Romero v Farstad Shipping

1. The appeal be allowed.
2. The cross-appeal be dismissed.
3. The orders made by the Court dated 6 May and 22 May 2014 be set aside and in partial replacement thereof: (a) the Court declares that the respondent breached its employment contract with the applicant; (b) the respondent pay to the applicant the costs of the hearing.
4. The question of repudiation and any associated questions such as affirmation or election and the question of damages be remitted to a judge of the Court for rehearing.
5. The respondent pay the applicant's costs of the appeal and cross-appeal. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

IN THE FEDERAL COURT OF AUSTRALIA TASMANIA DISTRICT REGISTRY GENERAL DIVISION TAD 9 of 2014

AND: FARSTAD SHIPPING (INDIAN PACIFIC) PTY LTD (ACN 105 011 989)

JUDGES: ALLSOP CJ, RARES J AND MCKERRACHER J DATE: 22 DECEMBER 2014 PLACE: SYDNEY (HEARD in HOBART)

OVERVIEW 1 In late 2011 Ms Lisa Romero, an employee of Farstad Shipping (Indian Pacific) Pty Ltd, was the second officer aboard the supply ship, Far Swan. She worked in that capacity for a 12 day voyage under the Master, Captain Cameron Martin. Prior to this posting, Ms Romero had enjoyed a successful career with Farstad and previous employers. This posting or "swing" was a significantly different experience. There was a substantial falling out between Captain Martin and Ms Romero. As a result, Ms Romero, ultimately at her request, was relieved from duty on the ship. Three days after disembarking, she emailed Farstad about several issues including her concerns in relation to her treatment by Captain Martin. While she had privately diarised a lengthy list of concerns, the email communication with Farstad was much more succinct. It also focussed on her own positive intentions. As to her complaints about Captain Martin, she left it to Farstad to decide how it should deal with the issue. The significance of, and important ambiguity within, the last sentence of the email are central to the disposition of this appeal. 2 Farstad published and promoted several workplace policies, including a Workplace Harassment and Discrimination Policy. This Policy spelt out the expected workplace behaviour of employees in relation (relevantly) to bullying and sex discrimination. It set out various procedures by which employees could report complaints about alleged departure by others from this expected standard of conduct. Although Ms Romero's email did not constitute either an informal or a formal complaint under the Policy (nor did Ms Romero intend it to be), Farstad nevertheless immediately treated her communication as being a formal complaint as described in the Policy. By this time (as Ms Romero was aware) Captain Martin had also raised with Farstad serious allegations about her as to her competency and temperament. Farstad commenced what purported to be an investigation in accordance with the Policy. 3 One of the difficulties in Farstad treating the matters Ms Romero had mentioned as being a formal complaint under the Policy was that this particular communication with her employer was no longer private and the entire dispute substantially escalated. In addition, but without notice to her, the nature of the investigation by Farstad developed rapidly, not so much into investigation of the matters of which she was complaining, but into questions raised by Captain Martin as to her own competence, capacity and temperament. Captain Martin, rather than Ms Romero, was the first person interviewed by Farstad following receipt of her email. Ms Romero contends that Farstad gave far greater weight and priority to the allegations raised by Captain Martin than it did to her concerns. More importantly and without notice to her, Farstad rolled into the purported investigation of her complaints, an investigation of her own competence. It did so without conforming to the processes set out in the applicable enterprise agreement. 4 Ms Romero lodged a complaint in the Australian Human Rights Commission. She asserted, as she did at trial, that Farstad, in the conduct of its employees and officers, had treated Ms Romero, by reason of her sex, less favourably than it would have treated a male in similar circumstances, thus discriminating against her contrary to s 14(2) of the Sex Discrimination Act 1984 (Cth) (SDA). 5 As no resolution was achieved in the Commission, the complaint against Farstad was pursued by Ms Romero in this Court. At first instance (Romero v Farstad Shipping (Indian Pacific) Pty Ltd [2014] FCA 439), Ms Romero's complaints were rejected. The primary judge concluded there was no sex discrimination. He was impressed with Captain Martin as a witness. 6 That finding has not been challenged on appeal. 7 However, Ms Romero also argued at first instance (and still contends) that the Policy formed part of her contract of employment. Farstad's breach of the Policy breached and/or repudiated her contract and she suffered loss and damage. The primary judge held that the Policy did not constitute part of Ms Romero's contract of employment as pleaded. Secondly, even if the Policy had constituted part of the contract of employment, it was not so significantly departed from by Farstad as to constitute any breach of the Policy or the contract, let alone a repudiation. 8 In this appeal from that decision, Ms Romero contends that each of those conclusions was wrong. 9 Farstad, on the other hand, supports the primary judge's decision, but also cross-appeals on the basis that the primary judge should also have held that s 54 of the Seafarers Rehabilitation and Compensation Act 1992 (Cth) (SRCA) precluded the bringing of Ms Romero's complaint of sex discrimination, as she had failed to make an election in the manner prescribed by s 55 SRCA. 10 Ms Romero had also appealed against the primary judge's conclusion that while an implied term of mutual trust and confidence existed, it had not been breached by Farstad. This ground of appeal was abandoned due to the subsequent decision of the High Court in Commonwealth Bank of Australia v Barker (2014) 312 ALR 356 in which the High Court said that the implied term of trust and confidence was not part of Australian law (as distinct from the implied duty of cooperation recognised in Secured Income Real Estate (Australia) v St Martins Investments Pty Ltd (1979) 144 CLR 596 (at 607) per Mason J). 11 For reasons that follow, we have concluded that: (a) the Policy did form part of the contract of employment; (b) the Policy was not complied with; (c) the contract was breached; and (d) the cross-appeal argument based upon s 54 SRCA is to be rejected. 12 Ms Romero is entitled to relief including damages for breach of the contract of employment to be determined by a judge of this Court if not agreed.

THE DECISION AT FIRST INSTANCE 13 In rejecting the sex discrimination claim, from which there is no appeal, his Honour was satisfied (at [17]) that if the behaviour of which Ms Romero complained did occur, it was not engaged in on account of Ms Romero's gender. His Honour was also of the view that Captain Martin's remarks as to the alleged incompetency of Ms Romero were not gender based. His Honour concluded that the poor relationship between Captain Martin and Ms Romero was the result of an escalating personality clash, rather than any sex discrimination on Captain Martin's part. The primary judge also concluded (at [19]) that, even if Captain Martin was pleased with her departure, Ms Romero's decision to leave Far Swan was driven by the deterioration of the relationship between Ms Romero and Captain Martin to a point where Captain Martin felt there was "no option" but to source a relief second officer. His Honour was also of the view that Ms Romero had a tendency towards an "exaggerated perception" of certain situations and that, in the case of Captain Martin, she had overreacted to a "relatively simple interpersonal conflict" (at [21]). None of those findings is challenged. 14 On addressing the question of whether the Policy formed part of Ms Romero's contract of employment, his Honour noted that the question of whether a policy was part of an employment contract was a vexed one and depended largely on the circumstances of any given case. His Honour referred to Goldman Sachs JBWere Services Pty Ltd v Nikolich [2007] FCAFC 120 (at [29]) (partially reported on the issue of costs in (2007) 163 FCR 62) where Black CJ recognised that the test was "objective" and that '[w]hat matters is what the language used, in context, would have led a reasonable person … to believe". Marshall J came to a similar conclusion (at [120]-[124]). His Honour also referred to Riverwood International Australia Pty Ltd v McCormick (2000) 177 ALR 193 per Lindgren J (at [43]) and to Black CJ in Nikolich (at [30]) where the Chief Justice said: The difficulty is that the statement in issue is not explicitly contractual in its language and could be seen as merely aspirational. It appears in a document of mixed content and purposes and, although these include contractual purposes, at least the primary repository of the employment contract is unambiguously elsewhere. The context is, however, decisive… if the statement that the firm "will take every practicable step to provide and maintain a safe and healthy work environment for all people" were no more than an aspirational representation, imposing no obligation on the maker, it would be seen as an exercise in hypocrisy. The statement is a reflection of, and is central to, WWU's expression of the "culture" of the firm and its approach to its staff, and its aspirations about the approach the employees will take to each other. The language used, taken in the context as a whole, points to the statement embodying a contractual obligation and the trial judge was correct in holding that it was a term of the contract. 15 The primary judge also referred to the Full Court decision in Commonwealth Bank of Australia v Barker (2013) 214 FCR 450, which was subsequently reversed by the High Court ((2014) 312 ALR 356). 16 The primary judge concluded (at [30]) that there was much in Farstad's Policy that could be described as "aspirational". Although new Farstad employees were made to sign the Policy, that was, his Honour said, not decisive in rendering it a contractual document (see Nikolich (at [121])). His Honour found that there was nothing in the Policy itself which suggested that its terms were to be terms of Farstad's contracts of employment with its employees or otherwise expressly or impliedly incorporated within them. Although there was some quasi contractual language in the Policy, in his Honour's opinion, it was insufficiently specific so as to amount to a binding contractual obligation. 17 Having rejected the contention that the Policy was part of the contract of employment, his Honour then went on to deal with the question of whether, in any event, there had been breach of the Policy by Farstad. He noted (at [31]) the following matters on which reliance had been placed by counsel for Ms Romero at first instance: there had been no appointment of a Contact Officer and no explanation to Ms Romero of her options under the Policy; there had been a failure to properly investigate Ms Romero's claims and to properly document their investigation; there had been a lack of impartiality in the investigation, in the sense that Captain Martin was interviewed first; Ms Romero had been interviewed on 16 December 2011 which involved an assessment of her competence, which was in conflict with a relevant enterprise agreement and which, Ms Romero contended, proved the lack of impartiality of Farstad in its investigation of her claim; and there had been a failure to ensure that Ms Romero was not disadvantaged by the decision as to her study being funded by Farstad. 18 His Honour did not find it necessary to examine all the complaints above or all the evidence supporting them because he was satisfied that employers, in conducting an investigation, are "obliged to act in a practical manner, and not to embark on a judicial hearing or police style examination of the circumstances": Gera v Commonwealth Bank of Australia Ltd (2010) 201 IR 26 per Lucev FM (at 36-37). He also noted the observation of Heerey J in Schaale v Hoechst Australia Ltd (1993) 47 IR 249 (at 252) "[e]mployers are not required to have the skills of police investigators or lawyers". 19 The primary judge concluded (at [33]) that the matters relied upon by Ms Romero did not constitute evidence of an improper investigation or one that was not otherwise in accordance with the Policy. His Honour considered that aspects of the meeting on 16 December 2011 might have been inappropriate by the overzealous examination of Ms Romero's competency, and that the evidence gathering and note-taking on the part of Farstad's employees, Mr Barrow and Ms Barker, was questionable. Despite this, he concluded that there was no breach and at no time was Farstad acting in anything other than a "practical manner". 20 As to the complaint that an investigation was instigated without Ms Romero having raised a formal complaint under the Policy, his Honour concluded that Ms Romero plainly made a complaint about Captain Martin's behaviour aboard Far Swan, and noted (at [33]): … whether it was formal or not was irrelevant. Investigations, while imperfect, were undertaken and a written report of the findings produced to Ms Romero's lawyer at the time, Ms Anna Crotty. On the first limb of her breach of contract claim, Ms Romero has failed to make out her case.

