Fair Work Ombudsman v Austrend International Pty Ltd

Federal Court of Australia|2018-02-28|Before: Mr AJ, Mr J, Gilmour J

The applicant's claims that: (a) the first respondent contravened s 351 of the Fair Work Act 2009 (Cth) by constructively dismissing Ms Aragon on 19 July 2016; and (b) that the second respondent was involved in this claimed contravention, (Claims) be dismissed.
The applicant pay the respondents' costs of the respondents' interlocutory application and the costs associated with the Claims on an indemnity basis, to be taxed if not agreed, and paid forthwith. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

GILMOUR J: 1 This is an application for summary judgment brought by the respondents. 2 The proceedings were instituted by the Fair Work Ombudsman (FWO) and allege that the first respondent (Austrend) took adverse action against a former employee, Ms Lindsey Aragon, because of her sex and/or pregnancy. The claim is made pursuant to s 351 of the Fair Work Act 2009 (Cth) (FW Act). 3 Specifically, the FWO claims that the adverse action comprised: (a) giving Ms Aragon warnings during her employment with Austrend; (b) issuing her a formal written warning on 29 April 2015; (c) unilaterally extending her period of unpaid parental leave on 1 April 2016; (d) refusing to allow her to return to work on 4 April 2016 on a full time basis; and (e) constructively dismissing her on 19 July 2016. 4 The second respondent, Mr Denzil Rao, is alleged to have been involved in those alleged contraventions. 5 The respondents have applied for summary judgment in relation to that part of the proceedings which alleges that Austrend contravened s 351 by constructively dismissing Ms Aragon on 19 July 2016 and that Mr Rao was involved in that contravention. 6 It is accepted by the FWO that if the application by Austrend is successful then it follows that, to the same extent, Mr Rao's application must also succeed. 7 The FWO contends that, at a meeting on 19 July 2016 (19 July meeting), Ms Aragon was forced to resign. The respondents contend that Ms Aragon resigned willingly in consideration for the payment of a sum of money, evidenced by an email which Ms Aragon sent to the FWO on the following day. For the following reasons, I accept the respondents' contention and will grant its summary judgment application.

Summary judgment principles 8 The respondents' application is made pursuant to s 31A(2) of the Federal Court of Australia Act 1976 (Cth) (FCA Act), and r 26.01(1)(a) of the Federal Court Rules 2011 (Cth) (Rules). The application is supported by the affidavits of Rochelle Airey (sworn on 31 October 2017) and Aravindhan Rajaratnam (affirmed on 27 October 2017). Ms Airey is the respondents' solicitor. Mr Rajaratnam is a director of Suraksha Holding Pty Ltd, which trades as a business development, growth and strategy services provider. Mr Rajaratnam has, since about May 2015, provided human resources services to Austrend. 9 The relevant test under both the FCA Act and the Rules, the burden of satisfying which is on the respondents, is whether the Court is satisfied that the FWO has no reasonable prospect of successfully prosecuting the proceeding or part of the proceeding. 10 Section 31A of the FCA Act relevantly provides: (2) The Court may give judgment for one party against another in relation to the whole or any part of a proceeding if: (a) the first party is defending the proceeding or that part of the proceeding; and (b) the Court is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceeding or that part of the proceeding. (3) For the purposes of this section, a defence or a proceeding or part of a proceeding need not be: (a) hopeless; or (b) bound to fail; (c) for it to have no reasonable prospect of success. (4) This section does not limit any powers that the Court has apart from this section. 11 The meaning and reach of s 31A is well established. The relevant general principles are not in contest. 12 It is well accepted the power to dismiss an action summarily is not exercised lightly. In Danthanarayana v Commonwealth of Australia [2016] FCAFC 114, the Full Court said, at [4], that: …to summarily dismiss a proceeding, and thereby preclude a person from having their case determined on its merits at a final hearing, is a serious step taken only with great care and if it is possible to conclude with confidence that there is no reasonable prospect of success; this is so despite the fact that under s 31A(2) of the Federal Court of Australia Act 1976 (Cth) … the power to summarily dismiss a proceeding is not dependent on the case being "hopeless" or "bound to fail" for it to have no reasonable prospect of success (Spencer v Commonwealth [2010] HCA 28 ; (2010) 241 CLR 118 at [17]-[26]). 13 Section 31A lowers the bar for obtaining summary judgment. The inquiry is whether there is a 'reasonable' prospect of prosecuting the proceeding or part of the proceeding, not whether a certain and concluded determination could be made that the proceeding or part of the proceeding would necessarily fail. Judgment may be granted even if it cannot be said the case is so clearly untenable that it could not possibly succeed: Spencer v Commonwealth of Australia (2010) 241 CLR 118 at [51]-[60] (per Hayne, Crennan, Kiefel and Bell JJ). 14 Once a moving party has established a prima facie case that the opponent has no reasonable prospect of success, the opposing party must respond by pointing to specific factual or evidentiary disputes that make a trial necessary. General or non-particularised denials will be insufficient to defeat the motion: Jefferson Ford Pty Ltd v Ford Motor Company of Australia Ltd (2008) 167 FCR 372 per Gordon J, as her Honour then was, at [127]. 15 Her Honour then said: [130] A fifth principle is that where there is a real issue of fact relevant to a pleaded cause of action, it is unlikely that that part of the proceeding has no prospect of success…So, for example, if the pleadings, affidavits, and other materials considered in connection with the summary judgment motion, reveal a factual dispute and that factual dispute must be resolved to determine whether or not the claim succeeds, it cannot be said that the claim has "no reasonable prospect of success". . . On the other hand, if the factual contest is unnecessary to the resolution of the cause of action pleaded, then in the absence of other relevant material, there is nothing to prevent the court entering judgment on that claim. … [132] I now come to a final, sixth principle, which is that in determining whether a real issue of fact exists such as to preclude summary judgment, the court must draw all reasonable inferences - but only reasonable inferences - in favour of the non-moving party…I emphasise "reasonable" because it is on this point that the lowering of the bar effected by s 31A becomes clear. By distinguishing between "hopeless" cases and those without reasonable prospects for success, the statute makes clear that the court need not (indeed, must not) refuse summary judgment on the basis of a factual dispute said to arise only from a plausible, as opposed to a reasonable, inference. 16 In a in separate joint judgment in Spencer, French CJ and Gummow J stated at [25] that: Where there are factual issues capable of being disputed and in dispute, summary dismissal should not be awarded to the respondent simply because the Court has formed the view that the applicant is unlikely to succeed on the factual issue. 17 Their Honours added at [26] that '[w]here an application under s 31A requires consideration of apparently complex questions of fact, then the caution uttered by Lord Hope is relevant'. This is a reference to his Lordship's decision in Three Rivers District Council v Governor and Company of the Bank of England (No 3) [2003] 2 AC 1 at 260-1, in which he stated: [M]ore complex cases are unlikely to be capable of being resolved [by way of summary judgment] without conducting a mini-trial on the documents without discovery and without oral evidence… that is not the object of the rule. It is designed to deal with cases that are not fit for trial at all. 18 In Jefferson Ford, Finkelstein J said at [23] that: In other words, the section requires the judge to conduct what might loosely be described as a preliminary trial and look more closely than he would under an O 14 application to a party's assertion that there is a real question of law or fact to be decided. Such an assertion is to be examined with a critical eye. The judge is to decide whether the opposing party has evidence of sufficient quality and weight to be able to succeed at trial. There will be cases where the asserted facts appear to be so improbable that there is no point in allowing them to go to trial. There will be others where the opposing party has not been able to show that the asserted facts are likely to be established at a trial. 19 In George v Fletcher (Trustee) [2010] FCAFC 53, Ryan and Logan JJ said, at [75], after referring to the judgment of Lindgren J in White Industries Australia Ltd v Cmr of Taxation (2007) 160 FCR 298, at [50]-[54]: …[Section] 31A is not concerned just with pleadings but with substance, not form. The mere presence of a factual controversy, however trifling, implausible, tenuous or tangentially relevant is not a bar to the exercise of the power conferred by s 31A to grant summary judgment. That would be inconsistent with the way in which the phrase "no reasonable prospect of success" is to be read in light of s 31A(3) (and s 17A(3)). 20 Accordingly, the mere existence of a factual dispute is not necessarily a bar to a grant of summary judgment. Rather the Court is required to evaluate the quality and weight of the evidence. When this leads to a conclusion that the version of the facts asserted by the party resisting the motion is either so improbable, or fanciful, or trifling, or implausible, or tenuous then summary judgment must be granted. So understood there is, in such a case, no real issue of fact: Australian Securities and Investments Commission v Cassimatis [2013] FCA 641 at [46]-[47]. 21 In this case the respondents submit that while there are factual controversies raised by the FWO's evidence: (a) many of the facts in issue are only tangentially relevant and are not a bar to the grant of summary judgment; (b) the conclusion that Ms Aragon was forced to resign is not supported by the asserted facts and is implausible and tenuous; and (c) the FWO has no reasonable prospects of successfully prosecuting its constructive dismissal claim even if it proves the asserted facts at trial.

