McLoughlin v Randstad Pty Ltd

THE COURT: 1 At the conclusion of the hearing of the appeal in this matter on 26 August 2021, we made orders that (a) the appeal be allowed on the basis of ground 1 of the notice of appeal concerned with the inadequacy of the reasons given; (b) the cross-appeal be dismissed; (c) the notice of contention be dismissed; and (d) the matter be remitted for rehearing by a different judge. 2 These are our reasons for the orders made on 26 August 2021. 3 Ms Beverly McLoughlin brings an appeal concerning her claim that she was dismissed in contravention of the provisions of the Fair Work Act 2009 (Cth) by her employer Randstad Pty Ltd. The dismissal from employment on 7 August 2018 occurred after Ms McLoughlin complained to the Fair Work Commission on 14 June 2018 that she was being bullied in the workplace and that the conduct had exacerbated her pre-existing mental health condition. Her dismissal was said to be for misconduct in posting material on LinkedIn. It was removed a day after it was published, although not immediately upon a request being made to remove it by Randstad of Ms McLoughlin. Ms McLoughlin claimed that her conduct in publishing the statement was a manifestation of her mental health condition. She brought proceedings in the Federal Circuit Court in which she claimed that she had been dismissed because she had exercised a workplace right, alternatively because of conduct that was a manifestation of her mental disability. Her claim was dismissed. 4 The letter of dismissal was signed by a Mr Nick Pesch, who at the time held the position of National Director in the Construction, Property and Engineering Division of Randstad. It was claimed by Randstad that it was the state of mind of Mr Pesch that was relevant in determining whether the statutory presumption expressed in s 361 of the Fair Work Act was rebutted. For Ms McLoughlin it was claimed that others had been involved in making or affecting the decision, particularly an external solicitor who acted for Randstad in the dispute and who undertook an investigation of complaints made against Ms McLoughlin. 5 After the hearing of the evidence by the primary judge over three days, the matter was adjourned on the basis that the parties would file written submissions. They did so. The submissions for Ms McLoughlin were detailed. They identified each of the propositions advanced to support the case and the evidence and contentions relied upon to support those propositions. It was evident that the case advanced depended upon understanding the narrative of events and viewing the actions that had been taken by Randstad within that context. The nature of the case being advanced was described by reference to the evidence that had been led. The law was set out carefully and submissions were made as to how the law applied to the facts. The case as advanced depended upon events that had occurred over a two year period and a challenge to the evidence of Mr Pesch as to what he knew when he signed the dismissal letter and why he did so. Those contextual matters, said to be known to Mr Pesch and others involved for Randstad from the history of the circumstances of the employment of Ms McLoughlin over a considerable period, were claimed to be significant for her case. 6 The decision to dismiss the claim was made by Judge Street, a judge of the Federal Circuit Court. The form of reasons that his Honour provided to the parties four months after the three day hearing of the applicant's claim and after receiving the detailed written submissions, is unusual in its form. So much was accepted by counsel for Randstad on appeal. It does not outline the issues or describe the case advanced by Ms McLoughlin or the nature of the defence advanced by Randstad. It does not provide any narrative of the facts relied upon or set out factual findings in the usual way. It does not apply the law to those facts. 7 Counsel for Randstad on appeal sought to support the reasons by identifying the extent to which the parties had been able to agree the chronology of relevant events for the purposes of the appeal. It was said that the extent of the agreement demonstrated that much of the history of what had occurred was not in dispute. Two observations may be made about that approach. First, the chronology is relatively long and refers to much of the evidence, but its content is not able to be discerned from reading the reasons. Most unusually for an appeal, the chronology of the relevant facts was not able to be prepared by reference to the reasons for decision. That is because the facts are not set out in the reasons. Second, the contentious issues as between the parties concern the conclusions that may be drawn from the way those events unfolded, particularly insofar as they supported the case advanced by Randstad that it was Mr Pesch who made the decision to dismiss and that he did so for reasons other than those advanced by Ms McLoughlin. There is no agreement as to those aspects. 