THE POLICY IN CONTEXT 21 To consider Ms Romero's argument that the Policy was part of the contract of employment, it is necessary to examine its content and the context in which it was communicated to Ms Romero. 22 Ms Romero confirmed that when she was initially inducted she watched two DVDs. One was about safety and the other took her through the Farstad policies. In addition, at the commencement of boarding the supply ship, Far Scandia, she underwent a vessel induction. She was shown the management systems disc, which contained all of Farstad's policies, procedures and guidelines. She had to demonstrate her familiarity with the disc and the policies and systems documented on the disc. She read through the contents of the disc to ensure that she was familiar with all the policies and procedures. The Policy was one such document. 23 Additionally, at the commencement of each swing, Ms Romero was required to undergo a safety briefing agenda with an officer. In doing so she would be reminded about the existence of the disc and the details of the policies. Ms Romero said she would have read through the policies on the disc, including the Policy, a number of times. 24 The relevant events unfolded in the following sequence. In June 2010, Ms Romero was first employed by Farstad as a second officer on a casual contract until December 2010. On 29 December 2010, she met with Mr Barrow, Farstad human resources manager in Melbourne, who granted her permanency. On this occasion, she mentioned to him her interest in studying for an Advanced Diploma Mate/Master. She was informed that the budget for 2011 had already been finalised, but Farstad would sponsor study for the Advanced Diploma in 2012. After receiving permanency, Ms Romero did another eight months service with Farstad as second officer. 25 Shortly after Ms Romero received oral confirmation that she would have a permanent appointment, she received a letter to that effect on 10 January 2011. This letter of engagement contained reference to Farstad Shipping Policies in a sentence which reads: In addition, all Farstad Shipping Policies are to be observed at all times. (emphasis added)

The Letter of Engagement 26 It is desirable to set out the letter in full in order to reveal the context of that key sentence: 10 January 2011 Ms Lisa Romero … Dear Lisa. We are pleased to confirm our offer of permanent employment with Farstad Shipping (Indian Pacific) Pty Ltd as a Deck officer on vessels owned or operated by Farstad Shipping in Australia and South East Asia and beyond. This appointment is conditional upon you completing a Company medical and three months probationary seatime. As you have successfully completed both, your appointment is effective from your next swing. Your wages and conditions will be governed by the Farstad Shipping (Indian Pacific) Pty Ltd and AMOU Oil and Gas 2010 Enterprise Agreement as amended or the relevant offshore contracts provided by Farstad Shipping (Indian Pacific) Pty Ltd affiliated companies for operations in the Indian Pacific region. You will be expected, if required, to serve on any vessel owned or operated by Farstad Shipping and be flexible in regards to availability. Whilst every attempt is made to accommodate individual requests in allocation to vessels, the decision of the Ship Manager and HR department will be final. In addition, all Farstad Shipping Policies are to be observed at all times. You are eligible to immediately join the Farstad Shipping Superannuation Plan within the Mercer Super Trust Corporate Superannuation Division, with all benefits outlined in the member booklet enclosed. If you wish to join this fund, please complete the membership application form and return to this office. Upon proof of existing Private Health Insurance you will be provided with a fortnightly allowance for private health cover as per the Enterprise Agreement to contribute to this cost. Each year proof will need to be provided to maintain this allowance. … (emphasis added)

The Policy 27 The Policy itself is headed "Workplace Harassment and Discrimination". There is an introductory section entitled "1.0 Purpose and Scope" which is in these terms: Farstad Shipping seeks to establish a workplace culture where all employees are treated fairly and with respect and dignity. Behaviors that are harassing, discriminatory or bullying in nature are totally unacceptable, destroy workplace harmony and co-operation, and are distressing and harmful to the individuals on the receiving end of such behaviours. Workplace harassment, discrimination and bullying are against the law and will not be tolerated in Farstad Shipping. Managers and supervisors are accountable for monitoring the workplace and reinforcing the harassment and discrimination procedure with employees. Farstad Shipping will: • Handle complaints promptly, with confidentiality, impartiality and with sensitivity to the complainant's needs; • Meet all legal and statutory obligations; and • Ensure employees making complaints of workplace harassment and discrimination are not disadvantaged in their employment conditions or opportunities. Farstad Shipping's harassment and discrimination procedure applies to all personnel, including part-time, full-time and casual employees, contractors and visitors. (emphasis added) 28 The Policy then goes on to deal at some length with the nature of discrimination, harassment and bullying which will not be tolerated in the workplace. It also provides at 2.4 under the subheading "Education and Training" that: All employees shall be made aware of the Company's Human Rights and Equal Opportunities Policy and the contents of [this Policy]. The Policy and Procedure shall be promoted and distributed at all levels of the organisation as part of an employee's induction and on an ongoing basis. Posters outlining the Policy and appropriate contact numbers shall be clearly displayed in the workplace. Regular education programs shall take place for all employees. Managers shall be trained in the principles of EEO and their responsibilities under the [Policy]. 29 It continues: 2.5 Harassment and Discrimination Contact Officers The company will establish, train and maintain Harassment and Discrimination Contact Officers to provide employees throughout the business with access to people with whom they can discuss concerns about workplace harassment and discrimination and receive guidance on the options available to deal with their issues. The Contact Officer's primary role is to help staff members resolve their issues themselves. If that fails to manage the situation however, then the Contact Officers can help the staff member to explore other options including making a formal complaint. The Human Resources Department is responsible for maintain (sic) an up to date list of Contact Officers. 2.6 Harassment and Discrimination Complaints Procedure 2.6.1 Raising Concerns and Identifying Options Farstad strongly encourages and supports employees who believe they have been subjected to harassing, bullying or discriminating behaviour, to bring their complaint to the attention of a Contact Officer or their Manager or the HR Department at the earliest possible opportunity. Also, Farstad strongly supports employees who believe they have witnessed harassing or bullying or discriminating behaviour in the workplace to encourage victims to bring their complaint to the attention of a Contact Officer, their Manager or the HR Department at the earliest possible opportunity. The Manager or HR Department may notify a Contact Officer, unless contact was made with a Contact Officer directly by the complainant. The Contact Officer will listen to the concerned person's complaint, explain the options available and provide advice as necessary. Ongoing support in the form or (sic) counselling may also be arranged utilising the Employee Assistance Program. All formal contacts regarding issues of a harassing, discriminatory or bullying nature are to be recorded by the person contacted and forwarded to the GM HR or Staff Administration Manager. The written record of contact should form a record of issue whether it be resolved, arise again at a later date, or escalate to a more formal investigation. (emphasis added) 30 The Policy emphasises confidentiality and flexibility. It provides: All contacts will be handled in a strictly confidential manner. 2.6.2 Assessing Options The employee must decide what action they want to take in terms of resolving the problem in an effective and acceptable manner. The options available include: • Taking informal action to resolve the complaint themselves, including talking to the alleged harasser, and if required, requesting that the Contact Officer or Manager be present. • Requesting the Manager discuss the concern with the alleged harasser to resolve the complaint informally. • Initiating a formal complaint and investigation under the Workplace Harassment and Discrimination procedure. • Initiating a general grievance/complaint through their line management where the employee believes they have been treated unfairly but not for any of the reasons contained in anti-discrimination legislation. • This procedure does not remove the employee's right to take their complaint directly to the relevant State Anti-Discrimination body or to the Human Rights and Equal Opportunity Commission. The person contacted by the complainant can facilitate the employee's assessment of these options, but the decision as to how to proceed must remain with the employee. 2.6.3 Informal Action This option emphasises resolution rather than factual proof or substantiation of a complaint. The informal option can be the first step in dealing with harassment or discrimination if the allegation is not or a 'serious' nature. The informal option may be used by the complainant where: • the allegations are of a less serious nature, but the complainant subjected to the behaviour wants it to cease nonetheless; or • the individual subjected to the behaviour wishes to pursue an informal resolution; or • the parties are likely to have ongoing contact with one another and the complainant wishes to pursue an informal resolution so that the working relationship can be sustained. The complainant can initiate the informal option by asking the person (harasser) to stop the behaviour to which they object. The complainant may also approach their Manager or a Contact Officer for assistance and request that they: • accompany the employee to discuss the issues with the alleged harasser; or • privately convey the complainant's concerns and reiterate the Company's policies and procedures on the matter. Managers and/or Contact Officers involved in the informal resolution of harassment and/or discrimination complaints are to complete and submit a confidential EEO, Harassment and Discrimination report to the GM HR. The Contact Officer or Manager involved must also follow up within two weeks to determine the outcome of the meeting. If the issue has been resolved, the procedure will stop. If the issue has not been resolved, the option of a formal complaint may be pursued. Employees are not required to exhaust all informal options for resolution before formal action can commence. 2.6.3(sic) Formal Complaint The formal option focuses on proving whether a complaint can be substantiated. This formal option may be appropriate where: • informal attempts at resolution have failed; • the complainant alleging harassment or discrimination has been victimised; • the complaint involves serious allegations of misconduct and informal resolution could compromise the rights of the parties; • the complaint is against a more senior member of staff. The formal option may help to ensure that the complainant is not victimised or disadvantaged; • the allegations are denied and the complainant wishes to proceed with an investigation to substantiate the complaint; or • the complainant wishes to make a formal complaint from the outset. If the employee chooses to go ahead with a formal complaint, they need to lodge the complaint in writing with their Manager. The complainant may request assistance from a Contact officer or their Manager if they require assistance in making a formal complaint. The Manager will inform the GM HR or Staff Administration Manager so that an investigation can begin, and so that the employee's manager can ensure that no victimisation takes place. If their Manager is the alleged harasser, the employee should lodge the complaint with their Manager's Manager, GM HR or Staff Administration Manager. (emphasis added) 31 Under the heading of "Formal Investigation", the Policy describes the processes and that an investigation will not normally be commenced without the employee's consent as follows: 2.6.4 Formal Investigation If an employee decides to make a formal complaint, the employee's Manager must investigate the complaint. In some circumstances this may not be considered appropriate, either because the Manager is the alleged harasser or because the Manager does not have the skills to conduct the investigation. In such cases, the Manager will need to appoint another manager to conduct the investigation. If no other Manager has the skills or experience to conduct this type of investigation, professional external assistance may be used. The investigator will interview: • the complainant; • the alleged harasser • other appropriate employees/witnesses. The investigating Manager will take a record of interview with the complainant, the alleged harasser and any witnesses. The parties to a complaint and any witnesses should be given the opportunity to peruse, correct and sign their record of interview. The investigation Manager should stress the importance of confidentiality with all people interviewed and should not discuss the investigation with anyone who does not have an express need to know. The investigating Manager should seek advice from the Company's Legal Council (sic) without divulging names if legal clarification is required. Only in cases of very serious allegation (e.g. Breach of Criminal Law) will an investigation be instigated without the employee's consent and the matter referred to an appropriate external agency. The relevant Managing Director shall be informed of an allegation that may be considered a very serious breach of Criminal Law. If the allegation against a person is a criminal act the complaint becomes a police matter. (emphasis added) 32 The Policy also sets out the relevant responsibilities of the "Contact Officer": 4.0 Responsibilities Contact officer • Arrange appointment with complainant to discuss complaint • Explain what options are available • Assist complainant make a formal complaint if requested • If appropriate complete EEO, Harassment and Discrimination Contact Form and forward to the GM HR or Staff Administration Manager. … (emphasis added)

