to acquire those shares.

PART 2: BACKGROUND AND EVIDENCE

2.1    The trial

10    The trial initially ran across three days (17–19 July 2023) during which evidence was received. Some weeks after the hearing of evidence, the parties filed comprehensive written closing submissions, upon which they elaborated at a further hearing on 27 September 2023.

11    The Court heard evidence from nine witnesses.

12    Mr Nuttall led evidence from the following witnesses, each of whom was cross-examined:

(1)    himself, who gave affidavit evidence.

(2)    Mr Graeme Baird, a registered psychologist who provided a report dated 27 November 2020 and a report dated 27 February 2023.

(3)    Dr Duc Nguyen, Mr Nuttall’s general practitioner at the relevant times, who provided a medical report dated 22 October 2020 and a report dated 1 March 2023.

13    The applicant also tendered two expert reports — one from Ms Smith, dated 24 December 2020, and another from Mr Hood, dated 9 March 2023. Ms Smith and Mr Hood are financial experts who were not required for cross-examination. Each of these experts was asked to opine on the alleged losses suffered by Mr Nuttall in relation to the exercise of Motus’ rights to acquire his Hatchcos Holdings shares.

14    Hatch led evidence from the following witnesses, each of whom was cross-examined:

(1)    Mr Kwak, Managing Director of Hatch for the Australia-Asia region.

(2)    Mr Schatz, Global Managing Director for Infrastructure for the Hatch group. Mr Schatz attended by video conference.

(3)    Mr D’Cruz, director of Hatch’s Metals business in Australia and a colleague of Mr Nuttall and Mr Moran.

(4)    Mr Moran, responsible for Hatch’s Infrastructure group in Australia.

15    The Court also received joint evidence from two psychiatrists, Associate Professor Khalid and Dr Larder in the form of a joint report and were cross-examined concurrently. Each of Associate Professor Khalid and Dr Larder also provided individual reports (Associate Professor Khalid in the form of a report dated 15 January 2022 and Dr Larder in the form of a report dated 8 May 2023). To the extent that the views expressed in their individual reports differed from that expressed in the joint report, the evidence in the joint report is accepted over that in the individual reports.

16    At the commencement of the trial, Mr Nuttall abandoned the following:

(a)    A claim that had he continued to perform his role after 4 September 2018, Hatch’s business would have reached the necessary financial milestones to entitle him to an earn-out payment as described in [22] below.

(b)    A defence to the cross-claim that was based upon the Hatchcos Group Inc shareholder agreement.

(c)    A contention that Mr D’Cruz was a decision-maker or person involved in the decision to engage in the alleged adverse action.

2.2    Hatch’s business

17    The Hatch group, headquartered in Canada, provides engineering services to businesses operating in a range of sectors around the globe. Hatch conducted a business in Australia of providing engineering services to businesses operating in the mining, metallurgical and energy industry sectors. In about 2015, Hatch began to provide services to public infrastructure businesses in Australia. Mr Moran was recruited in September 2016 to lead this part of Hatch’s business in Australia.

18    Over 2017 and 2018, Hatch successfully tendered for work on several infrastructure projects in Australia, including the West Gate Tunnel, Western Roads Upgrade, Melbourne Metro Tunnel and the Melbourne Airport Upgrade.

19    Over this period, Hatch also acquired smaller engineering consulting businesses that provided services to the public infrastructure industry in Australia. The consulting business conducted by Nuttall Engineering Consultants Pty Ltd was one of these businesses. The shares in Nuttall Engineering Consultants were acquired by Hatch on or about 15 June 2017 pursuant to the terms of a Share Purchase Agreement. Mr Nuttall was the guarantor of the seller’s obligations under that agreement.

20    Hatch’s website at the time quoted its Chief Executive Officer as saying:

We are accountable to our clients, communities, and employees for conducting our business in a manner which is safe, respectful, legal, and sustainable.

The website also stated that:

We maintain a supportive, professional and positive workplace environment by appreciating the unique skills, experience, and talent of each individual, treating everyone with courtesy, fairness and respect.

21    Hatch had a procedure for managing grievances and complaints recorded in a document entitled “Workplace Grievance Resolution Procedure – Australia Asia”, effective from February 2015. The document stated that the procedure did not form part of any employee’s contract of employment and Hatch could alter the manner in which the procedure was conducted in respect of any particular grievance. “Grievance” was defined as a “concern or complaint about an act, behaviour, omission, situation or decision, which an individual believes is unfair or unjustified”. Relevantly, the document provided that:

(a)    The procedure was available to employees, contractors/subcontractors, work experience students, volunteers and those who conduct work with and on behalf of Hatch within the Hatch workplaces of the Australia Asia region.

(b)    All parties have a right to be treated fairly, including any person against whom a complaint has been made. This means that the details of the complaint will be put to the respondent so that they will have an opportunity to respond or explain.

(c)    Grievances will be resolved in a sensitive manner.

(d)    All parties are expected to genuinely participate and co-operate in the process and make all reasonable attempts to resolve the grievance.

(e)    The nature and severity of the grievance will determine the appropriate procedure to resolve a grievance.

(f)    Under a heading “Informal Resolution Procedure”, it was stated that:

5.1    Informal Resolution Procedure

Workers maintain good relationships by dealing with workplace grievances at an early stage and in an informal manner. An informal resolution process may be appropriate to address minor workplace complaints, such as personality conflicts or one-off or recent situations where the behaviour is unwelcome or offensive. For example, it may be the respondent was not aware their behaviour was unwelcome or caused offence.

A worker (complainant) should address the grievance with the person concerned (respondent) if they feel comfortable doing so. The complainant should identify the behaviour, explain that the behaviour is causing offence and ask for the behaviour to stop. Both parties should approach the informal process with a willingness to resolve the situation in line with the principles of this procedure.

If the complainant does not feel comfortable addressing the grievance directly with the respondent, or after addressing the grievance with the respondent the behaviour continues, the complainant should report the grievance to their manager or HR representative. The manager and HR representative will determine the appropriate cause of action which may include raising the concerns directly with the respondent or facilitating a meeting between the parties in an attempt to resolve the grievance.

2.3    Terms of Hatch’s acquisition of Nuttall business and Mr Nuttall’s employment

Share Purchase Agreement

22    Pursuant to the Share Purchase Agreement, Hatch agreed to purchase the issued shares in Nuttall Engineering Consultants for the sum of $688,000 (subject to adjustment for working capital balances at closing) plus 2,050 ordinary shares in Hatchcos Holdings. The Hatchcos Holdings shares were directed by the seller to be delivered to Mr Nuttall in his personal capacity or as trustee. An additional earn-out payment (comprising of up to $330,000 and 480 Hatchcos Holdings shares) was payable if certain income targets were met by the business of the Hatch Southern Regional Office in the 12-month period ending 30 September 2019. It was a condition of the sale that Mr Nuttall sign an employment agreement with Hatch “as senior leader of the Hatch [Southern Regional Office] and Hatch Australia Infrastructure team with a commensurate title, role description and responsibilities, a total salary package of $330,000 (including superannuation) and employee benefits generally available to Hatch employees, together with a signed confidentiality, intellectual property and non-solicitation agreement”.

23    Completion of the Share Purchase Agreement occurred on 1 July 2017.

Contract of Employment

24    Mr Nuttall’s contract of employment with Hatch, signed by him on 30 June 2017, provided that Mr Nuttall was to commence “in the position of Manager Infrastructure – Southern Regional within the Infrastructure Group” reporting to the “Director Infrastructure, Australia, Nathan Wild”. Mr Nuttall’s duties were described as:

You will be required to perform the duties of your position and such other duties, within your skill and capability, as requested of you. If you have any queries in this regard please contact Nathan Wild.

You agree Hatch may alter your position, duties, responsibilities and level of authority during your employment in accordance with the needs of the business from time to time. These changes may be made by Hatch on a temporary or permanent basis.

You agree the terms of this Contract continue to apply to you throughout the period of your employment unless varied in writing and agreed by both parties.

25    The contract of employment provided the following in relation to “policies”:

You are directed to read and comply with the obligations imposed upon you within Hatch’s policies and procedures as they relate to your employment. These policies and procedures may be varied from time to time at Hatch’s discretion, and you are directed to comply with such variations.

The contents of Hatch policies and procedures are not contractual and do not confer contractual benefits upon you and do not impose contractual obligations on Hatch. The policies and procedures contain provisions which set out requirements that apply to you and actions Hatch may take which may affect employees.

A breach of your obligations under Hatch’s policies and procedures may result in disciplinary action, up to and including the immediate termination of your employment.

26    Mr Nuttall commenced work with Hatch in the role of Manager Infrastructure – Southern Region on 1 July 2017.

Shareholder Agreement

27    The Hatchcos Holdings shares held by Mr Nuttall (whether in his personal capacity or as trustee) were the subject of a shareholder agreement, dated 10 July 2017, between Mr Nuttall, Hatchcos Holdings and another principal shareholder in Hatchcos Holdings, Motus.

28    Pursuant to cl 5 of that agreement, relevantly:

(a)    Mr Nuttall granted a call option to Motus. Upon exercise of that option, Mr Nuttall was required to dispose of the Hatchcos Holdings shares for a price determined in accordance with cl 9 of that agreement.

(b)    Motus could exercise the call option at any time after an “Option Event” occurred by giving Mr Nuttall an Exercise Notice in respect of a number of shares determined under paragraph 5(c) of the agreement. “Option Event” was defined in paragraph 1(i) to mean:

(c)    Upon the giving of an Exercise Notice, a contract was to arise between Mr Nuttall under which Mr Nuttall was required to sell to Motus:

(i)    all of the Hatchcos Holdings shares he held, in the event of an Option Event other than Option Event (vi) or (vii);

(ii)    the number of Hatchcos Holdings shares determined by Hatchcos Holdings, in the event of Option Event (vi) or (vii) “as placing [Mr Nuttall] at a level of shareholding that is not less than the number of shares generally held by other Shareholders having similar roles or responsibilities at a similar standard of performance”.

(d)    Unless an Option Event occurs, a put option or call option could not be exercised unless Mr Nuttall made an application to Hatchcos Holdings for permission to exercise his put option.

29    Clause 16 required that any notice required or given for the purposes of the agreement was to be in writing “and shall be deemed to have been duly given if delivered to the Shareholder and Employee personally…or if mailed by prepaid registered mail addressed to…the Shareholder and Employee, at the last address recorded for the Shareholder in the registers of Hatchcos Holdings” and “any such notice shall be deemed to have been given at the time of delivery if delivered personally and if mailed by prepaid registered mail on the third next business day following the date of mailing”.

30    Mr Nuttall is also the beneficial owner of shares in Hatchcos Group Inc. These shares were held by trustees under the terms of an agreement under which the trustees held shares for certain employee shareholders of the Hatchcos group. Hatchcos Group Inc is an unlisted company owned by the employees of the Hatch group. Generally, senior employees performing valuable services are offered shares. Mr Nuttall’s Hatchcos Group Inc shares were also subject to the terms of a shareholder agreement made on 5 September 2017 between Mr Nuttall and Hatchcos Group Inc.

31    By the close of the hearing, neither party sought to rely upon this shareholder agreement for any purpose.

2.4     Chronology of Events

32    As will be seen, the relationship between Hatch and Mr Nuttall was plagued with difficulties and did not evolve as either party might have hoped or expected.

33    At the time Mr Nuttall commenced his employment with Hatch on 1 July 2017, Hatch’s Melbourne office was very small, with few employees. Both Mr Wild and Mr Moran were relatively recent hires.

34    Mr Nuttall’s employment agreement did not expressly set out the scope of his role as Manager Infrastructure – Southern Region and Mr Nuttall was never provided with a formal written description of his role. Mr Nuttall considered his role to encompass the following duties and responsibilities, in respect of the Southern Region (namely Victoria):

(a)     Managing the pricing of work and projects;

(b)     Bringing in business and clients, tendering;

(c)     Managing the control of costs and outgoings;

(d)     Hiring and termination of staff;

(e)     Growing the team to meet the business plan – namely, 40-50 employees by the end of October 2019;

(f)     Achieving the business plan target of revenue >$10 million in the Financial Year ending September 2019;

(g)     Client meetings;

(h)     Strategic growth of the business in the Southern Region;

(i)     Promote the profile of the Business in the Southern Region;

(j)     Manage the operations of the Southern Region; and

(k)     Acting as Project Director.

35    Mr Nuttall considered the central elements of his role to be in winning work and recruiting and managing staff. Between 2017 and 2018, Hatch successfully tendered for a number of significant infrastructure projects in the Southern Region, including Melbourne’s West Gate Tunnel, Western Roads Upgrade, Melbourne Metro Tunnel and designs for the Melbourne Airport Upgrade.

36    Mr Moran considered a central element of Mr Nuttall’s role to be in delivering projects on budget and in accordance with client expectations, including understanding the details of client projects and identifying any risk areas for Hatch.

37    At the commencement of his employment, Mr Nuttall travelled to Portugal where his partner and children were and to return to Australia with them. Mr Moran was unaware of the purchase of that leave and received what he considered to be short notice of that leave. Mr Nuttall was absent for approximately 2 weeks shortly after the commencement of his employment. By email sent to Mr Moran on 21 August 2017, Mr Nuttall acknowledged that he “clearly need[ed] to improve my communication on leave”. Mr Moran required Mr Nuttall to purchase leave to cover his absence.

38    Mr Wild had a history of suffering from depression and anxiety, often away from work due to illness. Mr Moran had at one time said to Mr Nuttall that “[Mr Wild] has gone off again”.

39    On 2 February 2018, Mr Wild sent an email to two individuals, at least one of whom was a direct report of Mr Nuttall (Mr Taylor), with a subject heading “Western Road Upgrade Design – critical design information, inputs and issues”, in which Mr Wild set out “a few concerns” he had with the project. He forwarded a copy of the email to Mr Moran. Mr Moran responded at one point:

Great to have you all over it. Tim is clearly not, irrespective of his rhetoric.

40    From February 2018, Mr Moran instituted monthly project review meetings with each project team to review project progress and budgetary performance as well as weekly Regional Infrastructure Leadership Team meetings with his direct reports to review employee utilisation.

41    In around March or April 2018, Mr Wild broke his ankle which also resulted in a further absence from the office. Mr Moran said to Mr Nuttall at the time that “[Mr Wild] is off again, now with a twisted ankle”.

