F.1. Issue 1 - Grounds 1 and 2
53 The first issue that arises in the appeal is whether the primary judge erred by finding that Mr Skrobanek was the agent of Head Oceania and, by virtue of his evidence, that Head Oceania had rebutted the statutory presumption under s 361 of the FW Act in terminating Mr Dorsch's employment.
54 Mr Dorsch submitted that Head Oceania's Constitution vests the management of that company in its directors. He contended that, as Mr Skrobanek was not an employee or officer of Head Oceania, he did not have the actual or apparent authority to terminate Mr Dorsch's employment, nor was there any evidence establishing that Head Oceania had conferred any such authority upon Mr Skrobanek. Further, Mr Dorsch submitted that the word "agent" contained in s 793 of the FW Act should be understood to have been used in its established sense as a legal term of art (citing Mie Force Pty Ltd v Allianz Australia Insurance Ltd [2024] NSWCA 23 at [122]) as describing persons with authority to create binding legal relations between a principal and third parties or to end those relationships. It was submitted that the relationship of agent and principal can only be established by the consent of both parties and that there was no evidence of any such consent to appoint Mr Skrobanek as an agent of Head Oceania. Mr Dorsch submitted that Mr Skrobanek's leadership roles in other entities within the Head Group did not make him an agent of Head Oceania.
55 Mr Dorsch next contended that, as Mr Skrobanek did not have any authority (actual or apparent), Head Oceania did not rebut the presumption in s 361 of the FW Act. He contended that the question of whether a body corporate has contravened the FW Act must be answered by assessing the state of mind attributed to the body corporate, against the elements of the contravention said to have been committed by it. It was submitted that as Mr Skrobanek did not have any authority, his state of mind was irrelevant to Head Oceania rebutting the presumption. Mr Dorsch submitted that:
It is this question of who has legal power to dismiss the Appellant that Mr Dorsch contends should trouble the Court. At its highest, Mr Dorsch submits that Mr Skrobanek could determine that the Appellant be dismissed but could not effect that decision, which it says needed to be done by the Respondent.
56 During the course of oral submissions before us, Counsel for Mr Dorsch developed the argument on the basis that there was no challenge to whether the termination was validly effected or the fact that Mr Skrobanek had the authority to determine whether to terminate the employment, but that Mr Skrobanek had no authority to implement the decision. The following exchanges that occurred during the course of oral submissions identify the way in which the argument was ultimately put:
SNADEN J: You also don't take issue, do you, with the fact of termination?
MR BRITT: No.
SNADEN J: As an act engaged in by the respondent.
MR BRITT: We don't.
SNADEN J: As a valid act.
…
SHARIFF J: Because you don't challenge the anterior finding of fact, isn't it a factual basis from which to infer, that Mr Skrobanek had at least ostensible or apparent authority in respect of decisions to be made, in respect of the appellant's employment?
MR BRITT: Well, your Honour, we say it goes the other way. We say what it does show is that Mr Skrobanek can make decisions, but other people are required to implement those decisions. That is, agree to the decision and implement it.
HATCHER J: That's a theoretical rather than factual proposition, isn't it?
MR BRITT: What was that, your Honour?
HATCHER J: That's a theoretical rather than factual proposition. The simple fact is, there was a finding made by the primary judge that Mr Skrobanek was the decision-maker for the dismissal, and was the person who effected and communicated the dismissal.
MR BRITT: That - and yes, and that he was an agent of - - -
HATCHER J: Well, leaving aside agency that they're the factual matters that are unchallenged in the appeal, aren't they?
MR BRITT: Correct, but at the end of the day, it is the respondent that actually has to terminate the appellant. And that required a decision by the respondent, and we do not have any evidence from any persons within the respondent as to why they followed the instruction or decision of Mr Skrobanek to terminate the appellant.
…
MR BRITT: But what we have in this case is, even Mr Skrobanek says, he requires someone else to implement a bonus.
SHARIFF J: That's an implementation issue. It sounds like you're accepting that he had - the decision-making power resided with him.
MR BRITT: He has the power to decide, he doesn't then have the power - - -
SHARIFF J: You accept then, he has the power to decide.
MR BRITT: Yes, and we've said that in our submissions. He can make a decision, but what then flows from that is other persons have to agree with that decision in order to terminate the appellant's contract.
57 We reject Mr Dorsch's contentions.
58 The question raised by s 361 of the FW Act required an examination of the reason or reasons of the person who took the adverse action. As was explained by French CJ and Crennan J in Board of Bendigo Regional Institute of Technical and Further Education v Barclay [2012] HCA 32; 248 CLR 500 at [44]-[45]:
[44] There is no warrant to be derived from the text of the relevant provisions of the Fair Work Act for treating the statutory expression "because" in s 346, or the statutory presumption in s 361, as requiring only an objective inquiry into a defendant employer's reason, including any unconscious reason, for taking adverse action. The imposition of the statutory presumption in s 361, and the correlative onus on employers, naturally and ordinarily mean that direct evidence of a decision-maker as to state of mind, intent or purpose will bear upon the question of why adverse action was taken, although the central question remains "why was the adverse action taken?".
[45] This question is one of fact, which must be answered in the light of all the facts established in the proceeding. Generally, it will be extremely difficult to displace the statutory presumption in s 361 if no direct testimony is given by the decision-maker acting on behalf of the employer. Direct evidence of the reason why a decision-maker took adverse action, which may include positive evidence that the action was not taken for a prohibited reason, may be unreliable because of other contradictory evidence given by the decision-maker or because other objective facts are proven which contradict the decision-maker's evidence. However, direct testimony from the decision-maker which is accepted as reliable is capable of discharging the burden upon an employer even though an employee may be an officer or member of an industrial association and engage in industrial activity.
