Zhang v The Royal Australian Chemical Institute Inc

REASONS FOR JUDGMENT 3 The appellant applied under s 170CP of the Workplace Relations Act 1996 (Cth) (the Act) for an order under s 170CR of the Act in respect of a claim that the respondent had contravened s 170CK of the Act by terminating the appellant's employment with the respondent. 4 The respondent applied to have the proceeding dismissed on the ground that the proceeding disclosed no cause of action under s 170CK(2)(e) of the Act: O 20 r 2 of the Federal Court Rules. 5 On 29 October 2004 Finkelstein J dismissed the appellant's application having concluded that her case was 'utterly hopeless'. 6 On 18 November 2004 the appellant filed a Notice of Appeal consisting of 22 pages (the first appeal). 7 On 3 December 2004, on the application of the respondent, Finkelstein J made an order that the appellant pay the respondent's costs of the proceeding incurred on or after 28 June 2004, such costs to be taxed on a party and party basis. 8 On 21 December 2005 the appellant filed a Notice of Appeal from that decision (the second appeal). 9 For the reasons which follow, both the first and second appeals must be dismissed. 10 The appellant was employed by the respondent as an accountant. She commenced work on 8 December 2000 and her employment was terminated on 12 December 2003. The reasons given by the employer for the termination of her employment are contained in a letter dated 12 December 2003 from the Chair of the respondent to the appellant: 'I refer to the meeting held at VECCI on Monday 8th December in relation to your written response to concerns raised in a previous meeting on Monday 1st December. Those present at the meeting on Monday 8th December in addition to yourself and myself were Ms Libby O'Connor from VECCI and by telephone, Mr Steve Mujovic from the Australian Services Union. In that meeting we discussed at length the matters of concern that had been raised by your employer including: ● failure to obey written lawful instructions; ● the downloading of email addresses of all the "Treasurers" and others onto your personal computer following suspension from all duties pending a meeting to clarify the employers concerns; ● Revealing of confidential information about a settlement between the RACI and another employee in an open email to the RACI's Treasurers and others; and ● The continued use of the RACI's email addresses to distribute confidential information contrary to an instruction not to do so at the conclusion of the meeting on December 1st. You were given a further opportunity at the meeting to add to your written response of December 3rd as to why your employment should not be terminated. We also considered further representations made on your behalf by the ASU. The Board has given full consideration to both the concerns raised and your verbal and written responses to them. The Board has determined that you have failed to provide a reasonable explanation. As such you leave the Royal Australian Chemical Institute no option but to terminate your employment. You are hereby given four weeks notice of termination of employment. You will be paid in lieu of this notice and you will not be required to work the notice period. With respect to collecting all personal belongings, I am prepared to meet with you at the RACI Offices at 9.00am Tuesday morning December 16th, to ensure that this can occur. Further, at that time you are required to return to the RACI all material that is the property of the RACI. Could you please contact me on 08 8381 3192 to confirm this is a suitable time. Following this meeting, all of your entitlements including your notice period will be paid to you via a cheque.' 11 Notwithstanding the reasons given by the respondent, the appellant complained that her termination was for a reason prohibited by s 170CK(2)(e) of the Act. 12 Section 170CK(2)(e) provides: 'Except as provided by subsection (3) or (4), an employer must not terminate an employee's employment for any one or more of the following reasons, or for reasons including any one or more of the following reasons: … (e) the filing of a complaint, or the participation in proceedings, against an employer involving alleged violation of laws or regulations or recourse to competent administrative authorities;' 13 Section 170CQ provides: 'In any proceedings under section 170CP relating to a termination of employment in contravention of section 170CK for a reason (a proscribed reason) set out in a paragraph of subsection (2) of that section: (a) it is not necessary for the employee to prove that the termination was for a proscribed reason; but (b) it is a defence in the proceedings if the employer proves that the termination was for a reason or reasons that do not include a proscribed reason (other than a proscribed reason to which subsection 170CK(3) or (4) applies).' 