42    On 4 May 2018, an email was sent to Mr Nuttall and Mr Taylor requesting they provide their preferred time to set a recurring team meeting with Mr Wild for the Civil and Structural teams, with the first to commence the following Monday. The email also attached an organisation chart. Mr Nuttall did not respond to the request for a preferred time but asked for his version of the organisation chart to be prepared for further discussion with Mr Wild. Mr Wild sent an email to Mr Moran saying:

Tim is becoming a problem.

Why...he and [Mr Taylor] are resisting team meetings and the structure I am putting in place is beyond me.

…

Can you call them into your office for a chat?

They seem allergic to role clarity, team leadership and taking directions from me.

43    Mr Moran responded by email saying:

let the 3 of us get together on Monday and talk it through. Tim seems to be responsive to that sort of approach historically.

44    At the end of June 2018, Mr Nuttall received an email from a representative of Hatch’s South African office, seeking to arrange a visit to Australia. On 2 July 2018, a follow up email was sent to Mr Nuttall and this time, also addressed to Mr Wild and Mr Moran. Mr Moran forwarded the email to Mr Wild as a “[g]ood example of Tim not covering things off before disappearing on leave”.

45    Mr Moran expected Mr Nuttall to be across the details of client projects, including budget, timing and costs issues. Mr Moran made inquiries of Mr Nuttall relating to details of projects which Nuttall considered to be non-urgent but in respect of which Mr Moran required timely responses. Mr Moran considered Mr Nuttall to fail to provide timely responses to his queries.

46    On 13 July 2018 Mr Nuttall sent an email to himself entitled “Dave Moran”, which was in the following terms:

Notes in response to Dave Moran phone call where he said: “Nathan has been working hard these past months...and so have I (DM), and you have managed to balance your life more and have time off...”

In the past two months I have:

Single handedly written and submitted the vicroads second prequal submission

Took over the entire management of the WRU structures group, drove realistic program to completion with entire team and contractor on board with really minor issues through effective communication

Drove re-structure of WRU management through strategic changes that our entire project team now is content, as well as largely stepping all over the PD to take action where the PO should have been

Undertook the compilation and strategy of the entire structures component on the successful Monash tender

Single handedly tendered and secured the Taylors Road bridge design

Still managed to spend enough time with the staff to retain Steve R and maintain happiness of others

Work with Rob H to complete and review a new ISO9001 QMS with circa 15 new documents

Amongst all other day to day activities with strategic growth, Jeremy/commercials, HPSJV, WGTP, resourcing, Planning BD, LD

But yes you and Nathan have worked hard and I have tried to also balance my family life.

Thank you

47    Mr Nuttall had a practice of working away from the office, sometimes from home. Mr Moran expected employees of the Infrastructure group to work from the office and attend office meetings in-person. Examples were given of Mr Nuttall failing to return to the office in time for a Regional Infrastructure Leadership Team meeting on 16 July 2018 due to flight delays after working remotely interstate and failing to return to the office when expected due to a “non-pupil day” at school. Mr Moran sent a message to Mr Nuttall at the time stating:

It just doesn’t feel very fair to me Tim. I think it was already really reasonable to let you work remotely last Monday and Friday. And travel should be in your time not the business’s. I’m not happy.

There were also instances of Mr Moran sending messages to Mr Nuttall, enquiring of when Mr Nuttall expected to be in the office.

48    On 16 July 2018, Mr Nuttall sent another email to himself with the subject line “Fwd: Dave Moran” in which he recorded the above text message from Mr Moran and added the following:

Working from home is just a location. I worked at least [fulltime] if not more those days. Today was an oversight but have been working and by the end of tonight would have produced a finalised [West Gate Tunnel project temporary works] proposal. [Mr Moran’s] approach is totally demoralizing and makes me not want to continue putting in effort totally unrecognised.

49    Mr Wild requested Mr Nuttall provide him an outline of the key responsibilities of the senior roles under Mr Nuttall, including Mr Nuttall’s own, on at least 20 July, 22 July, 23 July and 25 July 2018.

50    From mid-2018, Mr Wild was experiencing mental health issues resulting in absences from the office and throughout August 2018 was on extended leave. Mr Nuttall reported directly to Mr Moran during Mr Wild’s absence. Mr Nuttall was unable to respond to questions Mr Moran asked of him in project and leadership team meetings. Mr Nuttall did not consider it to be part of his role to have direct knowledge of the details Mr Moran sought.

51    Over July and August 2018 one of the projects Mr Nuttall worked on was a tender for a section of the Inland Rail Project in Queensland. Mr Nuttall had concerns about Hatch’s ability to resource a role as lead designer for the tender and had prepared a submission on the basis that instead Hatch would perform a consulting role. Mr Nuttall raised his concerns with Mr Moran. Following discussions he had with the client, Mr Moran agreed that Hatch would be capable of performing the role of lead designer.

52    On or about 6 August 2018, Mr Moran travelled to China for a week, during which time Mr Nuttall was responsible for creating the final presentation to the client to secure the tender for Hatch as lead designer for the Inland Rail Project. Before Mr Moran left for China Mr Nuttall expressed his concerns about Hatch’s ability to deliver the project should the tender be successful. Mr Moran told Mr Nuttall that he believed Hatch would be able to deliver the project as they would have time to assemble a team should the tender be successful.

53    On or about 7 August 2018, Mr Nuttall had a discussion with his colleague, Mr D’Cruz. Mr D’Cruz was not part of the same team as Mr Nuttall but was part of another group and was also based in Melbourne. In that discussion Mr Nuttall expressed difficulties he was experiencing with Mr Moran and workload issues resulting from Mr Wild’s absence. Mr Nuttall expressed his disagreement with Mr Moran’s manner for dealing with staffing issues and Mr Moran’s demands on Mr Nuttall to be across the details of client projects. Mr Nuttall considered Mr Moran’s demands in this respect were distracting Mr Nuttall from carrying out the work Mr Nuttall considered he should be performing. Mr Nuttall expressed frustration with Mr Moran’s failure to communicate with him and respond to issues Mr Nuttall considered important. Mr D’Cruz suggested that Mr Nuttall speak with Mr Kwak, the Managing Director for Asia and Australia.

54    During August 2018, there were issues with one of the projects Hatch was working on, the Western Roads Upgrade. Mr Wild, the leader for that project was on leave and the client communicated with Mr Nuttall.

55    Mr Nuttall considered Mr Moran’s manner towards him over August and September 2018 to be abrupt, unsupportive and unappreciative. Mr Nuttall had no recollection of Mr Moran ever congratulating or praising him. Mr Nuttall considered Mr Moran’s demands of him to be unreasonable.

56    Mr Nuttall considered that Mr Moran was issuing instructions to persons reporting to Mr Nuttall without communicating to Mr Nuttall. Mr Nuttall had concerns about the stress levels of some members of his team due to the responsibilities Mr Moran was imposing on them. When Mr Nuttall raised a query with Mr Moran about one of these instances relating to Mr Parsons, Mr Moran responded by email sent on 9 August 2018 stating:

Yes I asked him to cover [Mr Wild] on the JV Committee as most of the issues are commercial in any case. I thought I’d told you, sorry I didn’t.

I have not talked to him about [Mr Wild] beyond what I told the group, however I did ask him to stop sending emails to [Mr Wild] (which I thought should have been obvious).

I thought that he was handling the stress pretty well, but I could see that he was struggling in this morning’s call. I’ll spend some time with him next week. We can bring in help if we have to.

57    On 14 August 2018 Mr Nuttall received an email invitation to an on-line meeting with Mr Kwak. It was Mr Kwak’s practice to have periodic catch-ups with Hatch employees in different regions. Mr Nuttall was invited to raise any issues in respect of what was happening in his region or other matters he wished to discuss with Mr Kwak.

58    On 15 August 2018, at a monthly Infrastructure project review meeting relating to projects including the Western Roads Upgrade, Mr Nuttall was asked by Mr Moran to explain the increases in costs to complete the project. Mr Nuttall was unable to provide Mr Moran with the responses Mr Moran was seeking but said he would follow up on the costs issues raised. During the meeting Mr Nuttall also conveyed his belief that Hatch would be paid for an overrun on a different project. That belief turned out to be misplaced.

59    On 20 August 2018 Mr Nuttall received a message from a Hatch employee, Mr Taylor, telling Mr Nuttall that Mr Taylor was in hospital, having had a nervous breakdown and suffering anxiety. Mr Taylor held the role of Civil Director/Engineering Manager.

60    On 21 August 2018, Mr Nuttall entered Mr Moran’s office and read him Mr Taylor’s message. In addition to the absences of Mr Wild and Mr Taylor, another Hatch employee (Mr Howard, who held the role of Structures Lead) had been diagnosed with fatigue issues. Mr Nuttall told Mr Moran that there were workplace stress issues in the Melbourne office. Mr Moran did not agree that Mr Wild’s mental health issues were related to his work and considered that a level of stress in the workplace was to be expected. Mr Moran told Mr Nuttall that he considered it unlikely that Mr Taylor had suffered a nervous breakdown but was likely suffering some form of anxiety. Mr Nuttall said to Mr Moran that he was concerned about the demands being placed on employees as the business was expanding rapidly. Mr Moran told Mr Nuttall that he considered Mr Nuttall and Mr Parsons were able to deal with matters.

61    On 21 August 2018, there was a Regional Infrastructure Leadership Team meeting at which both Mr Moran and Mr Nuttall were present. Mr Nuttall was asked about staff utilisation in relation to a couple of projects. Mr Moran was not satisfied that Mr Nuttall was able to provide a satisfactory explanation. Costs forecast for the Western Roads Upgrade were above previous estimates. Mr Moran considered cost estimating and forecasting to be part of Mr Nuttall’s responsibility. At the meeting, Mr Nuttall was charged with responsibility for reviewing and taking control of the structures completion schedule.

62    On or about 21 August 2018, Mr Moran asked Mr Nuttall to come into his office and asked about Mr Nuttall’s experience in design management. He told Mr Nuttall that whilst Mr Moran knew Mr Nuttall was good at winning work, he was not sure of Mr Nuttall’s experience in managing the delivery of projects. Mr Nuttall took the question as a criticism and an insult, given Mr Nuttall’s professional experience. Mr Nuttall told Mr Moran that he had extensive design management experience, including on Brisbane Airport Link and other projects he had worked on during his time at Nuttall Engineering Consultants. Mr Moran instructed Mr Nuttall to lead the delivery of the Western Roads Upgrade project as the structure design manager and to be directly involved in the delivery of the project. Mr Nuttall raised his concerns about other issues relating to Hatch’s Infrastructure business, including staffing. Mr Moran instructed Mr Nuttall to focus on delivering the Western Roads Upgrade project.

63    Mr Nuttall was aware of issues with the Western Roads Upgrade project and had commenced to work on appointing a Structures director.

64    Mr Moran expressed concern to Mr Nuttall about what he perceived to be his lack of physical presence in the office.

65    On 22 August 2018 at about 8.19 am Mr Moran began to prepare a note of his thoughts about Mr Nuttall’s performance, particularly following Mr Nuttall’s responses at the Regional Infrastructure Leadership Team meeting the previous day. Mr Moran was preparing the notes with a view to informing a performance management discussion he intended to have with Mr Nuttall.

66    On 22 August 2018 at approximately 11.54 am, Mr Nuttall attended an on-line meeting with Mr Kwak which lasted about 50 minutes. There was difficulty in the evidence of each of Mr Nuttall and Mr Kwak in relation to the precise content of this discussion. Mr Nuttall’s evidence was coloured by his emotions, and it was difficult to distinguish between his recollection of what was said to him and what he believed or understood to be said. Mr Kwak’s evidence was given in a guarded manner and his recollections were unclear. The conversation occurred some five years ago. I make the following findings based on the balance of probabilities and the brief contemporaneous notes made by Mr Kwak.

67    Mr Nuttall told Mr Kwak that the business was succeeding but with Mr Wild away, Mr Nuttall was experiencing difficulties with Mr Moran. Mr Nuttall told Mr Kwak that members of Mr Nuttall’s team were suffering from stress related mental health issues. Mr Nuttall told Mr Kwak of the absences of Mr Wild and Mr Taylor due to anxiety issues and that he was struggling with Mr Moran’s management style. Mr Nuttall was struggling to meet Mr Moran’s demands (which Mr Nuttall considered to be task-driven and focussed on project details and unreasonable) while also performing the work that Mr Nuttall considered important.

68    Mr Nuttall said to Mr Kwak that Mr Moran was not communicating clearly and did not discuss matters with Mr Nuttall before making decisions that Mr Nuttall considered affected his work, in particular Mr Moran’s willingness to tender for the Inland Rail Project on the basis that Hatch would perform the lead design role. Mr Nuttall expressed concern to Mr Kwak that Mr Moran’s approach to this project was not consistent with the business plan for the Infrastructure group.

69    Mr Nuttall also expressed difficulties he was experiencing with other projects, including the Western Roads Upgrade project and West Gate Tunnel project because of difficulties Mr Nuttall saw in the way in which Hatch’s joint venture partner in those projects was performing its role.

70    Mr Nuttall also expressed concern that Mr Moran was working on his own organisation chart for the Southern region notwithstanding that Mr Nuttall and Mr Wild had spent significant time on creating such a chart. Mr Nuttall told Mr Kwak that Mr Moran had made a decision to hire someone Mr Nuttall had interviewed at Mr Moran’s request and had told Mr Moran was not appropriate for the role.

71    Along with other staff at Hatch, Mr Nuttall was working long hours. Mr Nuttall told Mr Kwak of his concerns about staff well-being and the workplace environment.

72    Mr Kwak told Mr Nuttall that he would look into the issues raised and that he understood that it could be difficult to discuss issues with Mr Moran. Mr Kwak said to Mr Nuttall that Mr Moran had come from a contracting background and he tended to have a different approach to someone from a consulting background. Mr Kwak’s notes of the 22 August 2018 catch-up record (emphasis added):

Tim struggling with David M- comms, task driver, project focus, needs alignment - investigate

73    Mr Nuttall was under the impression that he would be left to perform his own role in the way he considered appropriate.

74    On 23 August 2018, Mr Nuttall unexpectedly encountered Mr Wild in the street. Mr Wild was still on sick leave. Mr Wild told Mr Nuttall that he was feeling well, that he had established a routine that was working for him and was looking forward to returning to work. I accept Mr Nuttall’s evidence that Mr Nuttall told Mr Wild that he was looking forward to Mr Wild’s return and that matters had been difficult in his absence.