The Fair Work Act 2009 and dismissal 22 Section 351(1) of the FW Act relevantly states: An employer must not take adverse action against a person who is an employee . . . of the employer because of the person's . . . sex, . . .[or] pregnancy . . . 23 Under s 342(1) item 1 of the FW Act, adverse action is taken by an employer against an employee if the employer: (a) dismisses the employee; (b) injures the employee in his or her employment; or (c) alters the position of the employee to the employee's prejudice; or (d) discriminates between the employee and other employees of the employer. 24 In paragraph 70(e) of the Amended Statement of Claim filed on 23 May 2017 (ASOC), the FWO pleads that Austrend injured Ms Aragon in her employment and/or altered her position to her prejudice and/or dismissed Ms Aragon by 'constructively dismissing Ms Aragon on 19 July 2016'. 25 In s 12(1) of the FW Act, 'dismissed' is given the meaning set out in s 386. 26 'Dismissed' is defined in s 386(1) of the FW Act as follows: A person has been dismissed if: … the person has resigned from his or her employment, but was forced to do so because of conduct, or a course of conduct, engaged in by his or her employer. (emphasis added) 27 The significant verb in s 386(1)(b) is 'forced'. The employee must have resigned because they were 'forced' to do so because of the employer's conduct, or course of conduct. A voluntary resignation cannot constitute a forced resignation. 28 In Allison v Bega Valley Council (1995) 63 IR 68, the jurisdiction of the NSW IRC to deal with a reinstatement application turned on whether there was a dismissal or, as claimed by Mr Allison, a constructive dismissal. The Commission said, at 72-73: Although the term "constructive dismissal" is quite commonly used it can deflect attention from the real inquiry. That inquiry should involve an analysis of what occurred. Did the employer behave in such a way so as to render the employer's conduct the real and effective initiator of the termination of the contract of employment and was this so despite on the face of it the employee appears to have given his or her resignation? It is obvious that a consideration of these matters must be made on a case-by-case basis and that an attempt to formulate general principles in the absence of particular facts will not assist in the overall determination of this issue. In order to undertake the necessary analysis it is necessary to look carefully at all the relevant facts. It is necessary to determine whether the actual determination was effectively initiated by the employer or by the employee particularly where the dynamics within a factual situation may change. For example, an employer may demand a resignation with a threat of dismissal, negotiations may then ensue and the employee may ultimately be genuinely pleased with the outcome of those negotiations to the extent that any resultant resignation may be said to be given freely and without any undue influence being brought to bear by the employer. 29 In Allison, the Commission also referred to R v Prince Alfred College (1979) 46 SAIR 598, a decision of Olsson P (as he then was) in the South Australian Industrial Court in which the applicant, having been formally dismissed, was allowed to substitute his resignation for a dismissal. In discussing the question of constructive dismissal, Olsson P cited the following passage from the judgment of the Employment Appeals Tribunal in Sheffield v Oxford Controls Co Ltd (1979) IRLR 133: It is plain, we think, that there must exist a principle, exemplified by the four cases to which we have referred, that where an employee resigns and that resignation is determined upon by him because he prefers to resign rather than to be dismissed (the alternative having been expressed to him by the employer in the terms of the threat that if he does not resign he will be dismissed), the mechanics of the resignation do not cause that to be other than a dismissal. The cases do not in terms go further than that. We find the principle to be one of causation. In cases such as that which we have just hypothesised, and those reported, the causation is the threat. It is the existence of the threat which causes the employee to be willing to sign, and to sign, a resignation later or to be willing to give, and to give, the oral resignation. But where that willingness is brought about by other considerations and the actual causation of the resignation is no longer the threat which has been made but is the state of mind of the resigning employee, that he is willing and content to resign on the terms which he has negotiated and which are satisfactory to him, then we think there is no room for the principle to be derived from the decided cases. In such a case he resigns because he is willing to resign as the result of being offered terms which are to him satisfactory terms on which to resign. He is no longer impelled or compelled by the threat of dismissal to resign, but a new matter has come into the history, namely that he has been brought into a condition of mind in which the threat is no longer the operative factor of his decision; it has been replaced by the emergence of terms which are satisfactory. Therefore we think that the finding that Mr Sheffield had agreed to terms upon which he was prepared to agree to terminate his employment with the company - terms which were satisfactory to him - means that there is no room for the principle and that it is impossible to upset the conclusion of the tribunal that he was not dismissed. (emphasis added) 30 Thus, constructive dismissal does not extend to the circumstance in which an employee 'is willing and content to resign on the terms which he [or she] has negotiated and which are satisfactory to him [or her]'. 31 Such a circumstance does not constitute a 'forced' resignation so as to come within the definition of 'dismissed' in s 386(1)(b) of the FW Act. Rather, the person has resigned willingly 'as the result of being offered terms which are to (that person) satisfactory terms on which to resign'.