WAS THE POLICY PART OF THE CONTRACT OF EMPLOYMENT? 33 An important question is whether the contract of employment, as reflected in the accepted letter of engagement, also includes the Policy (as one of the Farstad policies). On its face, the Policy appears to bind both the employee and employer. The observation of the primary judge that this question is a vexed one is understandable. There is a considerable divergence of views in the handful of cases on the point.

The Approach to the Question 34 One point that is clear is that whether or not a policy will be incorporated into a contract of employment will depend upon the parties' intentions as objectively ascertained: Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 (at [40]-[41]). 35 In approaching the task of ascertaining the parties' intention, the starting point will be the language of the contract. The language adopted is to be viewed in context, not in abstract isolation. Further, regard must be had to the purpose and object of the transaction. 36 In Toll (at [40]), the High Court said (footnotes omitted): This Court, in Pacific Carriers Ltd v BNP Paribas, has recently reaffirmed the principle of objectivity by which the rights and liabilities of the parties to a contract are determined. It is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations. What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe. References to the common intention of the parties to a contract are to be understood as referring to what a reasonable person would understand by the language in which the parties have expressed their agreement. The meaning of the terms of a contractual document is to be determined by what a reasonable person would have understood them to mean. That, normally, requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction. 37 The observations in Toll were directed both to the question of whether there is a binding contract and also to what it contains. The focus in the present analysis is on the latter question. As Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ said in Royal Botanic Gardens and Domain Trust v South Sydney City Council (2002) 240 CLR 45 (at [10]) (footnotes omitted): In Codelfa, Mason J (with whose judgment Stephen J and Wilson J agreed) referred to authorities which indicated that, even in respect of agreements under seal, it is appropriate to have regard to more than internal linguistic considerations and to consider the circumstances with reference to which the words in question were used and, from those circumstances, to discern the objective which the parties had in view. In particular, an appreciation of the commercial purpose of a contract: "presupposes knowledge of the genesis of the transaction, the background, the context, the market in which the parties are operating." Such statements exemplify the point made by Brennan J in his judgment in Codelfa: The meaning of a written contract may be illuminated by evidence of facts to which the writing refers, for the symbols of language convey meaning according to the circumstances in which they are used. 38 In McCormick v Riverwood International (Australia) Pty Ltd (1999) 167 ALR 689 at first instance, Weinberg J (whose approach was upheld on appeal in Riverwood (2000) 177 ALR 193), set out the following principles (at [74]-[77]) : 74 In ascertaining the meaning of an expression contained in a contract such as the requirement that the applicant "abide" by all "Company Policies and Practices currently in place, any alterations made to them, and any new ones introduced", the approach to be adopted differs from that taken in statutory interpretation. It must rest on the premise that the contract was made in good faith with the object of at least potential mutual benefit by due performance. 75 The court approaches the task of ascertaining the meaning of the parties' expressions from an objective point of view. In the case of a disputed clause in a commercial agreement "the essential question is what would reasonable business people in the position of the parties have taken the clause to mean": Schenker & Co (Aust) Pty Ltd v Maplas Equipment and Services Pty Ltd [1990] VR 834 at 840 per McGarvie J. In Antaios Compania Naviera SA v Salen Rederierna AB [1985] AC 191 at 201 Lord Diplock said: … if detailed semantic and syntactical analysis of words in a commercial contract is going to lead to a conclusion that flouts business commonsense, it must be made to yield to business commonsense. 76 The parties may be bound by the meaning reasonably to be inferred in the circumstances, even if it does not conform to the interpretation advanced by either. It is not necessary that a statement should be subjectively intended to be a term of a contract in order to be one; it is enough if it can reasonably be so understood. 77 In Cheshire & Fifoot's Law of Contract (7th Aust ed, 1997) it is stated (p345) that: In interpreting the expressions of the parties, the court will consider them in their context. Except to the extent to which evidence is inadmissible, the court will as a matter of course take into account the objective background of the transaction, that is, its factual matrix, genesis and aim, and the common assumptions of the parties. 39 Analysing the language, on appeal, North J also emphasised mutuality of obligation, noting (at [107]): 107 The association of the expression "abide by" with the reference to the manual, essential characteristics of which have been analysed earlier in these reasons, suggest that the clause was intended to oblige Mr McCormick to comply with his obligations and also to signify that Mr McCormick had accepted an offer from Riverwood to the effect that it would comply with the obligations imposed on it by the manual. Thus, the clause reflected the parties' intention to offer and accept mutual obligations in accordance with the provisions of the manual. The fact that the clause refers only to "You" is consistent with this construction. While Mr McCormick agreed to abide by the manual, he was in part responding to Riverwood in that he agreed to accept its compliance with its obligations under the manual. The phraseology of the clause was proffered by Riverwood. Mr McCormick's acceptance carried with it an acceptance of Riverwood's offer to abide by the manual by conferring the benefits provided in the manual in favour of Mr McCormick. 40 Mansfield J agreed but paid more regard to the particular evidentiary context (consistent with s 27 of the Federal Court of Australia Act 1976 (Cth), noting (at [148]-[150]): 148 As discussed earlier, in my judgment, the significant facts known to the appellant at the time were that it had policies, that those policies included the application of the redundancy agreement (or its predecessors) to its employees, and that those policies were contained or partly contained in the manual. It also knew of the contents of the manual generally. The nature of its contents, in large measure, provided for the way its employees would be treated or the benefits for which they may be eligible. 149 The evidence of the respondent was that he had a general understanding of the existence of some redundancy agreement in existence, but he did not specifically know of the manual. It can readily be inferred that he apprehended that the appellant had some policies and procedures, for that is what the policy clause in the letter referred to, but he did not give evidence of knowing of the detailed content of any specific policies. The degree of his knowledge is not commensurate with that of the appellant. That may often be the case in circumstances such as those confronting the respondent when he signed the letter. He had by then been employed in the business generally for many years, and by the appellant for some months. His general understanding is, however, consistent with the more specific knowledge of the appellant. In the relevant sense, in my view, the facts known by the appellant were known also to the respondent. 150 In the light of the factual matrix referred to, I share the conclusion of the learned trial judge that the letter incorporates by reference the terms set out in the manual from time to time including the redundancy agreement. I further agree with the conclusion that the presumed intention of the appellant and the respondent, by reason of the policy clause in the letter, was that the respondent would receive the benefits of the policies of the appellant in the manual as they applied to him, including under the redundancy agreement (subject to that policy being changed by the appellant). The agreement "to abide by" those policies, in the circumstances, means that the respondent would receive or enjoy the benefits provided for by those policies but only according to their terms, and would himself comply with the terms of those policies as they applied to him. 41 His Honour then went on to examine the policy itself in order to consider what role its contents played in determining the question of whether the contents might, as objectively ascertained, reveal an intention either not to be part of the contract or to be included in the contract. In circumstances much like the present, his Honour had no hesitation in concluding that the high standards of conduct expected revealed an intention to create mutually binding obligations. His Honour said (at [151]-[152]): 151 I do not consider that the contents of the manual demonstrate, as the appellant contends, that it did not intend to be contractually bound to comply with its policies (subject to their alteration). There are certain policies where such an intention is clear from the context. One example is that whereby it expects its employees to maintain the highest standard of corporate conduct, but it agrees not to criticise any employee for adverse consequences which flow from adherence to that standard. It is most unlikely that the appellant envisaged that it could blithely ignore its part of that policy, or at least could do so with legal impunity. Its health safety and environment policy also has mutual obligations. It may also be observed that, in general, its policies are expressed in terms which are entirely apt to be treated as expressing mutually enforceable obligations; they are clear, precise, direct and mainly deal with matters which one might expect to be encompassed within a particular employment contract. 152 Nor do I consider that the fact that it was contemplated by the policy clause in the letter that the appellant might change its policies from time to time, or introduce new policies, signifies that it did not intend to be contractually bound to the respondent to comply with its policies from time to time. Its power to change its policies, or to introduce new policies, from time to time would be constrained by an implied term that it would act with due regard for the purposes of the contract of employment: eg Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 at 63, 137 - 138, so it could not act capriciously, and arguably could not act unfairly towards the respondent: cf Ansett Transport Industries (Operations) Pty Ltd v Commonwealth (1977) 139 CLR 54 at 61. It might also be a power which, by implication, must be exercised reasonably having regard to the nature of the contract and the entitlements which exist under it: Renard Constructions (ME) Pty Ltd v Minister for Public Works (1992) 28 NSWLR 234 at 279-280 per Handley JA. There is no issue as to the extent of any such implied constraints on the exercise of that power in this matter. Byrne v Australian Airlines Ltd (1995) 185 CLR 410 does not, in my view, point to any different conclusion in the particular facts of this appeal. It concerned the question whether a clause in an industrial award was by virtue of that character to be implied into a contract of employment: see per McHugh and Gummow JJ at 446. National Coal Board v Galley [1958] 1 All ER 91 provides an example where the terms of a contract of employment included terms incorporated by reference to a "national agreement" which it was contemplated might be altered or substituted over the period of employment. 42 Lindgren J dissented, but on a basis which turned on the particular language of the clause concerned. 43 Similarly, in Foggo v O'Sullivan Partners (Advisory) Pty Ltd (2011) 206 IR 87, Schmidt J rejected as "defy[ing] both logic and common sense" the contention that although it was common ground that an employee was bound by a policy, the employer would not be contractually bound. Her Honour said (at [116]-[119]): 116 That a reasonable person, in the circumstances, would have understood that the defendant, as well as Mr Foggo, was contractually bound to observe the grievance policy which it had implemented, unless varied or withdrawn, must be accepted. The policy envisaged that in the event that an employee had a grievance, he or she would advise the defendant, which would then take the steps specified in the policy to seek to resolve that grievance. That a reasonable person would understand that the employee was obliged to adhere to what the policy required of him or her, but that the defendant was not obliged to take the steps which the policy envisaged it would take, may not be accepted. That would defy both logic and common sense. 117 That conclusion is reinforced, when clause 9 of the policy is considered. It gave the defendant unfettered rights to alter or bring the policy to an end, providing in clause 9: "9. Duration of this Policy 9.1 This policy was brought into effect from 14 June 2010. 9.2 It will be reviewed on a regular basis (and updated as deemed necessary) to ensure that it remains relevant and appropriate to OP. 9.3 For the avoidance of doubt, this policy may be applied, varied or withdrawn at any time at OP's discretion." 118 In my view, unless and until the defendant exercised such rights, it was contractually obliged to adhere to the policy it had brought into effect. That conclusion is supported by views expressed in Riverwood International Australia Pty Ltd v McCormick (2000) 177 ALR 193 and Goldman Sachs JBWere Services Pty Ltd v Nikolich (2007) 163 FCR 62, where similar questions arose for consideration. In both Riverwood and Goldman Sachs the question of whether the employer, as well as the employee, was contractually bound by the policy in question as an implied term of the contract, arose to be considered. The test is that discussed in BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 at 282-3 and Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 442. 119 That a term which requires an employer, as well as the employee, to adhere to a policy which the employer has devised and implemented and which the employee is contractually obliged to observe, by express provision, would be implied in order to give business efficacy to the contracted contract, is immediately understandable. In the case of the policy here in question, it is evident that the contract could not operate reasonably and effectively without such an implied obligation. It would make nonsense of the employee's ongoing obligation to act in accordance with what the policy required of him or her from time to time, if the employer had no obligation to act in accordance with what the policy required of it. 44 In Nikolich, Black CJ applied Toll and reached a similar conclusion as seen from the last sentence in [30], which was cited by the primary judge (at [28]). 45 His Honour continued (at [31]) by looking at the nature of the relevant obligations, especially considering existing legal obligations: This conclusion is supported by the broad equivalence of the content of the statement with an employer's common law duty of care to an employee, to commonly imposed statutory duties and to the term that the law will imply in a contract of employment. Contracts of employment that are silent about an employer's obligations carry with them an implied term that the employer will take reasonable care to provide a safe place of work and a safe system of work. To take "every practicable step to provide a safe and healthy working environment" may be putting the standard somewhat higher, but not very much higher. The term found by the trial judge in this case, as interpreted reasonably according to the language used, does not greatly extend the obligation that would exist by implication at common law. 46 In the same appeal, Marshall J noted (at [120]): 120 The conclusion of Wilcox J on the topic of express incorporation of WWU into the contract is compelling, for the following reasons: • WWU formed part of the "office memoranda and instructions" which Mr Nikolich's letter of offer of employment said would be issued and with which he would be expected to comply as applicable. Goldman gave him no other document which may be described as "General Instructions" within the context of the letter of offer; • Mr Nikolich was required to read WWU and sign some forms contained within it, some of which covered the topics on which Wilcox J made findings, such as the Health and Safety Statement; and • WWU provided entitlements to employees in addition to setting out directions to them. It sets out what each of the parties could expect the other to do, during its subsistence, in respect of a broad range of matters. 47 Jessup J, (at [302]), dissented, not so much on the approach to be taken as on the particular facts of the case. 48 Reference might also be made to Akmeemana v Murray [2009] NSWSC 979 where Davies J (following Mansfield J (at [152]) in Riverwood Full Court) rejected a submission by the employer that a policy which would operate in its favour and somewhat harshly to the employee could, when it was formulated some months after the contract of employment, constitute part of it.