75    On 24 August 2018 Mr Nuttall’s partner was required to urgently fly to Portugal as her grandmother, with whom Mr Nuttall’s partner had a close relationship, had taken ill. Mr Nuttall was left to care for his two school-aged children. Mr Nuttall contacted Mr Moran on 23 August when he learned of his partner’s need to go and informed Mr Moran that he would need to work flexibly in the office for the following week to enable him to perform the school drop-off and pick-up but would work from home in the evenings. Mr Moran did not comment beyond remarking that he thought Mr Nuttall usually dropped his children off at school in the mornings.

76    Mr Kwak was concerned about the dynamics in Mr Moran’s team. On 24 August 2018, Mr Kwak spoke to Mr Moran in order to gain a better understanding of the working relationship between Mr Moran and Mr Nuttall. Mr Kwak asked Mr Moran how things were doing. Mr Moran told Mr Kwak about operational issues relating to projects for which Mr Nuttall was responsible and he was not happy with Mr Nuttall’s performance in respect of those projects. Mr Moran expressed frustration to Mr Kwak about Mr Nuttall’s absences from the office. Mr Nuttall’s strength was in business development but he was weak in project delivery. Mr Moran told Mr Kwak that Hatch was facing material write-offs in relation to some of the projects. Mr Moran raised the prospect of repositioning Mr Nuttall to improve his skills in project delivery. I accept Mr Kwak’s evidence that he did not tell Mr Moran the specifics of the matters raised by Mr Nuttall and that Mr Kwak did not revert to Mr Nuttall with a report of the things Mr Moran had said to him about Mr Nuttall.

77    On 28 August 2018, Mr Moran finalised the note he had commenced to draft on 22 August. That note was finalised in the following terms:

It was apparent to me from the Project reviews on 15th August and the RILT meeting on the 21st August that Tim was: -

1.    Not on top of the detail of the majority of the Southern Region projects. This includes status of contracts, financial (revenue and cost) performance etc,

2.     Not across detail of utilisation of many of the staff,

3.     Was over optimistic about the likely project outcomes and defensive of the obviously poor performance of the structures team,

4.     Displays of lack of ownership of issues [sic]. Blames JV partners or Project Managers under his control. Displays surprise at bad news.

…

Evidence of poor internal performance is incompetent design of the Airport gantries for Civilex and subsequent $150k write-down, reputational damage and exposure to delay damages. The need for large provisions on WGT, WRU.

Had no idea on the status of Taylor’s Road bridge.

Possible reasons for Tim’s performance are: -

1.    An over reliance on subordinates and on Jeremy Parsons. Huw Taylor on leave for three weeks and Rob Howard sick from 14th to 17th August. Tim clearly did not cover these absences directly.

2.    Spending inadequate time in the office to get across the detail. Estimated time in office <20 hours per week. Starts 9.30 to 10am and leaves 4.30 to 5.00pm each day. Often out of office inside those hours.

3.    Possibly operating above capability level. Either overwhelmed or incapable of getting accurate forecasts from Project Managers. Appears to be unable or unwilling to self-perform these tasks. Is possible that career to date included insufficient direct commercial management of projects.

4.    Has a tendency to be biased towards optimism. This is a strength in winning work but very dangerous in the delivery of work as real issues can be masked until it is too late to meaningfully intervene.

5.    Optimism [bias] means that poor internal performance is not adequately managed.

On top of this need to cover the issue of not responding to texts and emails etc. Just look at DM’s texts to Tim and the lack of responses as evidence.

78    Some time after preparing the note, Mr Moran had a discussion with each of Mr Kwak and Mr Schatz in which Mr Moran expressed his intention of repositioning Mr Nuttall into the role of Structures Team Lead.

79    On 31 August 2018, shortly before 7.00 am, Mr Moran sent Mr Nuttall and others an email in which he proposed that the Infrastructure team work 12-hour days through September with some critical functions also working Saturdays in order to deliver the Western Roads Upgrade project. Mr Moran proposed that staff would receive time off in lieu after the completion of the project and “perhaps some sort of reward”. In that email Mr Moran said he expected “the leadership should make similar commitments” and that he was “personally willing to do whatever is necessary”. Mr Nuttall responded by email in the following terms:

I think our biggest risk is [attrition]. If we lose any more key people we will guarantee failure to meet program. I [don’t] support this.

I believe that we manage the program tightly and request the guys to put in extra effort to meet the program as required. We should decide how we incentivise this.

Two weeks ago Hui had to work through until 3am to deliver a package with others from the Hatch team. He resigned the following [M]onday…The biggest risk to the [project is] losing any more key people.

80    Mr Moran’s proposal did not proceed.

81    Towards the end of August 2018, Mr Moran engaged in discussions with Mr Wild about Mr Wild’s return to work.

82    On the afternoon of 3 September 2018, Mr Wild returned to work. Mr Wild asked Mr Nuttall about Mr Moran. Mr Nuttall told Mr Wild that Mr Moran was trying to control everything, including by increasing the number of roles that reported directly to him and making decisions without consultation. Mr Nuttall told Mr Wild that Mr Moran’s approach was making things difficult and causing Mr Nuttall stress. Mr Nuttall told Mr Wild that he felt Mr Moran did not think highly of him and made him feel he was underperforming. Mr Nuttall told Mr Wild that he considered Mr Moran made excessive demands for the completion of unnecessary tasks. Mr Nuttall understood that Mr Wild had similar experiences with Mr Moran setting expectations that could not be met. Mr Nuttall told Mr Wild he was pleased Mr Wild was back and that he would look to Mr Wild for support.

83    On the afternoon of 3 September 2018, Mr Moran had a discussion with Mr Wild. Mr Moran informed Mr Wild of a change Mr Moran proposed making to Mr Nuttall’s role and that Mr Wild would be stepping into that role.

84    Mr Nuttall was aware Mr Moran met with Mr Wild some time after Mr Wild returned to the office prior to the 4 September Meeting.

85    At 10 am on 4 September 2018, Mr Nuttall and the leadership team had a meeting with Mr Moran. This meeting was in accordance with usual weekly practice. At the conclusion of that meeting Mr Moran said to Mr Nuttall that they should “catch-up” together with Mr Wild that afternoon. Mr Nuttall thereafter sent an email invitation to Mr Wild and Mr Moran with a description “catch-up”.

86    At about 2 pm on 4 September 2018, Mr Nuttall met with Mr Wild and Mr Moran in a meeting room. Although their perspectives not surprisingly differed, the recollections of Mr Moran and Mr Nuttall about the principal matters discussed at that meeting were broadly consistent.

87    After the meeting concluded and Mr Moran and Mr Wild had left the room, Mr Nuttall remained in the room and made notes of the meeting. The notes record Mr Nuttall’s feelings and perspective of the meeting. Given the importance of the 4 September Meeting to Mr Nuttall’s claim, the contents of the notes are set out below:

DM [David Moran], NW [Nathan Wild] and TN [Tim Nuttall] catch-up 4th Sept 2018.

DM not happy about operations and he is losing sleep.

DM blames me as responsible for WRU [Western Roads Upgrade] and every project. DM very abrupt that I am accountable and not doing my job, that I am not capable of role and not fulfilling role and that he questions my capability overall to do role.

Says [T]im responsible for everything. My fault. Must be accountable for everything and everything going badly.

In charge but not accountable – DM says about me.

[DM] says that [I’m] over positive then he finds out facts afterwards and things are bad. DM failed to give any example of this where I requested three or more times for an example stating that his comments were unfair and unjustified.

I request specific examples and DM repeats WRU and airport. Both of which have exceptional circumstances and reasons. NW present and he reinforces that WRU was not Tim[‘]s fault. NW was appointed as the lead for Hatch on the project but sits quietly while DM blames fault all on TN.

In fact WRU had M Rutter as [Project Director] and NW as the lead for Hatch but apparently DM thinks its all TN accountability.

Two weeks ago DM addressed the team stating that it was outstanding that our infrastructure business had made a profit in its first year (circa 800k – 1m) and that normally it would take 3 years to commence making a profit.

I ask for specific examples where I have been over positive and actual scenario is bad, and DM has none. I reinforce that I was negative on WRU, but that no matter how much action we took to PD, PM and NW as the Hatch rep, they either didn’t respond or simply didn’t act. Tim[‘]s hands were tied as D[M] trying to buy P&S and wanting the relationship. TN was forced into this from DM as this was DM[‘]s initiative to buy P&S. When TN told JB that he didn’t think they were a good fit for Hatch I think this negatively affected DM[‘]s opinion of TN.

DM clearly made it clear that he doesn’t think I am capable of the role I am in, that he has decided to demote me to structures lead and NW put in my current role. DM made it clear that he doesn’t think I am [up] to the role, again I requested specific examples which he refused to give, by saying, I think that I have already given you them.

Constructive firing based on my conversation with Jan.( It was two days after my discussion with Jan that D[M] [brought] me in to his office to talk derogatively at me [asking] what my problem is with stepping down to design manage and whether I had any design management experience. This was bullying and putting me down.)

My feedback to DM was that I don’t agree with him, he is being unfair to me in his negative judgement, that the business is having immense success in hiring, securing of projects, [the] fact no-one has resigned and that the small projects have an overall write up as in super-profit. Again DM. The major projects going over budget have real reasons and I was doing what was in my power to amend these.

When I gave my honest opinion DM said “I don’t want to make this a formal performance review issue” and reclarified that he thinks he is right and that I don’t accept it and that’s that. This was a threat that should I disagree with Dave then he will make this a formal performance record and instigate a warning process. A threat to fire me basically if I continue to discuss calmly where the examples to substantiate what DM says are. I was calm throughout and simply requested examples which he avoided and then came with this threat.

I made it clear that I do not agree with DM[’]s view, that I understand he has a strong view that he will not change.

DM reinforced that he is taking charge of org chart, implementing that I am structures lead now, and he will send that out today and he is implementing it regardless of if I agree. He also wanted to make it clear, which I already understood, that I had no necessary progression back to the role as infrastructure director and that this demotion was permanent unless proven that I could step up into my current role.

So D[M] was telling me that today he was going to show all of my employees that I was being demoted formally to the structures lead role, a role I was doing 8 years ago and had progressed over 6 years ago effectively into the current role I am in when I was at KBR (where I reported directly to the Asia Pacific Director Infrastructure – same title as Dave)

The facts are that under my leadership we have grown the team to circa 53 people, an order book of over 10m per annum and are making a profit. There have been some glitches but not actual financial losses. We have had no resignations and I achieved ISO9001 QMS certification last month, again way ahead of schedule. I said this to Dave that he was ignoring all the incredible work I had [done] and achieved and that he was announcing to the team only in the last two weeks about my success.

At the end Nathan said that if we don’t buy Lyndsay Dynan then he will need to leave as there is no justification for Hatch to require all Dave, Nathan and I. – Clearly given my demotion this really means that I need to go and am not required.

88    After the meeting, Mr Nuttall felt a state of shock and anxiety at a level he had not experienced before. Mr Nuttall left the office building and called a lawyer.

89    On 6 September 2018, Mr Nuttall received a copy of the notes Mr Moran prepared of the meeting of 4 September 2018 by email from Mr Moran entitled “Nuttall Performance Discussion”. Mr Moran’s notes reflect Mr Moran’s perspective on the messages he sought to convey at the meeting and were largely based on the note he prepared for himself on 28 August 2018. Mr Moran’s notes of the meeting of September were in the following terms:

Notes on the discussion between Tim Nuttall, Nathan Wild and David Moran at 1pm 4th September 2018.

David expressed concern that in the Project reviews on 15th August and the RILT meeting on the 21st August and recent discussions generally that Tim was: -

1.    Not on top of the detail of the Southern Region projects. This includes status of contracts, financial (revenue and cost) performance etc,

2.    Not across detail of utilisation of many of the staff,

3.    Was over optimistic about the likely project outcomes and defensive of apparent poor performance of the structures team,

4.    Displayed of lack of ownership of issues [sic]. Blames JV partners or Project Managers under his control. Displayed surprise at bad news.

For example, on WRU, the latest detailed forecast on time and cost to complete was substantially [worse] than previous estimates. Tim acknowledge[d] that it was probably correct although a bit conservative, but was not across the detail. Tim could not explain the reasons for the delayed completion, but advised that he would review. Did not present confidence that current program could be met.

Not across the reasons for the poor internal performance and apparent incompetent design of the Airport gantries for Civilex and subsequent $150k write-down, reputational damage and exposure to delay damages.

David noted that we were now looking at write downs on WRU, WGT, Portsea and Airport Gantries.

Tim was not aware of the status of Taylor’s Road bridge and advised that he would have to check with Rob Howard.

David suggested possible reasons for Tim’s performance were: -

1.    An over reliance on subordinates and on Jeremy Parsons. Huw Taylor on leave for three weeks and Rob Howard sick from 14th to 17th August. However, Tim clearly did not cover these absences directly.

2.    Spending inadequate time in the office to get across the detail.

3.    Possibly operating above capability level. Either overwhelmed or incapable of getting accurate forecasts from Project Managers. Appears to be unable or unwilling to self-perform these tasks.

4.    Has a tendency to be biased towards optimism. David noted that this is a strength in winning work but can be dangerous in the delivery of work as real issues can be masked until it is too late to meaningfully intervene. David believe[s] that this over optimistic view had contributed to the current projected write-downs on projects.

On top of this David noted the issue of Tim not responding to texts and emails from David in an adequate timeframe or not at all which was unacceptable at this level of management.

Tim did not accept that these allegations of poor performance were true. Tim said that he was aware of issues and that he was progressively getting on top of them. Tim advised that all of the things raised by David were symptoms of the rapid growth of the business and the associated lack of systems, project reporting etc. Tim also said that he had been distracted from doing his job by David asking him to assist with things outside of Southern Region such as Lindsay Dynan and the Acciona submission for the Inland Rail PPP.

David did not accept Tim’s reasons as an adequate excuse for the four performance issues raise[d].

David advised that he was restructuring the business to move Tim in the role of structures lead for southern region and moving Nathan into the role of Southern Region Manager. These changes in positions were to get the management closer to the delivery teams so that issues in the business could be resolved. David noted that Tim should look at this as an opportunity to improve. David advise[d] that this change would be communicated as being temporary and subject to improvement Tim would be reinstated to the role of Southern Region Manager. David noted that Tim would be provided with coaching and mentoring to assist with this. Work would also be undertaken to make expectations of each role much clearer.

90    The following findings concerning the 4 September Meeting are made on the balance of probabilities having regard to the evidence in its totality. In this respect, I find that neither Mr Nuttall’s note nor Mr Moran’s note conveyed the terms of what was said in the meeting. Rather the notes largely reflect Mr Nuttall’s feelings in response to what he thought he had heard and Mr Moran’s intentions of what he wanted to convey.