The facts leading up to the 19 July 2016 meeting 32 Ms Aragon was employed by Austrend as a full-time sales executive. On or about 10 July 2015 Ms Aragon commenced a period of maternity leave. 33 In March 2016, Ms Aragon informed Austrend that she wished to return to work on 4 April 2016. On 1 April 2016 Mr Rao informed Ms Aragon that she would need to provide a medical certificate before returning to work. There is an issue in another part of the proceedings as to whether she was required, in law, to provide such a certificate. It does not concern the present application. Ms Aragon emailed Mr Rao on 5 April 2016 asserting a right to return to work but did not then provide a medical certificate. She did not contact Austrend again until 5 July 2016. 34 On 5 July 2016, Ms Aragon sent Mr Rao an email attaching a medical certificate and, among other things, asked him to contact her to discuss a date for her return to work. 35 In the same email, Ms Aragon gave notice that she intended to commence a further period of maternity leave from 13 September 2016. Thus, she was seeking to return to work for a period of 10 weeks at most. She also requested payment for the time she had not been able to return back to work from 4 April 2016 onward. 36 On 7 July 2016 Mr Rao replied to Ms Aragon's email. His email to her included the statement that Austrend would like her to commence full time work on a 'fulltime (5 days a week - 38 hours) basis as agreed earlier'. It concluded by asking her to advise Austrend when it could expect her back at work. 37 On 8 July 2016 Ms Aragon replied to Mr Rao's email saying: In response to your email I would like to inform you that I will be in contact with you next week once I have a clearer picture of what comes next but I believe that a scheduled meeting between yourself, Vinnie, Myself and my support person is the next step needed before a date of return can be agreed on. In saying that I will also need to find suitable care arrangements for my daughter as Zac and our extended families all work full time. Thank you again for your response and I shall be in contact with you next week. 38 This response was somewhat enigmatic but certainly operated to delay Ms Aragon's return to work. What was clear was that she wanted a meeting, together with her support person, with 'Vinnie' (Mr Rajaratnam), and Mr Rao. 39 In an exchange of emails that followed, Austrend said they would work around her request and were looking forward to meeting with her and her support person 'as requested'. The meeting was arranged for 19 July 2016. 40 On 19 July 2016, at about 5 pm or shortly after, Ms Aragon and her partner Zac Altmann, as her support person, attended Austrend's premises and met with Mr Rao and Mr Rajaratnam (the 19 July Meeting). 41 What was said and done during the 19 July Meeting is, to some extent, in dispute.

The Amended Statement of Claim 42 In paragraphs 59(a) to (e) of the ASOC the FWO pleads that during the 19 July meeting Ms Aragon said she wanted to discuss the date on which she could return to work, and Mr Rao and Mr Rajaratnam did not discuss or provide Ms Aragon with a date on which she could return to work nor did they offer to pay her wages for the period from 4 April 2016 to the date of her return to work on her return to work. It is pleaded that, instead, Mr Rajaratnam told Ms Aragon that he did not think it was safe for her to perform certain duties while pregnant and said Austrend would pay her a sum of money in exchange for her stopping work for Austrend. 43 There is no allegation that either Mr Rao or Mr Rajaratnam said at any point to Ms Aragon that she could not return to work. Nor is it alleged that Mr Rajaratnam told Ms Aragon that he did not think it was safe for her to return to work - only that he did not think it was safe for her to perform certain duties. 44 In paragraph 59(f) of the ASOC, the FWO pleads that during the meeting on 19 July 2016, Ms Aragon was 'forced to accept the First Respondent's offer of payment in exchange for the termination of her employment by the First Respondent'. The pleading does not disclose how it is alleged Ms Aragon was forced to accept Austrend 's offer. 45 In paragraph 59(h) of the ASOC, the FWO pleads relevantly that 'Mr Rajaratnam handed Ms Aragon a pre-prepared letter, which stated that Ms Aragon agreed to…tender her resignation immediately' (Letter of Resignation). 46 The particulars to paragraph 59 refer to the Letter of Resignation signed by Ms Aragon, the letter signed by Mr Rao agreeing to pay Ms Aragon and the settlement amount. 47 In paragraph 60 of the ASOC, the FWO pleads that Ms Aragon's employment was terminated by Austrend on 19 July 2016 by way of a constructive dismissal. The particulars to paragraph 60 refer to and repeat the particulars to paragraph 59. 48 In paragraph 70(e) of the ASOC, the FWO pleads that Austrend injured Ms Aragon in her employment and/or altered her position to her prejudice and/or dismissed Ms Aragon by 'constructively dismissing Ms Aragon on 19 July 2016'. In paragraph 71 of the ASOC, the FWO pleads that Austrend took the adverse action alleged in paragraph 70 because of Ms Aragon's sex and/or pregnancy. 49 The FWO pleads that by acting as alleged in paragraphs 70 and 71 Austrend contravened s 351 of the FW Act: paragraph 72 of the ASOC. 50 In paragraph 77 of the ASOC the FWO pleads that Mr Rao was involved in each of the contraventions within the meaning of s 550(1) of the FW Act. 51 It can be seen from the above that pivotal to the claim that Austrend constructively dismissed Ms Aragon on 19 July 2016 is the bare allegation in paragraph 59(f) that Ms Aragon was 'forced to accept the First Respondent's offer of payment in exchange for the termination of her employment by the First Respondent'.