8 Otherwise, counsel for Randstad endeavoured to point to parts of the reasons where it was said that particular aspects of the case advanced by Ms McLoughlin were addressed. The difficulty for counsel was that there was no structure to the reasons and when points were addressed by the primary judge they were addressed at the highest level of generality. On reading, the reasons present as a disordered stream of consciousness which repeatedly state little more than words to the effect that 'I accept the evidence of the fourth respondent' (being Mr Pesch) and 'the submission for the applicant which I have just stated is rejected'. Further, the disjointed way in which the case was approached means that the nature of the case that was advanced for Ms McLoughlin is never set out. It was a case that depended upon understanding the narrative and it is not possible to discern any engagement with the narrative and the inferences that may be drawn from an understanding of context. It was not possible for the primary judge to meaningfully engage with a case of that kind by picking off aspects of the issues and dealing with them divorced from the overall context, at a high level of generality. Yet, that is the way the reasons were expressed. 9 As to the key issue of whether Mr Pesch was to be believed as to the evidence that he gave concerning the reasons for dismissal, the following passages from the reasoning of the primary judge are illustrative of the way in which the issues were approached by the primary judge. 10 First, after a discursive beginning, at [15] his Honour jumps into the following: Detailed analysis was engaged in both in cross examination of the third and fourth respondents and in submissions in relation to the first respondent's disciplinary policy in relation to ensuring the absence of bullying in the workplace and to have a safe place of work and procedure for disciplinary investigations. The applicant engaged in a very close detailed analysis of that disciplinary policy, the investigation taken and the absence of steps that might have been able to be taken against the perpetrator in 2016 or subsequently in 2018 to invite the drawing of adverse inferences against the respondent. The Court has declined to do so, as it has found the evidence of the real and ultimate decision maker, who was called to give evidence, is credible and truthful. 11 Despite the opening words to that paragraph, there is no consideration of the detailed analysis or why it should not be accepted. The paragraph itself appears unannounced, early in the reasons and presents as a conclusion unsupported by consideration of the evidence. There is no later analysis or reasoning to support the conclusion expressed on this key issue. 12 Second, at [24], the primary judge accurately describes the overall character of the case advanced for Ms McLoughlin in the following way: The applicant's case is the dismissal was adverse action and that the respondent has failed to discharge the onus under s 361 of the Act. The applicant in that regard invites the Court to take into account the whole of the surrounding circumstances in evaluating a substantial and operative reason or reasons for the dismissal of the applicant, as well as in relation to determining the issue of credibility in respect of the witnesses. The only adverse action pleaded in paragraph 62 the Amended Points of Claim is the termination on 7 August 2018 and the applicant's case under ss 340 and 351 of the Act is so confined. The alleged adverse action cannot be expanded to a course of conduct leading up to the dismissal. The Court has taken into account the whole of the surrounding circumstances in evaluating a substantial and operative reason or reasons of the respondents for that adverse action being the dismissal of the applicant. 13 There is no development in the reasons of any consideration of the whole circumstances as relied upon to support the claim. The reasons at this point and as subsequently expressed rest on statements of the kind expressed in the last sentence which is to the effect that the whole of the circumstances have been taken into account. Formulations of that kind do not provide reasons. They are no substitute for undertaking the task of setting out the findings of fact and the pathway by which a conclusion is reached. 14 Third, at [25], the primary judge returns to the key issue of the credit of the fourth respondent, Mr Pesch, and says: At the core of the case is the question of the credit of the fourth respondent, who in substance maintained that he was the sole and ultimate decision maker. Detailed criticism was made of the first respondent and the credibility of the fourth respondent by reason of information that was put on in response to the claims in these proceedings, in respect of which it was alleged that the first respondent was unaware that the applicant was seeing a psychiatrist in June 2018. In that regard, it is apparent that there were communications to employees of the first respondent that did identify that the applicant was seeing a psychiatrist and was obviously the subject of a mental illness. The Court does not find these criticisms warrant rejection of the fourth respondent's evidence either as to being the ultimate decision maker or in his evidence, which the Court accepts, as to his substantial and operative reason for the adverse action, and, which the Court finds rebuts the presumption as to a proscribed reason for the applicant's termination. 15 An important aspect of the case advanced by Ms McLoughlin is hinted at in this paragraph. It concerns the disavowal by Randstad of awareness of the seriousness of the status of the mental health of Ms McLoughlin at key points in the chronology. Yet, this aspect of the case is addressed at the highest level of generality without any indication as to why, despite what would appear to be an acceptance of part of the case for Ms McLoughlin, it was said to have no consequence for the credibility of the evidence given by Ms Pesch. 