(Emphasis added).
59 As is apparent from the above passages, the central question is "why was the adverse action taken?" and that is a question of fact to be answered in light of all the facts established in the proceeding. In the present case, the primary judge found that Mr Skrobanek made the decision to terminate Mr Dorsch's employment, and that this decision was made by him alone. This finding is not challenged.
60 Further, Mr Dorsch accepted that Mr Skrobanek could, and did, determine that Mr Dorsch's employment should be terminated. The point raised by Mr Dorsch that Mr Skrobanek did not, however, have the authority to implement the decision is a distinction without any substance. As the Full Court indicated in Wong v National Australia Bank Ltd [2022] FCAFC 155; (2022) 318 IR 148, to focus on where legal authority resides when determining whether an adverse action was taken by a corporate entity is apt to mislead. There, in the context of decision-making based on information or advice given by another person, the Court stated at [26], "it matters not that the person providing the information and advice does not formally possess the authority or power to effect the decision based on the information or advice". Here, the general point is the same. Once it was accepted that Mr Skrobanek was the person who was determining whether Mr Dorsch's employment should be terminated, and had such authority and exercised it, it was beside the point whether he had the legal authority to give effect to that decision by implementing it. In any event, as we have pointed out, there was no challenge to the fact that the termination was validly effected.
61 Mr Dorsch's submissions failed to address the central question as to why the adverse action was taken by reference to the accepted factual position. Once it is accepted (as it is here) that Mr Skrobanek was, in substance and reality, the decision-maker, it was his reasons that mattered to the outcome of that question. The primary judge not only accepted Mr Skrobanek's evidence as to his reasons for why that decision was made, her Honour also accepted his denials that the decision was not make for proscribed reasons. These findings were dispositive. As these findings are not challenged, Mr Dorsch's contentions in relation to Issue 1 must fail.
62 Mr Dorsch's reliance upon s 793 of the FW Act and the principles relating to actual or apparent authority are misplaced on the facts of this case. Relevantly, s 793(1) and (2) of the FW Act provide as follows:
Liability of bodies corporate
Conduct of a body corporate
(1) Any conduct engaged in on behalf of a body corporate:
(a) by an officer, employee or agent (an official) of the body within the scope of his or her actual or apparent authority; or
(b) by any other person at the direction or with the consent or agreement (whether express or implied) of an official of the body, if the giving of the direction, consent or agreement is within the scope of the actual or apparent authority of the official;
is taken, for the purposes of this Act and the procedural rules, to have been engaged in also by the body.
State of mind of a body corporate
(2) If, for the purposes of this Act or the procedural rules, it is necessary to establish the state of mind of a body corporate in relation to particular conduct, it is enough to show:
(a) that the conduct was engaged in by a person referred to in paragraph (1)(a) or (b); and
(b) that the person had that state of mind.
63 It will be apparent that the text of s 793(2) of the FW Act is expressed to operate on the basis that, in establishing the state of mind of the body corporate, "it is enough to show" that a person referred to in s 793(1) held the relevant state of mind. Section 793(2) in this sense facilitates proof of state of mind, but it is neither a codification of the doctrines of attribution or vicarious liability nor is it exhaustive as to the legal means by which the state of mind held by, or the conduct engaged in by, a body corporate may be ascertained: Director of the Fair Work Building Industry Inspectorate v Robinson [2016] FCA 525; 241 FCR 338 at [49]-[50]; Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner [2020] FCAFC 192; (2020) 282 FCR 1 at [257]; State of New South Wales - Sydney Trains v Annovazzi [2024] FCAFC 120 at [109].
64 In the present case, Mr Dorsch's position as to the operation and application of s 793 of the FW Act was inconsistent. As noted above, on the one hand, Mr Dorsch accepted that Mr Skrobanek was, in fact, the person who determined whether to terminate his employment. However, on the other hand, Mr Dorsch contended that Mr Skrobanek could not implement the decision even if he had the authority to make the determination such that his state of mind could not be attributed to Head Oceania unless there was evidence that they agreed with his decision and implemented it. For the reasons we have stated above, these submissions created a distinction without any substance. Once it was accepted that Mr Skrobanek had the authority to determine whether employment should be terminated, it was his state of mind that was relevant.
65 In any event, the primary judge's finding that Mr Skrobanek had the authority to make the decision to terminate Mr Dorsch's employment as an agent of Head Oceania accorded with the overwhelming weight of evidence in the proceedings below (which we have reviewed). Although Mr Skrobanek was not an officer or employee of Head Oceania, he was the Chief Operating Officer of Head International which was the ultimate holding company of the Head Group including Head Oceania: PJ [116], [120]. Mr Skrobanek's evidence was that the directors of Head Oceania were not required to delegate to him the role of giving an affidavit with that authority, as he was the one who appointed those directors. In addition, there was evidence given by Mr Prete (a director of Mares AP and Head Oceania) and Mr Davies (a director of Head Oceania), neither of whom said anything to cast doubt on Mr Skrobanek's evidence. Mr Dorsch was the only other director of Head Oceania at the relevant time. Mr Davies gave unchallenged evidence as to the allegations in relation to Mr Dorsch's conduct and that the decision to terminate the employment was one that was made by Mr Skrobanek. All of this evidence supported the finding that Mr Skrobanek was acting with the express or implied authority of Head Oceania to terminate Mr Dorsch's employment.
66 For these reasons, we reject Grounds 1 and 2.