The Further Amended Defence 52 The respondents' defence to the allegation of constructive dismissal is found in paragraph 59 of the Further Amended Defence filed on 26 July 2017 (FAD). Paragraph 59 pleads a detailed account of what the respondents say occurred in the meeting on 19 July 2016. 53 Among other things the respondents plead that: (a) Mr Rajaratnam made clear to Ms Aragon that she could return to full time work if she wished to but that if she was looking for a financial settlement instead, he would talk to Mr Rao; (b) after Mr Rajaratnam gave Ms Aragon and her partner time alone to consider what they wished to do, Ms Aragon advised that she wished to negotiate a financial settlement instead of returning to work; and (c) any discussion of a return to work date was thereby pre-empted and that following a period of negotiation Ms Aragon agreed to end her employment with Austrend in return for payment to her of a sum of money which was paid to her that day. 54 In paragraph 59(f) the respondents deny that Ms Aragon was 'forced' to accept Austrend's offer of payment in exchange for the termination of her employment. In paragraph 59(g) the respondents deny that the Letter of Resignation was 'pre-prepared' and say that it was typed by Mr Rajaratnam during a break in the 19 July meeting and only after the terms of settlement had been agreed. 55 In paragraph 59(f)(viii) the respondents plead terms of an email which Ms Aragon sent to the Applicant on the day following the 19 July meeting and in which Ms Aragon wrote that the 19 July meeting had gone 'really well', that after 'back and forward discussions' a settlement had been 'agreed upon (MUTUALLY)' and that she believed that, given her and her partner's 'current situation', the outcome was 'a win for us and i can now focus the pregnancy, the house and look for a new job when ready'. This letter is set out at [66] below.

The Reply 56 In the Reply filed on 9 August 2017, the FWO, at paragraph 18, makes a series of mostly bare denials in response to paragraph 59 of the FAD. However, at paragraph 18(n) of the Reply, the FWO alleges that the Letter of Resignation (which Ms Aragon signed) 'was in a file sitting on the table in the meeting room in which the 19 July Meeting was conducted and remained in that file on the table from the start of that meeting until it was handed to Ms Aragon by Mr Rajaratnam'.