91    Mr Moran commenced the meeting by expressing his dissatisfaction with the way in which the business was operating. Mr Moran told Mr Nuttall that Mr Nuttall was responsible for the performance of the Southern Region and that many of the projects were not progressing well. Mr Nuttall tried to draw Mr Moran’s attention to the achievements of the business, including its recruitment and retention of staff, its success in securing projects and its profitability. Mr Moran told Mr Nuttall that he was overly positive and there were problems that needed to be addressed. Mr Moran mentioned problems with the Western Roads Upgrade project and the Airport project.

92    Mr Wild and Mr Nuttall tried to explain that the issues relating to the Western Roads Upgrade project were not of Mr Nuttall’s making.

93    Mr Moran expressed reservations about Mr Nuttall’s capacity to perform the role of Manager Infrastructure – Southern Region. Mr Moran was making a change to the organisational structure by putting Mr Nuttall as Structures Team Lead and giving Mr Wild responsibility as Manager Infrastructure – Southern Region. The responsibilities of a Structures Team Lead were different from those of the Southern Region Manager.

94    Mr Nuttall expressed his disagreement with Mr Moran’s assessment of the business and his performance. Mr Moran told Mr Nuttall that he was implementing the change and was going to inform the team that afternoon. Mr Moran told Mr Nuttall that he would return to his role as Manager Infrastructure – Southern Region when he was satisfied Mr Nuttall had demonstrated an improvement in his capability of project delivery. I accept that Mr Moran made a representation to Mr Nuttall along the lines that Mr Moran did not want the issues to further develop requiring formal performance management. The meeting then concluded and Mr Moran and Mr Wild left the room.

95    On 5 September 2018, Mr Moran sent an email to the Infrastructure group of over 50 employees of Hatch. Entitled “Hatch Infrastructure AUA Structure”, the email was in the following relevant terms (emphasis added):

Each of you have been involved along our journey as we have grown our Hatch Melbourne office to around 55 staff over the past 18 months. This tremendous growth is well recognized by the industry and our company Board of Directors. We have said all along that we want to build a high end engineering business and create an environment where people can deliver quality work. That means we need the right level of resourcing, good systems and processes and effective management and leadership. The reality is that we have been stretched as a consequence of the rapid growth, and this has caused issues in the business that need to be remedied and improved on now, before we can move forward into our next stage of growth.

I thank all of you who have put in extra over effort in recent months to get deliverables issued under tight time pressures. To help the business focus on the resolution of issues, and to better support our staff we are temporarily going to consolidate the business before we push into further growth. As part of this I have requested Tim Nuttall and Nathan Wild to limit business development and focus their direct time and effort in such day to day operational issues to assist us build a high functioning business, particularly with regards to systems and processes, in technical, project management and general day to day management. This will allow management to get much closer to the delivery team and across the various issues that have to be resolved. This is to support the frontline of the business as well as for management to gain an understanding of how we can enhance the way we do things at Hatch in Melbourne. Your participation in seeking escalating suggestions to Tim and Nathan is strongly encouraged.

From an organization structure perspective, Tim will move into the role of Structures Team Leader role in the Melbourne office, and Nathan Wild will take Tim’s role as Southern Region Manager.

…

I attach an organisation chart that details these changes.

This change in roles for Tim and Nathan are temporary and we will review progress over the coming months. If you have any concerns with these changes please feel free to discuss them with me directly.

96    The structure chart showed Mr Wild as Director Infrastructure Southern Region reporting to Mr Moran as Managing Director Infrastructure AUA with Mr Nuttall reporting to Mr Wild as Regional Manager Structural. Mr Taylor as Technical Manager was to report directly to Mr Wild. Mr Nuttall was shown as having 18 direct reports. This email was the first time, of which Mr Nuttall was aware, that a structure chart for the Southern Region Office had been circulated. Mr Nuttall took it as a personal slight.

97    Mr Nuttall did not attend work on 5 September 2018 and has not returned to the Hatch offices since. Mr Nuttall obtained medical certificates from his general practitioner, Dr Nguyen, which he provided to Hatch. Mr Nuttall has also consulted a psychologist, Mr Graeme Baird.

98    The organisation restructure was not in fact implemented. Mr Wild’s mental health issues persisted and he was unable to assume the role he had been assigned.

99    On 18 October 2018, Mr Nuttall received a letter from Ms Helen Turner, HR Director Australia Asia for Hatch, with a subject line “Medical Condition and information required by Hatch prior to your return to work”. That letter relevantly stated:

I am sorry to hear that you have been away from the office sick from 05 September and your doctor has provided you with medical certificates certifying you unfit for normal duties from 05 September to 19 October 2018.

I understand that you are due to return to work on 22 October 2018. While you have been absent you requested that no one from work contact you and you stated that this request related to your medical condition.

Due to the length of your absence and the fact that you have disclosed that you consider your sick leave due to the effects of workplace stress, I am writing to you before you return to work to request that you cooperate in providing further information about your health to Hatch.

…

On 04 September 2018 you participated in a performance management meeting conducted by David Moran (Managing Director, Infrastructure, Australia Asia) and Nathan Wild (Director Infrastructure Australia). In that meeting feedback and assessment of your performance was provided in accordance with Hatch’s usual practices of monitoring the performance of its employees. You were advised of areas where your performance did not meet Hatch’s expectations for your role and seniority and that your performance required improvement.

As a result of that discussion you were also advised that your position would be temporarily changed from Southern Regional Manager to Structures Lead and this change would be communicated to the rest of the Hatch business. David Moran’s summary of this performance discussion was sent to you on 06 September 2018. The following day you visited Dr Duc Nguyen. Hatch is in receipt of four (4) medical certificates which advised you would be unfit for work from respectively: 05 September to 07 September; 10 September to 21 September; 24 September to 05 October; and 08 October to 19 October 2018.

The management requirements of the Hatch Melbourne office have changed during your absence and for business reasons when you return to work it will be to your original position of Manager Infrastructure – Southern Region. Your performance in that role will continue to be assessed, monitored and reviewed by Hatch and feedback provided to you. The performance issues raised by David Moran in the meeting on 04 September and referred to in his summary provided to you on 6 September will be a focus of ongoing review.

In the circumstances, and taking into account that performance management processes should not normally cause ill health, Hatch must take steps to meet its duties to you and the objective of providing you with a safe place to work.

Please also note that by clause 27 of your employment contract with Hatch you agreed that if Hatch has any concerns about your fitness for work you can be required to provide information from a health practitioner about your health related to work. As a result we have prepared a list of questions for your treating health practitioner, Dr Nguyen, to respond to.

…

We will need to receive the response from Dr Nguyen prior to or at the commencement of your return to work so that any appropriate steps can be taken or adjustments put in place as a result of Dr Nguyen’s comments and/or advice. You are authorised to remain on leave until Dr Nguyen’s response is available…

100    Mr Nuttall instructed his lawyers to respond to the letter. By letter dated 23 October 2018, Mr Nuttall’s legal representatives requested they be provided with “Hatch’s usual practices relating to performance management”.

101    By letter dated 24 October 2018, Ms Turner responded to Mr Nuttall’s legal representatives in the following relevant terms:

When Hatch identifies or becomes aware of issues or instances where an employee’s performance falls below what is expected or required, then feedback is provided to the employee identifying the performance weaknesses or problems that have occurred. Feedback is usually provided in a face-to-face meeting with the employee. In the meeting the employee is given the opportunity to explain or comment in response to any weaknesses or problems that are identified. When it is considered appropriate, actions may be taken as an outcome of the meeting. The outcome of a meeting may be confirmed or advised in writing to the employee, for example in a memo or email.

Tim is employed in the position of Manager Infrastructure - Southern Regional within the Infrastructure Group. He has a senior role in managing a number of important client projects. Tim has the technical qualifications to perform this role and when employed by Hatch had the apparent experience to competently manage client projects including supervising Hatch employees involved in those projects.

As the letter to Tim explains, on 4 September 2018 a performance management meeting of the type described above was conducted with Tim. Following the meeting, a summary of the meeting was sent to Tim on 6 September 2018.

When Tim returns to work, his performance will be monitored in light of the feedback provided in the meeting on 4 September. Hatch’s performance management will involve fortnightly face to face meetings to review performance.

During Hatch’s usual practices of performance management if performance problems re-occur or are not appropriately addressed by the employee, then a further meeting or meetings to provide feedback will be conducted. If the employee’s performance is subsequently assessed as unsatisfactory then he or she may be warned that their employment is at risk or their employment may be terminated.

…

It appears that Tim’s absence on sick leave arises from the performance management meeting on 4 September 2018. When other Hatch employees are involved in similar practices they do not usually suffer any illness and continue to attend work as normal.

It is in the above context that Tim is asked to cooperate in ensuring that adequate information is provided to enable management of his health at work in accordance with Hatch’s duty of care.

…

In the circumstances, the questions directed to Dr Nguyen are intended to facilitate a safe return to work for Tim and to identify any workplace accommodations that may be necessary or any future health risks that may arise…

102    Mr Nuttall’s legal representatives responded to the letter stating that Mr Nuttall’s position was that the meeting of 4 September was not a performance meeting conducted in a reasonable manner and exposed Mr Nuttall to significant health and safety risks. In particular, Mr Nuttall was given no advance notice of the nature of the meeting or forewarned that it was to be a performance meeting.

103    From 5 September 2018 Mr Nuttall has been on leave due to his medical condition. Mr Nuttall’s personal leave balance expired on about 19 September 2018.

104    On 6 September 2019 a Share Transfer Exercise Notice was dispatched to Mr Nuttall by post to his residential address in Victoria and was delivered on 10 September 2019. A copy of the notice was also sent to Mr Nuttall’s legal representatives by letter dated 8 November 2019. The notice, signed by Mr Kwak, was relevantly in the following terms:

This Exercise Notice is being issued to you in accordance with the provisions of your shareholder agreement as principal shareholder (the “Principal Shareholder Agreement”) with Motus Company Ltd (“Motus”) and Hatchcos Holdings Pty Ltd ABN 35 072 620 467 (“Hatchcos”) in respect of your shares in Hatchcos (“Shares”).

The following has occurred on September 6, 2019 (“Event”):

•    you have been absent from active employment for a continuous 12-month period or more than 14 months in a 24-month period;

…

Please deliver the share certificates listed under Share Certificates for the Shares being purchased by Motus to Hatch Shareholder Relations, as soon as possible and before the Closing Date [27 September 2019].

105    Mr Nuttall had ceased to reside at the Victorian address and did not receive the notice sent by post.

106    In around September 2019, the sum of $1,475,000 was deposited into Mr Nuttall’s account as the purchase price for the shares.

107    Mr Nuttall has not delivered to Hatch Shareholder Relations the share certificates for the shares the subject of the purported Exercise Notice.

PART 3: THE ADVERSE ACTION CASE

3.1    Summary

108    Mr Nuttall maintains that he raised four grievances and inquiries relating to his work and in particular to problems he was having with Mr Moran’s management style. He alleges that the decision to reassign him from his role and Mr Moran’s conduct in the 4 September Meeting was actuated or partly actuated by having raised some or all of those grievances and inquiries. Mr Nuttall contends that the consequences of those decisions and conduct constituted “adverse action” within the meaning of s 342 of the FW Act and because those decisions and conduct were actuated by reason of him having raised his grievances and inquiries, the resultant adverse action contravened s 340(1) of the FW Act.

3.2    The legislative framework

109    Division 3 of Part 3-1 of the FW Act is entitled “Workplace rights”. The purpose of the Division is to protect workplace rights and the exercise of those rights: s 334; Qantas Airways Ltd v Transport Workers Union of Australia [2023] HCA 27 at [21]. Section 340(1) provides:

(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.

110    Hatch is a national system employer as defined in s 14 of the FW Act and Mr Nuttall is a national system employee as defined in s 13 of the FW Act. Part 3-1 is therefore capable of having effect in the context of the relationship between Hatch and Mr Nuttall: s 339 FW Act.

111    The table in s 342(1) sets out the circumstances in which a person takes adverse action against another person. Relevantly, adverse action is taken by an employer against an employee if the employer injures the employee in his employment (item 1(b)) or alters the position of the employee to the employee’s prejudice (item 1(c)).

112    Section 341(1) defines the circumstances in which a person has a workplace right. It relevantly provides:

A person has a workplace right if the person:

...

(c)    is able to make a complaint or inquiry:

…

(ii)    if the person is an employee—in relation to his or her employment.

113    Section 341(1) is not a definition of “workplace right” in the sense that its text can be read into s 340: Qantas at [32]; [79]–[80].

114    An action will contravene s 340(1) if it is taken for a reason that includes a reason proscribed by that section: s 360 of the FW Act. Section 361(1) creates a presumption that the conduct was engaged in for a proscribed reason unless proven otherwise. That section is in the following terms:

(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

115    Section 793 of the FW Act relevantly provides:

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.

3.3    Principles to be applied

116    Mr Nuttall claims that Hatch, via the agency of its human officers, took “adverse action” against him and did so because (or for reasons that included that) he had exercised a “workplace right”. Because Mr Nuttall alleges that Hatch took action for that proscribed reason, the statutory presumption for which s 361 of the FW Act provides is engaged and it is for Hatch to prove its reasons were otherwise.

3.3.1    Adverse action

117    Mr Nuttall claims that he was subjected to “adverse action” in the form of:

(a)    Mr Moran’s conduct at the 4 September 2018 Meeting;

(b)    being told that he was to cease performing his role as Manager Infrastructure – Southern Region and was to instead perform the role of Structures Team Lead.

118    Hatch does not accept that Mr Nuttall was subjected to “adverse action”.

119    Mr Nuttall relies upon items (1)(b) and (1)(c) of the table in s 342(1). For the purposes of item (1) of the table in s 342(1) of the FW Act, an employer:

(a)    “injures [an] employee in his or her employment” if it subjects him or her to legally compensable injury; and

(b)    “alters the position of [an] employee to the employee’s prejudice” if, by its conduct, it visits any adverse affection 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; (1998) 195 CLR 1 at [4] (Brennan CJ, McHugh, Gummow, Kirby and Hayne JJ).

120    The circumstances in which an adverse action is taken is defined in s 342 partly by reference to the consequences of those actions. In this context, an alteration to the position of an employee will be prejudicial if it visits adverse consequences that are real and substantial, rather than merely possible or hypothetical: Qantas Airways Ltd v Australian Licensed Aircraft Engineers’ Association [2012] FCAFC 63; (2012) 202 FCR 244 at [32] (Gray, North and Besanko JJ); Construction, Forestry, Mining and Energy Union v Pilbara Iron Company (Services) Pty Ltd (No 3) [2012] FCA 697 at [48] (Katzmann J).