Was This Particular Policy Part of the Contract of Employment? 49 Farstad argues that the Policy was not contractual or part of the contract of employment. Rather than being aspirational, as suggested by the primary judge, Farstad argues that the Policy was "directive". It was directive in the sense, relevantly, that the Policy consisted of directions to employees, directions in the details as to how matters of workplace harassment and discrimination will be handled. Farstad contends that the language in the Policy, even where it uses the words "shall" and "will", is mostly talking about what is to be done. According to Farstad, it is a statement of intention, rather than mandating a particular way to do things. Farstad contends the words "are to be observed at all times" may be contrasted with expressly contractual language such as that used in Fogo, where the relevant grievance policy was held to have formed an explicit part of the employment contract. 50 It follows, Farstad argues, that an employee who signed the engagement letter acknowledging the need for observance of the Policy at all times would not, in undertaking conduct contrary to the Policy, commit a breach of contract. Rather, the breach that the employee would commit would be a breach of the implied term to follow the lawful and reasonable directions of an employer. The Policy constitutes, Farstad contends, the lawful and reasonable directions of the employer. It is in that sense that it is directive. The example given by Farstad would be that if there was a sign on the ship saying "no running on the gangway", an employee breaching that directive could not be said to be in breach of contract. Rather, he or she would be failing to comply with a lawful and reasonable direction, which might entitle the employer to take some disciplinary action in some form, such as a warning. 51 If the Policy is contractual and it is breached, Farstad argues, it would be an absurd result that every time an employee, or for that matter the employer, commits a minor breach, a cause of action in contract would accrue. That argument is without substance. Whatever the terms of a contract, each party is liable to the other if the former acts in breach of one of those terms. The legal remedy for breaches of contract that are trivial is nominal damages. No doubt a court that was called on to decide a claim for a single, trivial and inconsequential breach of contract would now approach the management of the proceedings and the award of costs with the provisions of Pt VB of the Federal Court of Australia Act 1976 (Cth) and its analogues in mind. In a practical sense, parties in an ordinarily harmonious employment relationship will accept a measure of sensible give and take in their day dealings without resorting to asserting contractual exactitude from the other. That is not to say persistent and unaccepted, but individually trivial, departures from contractual promises could not be considered to be a substantive breach, as cases such as Laurinda Pty Ltd v Capalaba Shopping Centre Pty Ltd (1989) 166 CLR 623 show. However, the issue of what consequences might flow from a breach does not arise as a consideration of whether a particular matter was agreed to be a part of a contract, except, perhaps, to the extent that it might affect the objective assessment of whether the parties will be taken, in all the circumstances, to have intended that matter to express a binding and enforceable promise: cf Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95 (at [24]-[25]) per Gaudron, McHugh, Hayne and Callinan JJ. 52 It would be unlikely, Farstad contends, for this particular Policy to constitute a contractual component because there were already in existence bullying laws, work health and safety, Commonwealth and State occupational health and safety laws at the time of these events. 53 However, the better view is to the contrary. The existence of legal obligations on the part of both parties, might be thought to be a good reason for contractually binding the parties to a specific method as to the manner in which those statutory obligations are to be observed. The legislation necessarily dictates that the obligations are serious, being an added reason why one would expect the promises to be binding. 54 If one assumes a prima facie expectation that there would be compliance with terms of policies, a question arises as to enforceability of policy terms if they are not deemed to be contractual. The answer to this may well be that if the terms fall short of being contractual or promissory, they may nonetheless constitute actionable representations in circumstances where there is express reliance upon such terms. The difficulty with this approach would be the need to prove additional elements in any claim, specifically reliance. (This approach was taken at first instance in Riverwood but not decided: see Riverwood Full Court (at [36])). 55 In situations where clear language is used and sufficient emphasis is placed upon the need for compliance (implicitly by both parties) with the terms of a company policy, then especially where that goes to fundamental conditions of employment, such as payment and the method of compliance with external statutory obligations, objectively viewed, the parties would be expected to regard such terms as contractually binding. 56 The language used in this instance, taking the Policy as a whole, makes it clear that there is an expectation by the company that there will be mutual obligations. In return for the employee complying with the terms of the Policy, the employer gives a responsive assurance that complaints of non-compliance by other employees will be treated in a certain way. 57 While counsel for Farstad suggested that these elements of the Policy were merely directive, that is, directing the employee as to how to go about making a complaint, on proper analysis they are more in the nature of a bargain with an exchange of undertakings and assurances or promises. 58 It is true, indeed, that there are aspects of the Policy which are merely aspirational. However, the specific obligations considered in this case were clearly ascertainable and quite capable of precise identification. There is thus no uncertainty or vagueness as to what the relevant terms of the Policy mean. Many enforceable contracts contain provisions that can be described as aspirational. These often include recitals or other terms, that are not of themselves individual expressions of discrete rights or obligations, but record, as part of the contractual terms, agreed positions that are available to inform the proper construction of the contract as a whole. Recitals in a contract or deed often provide an aid to the elucidation of the meaning of particular operative terms in a contract, albeit that the recitals themselves do not contain any promises or obligations that are capable of being enforced by law. However, the precise effect of every provision, including a recital, in a contract or deed will depend on the circumstances of the individual case. 59 One argument against policies being incorporated is the power an employer may have to unilaterally vary a policy. It is clear from cases such as Riverwood that this will not necessarily indicate that a company's policy is not part of the contract. Of course, it would be more precise and, therefore, more certain if the wording in a contract of employment referred, not only to any policy currently in place, but also policies as modified from time to time. This would also leave open other debates as to the nature of the alteration: see the discussion by North J in Riverwood (at [111]). The topic is academic in the present situation because it is clear that the terms of the Policy, with which Ms Romero has concern, were those applicable at the time she was employed. 60 It is relevant that the Policy was the subject of an education program at, or contemporaneously with, the offer of employment and was provided to the employee and that the employee was required to sign the Policy. It is also relevant that the benefit provided is consistent with the nature of the benefit which would be expected to be provided by statute and, therefore, a benefit ordinarily conferred in employment contracts. Further, it is relevant that there was regular reinforcement of policies on an ongoing basis. None of those matters, taken alone, may be decisive, but the cumulative effect of those features of this relationship point towards the incorporation of the Policy into the contract of employment. 61 The actual employment context is also particularly pertinent. There would be features of the activity involved in Ms Romero's employment which could readily lead to particularly problematic situations if bullying and discrimination were not precluded. In the context of operating ships, a calm environment is of particular importance, from a safety perspective, not only for the particular employee, but for many who may be affected by departure from such standards. 62 The Policy in this instance was part of the employment contract. The wording of the letter of offer taken with the importance of the Policy terms, the education of employees to reinforce the terms of the Policy are all factors leading to that conclusion. While some parts of the Policy may have been aspirational and some parts directive, Farstad's obligations in relation to dealing with serious complaints of sex discrimination and bullying were contractual promises given in exchange for employees being obliged to comply with the behavioural requirements imposed on employees by the Policy. 63 It is to be noted that no argument was put to the effect that other policies to which the letter of engagement may have referred were such as to affect the characterisation of the Policy in question.