The evidence concerning the 19 July meeting 57 The respondents rely on the affidavits of Ms Airey and Mr Rajaratnam. 58 Among other things, Mr Rajaratnam deposes that: (a) he said to Ms Aragon and her partner that they were there 'to discuss where this was going and Lindsey getting back to full-time work', that Ms Aragon should tell him 'what she really wanted. If it was full-time employment, that was fine; if she was looking for monetary compensation then [he] would talk to [Mr Rao]'; (b) he then asked Mr Rao to leave the room, which he did, to enable Ms Aragon and her partner to explore options with Mr Rajaratnam; (c) he said to Ms Aragon and her partner that Ms Aragon could return to work full time if she wished to but if she wanted a financial settlement he was happy to speak to Mr Rao and that he then left the room to allow Ms Aragon and her partner to talk; (d) when he returned to the room, Ms Aragon and her partner said they wanted to take a financial settlement, there was some discussion about how much and '[e]ventually they said if Austrend was happy to pay Lindsey her full-time salary from April to the meeting they would consider it'; (e) he went and spoke to Mr Rao who agreed to pay that amount but 'wanted the FWO complaint withdrawn' and that Mr Rajaratnam then returned to the meeting room and said to Ms Aragon and her partner that Mr Rao 'was happy to pay the amount asked for in return for [Ms Aragon] agreeing to resign and withdraw her complaint to the Fair Work Ombudsman'; (f) Mr Altmann said Mr Rao should 'pay another two weeks' and that they needed the money transferred that night because it was required for 'something to do with a house either a deposit or a bond'; (g) Mr Rajaratnam then went and spoke to Mr Rao who agreed to pay the additional amount; (h) Mr Rajaratnam then returned to the meeting room and said to Ms Aragon and her partner that Mr Rao would pay the additional two weeks and that, in return for the settlement, Ms Aragon would tender her resignation and withdraw all complaints and any matters lodged with the FWO and Fair Work Commission and that, if Ms Aragon and her partner were happy with that, Mr Rajaratnam would prepare some letters, to which they said 'yes'; (i) Mr Rajaratnam then went back upstairs and drafted two letters on one of the office computers to record the agreement that had been reached. One was to be signed by Mr Rao agreeing to pay the settlement amount and the other by Ms Aragon agreeing to resign and withdraw any complaints or applications that that had been made to the FWO and Fair Work Commission; (j) he drafted the letters only after the agreement had been reached with Ms Aragon; (k) he took the letters, one signed by Mr Rao, downstairs and gave a copy of the letter that Mr Rao had signed to Ms Aragon along with the Letter of Resignationfor her to sign, that he asked Ms Aragon if the contents were as requested and she said 'Yes', that he then left the room for a few minutes and that when he returned Ms Aragon signed the letter 'without hesitation or pressure'; (l) once the money was transferred to Ms Aragon's account Mr Rao came downstairs and said thank you and Ms Aragon and her partner left; (m) during the meeting, there was no discussion from Ms Aragon about when she wanted to come back to work, that Mr Rajaratnam did tell her that she could come back to work full time but that because Ms Aragon did not raise the issue of a return to work date, it was not discussed; (n) Mr Rao had made clear that if Ms Aragon came back to work Austrend would refer her to a medical practitioner and request a fitness for work certificate which Austrend would pay for and that it would be up to the doctor to say whether Ms Aragon was fit to do particular tasks or 'whether there were any requirements [that] would need to be accommodated'; and (o) the request for a financial settlement came from Ms Aragon and her partner and that Ms Aragon was not forced to accept an offer of a financial settlement - 'That was her choice'. 59 Mr Rajaratnam also deposed that Ms Aragon's partner had, during the meeting, stated that they would need the money transferred that night, and that, accordingly, the money was transferred to Ms Aragon's account before the meeting concluded. 60 Ms Airey's affidavit corroborates the evidence of Mr Rajaratnam in various respects, including that Mr Rao told her that Mr Rajaratnam typed the Letter of Resignation during a break in the 19 July meeting. Ms Airey also attaches a report from an IT professional indicating that the letters prepared by Mr Rajaratnam, including the Letter of Resignation, were created on Austrend's IT system at 6.27 pm on 19 July 2016. Ms Airey deposed that Mr Rao recalled the meeting having commenced at about 5-5:30pm. In Ms Aragon's email dated 20 July 2016, referred to later in these reasons, she states the meeting lasted about 2 hours. There remains an issue on the evidence as to whether the Letter of Resignation was prepared before or during the meeting. Nothing of consequence, for present purposes, turns on which of these occurred. 61 Importantly, the Letter of Resignation establishes a prima facie case that Ms Aragon was not forced to resign her employment and that the FWO has no reasonable prospect of success in its constructive dismissal claim. The FWO must therefore adduce evidence pointing to specific factual or evidentiary disputes that make a trial necessary: Jefferson Ford at [127]. To this end the Court must draw all reasonable inferences in favour of the FWO but only reasonable inferences: Jefferson Ford at [132]. Further if a factual contest is unnecessary to the resolution of the cause of action pleaded, that will not prevent the court entering judgment: Jefferson Ford at [130]. 62 The FWO's evidence of what occurred at the meeting is set out in paragraphs 22 to 26 of the affidavit of Fiona Malishev affirmed on 8 December 2017. There is no direct evidence from Ms Aragon or Mr Altman. In relation to the 19 July meeting, Ms Aragon through Ms Malishev denies that Mr Rajaratnam said many of the things he deposes to having said. Otherwise, Ms Malishev's hearsay evidence as to what did occur and was said in the 19 July meeting is relevantly to the following effect: (a) both Ms Aragon and Mr Altmann stated that Ms Aragon wanted to return to work; (b) Mr Rajaratnam asked Mr Rao to leave the room, which he did; (c) after Mr Rao left the room Mr Rajaratnam said he had been instructed by Mr Rao to 'find a solution' and to speak to them 'about how we can end this' to which they responded by reiterating their desire for Ms Aragon to return to work; (d) Mr Rajaratnam said words to the effect that 'it might not be safe to work' with Ms Aragon 'being pregnant again' because she would be required to drive and do heavy lifting and that 'Austrend is looking out for your safety', to which Ms Aragon responded by acknowledging her work required those things but saying she had done that when she was pregnant before right up until going on maternity leave; (e) Ms Rajaratnam said words to the effect of 'So what would it take for you to walk away from this situation? You could give me a figure now and we could work something out with Denzil so you could leave today and put this behind us and have this be an amicable parting. You'd be able to see Denzil out on the street and say hello to him in a friendly manner if we can agree to something today'; (f) Mr Altmann responded with words to the effect of, 'Her loss of wages'; (g) Mr Rajaratnam then left the room to give to give Ms Aragon and Mr Altmann time to discuss what they wanted to do; (h) when Mr Rajaratnam returned to the room and asked what they had decided to do, Ms Aragon said she wanted to return to work to which Mr Rajaratnam said words to the effect of, 'There are safety concerns with [Lindsey] returning to work, such as going up and down the stairs . . . You'll only be back at work for a short time before the baby is due so we would have to restructure the role and change your duties for only a short time.'; (i) Ms Aragon then said 'I would like my lost wages to be paid back to me... from 4 April up until now'; (j) Mr Altmann and Mr Rajaratnam then calculated the number of weeks between 4 April 2016 and 19 July 2016 and all agreed that there were 15 weeks between those dates, following which Mr Altmann asked for an extra two weeks payment 'to account for Ms Aragon's accrued annual leave'; (k) Mr Rajaratnam then left the meeting room because he said he wanted to speak with Mr Rao and returned after about a minute or so and said words to the effect of, 'That's fine'; (l) Mr Rajaratnam said Mr Rao had asked that Ms Aragon 'agree to drop everything to do with Fair Work' to which Mr Altmann said words to the effect of, 'We can't do that' and Mr Rajaratnam said words to the effect of, 'That's fine'; (m) Mr Rajaratnam then handed Ms Aragon a Letter of Resignation which was in a manila folder on the table, and had been throughout the meeting, and said words to the effect of, 'if you sign the [Letter of Resignation], Austrend will pay you your lost wages and then we can part ways and leave this all behind us'; (n) Mr Rajaratnam also handed Ms Aragon a letter from Mr Rao agreeing to pay Ms Aragon 15 weeks' pay, then took the letter back, left the meeting room and returned with an amended version which included the additional 2 weeks' pay; and (o) Ms Aragon then signed the Letter of Resignation. 63 The FWO puts in issue several assertions of fact made by the respondents. It is denied that: (1) Mr Rajaratnam said the meeting was to discuss 'Lindsey getting back to full-time work' and that if Ms Aragon wanted 'full time employment that was fine'; (2) Mr Rajaratnam said that Ms Aragon 'could return to work full time if she wished'; (3) either Ms Aragon or Mr Altmann said they wanted to take a financial settlement in response to Mr Rajaratnam asking what they had decided to do; (4) the Letter of Resignation was typed up after an 'agreement' had been reached with Ms Aragon; and (5) Mr Rajaratnam said that Mr Rao 'had made it clear that if Lindsey came back to work Austrend would refer her to a medical practitioner and request a fitness for work certificate which Austrend would pay for' and also that he said that 'it would be up to a doctor to say whether there were any requirements [that] would need to be accommodated'. 64 Taking the evidence at its most favourable to the FWO I will proceed, for present purposes only, on the basis that, at the 19 July meeting: (1) At the outset Ms Aragon said that she wanted to return to work. (2) Austrend, to the knowledge and involvement of Mr Rao, from the outset held the preferred position that Ms Aragon resign in consideration of a monetary payment. The Letter of Resignation had been prepared before the meeting and was contained in a folder on the table in the meeting room. (3) Austrend denied that it owed Ms Aragon any monies for the period from 4 April 2016 to the date of the meeting. (4) Mr Rao left shortly after the meeting commenced. (5) On four occasions Ms Aragon and Mr Altmann were left in the meeting room on their own to consider Ms Aragon's position and to enable Mr Rajaratnam to seek instructions on resolving the dispute from Mr Rao. (6) Ms Aragon signed the Letter of Resignation whilst Mr Rajaratnam was out of the meeting room. This was done shortly after she was provided with a letter signed by Mr Rao agreeing to pay the monetary consideration. (7) At Ms Aragon's request the amount of $16,343.80 (gross) was paid to her by internet bank transfer by Austrend whilst she was still at their offices. This was calculated by reference to the salary which she would have earned had she worked during the period 4 April to 19 July 2016 and an additional 2 weeks' pay.