121    The action that is proscribed by s 340(1), when read with item 1 of s 342, is action taken by an employer directed to an employee. The actions described in column 2 of item 1 of the table in s 342 are expressed by an active verb, relevantly, “injures” or “alters the position”. This implies that proscription is “essentially against an intentional act of the employer directed to an individual employee”: BHP Iron Ore Pty Ltd v Australian Workers’ Union [2000] FCA 430; (2000) 102 FCR 97 at [35].

122    As Kenny J later explained in Australian Workers' Union v BHP Iron-Ore [2001] FCA 3; (2000) 106 FCR 482 at [54] (AWU v BHP Iron-Ore) (emphasis added):

...it must be possible to say of an employee that he or she is, individually speaking, in a worse situation after the employer’s acts than before them; that the deterioration has been caused by those acts; and that the acts were intentional in the sense that the employer intended the deterioration to occur.

3.3.2     Employment-related complaints or inquiries

123    Pursuant to s 341(1)(c)(ii) an employee has a workplace right if the employee is able to make a complaint or inquiry in relation to his or her employment. It follows that an employee has exercised a workplace right when he or she exercises an ability to make a complaint or inquiry in relation to his or her employment.

124    There are a number of elements to s 341(1)(c)(ii) that must be satisfied:

(1)    The employee must have made a “complaint or inquiry”;

(2)    The complaint or inquiry must be “in relation to his or her employment”;

(3)    The complaint or inquiry must be one which the employee is able to make.

Complaint or Inquiry

125    In PIA Mortgage Services Pty Ltd v King [2020] FCAFC 15; (2020) 274 FCR 225 at [136]–‍[137], Snaden J observed that:

[136] The Macquarie Dictionary relevantly defines ‘complaint’ and ‘inquiry’ respectively as follows:

complaint

...

1. an expression of grief, regret, pain, censure, resentment, or discontent; lament; fault-finding.

2. a cause of grief, discontent, lamentation, etc

....

inquiry

...

2. the act of inquiring, or seeking information by questioning; interrogation.

3. a question; query.

– phr 4. make inquiry (or inquiries), to request information: to make inquiries at the office.

[137]    A ‘complaint’, then, is a communication that states a grievance or that otherwise asserts the existence of a state of affairs that its maker alleges is unsatisfactory, undesirable or unacceptable: see, in that vein, Hill v Compass Ten Pty Ltd (2012) 205 FCR 94 (Cowdroy J). In Shea v TRUenergy Services Pty Ltd (No 6) (2014) 242 IR 1; 314 ALR 346 (Dodds-Streeton J; hereafter, ‘Shea’), court had occasion to consider what might qualify as a ‘complaint’ for the purposes of s 341(1)(c)(ii) of the FW Act. Dodds-Streeton J there observed (at [29]) that:

...in the context of s 341(1)(c)(ii) of the [FW] Act:

(a)    a complaint is a communication which, whether expressly or implicitly, as a matter of substance, irrespective of the words used, conveys a grievance, a finding of fault or accusation

(b)    the grievance, finding of fault or accusation must be genuinely held or considered valid by the complainant;

(c)    the grievance, finding of fault or accusation need not be substantiated, proved or ultimately established, but the exercise of the workplace right constituted by the making of the complaint must be in good faith and for a proper purpose; [and]

(d)    the proper purpose of making a complaint is giving notification of the grievance, accusation or finding of fault so that it may be, at least, received and, where appropriate, investigated or redressed. If a grievance or accusation is communicated in order to achieve some extraneous purpose unrelated to its notification, investigation or redress, it is not a complaint made in good faith for a proper purpose and is not within the ambit of s 341(1)(c)(ii)...

…the second of the four propositions to which her Honour adverted in the passage above was the subject of some consideration on appeal: see Shea v EnergyAustralia Services Pty Ltd (2014) 242 IR 159 at [12] (Rares, Flick and Jagot JJ). Whilst the full court did not appear to adopt Dodds-Streeton’s J implication of good faith, they did not reject it and the appeal was decided on other issues: see, on that score, Environmental Group Ltd v Bowd (2019) 288 IR 396 at [144] (Steward J).

126    A complaint is communicated with the object of causing a reaction with some form of remedy: Environmental Group Ltd v Bowd [2019] FCA 951 at [123] (Steward J). A communication of discontent to a person who the communicator knows is incapable of assisting in a remedy is not made with the object of causing a reaction with some form of remedy. Such a communication is not a complaint.

In relation to employment

127    In so far as the second element is concerned, whether a complaint or inquiry is made “in relation to employment” depends on the subject matter of the complaint or inquiry. Although it is not necessary that the complaint or inquiry be directly related to its maker’s employment (Pilbara at [64] (Katzmann J); Shea v TRUenergy Services Pty Ltd (No 6) [2014] FCA 271 at [631] (Dodds-Streeton J)), it has been held in this Court that the subject matter of the complaint or inquiry must raise “an issue with potential implications for the complainant’s employment”: Walsh v Greater Metropolitan Cemeteries Trust (No 2) [2014] FCA 456 at [42] (Bromberg J). It is sufficient if the complaint is concerned with the person’s employment in a substantive way: Bowd at [126] (Steward J).

3.3.3    The exercise of workplace rights

128    A person exercises a right to complain or inquire in relation to their employment if that complaint or inquiry is one that they are “able to make”: FW Act, s 341(1)(c)(ii).

129    As Snaden J observed in Wong v National Australia Bank Ltd [2021] FCA 671 at [69], employees do not have an ability to complain or inquire in relation to their employment merely because they possess a capacity to communicate a grievance or interrogatory. In Shea, this Court said (at [625]):

...the requirement that the complaint be one that the employee ‘is able to make’ in relation to his or her employment suggests that there are complaints which the employee is not able to make in relation to his or her employment. The ability to make a complaint does not arise simply because the complainant is an employee of the employer. Rather, it must be underpinned by an entitlement or right. The source of such entitlement would include, even if it is not limited to, an instrument, such as a contract of employment, award or legislation.

130    It has been held that an ability to complain is relevantly underpinned by an entitlement or right where the subject matter of the complaint is itself a right or entitlement; Cigarette & Gift Warehouse Pty Ltd v Whelan [2019] FCAFC 16; (2019) 268 FCR 46 at [28]. It has been held that in such circumstances the source of that ability to complain is the general law of contract. It is therefore not necessary for the employment contract to expressly confer a right to complain: PIA at [26].

131    A complaint or inquiry about matters other than contractual rights or entitlements might nonetheless be made in relation to the employee’s employment but would seem to be required to be underpinned by a right or entitlement to make the complaint or inquiry. However, that right or entitlement to complain need not be conferred by contract. The right to complain or inquire must have a source by which it is conferred. As Snaden J said in Wong at [76]–[77]:

[76]    In order that a complaint or inquiry made in relation to employment might qualify as the exercise of a workplace right, the employee must first demonstrate that it was made in the exercise of some right or entitlement conferred upon them, whether instrumentally or otherwise. It is not sufficient that a complaint or inquiry is made simply because the employee feels (with justification or otherwise) that he or she has something to complain or inquire about. What must be shown is some right or entitlement to make the complaint or inquiry: some conveyed ability that distinguishes the making of a complaint or inquiry that qualifies as the exercise of a workplace right (on the one hand) from the making of a complaint or inquiry that (on the other) does not so qualify. In Maric v Ericsson Australia Pty Ltd [2020] FCA 452, Steward J held (at [55]):

For a person to be “able” to make an inquiry, that capacity must be anchored in a legal entitlement of some kind, whether it be statute, contract law, the common law of Australia, or some other instrument or thing that confers legal rights, in the sense described by Rangiah and Charlesworth JJ. in [PIA].

[77]     His Honour was there referring to an employee’s ability to ‘make an inquiry’ but the entitlement to which he referred applies in the same way to an ability to make a complaint.

132    The circumstances that suffice to distinguish complaints or inquiries that employees are “able to make” (for the purposes of s 341(1)(c) of the FW Act) and complaints or inquiries of other kinds has been the subject of much discussion in this Court. A summary of the state of authorities is to be found in Messenger v Commonwealth of Australia (Represented by the Department of Finance) [2022] FCA 677 at [141]–[143] (Snaden J).

133    More recently in Qantas, Steward J observed at [116]:

…In the case of para (c) the significance of the phrase ‘is able to make’ has led Dodds-Streeton J in Shea v TRUenergy Services Pty Ltd [No 6] to observe that the ability to make a complaint must be underpinned by some entitlement or right to do so, which, inferentially, must be actually and presently held by the employee. Dodds-Streeton J's observation has since been upheld by the Full Court of the Federal Court in Cigarette & Gift Warehouse Pty Ltd v Whelan. It is plainly correct.

(Footnotes omitted.)

134    Based on the current state of authorities, the ability to make a complaint does not refer to a physical ability but an ability that is underpinned by an entitlement or right. The ability is one that is conferred on or conveyed to the employee. But the authorities do not require the entitlement to complain to be conferred by contract or to be contractually enforceable. It appears that an entitlement that is gratuitously conferred by internal instruments in the nature of policies and procedures of the employer and communicated to employees can suffice: Serpanos v Commonwealth of Australia [2022] FCA 1226 at [159]–[160] (Snaden J).

3.3.4    Proof of proscribed purpose

135    Section 340(1) requires the state of mind of the alleged contravener to be proven: Qantas at [49]. It is Hatch’s state of mind that is relevant in the present case.

136    By virtue of s 361, if relevantly an employer is alleged to have engaged in adverse action, it is presumed to have acted for the reason proscribed by s 340(1) unless it is established otherwise. 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: Qantas at [63] (Gordon and Edelman JJ). It is for Hatch to disprove that the exercise of Mr Nuttall’s workplace rights was a substantial and operative reason for the restructure decision: Qantas at [49].

137    The imposition of the statutory presumption in s 361, and the correlative onus on employers, 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. The central question is one of fact to be answered in light of all the facts, namely “why was the adverse action taken?”: Board of Bendigo Regional Institute of Technical and Further Education v Barclay [2012] HCA 32; (2012) 248 CLR 500 at [44]–[45] (French CJ and Crennan J).

138    A distinction has traditionally been drawn by courts between the operative and immediate reason for taking adverse action as against a merely contributing factor to the undertaking such conduct: Qantas at [102]. Section 340 is concerned with operative reasons and not contributing factors: Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd [2014] HCA 41; (2014) 253 CLR 243 at [19] (French CJ and Kiefel J). Section 340 requires a determination of fact as to the reasons which motivated the person who took the adverse action. The word “because” in this context is not directed at causation or connection but with the reasons or motivation: BHP Coal at [7].

139    It is not necessary to prove that the reasons which actuated the conduct were procedurally or substantively fair: Khiani v Australian Bureau of Statistics [2011] FCAFC 109 at [31] (Gray, Cowdroy and Reeves JJ). A general protections proceeding is not a broad inquiry as to whether the applicant has been subjected to a procedurally or substantively unfair outcome: Ermel v Duluxgroup (Australia) Pty Ltd (No 2) [2015] FCA 17 at [48] (Bromberg J).

140    Thus, where an employer claims that the reason for taking adverse action was an opinion formed about an employee’s performance or capacity to perform his or her role, the question is not whether that opinion was fairly or properly or correctly formed. Rather, the inquiry remains: did the respondent form the views that it said that it formed; and, if it did, was it actuated to conduct itself in the way that it did on account of them (and not on account of any proscribed reason)?: Wong at [82]–[83] (Snaden J).

3.3.5    Corporate decision-making

141    Corporate decision-making is made by individuals, whether acting alone (for example, by an authorised individual agent officer) or collectively (for example, by a board of directors or committee of management). The state of mind of a collective is the accumulated state of mind of the individuals who resolve to carry out the action. Where the decision is made by an officer or agent of the corporate, the state of mind of that officer or agent will be the state of mind of the corporate.

142    The identification of the decision-maker is a question of fact. Where a company takes adverse action the decision-makers will usually be those who are authorised by the board of directors to make the decision: Qantas at [107] (Steward J). This Court has held that persons who are involved in the making of a decision may be a decision-maker depending on the nature of their involvement. It has been said that the focus is on “the conscious reasoning processes of those who had a material effect on the ultimate outcome to determine whether their reasoning processes were free of the alleged prohibited reason or reasons”: Construction, Forestry, Mining and Energy Union v Clermont Coal Pty Limited [2015] FCA 1014 at [121] (Reeves J).

143    The task is the identification of the actual, immediate or operative reasons for taking adverse action. Musings or thoughts of employees that ultimately play no part in the ultimate decision-making process are not to be equated with a reason for taking adverse action: Qantas at [104] (Steward J). However, where a person who does the act or thing constituting the adverse action acts on information or advice the provision or content of which is actuated by a prohibited reason, the adoption of such information or advice may necessitate the conclusion that the corporation’s reasons for the adverse action include that prohibited reason: Wong v National Australia Bank Ltd [2022] FCAFC 155 at [26] (Katzmann, Charlesworth and O’Sullivan JJ) (Wong (Full Court)).

3.4    Was Mr Nuttall subjected to adverse action?

144    Mr Nuttall’s claim that he was subjected to adverse action centres on the events of 4 September and in particular the meeting he had with Mr Moran and Mr Wild on that day. Mr Nuttall claims that adverse action was taken against him in two forms:

(a)    Mr Moran’s conduct at that meeting; and

(b)    The change in Mr Nuttall’s position communicated at that meeting.

145    Mr Nuttall claims that by Mr Moran’s conduct at that meeting and his direction to Mr Nuttall to attend that meeting, Mr Moran injured him in his employment and thereby Hatch took adverse action against him within item 1(b) of s 342(1). Mr Nuttall claims that Mr Moran’s conduct at that meeting aggravated his existing psychiatric condition and relies upon the joint expert report of Associate Professor Khalid and Dr Larder and his treating physician (Dr Nguyen) and Mr Baird.

146    For the reasons set out below at [238], I accept the joint evidence of Associate Professor Khalid and Dr Larder that Mr Moran’s conduct at that meeting caused Mr Nuttall to cease to be able to work in his employment. Although it was not the cause of Mr Nuttall having a psychiatric condition, it was the cause of Mr Nuttall ceasing to be able to cope. As a matter of ordinary common sense, Mr Moran’s conduct at the meeting (and in particular the lack of warning given to Mr Nuttall as to the true nature of the meeting) was an effective cause, albeit not the sole cause in a “but for” sense, of the aggravation of Mr Nuttall’s psychiatric condition (see March v E & MH Stramare Pty Ltd [1991] HCA 1; (1991) 171 CLR 506). It was that aggravation rather than the existence of that condition which resulted in Mr Nuttall being unable to perform his employment duties.