EVENTS LEADING TO AN INVESTIGATION 64 It is necessary next to consider some aspects of the circumstances giving rise to Ms Romero's 7 December expression of concern to Farstad. It should be stressed that this does not entail revisiting the finding that there was no discrimination. The issue is whether Farstad in its response, met its contractual obligations as articulated by its own Policy. 65 The question is whether Farstad's investigation of complaints by Ms Romero complied with its contractual obligations. 66 Ms Romero's employment appears to have run very smoothly until the events the subject of this proceeding. In particular, she worked with three Farstad masters between June 2010 and August 2011, but predominantly with Ms Lorrae Burke, who was the Master of "Far Scandia". Ms Romero's perception was that she had a good working relationship with all three masters, in particular with Ms Burke who had trained her in aspects of the "offshore industry". 67 On 13 June 2011 Ms Romero emailed Mr Barrow to inform him that she had applied to take unpaid leave for the September swing on Far Scandia in order to study for the first half of the Advanced Diploma (Chief Officer/Master) in August. Mr Barrow indicated that he would like to discuss the matter. They met in Melbourne on 16 June 2011. At the meeting, Ms Romero told Mr Barrow that she would self-fund the first block of study whilst on leave without pay. Her evidence was that he did not object to this proposal or suggest that it was unacceptable. (Despite making this offer, her evidence was that she knew of no other officer employed by Farstad who self-funded his or her participation in the course.) Her understanding from Mr Barrow was that if she put herself through the first block of study that Farstad would fund the second block in January 2012 (provided that she passed the first part of the course). Ms Romero completed the first part of the course on 18 November 2011 and was then rostered to commence work on Far Swan from 23 November 2011 to 21 December 2011. She was informed that she would be at sea for that period. She expected to return to Far Scandia after completing the second block of study. 68 Ms Romero's very detailed accounts of the unpleasant time (for both persons) aboard Far Swan need not be revisited. In light of the favourable finding concerning Captain Martin, not all the detail of events need be discussed in this analysis. Suffice it to say that on either account there were serious problems on the bridge between Captain Martin and Ms Romero. These came to a head on 1 December 2011 when Ms Romero made it clear to Captain Martin that she was having difficulties with his style of "Bridge Team Management". She explained that she was used to a more inclusive style of Bridge Team Management where she would be a valued member of the team. Her evidence was that Captain Martin said "you are a liability". This followed an event when Ms Romero felt it necessary to hand back the control of the ship to Captain Martin because she was having a crisis in confidence. What caused the crisis in confidence was the subject of evidence at trial. 69 On the following day, 2 December 2011, the Chief Officer came looking for Ms Romero, informing her that Captain Martin wished to see her on the bridge. The Chief Officer and she went to the bridge and on arrival Ms Romero was informed by Captain Martin that the Chief Officer was there as a witness. Captain Martin, on Ms Romero's evidence, said that he was not at all comfortable with her criticisms of him on the previous day. He explained that he had emailed Mr Barrow to inform him that Ms Romero was incompetent and that he wanted Ms Romero to telephone Mr Barrow to sort it out one way or the other. Ms Romero enquired as to what he meant by this and Captain Martin's response was that Mr Barrow was to sort out whether or not Ms Romero "got off the ship or not". 70 Ms Romero then telephoned Mr Barrow from the ship. He confirmed that Captain Martin had described her as being incompetent. Ms Romero explained some of the events to Mr Barrow, including the fact that she considered Captain Martin was compromising safety. Mr Barrow asked Ms Romero to speak to Ms Barker, also in the human resources area. The call was transferred to Ms Barker and after more conversation, Ms Barker indicated she would speak to Captain Martin. There was discussion about whether or not Ms Romero would be leaving the ship, she making it clear that she did not wish to be forced into a position where she would be asking to be removed from the ship. Ms Barker said that she would phone back after discussing the matter with Captain Martin. 71 Ms Romero returned to the bridge and overheard the end of that subsequent conversation. At the end of that call, Captain Martin handed her the phone at which time she spoke to Ms Barker who explained that she had asked Captain Martin to modify his management style to allow Ms Romero to rebuild her confidence. 72 There was another heated exchange on the bridge between Captain Martin and Ms Romero which Ms Romero says caused her a great deal of distress. At about 1800 hours on 2 December 2011 Ms Romero contacted a third person in human resources, who confirmed that a replacement officer for Ms Romero had been organised. She subsequently disembarked the ship on 4 December 2011.