Events following the 19 July meeting 65 What occurred following the 19 July meeting does not appear to be in dispute. 66 Ms Aragon sent an email dated 20 July 2016 (20 July email) to Mr Nathan Forwood, Fair Work Inspector with the FWO with whom she had previously been in contact. It stated as follows (without alteration): Dear Nathan As you are aware Zac & I met up with Vinnie and Denzil yesterday at 5pm at the Austrend office. The meeting went really well and every was spoken about and after 2 hours of discussions back and forward. Vinnie asked us if we would settle outside out FWO and court if we can agree on an amount. We made it known to him that: (1) We had asked for back pay only 2 weeks ago (2) It has and never was about money and (3) Even if I agree to something that FWO may still push on with there case and that would be between you and them, which they totally understood. After back and forward discussions it was agreed upon (MUTUALLY) with all water under the bridge and both parties situations taken into account that if there offer was right we could go our separate ways. The offer was that we were paid out all moneys owed and the notice period in exchange for my resignation and not proceed with MY claims against then which we accepted. I believe given Zac and I's current situation and my expressed concerns with going back to Austrend after all of this that this was a win for us as I can now focus the pregnancy, the house and look for a new job when ready with out any issues in the future. Dezil & Vinnie also requested i send a confirmation email with all parties CC'd in but just wanted to give you a separate email first. Feel free to contact me if need be. Regards Lindsey Aragon 67 Ms Aragon did not state or suggest in the email that she had been forced to resign. The content of the email was, in terms, to the contrary, referring, as it does, to an agreement, 'MUTUALLY' reached following negotiations, an outcome which she said was 'a win for us as I can now focus on the pregnancy, the house and look for a new job when necessary.' 68 Mr Altmann did not give evidence nor was hearsay evidence given on his behalf. 69 At the hearing of the application, counsel for the respondents brought to the Court's attention the fact that, although the parties had previously agreed that the allegation that Ms Aragon had been constructively dismissed was raised for the first time when the statement of claim was amended, in fact, the claim was in the statement of claim as filed on 13 March 2017. Nonetheless, this was the first notice the respondents had been given as to such a claim. 70 The same day, Mr Forwood replied, observing that he was 'Happy that the meeting went well and yourself and Austrend have come to an arrangement'. 71 On 28 July 2016, following some further communication between Ms Aragon and Mr Forwood regarding the amounts paid to Ms Aragon, Mr Forwood sent Austrend a compliance notice requiring it to pay Ms Aragon a further $2893.05 said to be for unpaid annual leave. 72 Mr Forwood's letter stated: On 19 July 2016, the Company met with Ms Aragon to discuss her return to work. During the meeting, the Company agreed to pay to Ms Aragon, after it was agreed: Ms Aragon would terminate her employment; 15 weeks wages being entitlements from 4 April 2016 to 19 July 2016; and 2 weeks' notice of termination. Payment was made to Ms Aragon on 19 July 2016, for an amount of $16343.80 (gross). [Emphasis added.] 73 On 1 August 2016 Mr Rao wrote to Mr Forwood asking whether the claim for $2893.05 was 'the final claim relating to the employment matter relating to Ms Aragon'. 74 On 2 August 2016 Mr Forwood replied saying: In respect of the findings of the FWO, outstanding annual leave is the only entitlement still unpaid. 75 On 11 August 2016, Austrend paid the sum of $2,893.50 less tax to Ms Aragon. 76 At no time did Mr Forwood allege or even suggest to Mr Rao that Ms Aragon had been forced to resign.