16 Fourth, at [27], the nature of the case advanced as being dependent upon a close analysis of the surrounding circumstances is again recognised: Very close analysis was engaged in of surrounding circumstances in respect of the communications leading up to the termination of the applicant, through the opening, cross examination and in the oral submissions and the written submissions up to the trial and after the Court reserved its decision. This includes the Applicant's Submissions dated 11 September 2020, the Respondents Submissions dated 9 October 2020, the Applicant's Supplementary Closing Submissions dated 11 November 2020, the Respondents Supplementary Submissions dated 3 December 2020 and the Applicant's Submissions in Reply dated 22 December 2020, as well as the chronologies, all of which the Court has taken into account. 17 Yet, in the balance of the reasons there is no consideration of the matters raised by that close analysis or the key propositions as outlined in the written submissions. Indeed, beyond listing the submissions and acknowledging their existence and stating that all of the submissions and the chronologies have been taken into account, the reasons fail to engage in any meaningful way with the matters raised by the submissions. 18 Fifth, at [28] the primary judge refers to there being a detailed focus upon the communications following the making of the bullying complaint. Such focus was indeed important for the applicant's case and understandably so given that her claim was that she was dismissed because she had made the complaint and because of conduct that was a manifestation of her mental health disability. However, in the balance of that paragraph and the next there is no consideration of the detail and yet that aspect of the case is rejected with the sweep of a few general sentences as follows: The first respondent was represented at the Fair Work Commission in respect of the bullying complaint by a solicitor, Mr Rossi, and the first respondent also engaged Mr Rossi, to the knowledge of the Fair Work Commission, in relation to the investigation of alleged misconduct by the applicant raised in the letter of the first respondent dated 23 July 2018. The Court does not accept that the propinquity or timing of the termination of the applicant being an event after the Fair Work Commission complaint, threat of interim injunction or surrounding communications supports the drawing of any adverse inference against the respondents. The making of the Fair Work Complaint does not prevent termination of the applicant for misconduct and equally does not mean that an adverse inference must be drawn against the respondents as to there being a proscribed reason for the subsequent termination of the applicant. The applicant was given a reasonable opportunity to respond to the complaint and did not do so which is why no such adverse inference should be drawn. The evidence of the fourth respondent, which the Court accepts, is a further reason why no such adverse inference should be drawn. 19 These passages presage a continuing theme in later paragraphs. The investigation conducted by Mr Rossi was concluded by providing an opportunity for response by Ms McLoughlin. The events by which she came not to respond to that investigation in the short period provided for response and after a refusal by Mr Rossi of a request for a further extension of time to provide a response (after granting an initial short extension) occupy much of the reasons: see [35]-[55]. The case for Ms McLoughlin was that aspects of the manner in which that investigation was conducted and its timing supported her case concerning the reasons why she was dismissed. The substance of those complaints is not addressed. Instead, the reasons repeatedly state that Ms McLoughlin was given a reasonable opportunity to respond but did not do so. However, within the context of proceedings in which Randstad bore the relevant onus by reason of the statutory provisions, general statements of that kind did not provide a foundation upon which the primary judge might determine the claim without engaging with the course of events and placing the evidence of Mr Pesch as to his state of mind in that context. The fact that Ms McLoughlin did not respond within the time provided for the investigation did not provide a basis upon which Randstad might discharge its onus or any justification for not considering the case advanced by Ms McLoughlin based upon the history of events. 20 Remarkably, this focus upon the investigation begins with the following conclusion (at [35]): Contrary to the applicant's submission, the investigation did give rise to real and significant steps that were taken by the first respondent against the alleged perpetrator of the bullying. This included the first respondent making certain adverse findings against the perpetrator in a first and final warning letter dated 3 August 2018. The Court finds that the respondents have rebutted the presumption that a substantial and operative reason for the taking of the adverse action was because the applicant had exercise a workplace right as pleaded or was because the applicant had a mental illness or disability. 