Federal Court of Australia

Atkins v North Australian Aboriginal Justice Agency Ltd [2024] FCA 686

SUMMARY

In cases of public interest, importance or complexity it is the practice of the Federal Court to prepare a summary of reasons for the Court’s orders to assist the public to understand the outcome of the proceeding. This summary is not to be read as a complete statement of the Court’s reasons, which are provided in the published judgment that will appear in due course on the Court’s website.

In 2007 the applicant, Ms Priscilla Atkins, commenced employment with the respondent, Northern Australia Aboriginal Justice Agency (NAAJA) as its Chief Executive Officer (CEO).

In November 2022 Ms Atkins made a written complaint, which she directed to NAAJA’s Board of directors. In that complaint she raised a number of allegations about the performance and conduct of NAAJA’s Chief Financial Officer, Ms Madhur Evans. Among other things, she asked the Board to advise what should be done about the matters she had raised.

By making that complaint Ms Atkins exercised a workplace right within the meaning of the Fair Work Act 2009 (Cth).

In the weeks and months that followed, NAAJA took a number of actions against Ms Atkins, including her suspension from employment in late November 2022, the passing of a resolution to terminate her appointment as CEO in January 2023 and the sending of a letter in February 2023 notifying her that she was dismissed.

Section 340 of the Fair Work Act prohibits an employer from taking an adverse action against an employee because the employee has exercised or proposes to exercise a workplace right.

In this action Ms Atkins alleges that NAAJA committed five contraventions of that provision.

The action was commenced on an urgent basis on 20 February 2023. In her originating application Ms Atkins sought (among other things) an interlocutory injunction restraining NAAJA from terminating her employment. At the first case management hearing, Counsel for NAAJA informed the Court that Ms Atkins had been dismissed and that her interlocutory application was therefore “dead in the water”.

The Court has previously made an order for the trial of separate issues as to liability and remedies. The trial as to liability was heard in late 2023.

Today, the Court publishes reasons for its conclusion that NAAJA contravened the Fair Work Act in each of the respects alleged by Ms Atkins. This is a summary of those reasons.

As explained in the reasons themselves, there will be no orders made today other than case management orders progressing the matter to a hearing in relation to any remedies to which Ms Atkins may be entitled. The Court expresses no view as to Ms Atkins’ prospects of obtaining the remedies sought on her originating process.

In this matter, there were issues in respect of which Ms Atkins bore the onus of proof and other issues in respect of which NAAJA bore the onus.

The complex factual background is set out in Part 3 of the reasons, and the evidence of the witnesses is summarised in Part 7. The parties’ pleaded cases are summarised in Part 4.

There were five adverse actions alleged by Ms Atkins.

The first was a decision to suspend her from her employment. The second was a decision to refer to an external consultant, BDO Australia Ltd, a series of matters for investigation, each going to the question of whether Ms Atkins had engaged in misconduct in the performance of her duties as CEO. The third was a resolution passed, or purportedly passed, by NAAJA’s Board to terminate Ms Atkins’ employment following the receipt of a report prepared by BDO which contained “findings” of misconduct against her.

The fourth was a decision to send to Ms Atkins a letter containing a series of allegations and to seek a response to them. A curious feature of the case was that the letter was sent after there had been a resolution to terminate Ms Atkins’ appointment as CEO. Ms Atkins responded to the allegations and at the same time sought a further opportunity to add more detail to her response.

The fifth adverse action was the delivery to Ms Atkins a letter notifying her that she had been dismissed from her employment without providing her with more time to respond.

The Court is satisfied that each of the actions taken against Ms Atkins meet the description of “adverse actions” as defined in the Fair Work Act. Disputes in connection with that issue have been resolved in Ms Atkins’ favour.

Ms Atkins’ case with respect to one of those actions was presented in the alternative. Her principal case was that the resolution providing for her dismissal was not a valid resolution of the NAAJA’s Board, both because the resolution was not passed at a meeting of the Board having the requisite quorum required by NAAJA’s Constitution and because it did not have the support of 75% of all of NAAJA’s validly elected directors in any event.

As explained in Part 6 of the reasons, the Court has accepted Ms Atkins’ argument that the resolution for her termination was not made in compliance with NAAJA’s Constitution. NAAJA’s argument that the resolution was valid notwithstanding that non-compliance is rejected. The consequence is that the purported dismissal of Ms Atkins could not be legally effective as a unilateral termination of the employment contract. Ms Atkins has persisted with her submission that the employment contract remains on foot and that NAAJA is in ongoing repudiatory breach of it. At this stage of the proceeding, the Court expresses no view as to the remedial consequences that may flow from the conclusions in Part 6 of the reasons. That is a matter in respect of which the parties are yet to make submissions.

It is not disputed that in the period following the suspension of her employment, Ms Atkins threatened legal proceedings, including proceedings to restrain the termination of her employment. Nor is it disputed that by making the complaint, by threatening the proceedings, and by in fact commencing this action, Ms Atkins exercised or proposed to exercise her workplace rights.