Consideration 77 Contrary to the submission of the FWO, the relevant facts which require determination are not complex. Rather they are in short compass and quite straight forward. The FWO sought to create in argument a complexity that does not exist and, significantly, was not pleaded. This it did by the construct of an argument that the alleged constructive dismissal was by virtue of Austrend's 'course of conduct', drawing on the language of s 386(1)(b) FW Act. The FWO sought to rely on the five matters pleaded in its ASOC and set out at [3] above as constituting adverse action. One of these is the allegation of constructive dismissal. In the ASOC, the FWO relies on the particulars provided in relation to the 19 July meeting in support of the claim of constructive dismissal. Those particulars are (with amendments incorporated): A. The Letter of Resignation was prepared by management personnel of the First Respondent and an unsigned copy of it was handed to Ms Aragon by Mr Rajaratnam during the 19 July Meeting. B. The Letter of Resignation was in the form of a typed letter dated 19 July 2016, signed by Ms Aragon and witnessed by Mr Altmann. C. A copy of the Letter of Resignation is in the possession of the Applicant and may be inspected by appointment. D. The First Respondent's agreement to pay Ms Aragon was in the form of a letter on the First Respondent's letterhead, dated 19 July 2016, signed by the Second Respondent and witnessed by Mr Rajaratnam. E. A copy of the First Respondent's letter dated 19 July 2016 is in the possession of the Applicant and may be inspected by appointment. F. The amount of $14,653.80 (net) represented a gross amount of $16,343.80 which was comprised of a. the equivalent of 15 weeks' wages for the period between 4 April and 19 July 2016; and b. the equivalent of two weeks' payment in lieu of notice of termination. 78 It is apparent that the constructive dismissal case against Austrend is confined to those particulars. Relying on the five matters pleaded in its ASOC and set out at [3] above as constituting adverse action is not open to the FWO. The five matters are separate allegations of adverse action. The first four are not allegations of a course of conduct for the purposes of the fifth allegation. Accordingly, I reject every submissions by the FWO based on such a premise. 79 It follows that I do not accept that evidence which may be led in relation to the first four allegations of adverse action is also relevant to the fifth allegation. 80 Accepting the evidence on behalf of the FWO at its highest, which I have summarised above, nothing which Mr Rajaratnam or Mr Rao said or did in the 19 July meeting could even arguably be construed as having 'forced' Ms Aragon to resign her employment. 81 It is not alleged, nor is there evidence, that Mr Rajaratnam or Mr Rao told Ms Aragon that she could not return to work. Rather, Mr Rajaratnam said that the respondents 'would have to restructure the role and change [her] duties' because of safety concerns. This indicated that her return to work remained an option. However, as I have indicated, I proceed, for present purposes only, on the basis that Austrend's preferred option was to reach an agreement with Ms Aragon whereby she resigned for a monetary consideration. 82 The FWO submissions place considerable emphasis on Ms Aragon's asserted feelings both during and after the meeting. Such evidence is said to be relevant to the question whether or not she was forced to resign by the conduct of Austrend. 83 The FWO points to the following evidence from Malishev's affidavit as to how Ms Aragon says she felt, namely that she: (a) was 'shocked' that the respondents were offering her a payment because she had not expected to get any money from them; (b) felt Mr Rajaratnam's words to the effect of, 'You'd be able to see Denzil out on the street and say hello to him in a friendly manner if we can agree to something today' implied Mr Rao 'would be unpleasant towards her if she did not accept the offer' and she was worried about what the working environment would be like on her return to work; (c) 'felt that she had no choice but to take the money being offered because she thought it might be her only chance to get any of the wages she had lost and if she refused the offer and insisted on returning to work, it could result in her having no job and no back-pay'. Ms Aragon believed the respondents would resist her return to work and say she was not entitled to any payment; and (d) left the 19 July Meeting 'with mixed feelings because, although she had not expected to receive any money from the respondents and she was relieved that she no longer had to deal with Mr Rao and what she describes as the 'drama' surrounding her return to work, she felt that she did not get what she had wanted from the meeting, which was a return to work date'. 84 A number of things may be said about this evidence. First, I find this evidence implausible given the terms of the 20 July email from Ms Aragon to Mr Forwood of the FWO, combined with the absence of evidence that she ever complained that her resignation was, in effect, forced. That it is in controversy does not then lead to rejection of the respondent's application: White Industries at [50]-[54]. 85 Second, even if true, such feelings do not in any way inform the resolution of that question. Even had she been shocked that Austrend was offering her a financial settlement in return for resigning does not render Ms Aragon's resignation as being forced. Likewise, even assuming that she had taken Mr Rajaratnam's words about her being able to see Mr Rao out in the street and to be able to say hello to him in a friendly manner as an obscure implication that Mr Rao would be unpleasant to her if she declined the offer of a financial settlement, and that she was worried as to what the working environment would be like were she to return to work, still does not mean that she was forced to resign. 86 Her concern and worry in such circumstances did not deprive her of the choice of refusing the offer of settlement and refusing to resign. Similarly even if she 'felt' she had no choice but to take the monetary offer because it might be her 'only chance' of getting the wages she considered she had lost (and was entitled to claim from Austrend) was again a matter for her. In fact, it would not have been her only chance. She could have taken legal action against Austrend, even although it denied her claim. This is not conduct on the part of Austrend which, in law, could constitute her being forced to resign. So, too, is the case where she thought that if she refused the offer she would have no job. Such conclusions were hers, if indeed she reached them, which, as I say, I find to be implausible. Even accepting that she thought this, it does not constitute conduct by Austrend. Her 'mixed feelings' upon leaving the meeting which led her to feel that she had not got what she wanted, namely a return to work, defy credible acceptance for reasons I have given but in any event is not conduct on the part of Austrend capable of establishing that it forced her to resign. 87 There is neither a hint nor a suggestion that Ms Aragon was threatened or intimidated. To the contrary, she had her support person, Mr Altmann, there. Mr Rao stayed away during the negotiations. Ms Aragon and her partner were given time alone to consider her position. Her partner put forward settlement proposals. 88 The negotiated settlement of any dispute will often not be ideal for either party. Seldom does each party achieve everything they wanted. There may be second thoughts after a settlement agreement is made, perhaps mulling over what may have transpired had a settlement not been reached. However a settlement does bring certainty and enables the parties to move on. Such too was the case here. Ms Aragon's email says so expressly, insofar as she informs Mr Forwood that 'this was a win for us as I can now focus the pregnancy, the house and look for a new job when ready with out any issues in the future'. 89 The FWO's submissions concerning the construction to be placed on the content of the 20 July email are somewhat disingenuous. The FWO submits that it is clear, on the face of the 20 July email, that she intended to focus on the positives of the meeting and seemed to see no need to criticise the respondents, including to suggest that she had felt forced to resign. This, the FWO submits, can in no way diminish the feelings she actually felt at the time of the 19 July meeting. 90 The FWO submits that the email must be read in context, including with reference to Ms Aragon's expectations of the 19 July meeting and her explanation of why she used the words she did to describe that meeting to Mr Forwood, including: (a) that the meeting had gone 'really well' compared to the expectations of the 19 July Meeting that she had prior to the meeting; (b) that her use of the word 'mutual' was merely intended to convey that both sides had signed letters that set out the terms of the settlement, and was not intended to convey that the terms had been negotiated; (c) Mr Rajaratnam's conduct in the meeting, including by not discussing a return to work option with her, reinforced her belief that the respondents did not want her to return to work; (d) that she and Mr Altmann were under financial pressures by reason of her being without a full time income for some eight months; (e) that she was relieved to end the feelings of anxiety and stress she had when dealing with the respondents in her attempts to return to work. 91 The email, it was submitted, was written by Ms Aragon by way of a summary of the outcomes from the 19 July meeting, with what might be described as 'rose-tinted glasses' but clearly not a full blow-by-blow account of everything said and done during the meeting. 92 The FWO submits that the email, containing a mere summary of the outcomes that had been reached at the 19 July meeting, cannot be given more weight than the meeting participants' evidence of what occurred during the meeting itself. This may be accepted. 93 However it is to be expected that the email will reveal the truth upon the matters it concerns. I find that the email means exactly what it states: that Ms Aragon, following negotiation with Austrend, reached an agreement voluntarily that she would resign upon terms that she receive certain monetary compensation. It was an agreement that Ms Aragon emphasised was mutually reached. Austrend's offer was 'right'. It gave her apparent peace of mind about not going back to work at Austrend. It amounted to a 'win for her and her partner Mr Altman. She could focus on her pregnancy, her house, and look for a new job when she was ready. That she may have had a subsequent change of heart, if indeed that is what occurred, does not convert an amicable settlement freely and voluntarily made into a constructive dismissal. 94 The FWO then submits that it is inefficient and inappropriate for summary judgment to be granted with respect to the constructive dismissal claim when the remainder of the FWO's claim, with respect to the other four grounds of adverse action will, in any event, proceed to trial. 95 This it is submitted is particularly so in circumstances where facts that are relevant to the constructive dismissal claim, and which would be subject to findings of fact in respect of a summary judgment, are also relevant to the other parts of the FWO's claim. 96 I have for reasons stated rejected such an argument. 97 The FWO acknowledges that, in the event the Court orders summary judgment of the FWO's constructive dismissal claim against Austrend, it follows that the Court must also order summary judgment with respect to the FWO's claim that Mr Rao was involved in that contravention (because the allegation of accessorial liability has no role to play in the absence of a primary contravention against Austrend).