14 Finkelstein J said that section 'speaking loosely, reverses the onus of proof in relation to the reason for a dismissal'. I think that is an appropriate description of the effect of s 170CQ. 15 If the employee asserts as a fact that the employee's employment has been terminated for a proscribed reason in s 170CK(2) of the Act, the employee will be entitled to an order under s 170CR unless the employer proves that the termination was for a reason or reasons that do not include a proscribed reason. 16 As I have already indicated, the appellant relied upon the proscribed reason in s 170CK(2)(e) and asserted that her employment had been terminated for one of the matters in that paragraph. 17 She swore an affidavit in support of her application in which she asserted that she had made a number of complaints to the respondent about the conduct of officers employed by the respondent and, in particular, a Mr Smallridge, who was formerly the national Director of the respondent. 18 In that affidavit, she did not assert that she had made any complaint to any party apart from the respondent itself. 19 In He, in the matter of an application for Writs of Mandamus and Certiorari or Constitutional Relief against Lewin [2004] FCAFC 161 ('He'), the Full Court of this Court discussing s 170CK(2)(e) said at [44]: 'The fact that no application was made to the Commission in respect of any ground specified in s 170CK may not have been an accident. At the time of his application, and in the hearing before Commissioner Lewin, Mr He was legally represented. So far as the evidence before this Court goes, it appears that the only complaints Mr He made about the issue of the crane capacity and the issue of underpayment of superannuation were complaints made to management of the second respondent. Section 170CK(2)(e) is directed to the making of complaints to outside authorities, either by way of instituting proceedings against an employer, or by way of making allegations to officials who are empowered to investigate such allegations. The ground would not be established by the making of complaints directly to the employer alone.' 20 The appellant's husband (Mr He) who was the applicant in that case sought and obtained leave to put the appellant's arguments on this appeal. The appellant argued that the decision in He was wrong. 21 The Court would follow a previous decision of the Full Court unless satisfied that that decision was plainly wrong. 22 In my opinion, there is no reason to doubt the correctness of the construction of s 170CK(2)(e) arrived at in He. Indeed, for the reasons which follow, I agree with that construction. 23 Three circumstances can trigger the operation of the proscribed reason in s 170CK(2)(e). First, the filing of a complaint by the employee. Secondly, participation by the employee in proceedings against an employer. In both those cases they must involve alleged violation of laws or regulations by the employer. The punctuation supports that construction. Thirdly, recourse by the employee to competent administrative authorities will trigger the operation of the section. All three circumstances are directed to complaints to parties other than the employer. 24 However, it was argued by the appellant that a complaint to the employer would be caught by the subsection. 25 In my opinion, that cannot be so on a plain reading of the subsection. Section 170CK(2)(e) speaks of 'filing' a complaint. An employee who complains to his/her employer does not thereby file a complaint. A complaint can only be filed somewhere and with someone other than the employer and probably only to a Court or Tribunal. That is consistent with reading the 'filing of a complaint' with the words that follow 'or the participation in proceedings', namely 'against an employer involving alleged violation of laws or regulations'. 26 The use of the word 'against' in s 170CK(2)(e) also means that the complaint must be to someone other than the employer. An employee who complained to the employer about the employer's conduct would not be filing a complaint 'against' that employer. 27 Schedule 10 to the Act is the Convention Concerning Termination of Employment at the Initiative of the Employer, relevantly described as 'Termination of Employment Convention 1982'. 28 Article 5 of that Convention states: ' The following, inter alia, shall not constitute valid reasons for termination: (a) union membership or participation in union activities outside working hours or, with the consent of the employer, within working hours; (b) seeking office as, or acting or having acted in the capacity of, a workers' representative; (c) the filing of a complaint or the participation in proceedings against an employer involving alleged violation of laws or regulations or recourse to competent administrative authorities; (d) race, colour, sex, marital status, family responsibilities, pregnancy, religion, political opinion, national extraction or social origin; (e) absence from work during maternity leave.' 