FARSTAD'S INVESTIGATION 73 Ms Romero returned to her home town of Hobart on 5 December 2011. On the way home from the Hobart airport she received a phone call from Mr Barrow who indicated that he was looking at sending her back to sea. Ms Romero expressed concern about the serious accusations of competency and mental health issues which had been levelled against her by Captain Martin, so the matter was left unresolved. 74 On 7 December 2011, Ms Romero sent an important email to Mr Dick Hall, General Manager, Farstad and to personnel in human resources, specifically, Mr Barrow and Ms Barker, in these terms: … I have been reflecting on my recent trip on board Far Swan and wanted to thank you for your support by assisting in an attempt to improve the situation. It is comforting to know that [Captain Martin's] management style is seen as needing to change. It has certainly taken a toll on me. I am very concerned that [Captain Martin] has made inappropriate comments about me. He has told me that he emailed the Ship Manager and explained to him and Peter Barrow that I am incompetent. To me he also expressed this opinion as well as commenting that I have mental health issues. As Peter Barrow pointed out, I have a very good work history with Farstad as I also do with other companies. Lucy asked [Captain Martin] to modify his management style to assist me to regain my confidence and to deliver my training in smaller blocks. He put the phone down after talking with Lucy, walked over to me and told me that the only reason I was still on board was because he couldn't get rid of me. He explained Lucy's instructions with regard training and so ordered me off the bridge, even though it was the beginning of my four hour watch. [Captain Martin's] behaviour was non relenting and targeted bullying towards me from the first hour of the 12 day trip. Farstad clearly places a high level of importance on safety issues on it's (sic) vessels and [Captain Martin] undoubtedly jeopardised safety for the sake of illustrating his belief that I am incompetent. I have just put myself through the first of two blocks of study for an Advanced Diploma (Chief Officer/Master). Given that Farstad will sponsor the second block commencing in January, I propose for the time being I do not return to sea in order to recover from this difficult experience. [Captain Martin's] inappropriate behaviour needs to change but this is a matter for Farstad management to address. My intention is to continue my professional development through study and return to sea to what has been up until now, a productive and happy working environment with Farstad. … (emphasis added) 75 Ms Romero stresses (quite correctly) that the email was not a "formal complaint" and was not intended to be. No reference whatsoever was made to the Policy in her email. Mr Barrow responded by email in these terms: … Lisa, this matter is still to be properly investigated. [Captain Martin] also has his rights and we will be interviewing both [Captain Martin] and yourself at an appropriate time. As for study leave that is always subject to budget approval for 2012 which we are in the process of finalising with Norway. We will find a mutually convenient time to meet with you within the next fortnight. I am also meeting with my Norwegian colleagues. … 76 Again, this response did not suggest the Policy had been engaged. 77 Somewhat unexpectedly, on the following day, Ms Romero was contacted by human resources to ask if she would participate in an anchor handling course that was to commence back in Western Australia on 12 December 2011. Ms Romero said she attended this course under great strain. Difficulties were experienced due to her response to the recent events. 78 On the last day of the course she was contacted by Ms Barker and requested to attend a meeting in Melbourne on 16 December 2011 about the events on Far Swan with Captain Martin. Ms Barker explained that she and Mr Barrow would be present. Ms Romero was under the impression that it was going to be a casual chat and more like a debriefing. Ms Barker also indicated that a Ms Sally Anderson would also be attending the meeting. Ms Romero ascertained that Ms Anderson took care of discrimination issues and Ms Romero expected that Ms Anderson would be in the meeting to support her. Ms Romero travelled from Perth to Melbourne on the overnight flight arriving in Melbourne, without sleep, only two hours before the scheduled meeting. While those representing Farstad offered her some limited opportunity to recover from that trip, Ms Romero was keen to complete the meeting. 79 Ms Romero recounted the events of the meeting in great detail, having typed them up shortly after it. At the meeting she quickly formed the view that it was more of an interrogation of her and that the questions being advanced were not relevant to the events on the Far Swan. She described the line of questioning as being aggressive and demeaning. She perceived the questions as being consistent with and supportive of complaints against her by Captain Martin. Ms Romero said that this meeting had a serious impact on her health. 80 In her typed record of this meeting, Ms Romero recorded, amongst others, the following exchanges (with "Cam" referring to Captain Martin): Lucy: But what are your plans? Are you aiming for promotion? Lisa: At the moment I think a lot of things are uncertain? Lucy: Did you expect a chief officer's position when your studies were complete? Lisa: My priority was to advance my knowledge. … Sally: How many swings have you done on Far Scandia? Lisa: About 8. Sally: After 8 swings did you feel competent at driving? Lisa: I felt competent at driving a lot earlier than that. Sally: So after 8 swings you felt competent at driving. As far as studying goes, we think it would be better for you to go back to sea now and we can consider studying some time (sic) in the future. I was employed with Farstad for 6 years before I got sponsored to study. … Sally: We will consider training in the future but for now we will arrange for you to go back to sea. When can you go to sea? Lisa: I have a contract on selling my boat in early January. It's subject to sea trials and slipping, so I need to be in Hobart for that. I will not risk the sale of the boat because of Cam's actions, they have been very injurious as it is. Sally: How was your time with Lorrae? Lisa: What do you mean? Sally: How was Lorrae's training on board Far Scandia? Lisa: I have been responsible for a lot of training during my career. I've worked for years training young people how to sale square rig ships. Lorrae's training was good, she an expert at it. Sally: Did you ever have any problems with Lorrae's training? Lisa: No. … Sally: How was Cam's training? Lisa: There was nothing wrong with the method of Cam's training, the problem was the way he treated me. I've sailed with about 15 different masters, I've never experienced something like this before. His victimisation of me was so bad that I started to get anxious and to shake when he came to the bridge. He constantly criticised me and put me under unnecessary pressure. If I fumbled with a piece of equipment that was new to me, he would make comments like "A lot of things badly done", or curse. Sally: Some people are just like that, more formal and less friendly. Lisa: When you see a person treat you in a manner very differently to how they treat other crew members and they tell your colleagues that you were fucking around with and broke a piece of equipment that you haven't touched, you conclude that something is wrong. Sally: You were anxious when you were on the bridge. Lisa: No, I was anxious when Cam came to the bridge. Sally: You were anxious on the bridge. Where was the ship when this fumbling occurred? Because if it's within 500m, clearly this is serious. Lisa: Well outside 500m. Sally: Why did you hand the ship back to Cam. Lisa: Cam kept calling me back to the chart table to look at a diagram. I was getting concerned because I was loosing (sic) the time I needed for the approach. The distances and margins that I'm comfortable with would not be available if the conversation at the chart table continued. I explained to Cam that I was having a crisis of confidence and asked him to take the ship back. Cam took the ship alongside the platform and asked me where my confidence had gone. I said I was finding his bridge team management style difficult. And that was my crime. … Sally: When Cam came to the bridge was the ship ready to go into the 500 m zone. Lisa: No, the thrusters were not online and we were at full speed. Sally: Why weren't the thrusters online? Lisa: Because we were well over a mile off the platform. Sally: Why hadn't you started them up? Lisa: I'm not going to start up thrusters more than a mile off the platform. Sally: Why weren't you closer to the platform? Why didn't you increase speed? Lisa: We had a scheduled arrival time and we were on schedule. Sally: But you could have increased speed and had more time for the approach. Lisa: We were coming from harbour direct to the platform and we were at maximum operational pitch. Sally: So you couldn't go any faster. Lisa: No. Sally: Where was the ship when you handed it back to Cam? Lisa: A mile off the platform. Sally: Does Lorrae think you're a competent ship handler? … Lucy: This is a report from Lorrae, she says you have problems with supervision. On an occasion when she was supervising you, you said she didn't supervise Andrew in the same way. … Sally: … What about the simulator. How was that? Lisa: It was bad timing for me because my confidence is very low after the events on Far Swan. The simulator training is good but the simulation has glitches. Sally: I can't imagine a safer environment, it's not like you can damage any thing (sic). Lucy: This is a report from the simulator, they said you were reluctant to drive. Lisa: Did you send me on a simulator training course and use it to assess me? You shouldn't do that without me knowing. Lucy: I didn't know you were on the simulator course until yesterday. Lisa: I've never stepped foot on an anchor handler. That's wrong to do that. Lucy: Are you reluctant to take risks? Lisa: I've sailed twice around the world in a 47 foot yacht and taken my children to Antarctica and Sub Antarctic Islands on the boat. I've been employed as a square rig master. I doubt you employ another person as prepared to take risks as I am but they are calculated risks. Farstad doesn't pay me to take unnecessary risks with their ships. Lucy: Do you think your (sic) a good ship handler? Lisa: Yes. Lucy: These reports indicate otherwise. … Lucy: Cam says he didn't tell you you had mental health issues but he said he was concerned about your mental health. What did he say because there is a big difference? Lisa: I can't remember but I don't think there is a big difference between the two statements. … Peter: I was the one who sent you on the simulator course. We try to have three deck officers, three engineers and three IR's and I knew you were around. I've spoken to Lorrae and she has told me that she almost felt attacked by you. She said the mood of the ship improved when you got off. It was news to me. Cam was the Captain of the ship and you need to go and learn how to behave on board. He was concerned for you when he contacted the office. He was worried about you over the Christmas business. … Lisa: Cam bastardised me for the duration of the trip, he wasn't concerned for me. Peter: That is a big allegation to make and I'm not just taking your word on that. Lisa: It's the truth. Peter: You need to go and learn how to behave on board. Lisa: The company policies you plaster on the bulkheads about equal opportunities and bullying are bullshit. Peter: Now hang on, if we didn't take these things seriously we wouldn't have flown Lucy to Karratha to interview Cam and we wouldn't have you here. We go to a lot of trouble to get these things right. … Sally: I don't care how often some one (sic) says the f word but I can't stand the c word. Lisa: Maybe that's just a matter of personal preference. Sally: You have an obligation to tell us who. Lisa: It's not my war. Sally: You keep talking using aggressive terms like battle and war. How can we fix it if you don't report it, you should report it to the office. Lisa: I can assure you I will not be calling the office every time some one (sic) tells me to fuck off or something like that. … Peter: I have no knowledge of Cam behaving in that way. Sally: We would like to get you and Cam in to the office. Lisa: Do you seriously want me to break down like this in front of Cam? [I was crying and shivering from the combination of cold and the emotional drain, the meeting had been more than two and a half hours long at this stage] Sally: Well maybe in time. Lisa: I don't ever want to be in the same room as Cam. I don't want any more to do with this. I don't plan to take it any further. Peter: You may be required to answer some questions. Lisa: Ok. Please excuse me, I'm extremely cold. … Peter: This could become a union matter. Sally: Are you a member? Lisa: I'm not a member. Peter: We'll get back to you between Christmas and the new year, or early in the new year. 81 From these extracted passages, it can be seen that the discussion on 16 December 2011 extended very much into pressing Ms Romero on concerns about her own competence, including her temperament. These were the very matters raised by Captain Martin. Unsurprisingly, as that topic was entirely unexpected, she was particularly concerned about this meeting. 82 While Farstad would certainly be expected and required to make enquiries concerning safety issues and competency, especially when a ship's master had raised concerns, the complaint advanced by senior counsel for Ms Romero is that Farstad was purporting to conduct an investigation into Captain Martin's conduct pursuant to the Policy, when in fact the main investigation was into his assertions against Ms Romero. The issues were entirely different. Further, Ms Romero was not given notice that a formal investigation was being conducted, which had never been her wish or intention. 83 Farstad should have dealt with the two issues separately on deciding she had raised a formal complaint, and should certainly have dealt with it in accordance with the Policy, which it did not. 84 At no time did Farstad adequately document any detailed account by Ms Romero of her complaints or document the response of Captain Martin. The focus with Captain Martin was listening to his complaints about Ms Romero. Other witnesses were not interviewed, such as the engineer on Far Swan, although reference was made to him in the interview of 16 December 2011. 85 There are other difficulties with the investigation which, while making every proper allowance for the fact that it need not be conducted to the standard of, say, a police investigation, nevertheless had the capacity to indicate a partiality towards Captain Martin and something of a prejudgement of the issues. For example, in an email from Mr Barrow to Captain Martin on 5 December 2011, Mr Barrow asked Captain Martin to give a "full report on her conduct towards you" at a time when he was well aware that Ms Romero also had serious complaints about Captain Martin. Similarly, in an email a month later from Ms Barker to Captain Martin, the Captain was given reassurance that he should not be overly concerned about the investigation. No such assurances were ever offered to Ms Romero. 86 Ms Romero had been informed that Farstad would revert to her early in the new year. On 14 February 2012 (not particularly early in the new year), in the form of a letter dated 9 February 2012, she received written advice of the outcome. This was after the date her study was to commence. 87 On the topic of the study, in the 16 December 2011 interview, Ms Barrow, Ms Barker and Ms Anderson expressed their opinions to Ms Romero that she should return to sea before embarking on further study, even though Ms Romero had agreed to fund it and the study was already scheduled for early February 2012. She had already spent $20,000 of her own money and lost income of about $40,000 in order to do the first half of an Advanced Diploma (Chief Officer/Master). 88 Following the meeting Ms Romero made requests for copies of the written complaints Captain Martin had made against her. These were not provided by the company, with Ms Barker explaining via email dated 31 January 2012, that they were confidential as they constituted part of the investigation. The same response was given in relation to reports about her performance in the simulator training course and a report from Ms Burke. 89 The ultimate report, written by Ms Barker and dated 8 February 2012, ran to some 94 paragraphs. It was headed "Investigation Report - Workplace Grievance of Lisa Romero". According to the report, some of Ms Romero's allegations were said to be contained in the 7 December 2011 email and others from the interview on 16 December 2011 in Melbourne. 90 The company rejected the claims, concluding that there had been a "clash of personalities and communication styles". 91 The report indicated that the company (through Mr Barrow), in conducting the investigation, had "sought to follow as closely as possible, the approach set out in [the Policy]". The approach set out in the report was described as follows: … 9. The Policy requires that formal management of a complaint may be appropriate where the complaint is made against a more senior member of staff. In the circumstances, it is appropriate that the Grievance is managed as a formal complaint. 10. Where a formal complaint is investigated, the investigator is required to interview the complainant, the alleged harasser and other employees as appropriate. I have conducted these interviews and retained documents setting out the information provided by each witness. 11. The following interviews, formal responses and emails were obtained by me and were collated as evidence in the investigation: (a) initial phone conversations with [Captain Martin] and Ms Romero separately; (b) email statements from Ms Romero dated 6 and 7 December 2011; (c) conversation with [Captain Martin] on board Far Swan on 10 December 2011; (d) email from Lorrae Burke, Master, Far Scandia dated 12 December 2011; (e) feedback … on Ms Romero's simulator training session on 16 December 2011; (f) interviews with Ms Romero conducted by Sally Anderson, … and myself in the Melbourne Office; (g) telephone interview with [Captain Martin] on 21 December 2011 conducted by Ms Anderson, Peter Barrow, General Manager Human Resources, and myself; (h) telephone conversations with Alan Payard, Chief Officer on Far Swan during the period of the allegations and Courtney Sexton 2nd Mate on Far Swan previously. (i) formal response from [Captain Martin] regarding the allegations dated 10 January 2012. 12. The Policy requires that once an investigation has been completed, a confidential written report is to be prepared outlining the nature of the complaint, the steps taken in the investigation process, and recommendations. This Report is the confidential written report prepared to comply with the policy requirement. 13. The Policy requires that the report is submitted to (in this case) the General Manager HR for determining any disciplinary or other action to flow from the Report recommendations. Accordingly, this Report is hereby submitted to Peter Barrow, General Manager HR. 14. The Policy provides that the concerned person and the alleged harasser are to be advised of the outcomes of the complaint in writing and requested to return a signed copy of the correspondence to the GM HR or Staff Administration Manager acknowledging that they have read it. 15. A copy of suggested correspondence to Ms Romero and to [Captain Martin] is annexed to this Report for consideration. (emphasis added) 92 A series of recommendations to Mr Barrow was made in the report. Mr Barrow in a letter to Ms Romero indicated that of those he accepted the following recommendations which he conveyed to her: 1. You should be offered training in managing any apprehension when facing unfamiliar tasks. If you wish to explore this further please let me know. 2. Noting you reported feeling that you would be penalised for undertaking further studies, that an appropriate time for you to be released to attend further study has not yet been identified, and that you were dissatisfied with the on-the-job training provided during your most recent swing on the Far Swan, you should be asked whether prior to attending further study you wish to first gain further experience that may be available with a few more swings. Please let me know when you prefer to undertake further study (including whether you wish to undertake further swings first and if so, how many). 3. In the immediate future, you should return to sea on a different vessel, so you can gain the necessary experience to move forward without a relationship with the master strained by (for the moment) a clash of communication styles. … 93 Ms Romero was requested to sign a declaration at the foot of the 9 February 2012 letter to her containing the report so as to confirm that she understood the letter and the outcomes of the formal investigation. 94 She declined to do so. Ms Romero's solicitors responded on 21 February 2012 firmly indicating that Ms Romero would not sign the declaration. They observed that no proper procedure had been followed to deal with the assertion by Captain Martin that Ms Romero was incompetent, other than "inappropriate aggressive questioning" on 16 December 2011. The letter continued: (1) … To be assessed as 'incompetent' is extremely detrimental to any Officer. To be denied a copy of the assessment report by a Master who had assessed her as 'incompetent', as well as any other documents, presumably in support of this assessment, which have been obtained from other sources, offends all the principals (sic) of natural justice, as well as your own company's performance management processes. To state that my client's competency issue is separate to your purported investigation which led to the Report of the 9 February is wrong. [Captain Martin's] accusations of 'incompetency' is not mutually exclusive from the events that took place on 'Far Swan' between himself and Lisa Romeo. Our client says [Captain Martin's] unfair assessment of her competency forms an integral part of her claim of discrimination and unfair treatment in the workplace. She claims that he unfairly assessed her as incompetent as a bullying tactic to get her off the ship. In fact, when she emailed you on 7 December stating that she welcomed an investigation she had primarily in mind that you were investigating [Captain Martin's] report on her competency and the reasons for a negative assessment. To this extent, in our view, the purported investigation refer (sic) to in your correspondence of the 9 February is questionable both to fairness, accuracy and motive. Again, we ask that a copy of [Captain Martin's] assessment report on Lisa Romero's competency be forwarded to us. We also require assessment reports (via email) made by Lorrae Burke which refer to Ms Romero's competency as well as an assessment report from the Simulator Training Centre on her competency when she attended a training course in Perth on Anchor Handling. … (2) Ms Romero referred to a number of incidents of alleged discriminatory behavior (sic) and bullying by [Captain Martin] in her email to you on the 7 December 2011. You state this forms the basis of her complaint. This is incorrect. The email of the 7 December does not purport to be a detailed complete formal complaint of "bullying, bastardization and victimization" by [Captain Martin]. The substantial part to that email referred to issues of the alleged incompetency, and our client also referred to a number of events that had taken place on 'Far Swan' that she thought were discriminatory. Under intense interrogation on the 16 December 2011 by yourself, Lucy Baker (sic) and Sally Anderson, in your Melbourne Office, she alluded to further incidents of alleged discriminatory action by [Captain Martin]. Much of what was raised in that meeting were matters unrelated to any problems that our client had had with [Captain Martin] in respect to his actions and attitude towards her whilst on 'Far Swan'. Our client states that she was given little chance of discussing in full details all the events that took place on 'Far Swan' with [Captain Martin] which would form the basis of any formal complaint. In fact, she reports that she was so traumatized by the intensity and vitriol of the questioning that she left the meeting in total shock. She is now on sick leave with supporting medical certificate because of this treatment. … What we do know as factual is that [Captain Martin] the alleged perpetrator of discriminatory practices was not put through the rigid and demeaning process that our client was put through on the 16 December 2012. What is also clear is that our client by indicating that she had been discriminated against by [Captain Martin] was put through an unexpected interrogation under the guise of an investigation of a complaint. Furthermore, one of the recommendations of that purported investigation penalizes our client by finding she needs training in 'managing apprehension when facing unfamiliar tasks'. This had never been previously canvassed to our client nor has she had any opportunity to respond to it. She does not even know where the complaint or assessment came from, as it was unrelated to the investigation. A disturbing factor is that you have approved a recommendation which postpones our client's approved study leave, which she was scheduled to start in January 2012. It appears you have done this primarily on the basis, that she was dissatisfied with [Captain Martin's] on-the-job training while on 'Far Swan'. As a result, it would appear that she has been disadvantaged and penalized for raising the matter of discriminatory acts of [Captain Martin]. From the report we can only conclude that your Ms Lucy Barker determined that the alleged acts of discrimination of [Captain Martin] towards our client were nothing more then (sic) a personality clash and difference of communication styles. It follows then, that 'Farstad', as both [Captain Martin's] and Ms Lisa Romero's employer, must view all the acts of alleged discrimination against [Captain Martin] as nothing more then (sic) 'reasonable management actions', which they will undoubtedly defend as such in any subsequent action that Ms Romero may have open to her. (emphasis added)