Costs 98 The respondents, at the hearing, sought costs on an indemnity basis. The FWO conceded in argument that, in the circumstances of this case, if the respondents were successful in their summary judgment application then they should have their costs. 99 Neither the FWO nor the respondents took the Court to s 570 of the FW Act although, no doubt, the parties would have had the requirements of this section in mind. 100 Under s 570(1) of the FW Act, a party to proceedings in relation to a matter arising under the FW Act may be ordered to pay costs incurred by another party only if the requirements of s 570(2) are satisfied, namely whether the Court is satisfied: (a) that the party instituted the proceedings vexatiously or without reasonable cause; or (b) that the party's unreasonable act or omission caused the other party to incur the costs; or (c) of both of the following: (i) the party unreasonably refused to participate in a matter before the FWC; (ii) the matter arose from the same facts as the proceedings. 101 In Council of Kangan Batman Institute of Technology and Further Education v AIRC (2006) 156 FCR 275, at [60] the Full Court said in relation to similar requirements in predecessor legislation to the FW Act, the Workplace Relations Act 1996 (Cth): … A party does not institute proceedings without reasonable cause merely because that party fails in the argument put to the Court: R v Moore; Ex parte Federated Miscellaneous Workers' Union of Australia (1978) 140 CLR 470 per Gibbs J at 473. The section reflects a policy of protecting a party instituting proceedings from liability for costs, but that protection may be lost. Although costs will rarely be awarded under the section and exceptional circumstances are required to justify the making of such an order (see Heidt v Chrysler Australia Ltd (1976) 26 FLR 257; 13 ALR 365 per Northrop J), a proceeding will be instituted without reasonable cause if it has no real prospects of success, or was doomed to failure: see Kanan v Australian Postal and Telecommunications Union (1992) 43 IR 257 per Wilcox J; see also Bostik (Australia) Pty Ltd v Gorgevski (No 2) (1992) 36 FCR 439; and Nilsen v Loyal Orange Trust (1997) 76 IR 180. 102 In Kanan v Australian Postal & Telecommunications Union (1992) 43 IR 257, Wilcox J stated at 264-5: It seems to me that one way of testing whether a proceeding is instituted "without reasonable cause" is to ask whether, upon the facts apparent to the applicant at the time of instituting the proceeding, there was no substantial prospect of success. If success depends upon the resolution in the applicant's favour of one or more arguable points of law, it is inappropriate to stigmatise the proceeding as being "without reasonable cause". But where, on the applicant's own version of the facts, it is clear that the proceeding must fail, it may properly be said that the proceeding lacks a reasonable cause. 103 I accept the respondents' submission, made at the hearing, that it should have been apparent to the FWO, particularly because of the content of the 20 July email, that this claim had no real prospects of success from the outset and that it must fail. I make the finding that the proceedings were therefore instituted by the FWO without reasonable cause, for the purposes of ss 570(1) and (2)(a). 104 It follows that, in my view, an order for costs should be made against the FWO. It must then be considered whether the costs awarded should be awarded on an indemnity basis. 105 Ordinarily, under s 43(2) of the FCA Act, the Court will dispose of costs of a proceeding upon its discretion and, under s 43(3)(g), the costs may be ordered to be assessed on an indemnity basis. The Court's discretion to award costs must be exercised judicially: Ruddock v Vadarlis (No 2) [2001] FCA 1865. Further, the Court must take account of any failure by a party to comply with its obligation to conduct the proceeding in a way that is consistent with the overarching purpose to facilitate the just resolution of disputes according to law as quickly, inexpensively and efficiently as possible: FCA Act ss 37N(4) and 37M(1). 106 The question in an ordinary case would be whether the facts and circumstances of a particular case justify the making of an order for the payment of costs other than on a party and party basis. The categories of case in which indemnity costs may be ordered are not closed. It is accepted that indemnity costs may be awarded where 'the applicant, properly advised, should have known that he had no chance of success': Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397 at 401. 107 As I have stated earlier, I find that the FWO made the application when it should have known that there were no real prospects of success. The claim of constructive dismissal should not have been brought and the respondents should have their costs of their interlocutory application on an indemnity basis, as well as the costs associated with the issue of the alleged constructive dismissal of Ms Aragon. The costs should be paid forthwith, once agreed or taxed if not agreed, rather than at the conclusion of the principal proceeding, which is yet to be listed for trial.

Orders 108 There will be orders that: (1) The Applicant's claims that: (a) the First Respondent contravened s 351 of the FW Act by constrictively dismissing Ms Aragon on 19 July 2016; and (b) that the Second Respondent was involved in that contravention, (Claims) be dismissed. (2) The Applicant pay the Respondent's costs of the respondents' interlocutory application and the costs associated with the Claims on an indemnity basis, to be taxed if not agreed, and paid forthwith. I certify that the preceding one hundred and eight (108) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gilmour.

Workplace Relations Act 1996(Cth)

FW Act, the Workplace Relations Act 1996(Cth)

Fair Work Act 2009(Cth)ss 12(1), 342(1)

Federal Court of Australia Act 1976(Cth)ss 31A(2), 37N(4), 37M(1), 43(2), 43(3)(g)

Federal Court Rules 2011(Cth)r 26.01(1)(a)

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