29 The Act makes those reasons for termination unlawful. The purpose of the Article is to prevent retaliation against employees who make complaints to third parties against their employers: International Labour Organisation 'Protection against Unjustified Dismissal' Report of Committee of Experts, International Labour Office, 1995, pars 115-117. 30 For all those reasons, in my opinion, the decision in He is, with respect, correct. 31 Because the subsection serves the purpose of protecting an employee against retaliation by an employer when the employee does one of the three matters in that subsection, it follows that the subsection contemplates that the employer must be aware of the complaint or the participation in proceedings or the recourse to an administrative authority. Otherwise the employer could not be acting because of any of the circumstances in the subsection. It could not be the reason for the termination of employment. 32 Finkelstein J applied the decision in He and concluded, rightly in my opinion, that there was no allegation in the affidavit accompanying the application of a complaint to a third party. 33 In those circumstances, s 170CQ did not operate to throw the onus upon the employer to establish that the termination was for a reason or reasons that do not include any of the reasons in s 170CK(2)(e). No onus was cast upon the respondent by the affidavit because there was no allegation that a complaint was made which satisfied the type of complaint prescribed by s 170CK(2)(e). 34 However, at the hearing before Finkelstein J, the appellant provided three other documents which she said represented complaints of the kind provided for in s 170CK(2)(e). The first was a completed application form for compensation under the Accident Compensation Act 1985 (Vic) which was signed by the appellant on 11 December 2003 and witnessed on 12 December 2003. There was no evidence before the Court as to whether the claim for compensation had been lodged with WorkCover before 12 December 2003, being the date of the appellant's termination. However, Finkelstein J concluded, on the authority of Jennings v Salvation Army [2003] FCA 1193 that, even if it had been a claim for compensation, it was not a complaint within the meaning of s 170CK(2)(e). I agree with that conclusion. 35 The second document before him was an e-mail dated 24 November 2003 from the appellant to Ms Musolino, the Occupational Health and Safety Officer at the Victorian Trades Hall Council. 36 The e-mail was in the following terms: 'I need an urgent help. I was forced by my director to work more than a full time hours but paid three days per week. It caused me on 3rd stage urgency of right leg operation. I have just recovered since I stopped work overnights, per my director's agreement, my director is now giving me more works than before. If I can not complete on time, the company will dismiss me. I was also forced do not keep $1.4m share investment record for the company and I am not allowed to provide proper reports on the shares. I am also forced to input more than $122k wrong amounts to accounting record. I told the Board I can not do it therefore, the Board Chair called me frequently by using awful telephone manners and I am facing termination. I have many written documents to proof my case. Please help me, thank you very much!' 37 That e-mail was not a complaint of the kind contemplated in s 170CK(2)(e). It was a document in which the appellant sought assistance. Indeed, that is how it was understood by Ms Musolino who responded: 'I can only suggest that you contact either a lawyer or if you belong to a professional association contact them. There is nothing I can do to help you - you must take action yourself.' 38 There was no evidence that the respondent was ever aware, prior to the termination, of the e-mail from the appellant to Ms Musolino or Ms Musolino's reply. 39 A third and final document which was handed to the primary judge was an e-mail dated 25 November 2003 from the appellant to the Australian Taxation Office which was in the following terms: 'I am accountant of The Royal Australian Chemical Institute Inc. (The RACI) the company's ABN is 69 030 287 244. The Director Mr. Robert Barnes has resigned on 26 May 2003 and new Office Holder director is Andrew Smallridge since early July 2003 (Andrew is also the National Treasurer of the company). The Company received a 'Voluntary Treasurer's Handbook for small ono-profit [sic] organisations' in May 2001, when I give the book to Andrew he refused to accept it and he even did not allow me to copy and give this book to any of the company's more than 50 sub-entities' voluntary treasurers. Therefore, I tried my best to perform the National Treasurer's duty to ensure the RACI sub-entities report GST correctly and on time by working significant unpaid hours for three years. Since Robert resigned, Andrew instructed other