FARSTAD DID NOT COMPLY WITH THE POLICY 95 The Policy was breached in a number of respects. The first is that there was no decision by Ms Romero to pursue any action under the Policy. Put another way, she made no decision to initiate a formal complaint and trigger an investigation under the Policy. This is a central plank to the argument on appeal. Ms Romero's email of 7 December 2011 was certainly not in terms a formal complaint, even though it was treated in that fashion by Farstad. Indeed, to the contrary, Ms Romero made the point expressly in that email that Captain Martin's behaviour was "a matter for Farstad management to address". A formal complaint which conformed with the Policy would be expected to articulate the specific complaints and, in view of the seriousness of the matter, make it clear that the employee was electing to lodge a formal complaint. According to the Policy, such a formal complaint needs to be lodged in writing and procedures are put in place so that when an investigation commences no victimisation can take place. A formal complaint should not be inferred by receipt of an email from an employee which makes no reference whatsoever to the Policy, makes no reference to a formal complaint and does not specify details of a formal complaint. 96 An appropriate option in the circumstances, as expressly foreshadowed by the Policy, would be for a suitable representative of Farstad, such as Ms Barker, to meet with Ms Romero to explain to Ms Romero her options under the Policy and to explain to her in broad terms the consequences in exercising any of those options. 97 The procedure adopted by Farstad did not comply with 2.6.2, the second 2.6.3 and 2.6.4 of the Policy. 98 Secondly, Farstad failed to properly or fully document the investigation, contrary to 2.6.1 and 2.6.4 of the Policy. The initial telephone contact with the human resources department on 2 December 2011, which triggered Farstad treating the Policy as being invoked, was recorded on post-it notes. While there could be no criticism of a temporary method of recording, one would expect more formal treatment of the recording of a complaint soon after it was made if Farstad was treating such a complaint in the crucial manner it suggested and as required by the Policy. There were also on proper analysis, inadequate records of the interview with Ms Romero which occurred on 16 December 2011. Ms Romero herself prepared extensive typed notes of the entire exercise, which are substantially more detailed than the notes taken by those representing Farstad. 99 But most importantly on this topic, there was a general failure to carefully and systematically investigate the complaints of Ms Romero once the company had determined that they should be treated as a formal complaint. Strangely, the company chose to interview Captain Martin first, albeit very briefly, before interviewing Ms Romero. Ms Barker flew over 3000 kms from Melbourne to Dampier and boarded Far Swan to put the brief and skeletal complaints to Captain Martin and while there, to give a training session on harassment and discrimination. The detailed allegations from Ms Romero had not then been collated by Farstad, were not capable of being put to Captain Martin and were not put to him. Ms Barker did not interview other potential witnesses on that visit. Despite his having mentioned that he had made notes on 21 December 2011, Ms Barker did not ask Captain Martin for those notes on that visit or subsequently. Farstad never obtained a copy of his notes before Captain Martin destroyed them. 100 Further, the conduct of the 16 December 2011 interview was of serious concern. To the limited extent Ms Romero was given any proper notice of the true purpose of the interview, she understood it was to deal with her concerns in relation to Captain Martin, rather than vice versa. An examination of her, effectively, unchallenged account of the occasion, however, reveals that she was ambushed with a sequence of complaints or assertions against her competency. 101 In fairness, there are certainly indications from the internal documents and the communications to Ms Romero that Farstad thought it was complying with the Policy and discharging its functions with care and urgency. The analysis set out above, however, indicates the ways in which Farstad's performance fell short of the standard and procedure promised under the Policy. Essentially, it was the rolling up of the concerns Ms Romero had expressed about Captain Martin with his complaints against her that caused the major difficulties. All indications were, as contended by Ms Romero, that Farstad formed the view that Captain Martin's complaints were considerably more serious and likely to be substantiated. With a focus on his complaints about Ms Romero's alleged incompetency (complaints which were ultimately rejected), her own complaints about his failure to comply with the Policy were not effectively examined and were lost. 102 The two lines of inquiry should have been kept separate. It was appropriate for the company to pursue Captain Martin's challenges about Ms Romero's competency, but in doing so, there were procedures designed by the enterprise agreement which were to be followed. It was also appropriate, indeed, promised under the contract that if a complaint were made under the Policy, it would be pursued in accordance with a certain standard. Not only was no formal complaint actually lodged, but the standard applicable under the Policy, had it been lodged, was not met. The Policy, and thus the contract, was breached by Farstad.