147    However, I do not accept that Mr Moran took adverse action against Mr Nuttall by his overall conduct at the 4 September Meeting. Mr Moran did not engage in that conduct in order to injure Mr Nuttall. Item 1(b) of the table in s 342 applies if an employer injures the employee in his or her employment. As explained above, the proscription is against the intentional deterioration in the employee’s situation (AWU v BHP Iron-Ore at [54]). It requires an intentional infliction of injury. The fact that an injury is suffered does not of itself demonstrate that adverse action was “taken” in the context of s 342 when read with the proscription in s 340. The proscription in s 340 is against adverse action being taken for a reason (because). The focus is on the taking of the action by, here, the employer.

148    Mr Nuttall contends that Hatch (through Mr Moran) took adverse action against him at the 4 September Meeting by the communication of the restructure which it was said “demoted” Mr Nuttall from his position as Manager Infrastructure – Southern Region. After that meeting, the restructure was communicated more broadly by email to the Infrastructure group. Mr Nuttall contends that Mr Moran thereby “altered” Mr Nuttall’s position to Mr Nuttall’s prejudice and accordingly Hatch took adverse action against Mr Nuttall within item 1(c) of the table in s 342(1).

149    Hatch contends that because the restructure did not in fact take effect (because of issues with Mr Wild’s health), the actions taken at the 4 September Meeting did not effect a prejudicial alteration to Mr Nuttall’s position as employee because the consequences of the action were merely possible or hypothetical. Hatch further contends that having regard to the terms of Mr Nuttall’s employment, there was no alteration to his position. Mr Nuttall’s contract of employment expressly provided that Hatch could alter his position, duties, responsibilities and level of authority in accordance with the needs of the business from time to time.

150    I find that Hatch did alter the position of Mr Nuttall to his prejudice. Item 1(c) has wide application and is capable of encompassing circumstances in which there is a diminution in the esteem in which an employee is held by his or her colleagues (Wong at [106] (Snaden J)). I have found that at the meeting, Mr Moran, in the presence of Mr Wild, communicated his dissatisfaction with Mr Nuttall’s performance and informed Mr Nuttall that the alteration of his position was a consequence of, and intended to provide an opportunity for remediation of, what Mr Moran perceived as deficiencies in that performance. Mr Wild was told at the meeting that he was to assume Mr Nuttall’s position. I find that Mr Moran’s communications at the 4 September Meeting conveyed to those present, including Mr Wild, that Mr Nuttall was not performing his role satisfactorily. By the email sent on 5 September, it was apparent that Mr Nuttall had been allocated a role with reduced responsibilities and scope and Mr Wild was to assume Mr Nuttall’s role as Manager Infrastructure – Southern Region. There was a communicated demotion of Mr Nuttall which diminished the status of Mr Nuttall.

151    The consequences of the actions taken in and shortly after the 4 September Meeting were not hypothetical or theoretical. The communications effected a real and substantial deterioration in Mr Nuttall’s position by reason of the effect of those communications on those who received it.

152    The fact that Hatch was permitted by the terms of the contract of employment to alter Mr Nuttall’s position does not change the fact that there was an alteration of position or the fact that the alteration detrimentally impacted the status of Mr Nuttall’s position.

153    In cross-examination Mr Moran sought to characterise the alteration in Mr Nuttall’s position as a restructure to have Mr Nuttall temporarily focus on a problem with a project and that this was something Mr Moran had done himself when a project “needs that level of management focus”. Mr Moran’s evidence was:

That’s not a demotion…When you’re focusing – you’re temporarily focusing on a problem. It’s not a step backwards. It’s what you have to do.

154    In cross-examination, Mr Schatz also denied that the change in Mr Nuttall’s position was a demotion as “technical roles are the most valued in the organisation” and were not “subservient to management roles”.

155    I do not accept the characterisation that Mr Moran and Mr Schatz attributed to Mr Nuttall’s change in position. Mr Moran intended to change Mr Nuttall’s position until Mr Moran was satisfied Mr Nuttall demonstrated improvement in his performance. The restructure was a change in formal reporting lines that was communicated to the organisation as a whole. It was in an organisational sense, a demotion.

156    I accept that Hatch took adverse action against Mr Nuttall for the purpose of s 342(1) (item 1(c)).

3.5    Did Mr Nuttall possess and exercise workplace rights?

157    Mr Nuttall contends that he exercised workplace rights by making four complaints or inquiries in relation to his employment and those complaints or inquiries were ones which he was able to make.

3.5.1    The complaints and inquiries that are relied upon

3.5.1.1    First Complaint

158    The first “complaint” relied upon was the content of the discussion Mr Nuttall had with Mr D’Cruz on 7 August 2018 in which Mr Nuttall expressed to Mr D’Cruz the difficulties he was experiencing with Mr Moran and the stress he was suffering. Mr D’Cruz and Mr Nuttall’s evidence of the content of that discussion was broadly consistent.

159    I accept that the discussion took place along the lines set out at [53] above.

3.5.1.2    Second Complaint

160    The second “complaint” relied upon was the content of the discussion Mr Nuttall had with Mr Kwak on or about 22 August 2018 in which Mr Nuttall told Mr Kwak that Mr Nuttall was struggling with Mr Moran’s management style, that Mr Moran was not communicating clearly or consulting Mr Nuttall appropriately, that Mr Moran’s demands were not in Mr Nuttall’s view reasonable or consistent with what Mr Nuttall considered to be appropriate priorities and that there was stress across the infrastructure team.

161    I accept that the discussion took place as set out at [67]–[73] above.

3.5.1.3    Third Complaint

162    The third “complaint” relied upon by Mr Nuttall was the content of the discussion Mr Nuttall had with Mr Moran on or about 23 August where he informed Mr Moran of his wife’s need to travel to Portugal and that he would need to work flexibly the following week in order to take his children to and from school. Mr Nuttall contends that the content of this discussion constituted an “inquiry” for the purposes of s 341(1)(c).

163    I accept that a discussion along those lines took place as set at [75] above.

3.5.1.4    Fourth Complaint

164    The fourth “complaint” relied upon by Mr Nuttall was the content of his discussion with Mr Wild on 3 September 2018 upon Mr Wild’s return from extended leave where Mr Nuttall told Mr Wild that Mr Moran’s approach to management was making matters difficult for Mr Nuttall and causing Mr Nuttall stress. Mr Nuttall contends that the contents of the discussion constituted a “complaint” and an inquiry by which Mr Nuttall requested Mr Wild’s support.

165    I accept that a discussion along these lines took place on 3 September 2018.

3.5.2    Did Mr Nuttall make a complaint or inquiry?

166    Hatch contends that none of the “Complaints” relied upon by Mr Nuttall had the character of a “complaint or inquiry” as required by s 341(1)(c). The First, Second and Fourth “Complaints” were said to be no more than instances of Mr Nuttall “letting off steam” rather than making a complaint. The Third “Complaint” was not in the nature of an inquiry or question asked of Mr Moran but rather informing Mr Moran of a state of affairs.

167    As Snaden J said in Wong at [153], it “may be accepted that not every interaction by which one person communicates to another the existence of some suboptimal state of affairs will qualify as a ‘complaint’, as that term is properly understood”. The reasons for the communication are important. A complaint in this context is an expression of grievance made with the purpose of seeking consideration, redress or relief from the matter about which there is aggrievance (Alam v National Australia Bank Limited [2021] FCAFC 178; (2021) 288 FCR 301 at [59] (White, O’Callaghan and Colvin JJ)).

168    The First Complaint was made in the course of discussions between Mr Nuttall and Mr D’Cruz. Mr Nuttall did not report to Mr D’Cruz. Nor did Mr D’Cruz have any management responsibilities in relation to the matters in respect of which Mr Nuttall was expressing dissatisfaction. Mr Nuttall was communicating with a colleague who held a position in the organisation which meant Mr D’Cruz had very limited ability to assist in providing a remedy. Mr D’Cruz considered the expression of grievance by suggesting Mr Nuttall speak to Mr Kwak.

169    The Second Complaint followed chronologically from the First Complaint.

170    In the conversation with Mr Kwak, Mr Nuttall told Mr Kwak that he was stressed by the demands Mr Moran was placing on him, that Mr Moran was not consulting with Mr Nuttall before making decisions that Mr Nuttall considered affected his work and a concern that Mr Moran was making decisions that Mr Nuttall did not consider to be consistent with the business plan for the Infrastructure group. Mr Nuttall expressed his concern to Mr Kwak about the work environment under Mr Moran.

171    The matters raised by Mr Nuttall in his discussion with Mr Kwak were in the nature of grievances. They were communicated to Mr Kwak for the purpose of obtaining Mr Kwak’s assistance in resolving them. They were in the nature of “complaints”. They were made in response to an open invitation by Mr Kwak to Mr Nuttall to raise any matters of concern. Mr Kwak offered to help.

172    I do not accept Mr Kwak’s characterisation of his discussion with Mr Nuttall on 22 August 2018 as Mr Nuttall “letting off steam”. Whilst Mr Nuttall had not invoked or sought to invoke the formal complaints procedure set out in Hatch’s complaints policy, Mr Nuttall was seeking resolution of his grievance through an informal process (as that policy document recognised may be appropriate). The fact that Mr Kwak did not perceive Mr Nuttall as making a formal complaint is not to the point.

173    The Third “Complaint” was said to be an “inquiry” relating to Mr Nuttall’s need to work flexibly for a week whilst his wife was in Portugal. Mr Nuttall contends that there was in this discussion an implicit request to work flexibly which Mr Moran could have refused.

174    By his conversation with Mr Moran on or about 24 August 2018 Mr Nuttall was conveying to Mr Moran information about his personal circumstances (his wife being overseas) and of his need and intention to work flexibly for that week. He was not making a request or inquiry of Mr Moran but informing Mr Moran of a state of affairs. I do not accept that there was an implicit or “in substance” inquiry being made of Mr Moran.

175    The Fourth “Complaint” was said to have occurred on 3 September 2018 in the course of a discussion Mr Nuttall had with Mr Wild.

176    Mr Wild did not give evidence in these proceedings as explained further at [208].

177    I accept that Mr Nuttall informed Mr Wild of his state of discontent. I have some reservations about whether a discussion had with an individual on the afternoon of his return from extended sick leave was had with the object of seeking Mr Wild take notice of and consider the unsatisfactory state of affairs that Mr Nuttall perceived as existing in respect of his interactions with Mr Moran. Notwithstanding this reservation, I proceed on the basis that the Fourth Complaint constituted a “complaint” for the purposes of s 341(1)(c).

178    I also proceed on the basis that Mr Nuttall made an inquiry of Mr Wild in the form of a request for Mr Wild to assist and support him in Mr Nuttall’s interactions with Mr Moran.

3.5.3    Were the complaints or inquiries related to Mr Nuttall’s employment?

179    I accept that each of the First to Fourth “Complaints” were communications made in relation to Mr Nuttall’s employment. I do not understand Hatch to have contended otherwise.

3.5.4    Was Mr Nuttall “able to make” the complaints or inquiries?

180    As explained above, in order for Mr Nuttall to be able to make the complaints or inquiries, the right or entitlement to make the complaint or inquiry must be founded on a source of entitlement. Where the complaint or inquiry relates to a contractual right or entitlement, the ability to complain is sourced in the common law relating to contracts.

181    Mr Nuttall contended that his complaints ought to be characterised as complaints relating to Mr Moran’s interference with his ability to discharge his contractual obligations to perform his role as Manager Infrastructure – Southern Region. Accordingly the source of Mr Nuttall’s ability to complain was to be found in his contract of employment.

182    Hatch contended that for Mr Nuttall to have an ability to make the complaint or inquiry it is necessary to show that his contract of employment provided for the right to complain or the complaint must relate to the non-observance of an express term of employment. A complaint that relates to an employee’s duty of fidelity (to discharge employment duties in the best interests of the employer) is not such a complaint because “[a] term of that type cannot provide a relevant source of entitlement: were that the case, any complaint arising in an employment context would be one that the employee is ‘able’ to make”. Hatch relied upon Wong at [173]–‍[175].

183    It is important to understand the nature of the First, Second and Fourth Complaints made here. Unlike Wong, here the complaints about Mr Moran’s management went further than complaints made “in aid of [him] discharging obligations that arose both contractually and as a matter of expectation”: Wong at [173] (Snaden J). Amongst other things, Mr Nuttall was complaining about what Nuttall perceived to be Mr Moran’s direct interference with Mr Nuttall’s ability to perform his employment duties, by reason of what Mr Nuttall perceived as unreasonable demands that were not consistent with the core of Mr Nuttall’s role.

184    As Snaden J recognised in Wong, “potential sources of that right or entitlement are not limited to contracts, awards, statutes or other instruments. But some such source there must be, nonetheless”: [175].

185    Based on the approach of the majority in PIA, the source of Mr Nuttall’s right to complain about direct interference with Mr Nuttall’s ability to discharge the duties of his role is in the general law related to contracts. The First, Second and Fourth Complaints were not merely connected to the contract of employment or made in aid of an ability to discharge a contractual obligation (such as a complaint about level of resources) but related to a perceived direct interference with Mr Nuttall’s ability to discharge the role.

186    A significant part of the difficulties in this case arose from the lack of clarity with which the scope and responsibilities of Mr Nuttall’s role as Manager Infrastructure – Southern Region was defined in the contract of employment. That lack of clarity does not change the character of the nature or the subject matter of the complaints made by Mr Nuttall.

187    At least in so far as the Second and Fourth Complaints are concerned, Mr Nuttall’s right to complain about Mr Moran’s approach to managing Mr Nuttall was also sourced in Hatch’s Workplace Grievance Resolution Procedure. In his discussion with Mr Kwak, Mr Nuttall expressed a “grievance” as defined in that policy document. The fact that Mr Kwak may not have subjectively perceived Mr Nuttall’s issues as being in the nature of a grievance as defined in the Procedure document or as Mr Nuttall invoking that Procedure is not relevant. Similarly, the fact that Mr Nuttall may not have been consciously aware of, or expressly referred to, that Procedure is not relevant. By its published document, Hatch gratuitously bequeathed Mr Nuttall an ability to complain about personality conflicts. By expressing his issues with Mr Moran’s management of him to Mr Kwak, Mr Nuttall exercised that ability.