21 However, in the reasons that follow, the reader struggles to find any reasoned support for the conclusion on that key issue, particularly given that the case for Ms McLoughlin depended upon understanding the chronology of events and dealings by Randstad over a considerable period and the knowledge of the employees of Randstad of her circumstances as a long standing employee who had raised a number of complaints about bullying by her supervisor which complaints were found to have substance. 22 The above analysis is not exhaustive but it is sufficient to illustrate the substantial deficiencies in the reasons as expressed by the primary judge. 23 In consequence, the reasons lack reasoned findings as to many of the key facts in dispute and do not address the substance of the contentions advanced to support the claim. They consider no case law and discuss no matters of legal principle. They do not outline by reference to the requirements of the relevant statutory provisions why the applicant's case was not accepted. Indeed, other than at the highest level of generality, they do not describe the case as advanced by Ms McLoughlin. The key propositions advanced by the coherent, ordered and particularised claims of fact and law articulated by the applicant are not set out, or reflected in the reasons, nor are those claims addressed by them. 24 The claim by Ms McLoughlin that the conduct that led to her dismissal was a manifestation of her mental disability was not addressed at all. In submissions advanced in the appeal that failure is correctly characterised as a central issue in the case. It is noted merely to illustrate how fundamental the failure of the primary judge was in addressing the content of the case advanced for the applicant. There were other such failures which it would serve no purpose to enumerate. The submissions in the appeal join issue on what appear to be a number of such significant aspects of the claim about which there is little or no consideration in the document provided to the parties by the primary judge as his Honour's reasons. 25 The duty to give reasons is an inherent aspect of the exercise of judicial power: Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs v AAM17 [2021] HCA 6 at [22]. The required content and detail of judicial reasons depends upon the nature of the jurisdiction being exercised and the particular subject matter: Wainohu v New South Wales [2011] HCA 24; (2011) 243 CLR 181 at [56] (French CJ and Kiefel J). At the heart of the judicial function is the performance of the duty to ascertain the facts, identify relevant rules of law, apply those rules to the facts and exercise any relevant discretion: Wainohu at [58]; and Waterways Authority v Fitzgibbon [2005] HCA 57; (2005) 79 ALJR 1816 at [130]-[131] (Hayne J). 26 In DL v The Queen [2018] HCA 26; (2018) 266 CLR 1, the High Court dealt with the adequacy of reasons provided by a judge sitting without a jury in a criminal case. In that context, the Court at [34] approved of the following passage from AK v Western Australia [2008] HCA 8; (2008) 232 CLR 438 at [85]: Ordinarily it would be necessary for a trial judge to summarise the crucial arguments of the parties, to formulate the issues for decision, to resolve any issues of law and fact which needed to be determined before the verdict could be arrived at, in the course of that resolution to explain how competing arguments of the parties were to be dealt with and why the resolution arrived at was arrived at, to apply the law found to the facts found, and to explain how the verdict followed. 27 The same responsibilities arise in discharging the judicial function in a civil case. The reasons should formulate the issues for resolution that arise from the crucial arguments of the parties and then resolve the issues of fact and law that are necessary to determine those issues. The competing arguments must be addressed and the law as found applied to the facts as found. 28 Whether the function has been discharged does not depend upon whether the reasons are lengthy or elaborate: Thorne v Kennedy [2017] HCA 49; (2017) 263 CLR 85 at [61]. But they must deal with the essentials needed to discharge the judicial function having regard to the particular case and what is at stake in the litigation. 29 Even in a busy court with a high volume of cases and limited time for preparation of reasons like the Circuit Court, the basic judicial task of providing reasons that engage with the nature of the case advanced and provide a contextualised explanation for why the claim is to be refused or a defence not upheld must be stated. The cases advanced in such courts often give rise to similar issues and references to established principles can be brief. Also, the task of finding the facts and applying the law to those facts need only deal with those matters necessary to dispose of the 'crucial arguments', but it must be undertaken. 30 Importantly, the reasons must make those factual findings which are sufficient to enable an appeal court to perform its function and explain to the parties the reason for the outcome, especially as to why the losing party has not been successful: Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 at 260 (Kirby P), 268-269 (Mahoney JA), 280 (McHugh JA); and Beale v Government Insurance Office of New South Wales (1997) 48 NSWLR 430 at 441 (Meagher JA). 