CROSS-APPEAL 103 The cross-appeal should be dismissed for the reasons given by the primary judge. His Honour referred to s 54(1) and s 55 SRCA which are relevantly in these terms: 54 Employee not to have right to bring action for damages against employer etc. in certain cases (1) Subject to section 55, a person does not have a right to bring an action or other proceedings against his or her employer, or an employee of the employer in respect of: (a) an injury sustained by an employee in the course of his or her employment, being an injury in respect of which the employer would, apart from this subsection, be liable (whether vicariously or otherwise) for damages; … 55 Actions for damages-election by employees (1) If: (a) compensation is payable under section 39, 40 or 41 in respect of an injury to an employee; and (b) the employee's employer or another employee would, apart from subsection 54(1), be liable for damages for any non-economic loss suffered by the employee because of the injury; the employee may make an election in accordance with subsection (2) to institute an action or proceeding against the employer or other employee for damages for that non-economic loss. … (4) If an employee makes an election: (a) subsection 54(1) does not apply in relation to an action or other proceeding subsequently instituted by the employee against the employer or another employee for damages for the non-economic loss to which the election relations, and (b) compensation is not payable after the date of the election under section 39, 40 or 41 in respect of injury. … 104 His Honour also referred to the definition of "injury" in s 3 SRCA, which is, relevantly, in these terms: 3 General definitions … injury means: … (b) an injury (other than a disease) suffered by an employee, being a physical or mental injury arising out of, or in the course of, the employee's employment; … 105 The primary judge referred to the second reading speech on the introduction of the Seafarers Rehabilitation and Compensation Bill 1992 (Cth) in which it was stressed that common law negligence actions were counter-productive to the fundamental objectives of the Act, which were "to help injured employees rebuild their lives and return to employment as quickly as possible". It was explained that the new legislation would restrict common law actions against an employer or fellow employee to non-economic losses and cap the amount of damages that a court may award. Similar sentiments were expressed by members at the second reading of the Commonwealth Employees' Rehabilitation and Compensation Bill 1988 (Cth) where "the common law negligence action which bases its entitlement on proof of fault" was deemed "a costly, inefficient and inappropriate mechanism for compensating injured workers". 106 His Honour was satisfied that it was plain that the Parliament did not intend that the SRCA should have the effect which Farstad contended, namely, to bar an action for breach of contract to which injury was largely incidental. In reaching that conclusion his Honour applied the same process of reasoning expressed in State of South Australia v McDonald (2009) 104 SASR 344 (at [196] and [204]) by Doyle CJ, White and Kelly JJ in respect of the Workers Rehabilitation and Compensation Act 1986 (SA). The central focus of s 54 SRCA was to ask what was being claimed. The answer to that question, according to the primary judge (at [50]), was that Ms Romero claimed a breach of the SDA which, alone, gave the Court jurisdiction. Her contractual claims fell under its accrued jurisdiction. He concluded (at [53]) that s 55 SRCA did not arise in the case before him. 107 There is no doubt that the claim by Ms Romero in the proceeding below was a claim "in respect of" an alleged breach of the SDA as well as a claim for breach of contract in the Court's accrued jurisdiction. As the second reading speech makes clear, s 54 SRCA is plainly directed towards personal injury claims brought under the common law. 108 To the primary judge's reasoning may be added the observation that s 6 SRCA provides: 6 Injuries suffered by employees A reference in this Act to an injury suffered by an employee is, unless the contrary intention appears, a reference to an injury suffered by the employee for which compensation is payable under this Act. (emphasis added) 109 Clearly damages either under the SDA and the Australian Human Rights Commission Act 1986 (Cth) (AHRCA) or at common law for breach of contract are not compensation "payable under this Act" (i.e. the SRCA). The claim under the SDA is only capable of being pursued by virtue of s 46PO of the AHRCA. 110 Further, there could not possibly be any discernible policy reason to exclude such claims from the industry in which these parties were participants.

CONSEQUENCE OF FARSTAD'S NON-COMPLIANCE 111 The brief grounds of appeal and the succinct submissions do not specifically contend that the employment contract was repudiated, but they do contend it was breached. We were told in oral submissions that a contention was made before the primary judge that the contract had been repudiated. It seems clear that this contention is repeated on the appeal. Farstad rejected the contention at first instance and on appeal on the basis that the efforts to return Ms Romero to work made it clear that Farstad wanted the contract to remain on foot. That may be accepted. However it does not provide a complete answer. 112 A breach of a contract by repudiation occurs when a party evinces an intention no longer to be bound by it or to fulfil it only in a manner substantially inconsistent with the contractual obligations. Repudiation will arise where there is conduct consistent with a renunciation either of the contract as a whole or a fundamental obligation under it: Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd (2007) 233 CLR 115 (at [44]). Repudiation of a contract is a serious matter and is not to be lightly found or inferred: Shevill v Builders Licensing Board (1982) 149 CLR 620 (at 633). To amount to a refusal to perform the contract, the breach must be sufficiently serious: see, for example, Re Rubel Bronze and Metal Co Ltd [1918] 1 KB 315 (at 322); Abu Dhabi National Tanker Co v Product Start Shipping Ltd (No 2) [1993] 1 Lloyd's Rep 397 (at 407) and Suisse Atlantique SociÉtÉ d'Armement Maritime SA v. NV Rotterdamsche Kolen Centrale [1967] 1 AC 361 (at 394, 429, 435). 113 The investigation of Ms Romero's complaints was scant indeed. There was no proper appreciation of the detail of her concerns. If there were to be an investigation, even though it was not requested, those details needed to be put to Captain Martin to ascertain his response. Any relevant witnesses needed to be interviewed in order to reach findings. Detailed records should have been kept. 114 A major complicating factor was that there were two parallel investigations in play. While that may not be particularly unusual, the vice was in the merging of the two rather than treating them separately in accordance with the standards applicable to each of the alleged complaints. 115 Ms Romero justifiably considered that she had been treated very unfairly and in a way that expressed to her a view that her employer was either not taking her complaints seriously or was misusing her complaints in a way that her own competence had assumed the major focus. Her reaction was entirely legitimate. 116 It may be that this engendered in Ms Romero an objectively justified view that Farstad had not complied, and would not thereafter comply, with its contract with her. 117 Although on a number of occasions Farstad indicated that it proposed that Ms Romero return to her duties at sea under a different master to regain confidence, the test as to repudiation is objective: DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423 (at 431). The handling of the matter by Farstad in a manner entirely inconsistent with the Policy, was such that Ms Romero quite reasonably suffered a complete lack of confidence in her employer. In those circumstances, objectively viewed, it was entirely probable and reasonable that Ms Romero would not wish to return to work with Farstad. 118 It may be that Farstad repudiated the contract of employment by performing it in a manner fundamentally different from that agreed between the parties. The issue of repudiation was not dealt with by the primary judge (as he found no breach). It was barely touched on appeal before this Court. The question of damages must be remitted for trial. That trial should also encompass the question of repudiation. It may be that notions of repudiation are best analysed by properly characterising the nature of the terms in question; whether warranty, condition or intermediate term: Koompahtoo Local Aboriginal Land Council (at 137) per Gleeson CJ, Gummow, Heydon and Crennan JJ. Whether additional evidence should be permitted should be left to the trial judge. Such investigation should in no way compromise the existing findings of credit that involved Captain Martin. However, Ms Romero is entitled to have damages for breach of contract assessed, the measure of which may depend upon the character of the terms breached, and whether Farstad's conduct was repudiatory.

CONCLUSION 119 The following orders should be made:

1. The appeal be allowed.
2. The cross-appeal be dismissed.
3. The orders made by the Court dated 6 May and 22 May 2014 be set aside and in partial replacement thereof: (a) the Court declares that the respondent breached its employment contract with the applicant; (b) the respondent pay to the applicant the costs of the hearing.
4. The question of repudiation and any associated questions such as affirmation or election and the question of damages be remitted to a judge of the Court for rehearing.
5. The respondent pay the applicant's costs of the appeal and cross-appeal. I certify that the preceding one hundred and nineteen (119) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Chief Justice Allsop, Justice Rares and Justice McKerracher.