188    In his discussion with Mr Wild, based on the findings made above, Mr Nuttall was reporting a “grievance” as defined in the Procedure document to his manager. However, Mr Nuttall’s “inquiry” of Mr Wild for Mr Wild’s support, was not an “inquiry” which Mr Nuttall was relevantly “able to make”. By his request, Mr Nuttall was asking Mr Wild to essentially take his side. Hatch’s Procedure did not confer on Mr Nuttall an entitlement to request an advocate to assist him.

3.5.5    Conclusions

189    I find that the First, Second and Fourth “Complaints” were each a “complaint or inquiry” made by Mr Nuttall in relation to his employment and each of the Second and Fourth “Complaint” was a complaint Mr Nuttall was relevantly “able to make”. The making of the Second and Fourth Complaint was an exercise by Mr Nuttall of a workplace right for the purposes of s 340(1)(a)(ii).

190    Based on the views expressed by the majority in PIA at [19], the First Complaint may be regarded as one Mr Nuttall was “able to make” because of the connection between the complaint and Mr Nuttall’s contract of employment.

3.6    Was adverse action taken because of Mr Nuttall’s complaints and inquiries?

191    Mr Nuttall alleges that the adverse action taken against him was actuated or partly actuated by the Complaints he made.

192    For the purposes of the analysis that follows, I have assumed that each of the First to Fourth Complaints constituted the exercise of a workplace right for the purposes of s 340(1)(a)(ii).

3.6.1    The nature of the action taken

193    Based on the finding set out above, adverse action was taken against Mr Nuttall by Hatch by the announcement of the alteration to Mr Nuttall’s position within the Infrastructure group. The fact that the alteration was not ultimately given effect to does not change the fact that Mr Nuttall suffered prejudice as a result of the announcement of that alteration both in the meeting of 4 September and in the email sent shortly thereafter. The restructure announced by Mr Moran to Mr Nuttall in the presence of Mr Wild and later by email to the Infrastructure group would have resulted in Mr Nuttall ceasing to be primarily responsible for securing new business across the Southern Region and reducing his responsibilities for managing staff. By diminishing his responsibilities, the prestige of his position was prejudicially altered.

194    There is no direct evidence that tends directly to prove that the adverse action was taken because Mr Nuttall made any of the Complaints. Rather, Mr Nuttall relies upon the statutory presumption in s 361 of the FW Act.

195    By his pleadings Mr Nuttall nominated Mr Moran, Mr Wild, Mr Kwak and Mr D’Cruz as the human agents through whom Hatch resolved to engage in the conduct that it did. In opening submissions, Mr Nuttall also nominated Mr Schatz. By closing submissions Mr Nuttall abandoned his nomination of Mr D’Cruz but nominated Ms Rowena Gamble as another individual who “had a material influence on the decision to demote” Mr Nuttall.

196    Each of Mr Moran, Mr Schatz and Mr Kwak gave evidence. Neither Mr Wild nor Ms Gamble gave evidence. As explained below, the effect of Mr Moran’s evidence was that he was the sole individual who made the decision to restructure Mr Nuttall’s position and that although he spoke to Mr Schatz, Mr Kwak and Ms Gamble prior to announcing the decision, he did not seek their approval for the making of the decision or seek their recommendations in relation to the restructure.

197    Mr Nuttall urged the Court to infer that Mr Wild did not give evidence because his evidence would not have been helpful to Hatch’s case: Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298. Mr Nuttall contends that the evidence of Mr Moran as to the nature of the involvement of Mr Schatz, Mr Kwak and Ms Gamble ought to be rejected. Mr Nuttall also contends that the evidence of Mr Schatz and Mr Kwak ought to be rejected and given that Ms Gamble was not called to give evidence, it follows that Hatch has not adduced evidence that rebuts the presumption that the adverse action was taken because of a proscribed reason or for reasons that include a proscribed reason.

198    Hatch contends that the direct evidence of Mr Moran, Mr Kwak and Mr Schatz is sufficient to support a finding that any action taken against Mr Nuttall was not taken by Hatch for reasons that included a proscribed reason. Hatch contends that the direct evidence also evidences the reasons why the action was taken. Hatch contends that the direct evidence — both positive (that is, about what did actuate the conduct) and negative (that is, about what did not) — suffices to rebut the statutory presumption.

199    As explained in Wong at [189], in determining whether Hatch has displaced the presumption that adverse action was taken for a proscribed reason, there are two questions to be addressed:

(1)    Who within Hatch should be understood to have decided that Mr Nuttall should be treated in the way he was?

(2)    Does the evidence rebut the statutory presumption that that person or those people made that decision (wholly or partly) because of the fact that Mr Nuttall had made one or more of the First to Fourth Complaints?

3.6.2    Who made the decision?

200    Each of Mr Moran, Mr Kwak and Mr Schatz gave evidence that Mr Moran alone made the decision to remove Mr Nuttall from his role as Manager Infrastructure – Southern Region. Mr Nuttall does not dispute that Mr Moran was a decision-maker. He contends however that other persons were also relevantly involved in the process that led to his demotion, sufficient to constitute the state of mind that actuated the action taken.

3.6.2.1    Mr Moran’s reasons for the decision

201    Mr Moran’s evidence was that he made the decision to restructure Mr Nuttall’s position because of concerns he had about Mr Nuttall’s performance.

202    As the chronology of events summarised above demonstrates, Mr Moran developed concerns about Mr Nuttall’s performance from at least February 2018. Mr Moran considered that part of Mr Nuttall’s role was to be across the details of project performance (including budgetary performance) and issues that were emerging with project delivery. Mr Moran was not satisfied that Mr Nuttall was adequately performing this aspect of the role. Mr Moran was also frustrated by what he perceived to be a lack of Mr Nuttall’s physical presence in the workplace. As evidenced by his emailed note to himself on 13 July 2018, Mr Nuttall subjectively had an awareness of Mr Moran’s frustrations, though Mr Nuttall considered them to be unfair and unwarranted.

203    In so far as the First Complaint is concerned, there is no evidence to support a conclusion that Mr Moran was aware of Mr Nuttall’s discussion with Mr D’Cruz that took place on or about 7 August 2018. Indeed, the evidence was that Mr Moran was not in the country at the time of that discussion and there is no evidence that Mr Moran learnt of that discussion prior to the events of 4 September 2018. I find that Mr Moran’s decision to take the adverse action against Mr Nuttall was not made wholly or partly because of the making of the First Complaint.

204    In so far as the Second Complaint is concerned, I find that following his discussion with Mr Nuttall, Mr Kwak spoke with Mr Moran on or about 24 August 2018 to “better understand the working relationship between the two of them”. Mr Kwak’s evidence was that he did not disclose to Mr Moran that Mr Nuttall had expressed frustrations with Mr Moran. Mr Moran’s evidence was that Mr Kwak did not inform Mr Moran of Mr Nuttall having raised any specific issue or complaint about Mr Moran in a meeting on 22 August 2018 or at any other time. Mr Kwak was concerned to investigate the state of the working relationship between Mr Nuttall and Mr Moran. Mr Kwak’s evidence was that he did not “share specific concerns or frustrations one employee may have expressed about another as this may impede subsequent conversations between them”. I accept the evidence of Mr Moran and Mr Kwak’s evidence that Mr Kwak did not share with Mr Moran the specific nature of Mr Nuttall’s complaints about Mr Moran in Mr Kwak’s discussion with Mr Moran on 24 August 2018. Mr Kwak spoke to Mr Moran in order “to figure out what is the story…not a side of the story”. Following his discussion with Mr Nuttall, Mr Kwak:

smelled that something doesn’t smell right. Something is not working right. There’s misalignment, and all you had to do was ask questions, and, slowly, things come out.

Mr Kwak’s evidence is consistent with Mr Moran’s evidence and broadly consistent with the Workplace Grievance Resolution Procedure process.

205    I find that Mr Moran’s decision to restructure Mr Nuttall’s position was not made wholly or partly because Mr Nuttall had made the Second Complaint to Mr Kwak. I do not accept that Mr Moran’s evidence that Mr Kwak did not inform Mr Moran that Mr Nuttall had “raised any specific issue or complaint” about Mr Moran to be “nuanced” or contrived. I find that Mr Moran was aware that his relationship with Mr Nuttall was strained and that Mr Moran was cognisant of Mr Kwak having a similar awareness. By the time Mr Moran had discussions with Mr Kwak after Mr Kwak’s meeting with Mr Nuttall, Mr Moran had formed strong views about Mr Nuttall’s performance. It was those views, rather than any awareness or suspicion that Mr Nuttall had spoken to Mr Kwak about Mr Moran, that were the cause of Mr Moran’s decision to restructure Mr Nuttall’s position.

206    As explained above, Mr Nuttall sought to characterise the Third Complaint as in the nature of an inquiry to work flexibly for one week. Even if I were to accept that characterisation (which I do not), I do not accept that Mr Moran’s decision to restructure Mr Nuttall’s position was made wholly or partly because Mr Nuttall had made the Third Complaint. The evidence is that Mr Moran expressed neither agreement nor objection when informed by Mr Nuttall of his need to work flexibly for a week. I find that Mr Moran’s decision to demote Mr Nuttall by restructuring part of an organisation was not made wholly or partly because Mr Nuttall informed Mr Moran of his need to work flexibly for a week.

207    In relation to the Fourth Complaint, I accept Mr Moran’s evidence that he was not aware of Mr Nuttall complaining to Mr Wild about him or of the content of the discussion between Mr Nuttall and Mr Wild on 3 September 2018. Having regard to the chronology of events, I do not accept that any discussion Mr Nuttall had with Mr Wild on the afternoon of 3 September 2018 contributed in any way to the decision announced by Mr Moran to Mr Nuttall on 4 September 2018. It was agreed (as recorded in the agreed chronology filed by the parties) that on or about 20 August 2018, Mr Moran asked Mr Nuttall about his experience in design management. Mr Moran had made notes of his concerns about Mr Nuttall’s performance on 28 August 2018. I find that Mr Moran had already made the decision to restructure in the lead up to Mr Wild’s return to work.

208    I do not draw any Jones v Dunkel inference that Mr Wild was not called because his evidence would not assist Hatch. Whilst Mr Wild was not called to give evidence, the evidence before the Court supports a finding that Mr Wild, at least as at June 2021, continued to suffer serious mental health issues. I do not consider Mr Wild to be in “Hatch’s camp” or under their control or direction.

3.6.2.2    Conclusions about Mr Moran

209    Mr Moran was subjected to cross-examination. Mr Moran gave his answers in a composed and focused manner and did not attempt to evade difficult questions. He was direct. He agreed with propositions even when the propositions painted him as lacking in empathy. For example:

(1)    In relation to the discussion held on 21 August 2018, in which Mr Nuttall raised the message he received from Mr Taylor and the concerns he had about staff stress levels:

COUNSEL FOR MR NUTTALL: So you said to [Mr Nuttall], I suggest, that, in response to these mental health issues, “We would just – we will just have to do everything and cope.” That’s what you said to [Mr Nuttall]. Do you agree?

MR MORAN:---Yes.

COUNSEL FOR MR NUTTALL: You told [Mr Nuttall] that he just had to roll his sleeves up. Does that sound right?---

MR MORAN: ---More likely I would have said, “Just go to – get into the project.”

(2)    In relation to a conversation Mr Moran had with Mr Nuttall also on or about 21 August in which Mr Nuttall raised with Mr Moran a number of issues, including the issue of the retention of staff due to stress-related issues:

MR MORAN: ---Yes. It was an ongoing issue that he was raising with me. Yes.

COUNSEL FOR MR NUTTALL: Yes, and he – your response to that was that [Mr Nuttall] needed to let go of those issues and focus on the WRU structures delivery?

MR MORAN: ---Yes.

COUNSEL FOR MR NUTTALL: Remember saying that?

MR MORAN: ---Yes.

(3)    In relation to the 4 September Meeting, Mr Moran accepted that notwithstanding he was intending to tell Mr Nuttall of the restructure and his reasons for implementing it at that meeting, Mr Moran gave Mr Nuttall no indication that the meeting was to be anything other than a “catch-up”.

210    I accept that Mr Moran’s answers were an honest account of his perceptions and his state of mind. I do not accept that Mr Moran concocted “a list of supposed performance issues” to use as justification for demoting Mr Nuttall. Mr Moran’s evidence is consistent with the history of his relationship with Mr Nuttall which discloses a series of frustrations held by Mr Moran in respect of Mr Nuttall over a considerable period of time.

211    I am satisfied that Mr Moran’s decision to restructure Mr Nuttall’s role was not made (either wholly or in part) because Mr Nuttall made any of the First to Fourth Complaints. I accept Mr Moran’s evidence. I accept that Mr Moran genuinely formed views about the adequacy of Mr Nuttall’s performance and that he acted upon those views. There was no obvious disconnect between the views Mr Moran claimed to have formed and the circumstances, particularly given Mr Moran’s intense focus on project performance and his subjective expectations of Mr Nuttall’s role. I find that in making the decision to restructure and in announcing that restructure Mr Moran was not subjectively conscious of other considerations beyond his perception of a need to improve Mr Nuttall’s performance to align with Mr Moran’s expectations of the role Mr Nuttall held.

212    I do not accept Mr Nuttall’s submission that the decision to restructure his position could not have been made by Mr Moran because of concerns with Mr Nuttall’s performance. It was submitted that such a restructure would not be a rational way of addressing performance concerns. The proposition was that “the way to cure performance concerns, or have an employee improve, is to leave them in their current role and perhaps mentor them in that current role to get better”. I do not accept that proposition, having regard to Mr Moran’s perception of the role and his perception of Mr Nuttall’s performance. The submission made by Mr Nuttall that the restructure would not develop his skills as Manager Infrastructure – Southern Region reflects Mr Nuttall’s perception of the role as being directed at business development. On that perception the restructure could not logically contribute to the development of business development skills. But that was not how Mr Moran perceived the Southern Region role. Mr Moran was concerned about a specific aspect of Mr Nuttall’s performance — in particular, his ability to be across the detail of projects. The restructure was intended to focus Mr Nuttall on the details of a particular project to improve what Mr Moran perceived to be a deficiency. Given Mr Moran’s perception of Mr Nuttall’s performance, Mr Moran’s actions were not irrational. Whether the actions were fair, or Mr Moran’s perception of Mr Nuttall’s performance was warranted or correct, is not the question.

3.6.2.3    Mr Kwak

213    Mr Nuttall contends that Mr Kwak was either a joint decision-maker in respect of the decision to demote Mr Nuttall or was a person who had a material influence on that decision.