Section 361 of the Fair Work Act operates so that in a proceeding where an employee alleges that his or her employer took action for a reason prohibited under s 340, it is presumed that the action was taken for that prohibited reason unless the employer proves otherwise.

The effect of that provision is that the Court must presume that NAAJA took each of the adverse actions for reasons that included Ms Atkins’ exercise of the workplace rights referred to in her pleadings. That presumption applies unless NAAJA proves otherwise.

In its Further Amended Defence, NAAJA asserted the reasons why each of the adverse actions was taken against Ms Atkins. That pleaded case has been assessed against the evidence as a whole.

NAAJA alleged that Ms Atkins was suspended from her employment because the Chairperson of NAAJA’s Board had a bona fide belief and made a bona fide allegation that Ms Atkins had engaged in fraudulent conduct by forging or otherwise misusing the Chairperson’s signature on a document so as to secure for herself a five year extension of the employment contract together with an increase in her salary, neither of which (the Chairperson alleged) had the approval of the Board.

That aspect of NAAJA’s case is examined in Part 11 of the reasons. The Court’s conclusion is that the evidence relied upon by NAAJA was insufficient to support the factual findings it invited the Court to make. More specifically, the evidence was insufficient to support a finding that the allegation about the use of the Chairperson’s signature was a bona fide allegation. The Court is not satisfied that the allegation was not made by a person actuated by Ms Atkins’ exercise of her workplace right to make the complaint. The consequence of that dissatisfaction is that the presumption in s 361 of the Fair Work Act applies.

Following Ms Atkins’ suspension, BDO was engaged to commence what was described as an “independent audit” of matters relating to Ms Atkins’ conduct. NAAJA’s pleaded case was that BDO was engaged because directors had developed concerns that Ms Atkins had engaged in misconduct that impacted adversely on NAAJA’s financial position and reputational standing. Those concerns, NAAJA alleged, happened to arise in the period following the complaint but were unconnected with it.

As explained in Part 11 of the reasons, the evidence as to by whom, when and why the so-called “concerns” were raised was vague and variable. So too is the evidence as to when, and by whom BDO was engaged, who was responsible for identifying the scope of its work and who provided BDO with documentation. There is evidence that Ms Evans, the person against whom Ms Atkins’ had complained, had a substantial role in those processes and that she also participated in communications relating to the future of Ms Atkins’ employment. Ms Evans was not called to explain that involvement and the evidence does not otherwise provide an explanation for it, at least in a way that would assist NAAJA’s case.

The Court has concluded that there was a deliberate decision to confine BDO in the conduct of its investigation by directing it not to obtain any information or documents from Ms Atkins that may be relevant to the subject matter of the investigation. The Court has concluded that information relevant to the subject matter of the investigation was withheld from BDO and from the Board, specifically by NAAJA’s Chairperson. That conduct is not consistent with a genuine desire to have BDO independently make fair and factual “findings” in connection with the subject matter of the investigation.

Most of the directors who joined in the resolution to terminate Ms Atkins’ appointment relied on the report of BDO and on the asserted status of the investigator as an “independent auditor”. On the unique facts of this case it was necessary for NAAJA to demonstrate that BDO’s report did not form part of a design to remove Ms Atkins from the workplace because she had made the complaint, including by giving the false appearance of fairness and independence through the engagement of an external consultant.

Following the resolution, at the January Meeting events occurred that were not known to most of NAAJA’s directors. They included sending a letter to Ms Atkins purporting to afford her procedural fairness in connection with a decision that had in fact already been made.

The evidence does not support a conclusion that the few directors involved in that activity had a genuine desire to afford Ms Atkins’ procedural fairness. The evidence does not demonstrate that they in fact gave any meaningful consideration to the response that Ms Atkins gave to the allegations against her. Most critically, they determined not to provide Ms Atkins’ response to the Board for its consideration, notwithstanding that the letter to Ms Atkins assured her that would be done. Each of those directors expressed a desire to act in considerable haste.

The Court is satisfied that those directors made those decisions in circumstances where they were aware that Ms Atkins had threatened to commence legal proceedings to restrain the termination of her employment unless NAAJA gave an undertaking that it would not do so. It matters not whether they knew that this action had in fact been commenced.

In all of the circumstances described in the reasons, the evidence does not demonstrate that those actions were not taken for reasons that included Ms Atkins’ exercise or threatened exercise of her workplace rights.

The consequence of those findings is that Ms Atkins has the benefit of the presumption in s 361 of the Fair Work Act. To have the benefit of that presumption it was not necessary for her to prove that particular element of the contraventions she alleged against NAAJA. That is why much of the reasons are expressed in terms of observations about the insufficiency of the case presented by NAAJA, rather than in terms of positive findings.

There will be orders progressing the matter to a hearing on the question of remedies, including the quantification of civil penalties in accordance with s 545 of the Fair Work Act.

CHARLESWORTH J

27 JUNE 2024, ADELAIDE