31 The reasons of the primary judge in this case are repetitive and expressed at a high level of generality. Their length, 99 paragraphs, belies their lack of content. They lack a statement of the detail of the applicant's case, a consideration of what actually happened in the dealings between the parties the subject of the proceedings or why the applicant's claim in the terms in which it was put was not accepted. That is because the document lacks any real analysis of the evidence, any consideration of what was said under cross-examination, any reference to the content of any material document and any articulation of or engagement with the content of the key submissions advanced to support the applicant's claim, or indeed the respondents' defence. They are in a form which deprives the parties of a fair exercise of their right to appeal to this Court, a right the exercise of which depends upon the primary judge adequately discharging the primary duty of finding the relevant facts. Equally, they fail to serve the purpose of fairly quelling the dispute because they are a manifestly insufficient foundation for a decision of the kind that the primary judge was called upon to make. 32 As has been observed, it was accepted that a significant part of the case advanced by Ms McLoughlin depended for its resolution upon conclusions as to the credibility of Mr Pesch. Further, the case advanced for Ms McLoughlin sought to impeach his credibility by relying on the context of the historical narrative about which the primary judge made no findings of fact. Therefore, the lack of content in the reasons and the need for findings of credibility to be made based upon properly supported findings as to the events in issue means that there is nothing to be done but to remit the matter for rehearing by another judge. 33 The reasons provided were so inadequate and failed to deal with so much of the critical content of the case advanced for Ms McLoughlin that they manifest a failure to make the necessary findings of fact and law required to dispose of the essential aspects of the case advanced by Ms McLoughlin. The extent of their deficiency means that this is not a case where this Court might fairly exercise its discretion against ordering a new trial: as to which, see Pollard v RRR Corporation Pty Ltd [2009] NSWCA 110 at [67]. 34 For the above reasons, we concluded that Ground 1 in the Further Amended Notice of Appeal should be upheld and that by itself necessitates a retrial of the appellant's application. As a result, it is unnecessary to address the appellant's other grounds of appeal. 35 There is a cross-appeal that seeks to raise issues about an interlocutory ruling striking out paragraph 68 of Randstad's amended response. As to that aspect we indicated that the appropriate course would be to note it as an issue that has not been determined. Therefore, on remitter it would be open to the judge conducting the fresh hearing to make such orders as may be considered appropriate in all the circumstances concerning whether Randstad should be allowed to raise such matters by way of defence at the rehearing. Otherwise, the notice of cross-appeal sought to challenge provisional findings by the primary judge concerning damages that might have been awarded if the claim had been upheld. In effect it sought to raise a case that those findings should not be given effect if the appeal was otherwise allowed. As a purported challenge to findings rather than relief it is difficult to see how they give rise to matters for cross-appeal. In any event, as the matter is to be remitted it is not necessary to deal with those aspects. To be clear, the issue of the damages or other relief that might be granted if Ms McLoughlin is successful on any rehearing will be a matter for the judge hearing the matter and any such decision should be made unconstrained by the views expressed by the primary judge. 36 It was accepted that matters raised by Randstad by way of notice of contention fall away if the appeal is allowed on the basis of inadequacy of reasons and the matter remitted for rehearing. 37 Counsel for Ms McLoughlin contended that it was open to this Court sitting on appeal to conclude that Ms McLoughlin's conduct giving rise to the termination (the LinkedIn post) was a 'manifestation' of her disability and that her claim under s 351 of the Fair Work Act should be allowed. The submission rested in part upon the finding by the primary judge that the LinkedIn post was one of the reasons given for her termination. In our view, it is not possible or feasible to proceed in that way. In order to do so, it would be necessary to consider expert evidence that was not addressed by the primary judge. Also, it would involve taking at face value aspects of the reasons without regard to the defects that we have outlined. Where, as in the present case, the process of fact finding has wholly failed, it is not this Court's function to pick up part of the findings as the foundation for a conclusion as to part of the case whilst at the same time upholding the complaint that the reasons are inadequate: see, by way of example, Waterways Authority v Fitzgibbon at [133]. 38 As to costs, for Ms McLoughlin an opportunity was sought to make submissions that there should be orders as to costs on the basis that the requirement of s 570(2) of the Fair Work Act are met in the present case. For that reason, the Court made orders timetabling the provision of written submissions in response concerning costs and providing that, subject to any further order, the question of costs would be determined on the papers. I certify that the preceding thirty-eight (38) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices White, O'Callaghan and Colvin.

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