214    Hatch contends that it was Mr Moran’s decision alone.

215    The evidence was that prior to informing Mr Nuttall of the restructure and prior to the meeting of 4 September, Mr Moran informed Mr Kwak of the restructure to give Mr Kwak an opportunity to voice any concerns he had. Mr Kwak denied that he was a joint decision-maker or contributed to the decision. I understood his evidence to be that in making key decisions, it was usual practice to “bounce it off a couple of people”. Mr Kwak’s evidence was that Mr Moran spoke to him about the restructure and Mr Kwak did “not have a problem with it”.

216    I find that Mr Kwak’s involvement in the process that led to the restructure decision was not sufficient to constitute Mr Kwak as a decision-maker or otherwise to constitute Mr Kwak’s state of mind as part of the corporate state of mind of Hatch. Mr Moran had the power and authority to make the restructure decision. Mr Moran had made the decision to demote Mr Nuttall. Mr Moran accorded Mr Kwak the opportunity to discuss or even dissuade Mr Moran from implementing the decision to restructure but Mr Kwak’s did not intervene. Mr Kwak’s involvement did not actuate the decision, nor amount to material influence in the making of the decision to restructure Mr Nuttall’s position. That decision was Mr Moran’s alone.

217    This conclusion is consistent with Mr Moran’s evidence that he told Mr Kwak what he was doing because Mr Kwak had a superior position in the company in order to give Mr Kwak an opportunity to suggest that maybe he should not do it or suggest that he do something else. Mr Kwak accepted Mr Moran’s judgement to undertake the restructure and the decision made reflected Mr Moran’s judgement.

3.6.2.4    Mr Schatz

218    Mr Nuttall contends that Mr Schatz was either a joint decision-maker in respect of the decision to demote Mr Nuttall or was a person who had a material influence on that decision.

219    I find that Mr Schatz’s involvement in the process that led to the restructure decision was not sufficient to constitute Mr Schatz as a decision-maker or otherwise to constitute Mr Schatz’s state of mind as part of the corporate state of mind of Hatch. Mr Moran informed Mr Schatz of his decision to accord Mr Schatz the opportunity of voicing any concerns. Mr Schatz did not express any concerns. Mr Schatz’s involvement did not actuate the decision to restructure Mr Nuttall’s position nor have a material influence in the making of the decision. That decision was Mr Moran’s alone.

220    Mr Nuttall submitted that Mr Schatz was an unsatisfactory witness because he did not concede that the restructure involved a demotion. Although I have concluded that the restructure did involve a demotion, I accept Mr Schatz’s evidence that he had no regular dealings with Mr Nuttall. Mr Schatz was based in Canada. He relied upon management in Australia and the Asia Pacific in relation to matters involving the Australian infrastructure team. Mr Schatz accepted Mr Moran’s judgement to reassign Mr Nuttall to a Structural Team leader’s role. The decision to reassign was made by Mr Moran and not actuated by Mr Schatz.

221    This conclusion is consistent with Mr Moran’s evidence.

3.6.2.5    Other “decision-makers”

222    Mr Nuttall contends that Mr Wild influenced the making of the decision to change Mr Nuttall’s position in the Hatch organisation in the discussions between Mr Moran and Mr Wild on 3 September 2018.

223    Mr Moran’s evidence was that he had “already made the decision on how I was going to restructure, and I was having [Mr Wild] review it”.

224    I conclude that Mr Wild did not relevantly influence the making of the decision to alter Mr Nuttall’s position. At the time of the 4 September Meeting, Mr Wild had just returned from extended sick leave. Mr Wild had not been directly involved in or observed Mr Nuttall’s performance over the period during which he had been away. Mr Moran informed Mr Wild of the decision Mr Moran had made based on Mr Moran’s direct experiences with Mr Nuttall and also informed Mr Wild of the reasons he had made that decision. I accept Mr Moran’s evidence that Mr Wild did not contribute to the making of the decision.

225    For the reasons set out above, I do not draw any inference that Mr Wild’s evidence would not have assisted Hatch.

226    Mr Nuttall further contends that Ms Gamble, a human resources employee of Hatch, had a material influence on the decision to demote Mr Nuttall. Mr Nuttall did not identify Ms Gamble as a decision-maker or a person relevantly involved in the decision to take adverse action against him. Nor was Ms Gamble identified in Mr Nuttall’s written or oral opening submissions. Mr Nuttall’s submission as to Ms Gamble’s involvement is based on the following exchange in Mr Moran’s cross-examination:

COUNSEL FOR MR NUTTALL: Were you talking with Human Resources before 4 September about the restructure?

MR MORAN: Yes.

COUNSEL FOR MR NUTTALL: Who were you talking to?

MR MORAN: Rowena Gamble.

COUNSEL FOR MR NUTTALL: And did she give input into the reasons for demoting [Mr Nuttall]?

MR MORAN: I don’t agree it was a demotion.

COUNSEL FOR MR NUTTALL: Sorry, changing his position, if you prefer?

MR MORAN: She was aware, yes.

COUNSEL FOR MR NUTTALL: Yes, and she was involved in setting up that restructured arrangement, was she?

MR MORAN: She was informed.

COUNSEL FOR MR NUTTALL: She was informed. Did she help you put the chart together – the organisation chart?

MR MORAN: No.

227    Ms Gamble was not called by Hatch to give evidence.

228    It may not be necessary for the applicant to identify a particular individual by name in order to engage the statutory presumption. As the Full Court said most recently in Monash Health v Singh [2023] FCAFC 166 at [113]–[115] (Katzmann, Snaden and Raper JJ):

[113]    …To engage the statutory presumption, an applicant must allege that ‘a person took, or is taking action for a particular reason or with a particular intent’: s 361(1)(a). A ‘person’ includes a body corporate. By operation of s 793, the conduct of a body corporate inheres in the conduct of the human officers, employees or agents through whom it acts.

[114]    Here again it is important to note that the case did not proceed by pleadings. The claim form identified the body corporate, rather than individuals who made the decision or materially influenced the decision to terminate. Monash Health did not apply to strike out the claim, require pleadings or request further and better particulars (including particulars of the identities of the decision makers).

[115]    There is a distinction between what a litigant must do in order to invoke the statutory presumption for which s 361 of the FW Act provides (on the one hand) and the circumstances in which a pleading might be vulnerable to attack in the usual ways (on the other). In this case, as is explained above, it was squarely put that Monash Health did things (most significantly, dismissed Mr Singh) for a reason or reasons proscribed by Pt 3-1 of the FW Act: that suffices to invoke the statutory presumption. The relevant actor — that is to say, the perpetrator of the adverse action — is the corporate entity and its state of mind was very clearly alleged.

229    Mr Nuttall contended that it followed that having engaged the presumption, Hatch could not rebut the presumption in the absence of calling Ms Gamble, relying on the following passage from Wong (Full Court) at [25]:

As the decisions in Wood, Voigtsberger and Roberts demonstrate, the word ‘because’ as it appears in s 340 of the FW Act directs attention to the reason for an action, which is to be found in the state of mind of the person alleged to have taken the adverse action. Where (as here) that person is a corporate entity, it will in all cases be necessary to examine the state of mind of the human actor or actors who (alone or together) caused the corporation to take the action that it did or, to adopt a phrase from Wood, who ‘played the decision-making part in the joint administrative activities’ culminating in the actual act that constitutes the adverse action. It may be convenient to refer to the person whose conduct directly visited the adverse action on the employee as the ‘decision-maker’ but his or her decision-making process may incorporate the state of mind of other people, including by adopting facts or opinions asserted by them.

230    I find that Ms Gamble did not actuate the decision to demote Mr Nuttall. Nor did she materially contribute to the making of the decision. I accept Mr Moran’s evidence that he informed Human Resources about the restructure. That is not unexpected. I accept that Mr Moran had authority to make the decision to restructure and he exercised that authority. He did not make the decision jointly with a representative from Human Resources. Ms Gamble did not actuate the decision to restructure or materially influence its making. She was informed of Mr Moran’s decision but Mr Moran did not consult with her or involve her in the making of his decision. I am satisfied that Ms Gamble did not have a material influence on the making of the decision based on the evidence of Mr Moran and the objective facts and circumstances. She thus did not play a “decision-making part” in the sense referred to by the Full Court in Wong (see also Dorsch v HEAD Oceania Pty Ltd [2024] FCA 162 at [222]–[223]).

231    Furthermore, there is no evidence or allegation that Ms Gamble was aware of Mr Nuttall making any of the First to Fourth Complaints. Ms Gamble was not a party to any of the discussions. None of the parties to those discussions had reason to speak to Ms Gamble about those discussions and there is no allegation that they did so. Having regard to the entirety of the circumstances, any involvement Ms Gamble may have had in the restructure was not influenced by Mr Nuttall exercising any of the workplace rights on which he relies.

3.7    Conclusions relating to Hatch’s conduct

232    The decision to demote Mr Nuttall was made by Mr Moran alone. He informed Mr Schatz and Mr Kwak before informing Mr Nuttall of his decision in order to give them an opportunity to raise any concerns they may have had with the decision. Neither Mr Schatz nor Mr Kwak had any problems with Mr Moran’s decision. They did not relevantly materially influence the making of the decision by Mr Moran.

233    I do not accept that the repositioning of Mr Nuttall was undertaken in order to put Mr Nuttall in a position where he could no longer cause problems by complaining about Mr Moran or that there was a view within Hatch that Mr Nuttall’s complaints about Mr Moran were undermining Mr Moran’s position in the company. The evidence does not support a conclusion that Mr Nuttall was regarded within Hatch as a troublemaker. The restructure did not remove Mr Nuttall from the organisation or reduce his contact with other employees. I do not accept that the restructure was undertaken so that Mr Nuttall could “no longer cause problems” for Mr Moran.

234    I do not accept that the restructure was undertaken as retribution for Mr Nuttall making any of the First to Fourth Complaints. The restructure would not have reduced Mr Nuttall’s pay or entitlements. Following the restructure, Mr Nuttall was to retain his shareholding in both Hatch and its parent. There were significant problems with some of Hatch’s projects in the Southern Region, including the Western Roads Upgrade. Whether fairly or not, particularly given the lack of clarity around the scope of Mr Nuttall’s role when Mr Nuttall commenced his employment, Mr Moran had formed the view that the problems were at least partially attributable to what he perceived to be deficiencies in Mr Nuttall’s knowledge of the details of those projects. From Mr Moran’s perspective, the restructure would address these issues.

235    I am satisfied that on the balance of probabilities Mr Nuttall was to be repositioned because Mr Moran had concerns about Mr Nuttall’s performance in his role. I am satisfied that Hatch did not reposition Mr Nuttall (either wholly or in part) because he made any of the First to Fourth complaints. I am satisfied that Hatch has discharged its onus of disproving that a substantial and operative reason for the decision to restructure was because Mr Nuttall had exercised a workplace right or because Mr Nuttall had a workplace right. The requirements of s 340 of the FW Act are not made out.

3.8    Causation

236    Because I have found that s 340 was not contravened, the question of whether adverse action caused Mr Nuttall loss or damage does not arise.

237    If I am wrong, for the reasons set out at [146] above, I am satisfied that the adverse action taken in the form of restructuring Mr Nuttall’s position and announcing that restructure during and after the meeting of 4 September 2018 aggravated Mr Nuttall’s psychiatric condition to the point where Mr Nuttall could no longer cope or attend work at Hatch. I accept that the existence of Mr Nuttall’s condition was caused by a number of stress factors that Mr Nuttall experienced in 2017 after he sold his business to Hatch and after he changed his work role to become an employee of Hatch, his fixation with the 4 September Meeting and complex issues in his personal life. However, what caused Mr Nuttall to cease to be able to perform his employment duties was the aggravation of that existing condition which occurred as a result of the 4 September 2018 Meeting.

238    Mr Moran’s own evidence was that he had been planning since 22 August 2018 to have a performance management discussion with Mr Nuttall. That was the purpose and intent of the 4 September Meeting. When Mr Moran asked Mr Nuttall to arrange a meeting for 4 September 2018, he did not tell Mr Nuttall of the nature of the meeting. The psychiatric evidence was that because Mr Nuttall was not prepared for the discussion as it eventuated, Mr Nuttall felt he was ambushed and it impeded Mr Nuttall’s ability to deal with the meeting. That sense of ambush contributed to the deterioration in Mr Nuttall’s psychiatric condition.

239    Mr Nuttall has since 20 September 2018 not earned wages by performing services for Hatch. The extent to which Mr Nuttall may have been able to make a claim under income protection insurance was not explored in evidence.

240    I do not accept Hatch’s submission that Mr Nuttall may have mitigated his loss had he agreed to take anti-depressant or anti-anxiety medication. The psychiatric evidence, which I accept, was that Mr Nuttall suffers from a mood disorder which in the absence of any medication, has persisted and therefore has become entrenched, or harder to shift. The mood disorder means that Mr Nuttall’s sense of well-being does not improve by being away from Hatch. The psychiatric evidence was that medication is available that:

corrects that imbalance, and then the person’s cognition may become more positive, and they can problem solve ..... negative cognitions, you have work problems ..... problems here, but he’s – he’s not able to solve them. The antidepressant is not going to solve their life problems. It’s not going to solve his relationship problem, nor it is it going to solve his financial problem, but it will put him in a better frame of mind to think positively and look at problem solving his problems.

However, the psychiatric evidence was also that counselling and medication would not be sufficient to overcome a breakdown in Mr Nuttall’s employment relationship with Hatch. Medication was not going to address the sense of mistrust between Mr Nuttall and Hatch in a way that would have enabled Mr Nuttall to return to work at Hatch.

241    Mr Nuttall was reluctant to take such forms of medication because of concerns he had about side-effects. He had seen his ex-wife suffer from side-effects from similar forms of medication. The psychiatric evidence was that such medication can have material side-effects. Mr Nuttall was not acting irrationally in his reluctance to take such medication.

242    I find that Mr Nuttall’s refusal to take medication was not a cause of his loss.

PART 4: THE SHAREHOLDER AGREEMENT CLAIM AND CROSS-CLAIM

4.1    Mr Nuttall’s Claim in respect of the Shareholder Agreement

243    Mr Nuttall claims that the purported exercise of the call option by Motus was a breach of cl 5(d) of the shareholder agreement because no Option Event had occurred as at 6 September 2019 when the option was purportedly exercised. Mr Nuttall contends that as at 6 September 2019 he had not been absent from active employment for a continuous period of 12 months or for more than 14 months in a 24-month period; rather, Mr Nuttall had been on extended unpaid leave.

4.2    The Cross-Claim