staff to collect GST reports (the RACI only has one ABN, all sub-entities report GST through National Office) because he said to me my efforts was not necessary and now he gives people GST instructions without learning any GST requirement. I asked Andrew to inform ATO he is the new Office Holder and he should sign GST reports to declare the RACI's GST returns are true and correct. Andrew refuses to do so and said the company paid me to take the responsibility. I obtained a form of change GST registration details from ATO and give it to Andrew two month ago, he still refuse to sign and lodge the form until now. Andrew does not collect outstanding GST report from one of the RACI's sub-entity but forced me, through the RACI Boad, to sign an uncompleted GST return for end of June 2003. Would you please to advise Andrew Smallridge to lodge the form to register his detail ASAP and advise Andrew he is responsible to ensure GST compliance of the RACI and the correctness of the company's GST returns? Most importantly, I would like to delete my name as an authorised contact person about the company's GST information because I don't want to accept any GST related authorisation from Andrew Smallridge. Thank you very much for your help.' 40 This was not a complaint of the kind contemplated in s 170CK(2)(e) but was a request to have her name removed as an authorised contact person about the respondent's GST information. 41 Not only was it not a complaint, nor was it, in my opinion, recourse by the appellant to a competent administrative authority as contemplated in s 170CK(2)(e). 42 Moreover, there is no evidence that the respondent ever became aware of the communication to the Australian Taxation Office or its terms. 43 Thus, there was no evidence that any of the three documents relied upon ever came to the attention of the respondent. 44 That of itself, being an evidentiary matter, would not have been enough to dismiss the application on a strike-out application, but the absence of such evidence was relevant in considering the appropriate order. 45 An action will only be dismissed where it is clear, beyond doubt, that the party who has brought the action cannot succeed: General Steel Industries Inc v Commissioner for Railways (NSW) and Others (1964) 112 CLR 125 at 129-130. 46 In my opinion, Finkelstein J was right to conclude that the appellant's case was hopeless because she had not asserted that she had been dismissed for any reason contemplated in s 170CK(2)(e). 47 This, in my opinion, was one of those cases. 48 For those reasons, in my opinion, the first appeal must be dismissed. 49 As I have already indicated, the respondent sought an order for costs notwithstanding the provisions of s 170CS of the Act. 50 Section 170CS provides: '170CS(1) Subject to this section, a party to a proceeding under section 170CP must not be ordered to pay costs incurred by any other party to the proceeding unless the court hearing the matter is satisfied that the first-mentioned party: (a) instituted the proceeding vexatiously or without reasonable cause; or (b) caused the costs to be incurred by that other party because of an unreasonable act or omission of the first-mentioned party in connection with the conduct of the proceeding. 170CS(2) Subsection (1) does not empower a court to award costs in circumstances specified in that subsection if the court does not have the power to do so. 170CS(3) In this section: "costs" includes all legal and professional costs and disbursements and expenses of witnesses.' 51 Costs can only be awarded in either of the circumstances referred to in pars (a) or (b) of s 170CS(1). Clearly, it was upon the respondent to establish either that the proceedings had been instituted vexatiously or without reasonable cause, or that the appellant had caused the costs to be incurred because of an unreasonable act or omission in connection with the conduct of the proceeding. 52 The decision upon which Finkelstein J had relied in determining the true interpretation of s 170CK was He. As I have already said, the applicant in that case was, in fact, the appellant's husband who appeared on behalf of the appellant before Finkelstein J. 53 The decision in He had not been given prior to the institution of these proceedings. 54 Finkelstein J therefore concluded that it could not be said that the proceedings had been instituted vexatiously or without reasonable cause. 55 On the other hand, Finkelstein J concluded that once the Full Court handed down its decision in He 'it would have been clear to Ms Zhang and her husband that the decision covered this case, making the applicant's claim hopeless. In that circumstance, Ms Zhang's persistence in continuing the action was unreasonable'. 56 An order for costs made under s 170CS is an exercise of discretion on the part of the judge which can only be exercised if one of the grounds in s 170CS for its exercise have been made out. 57 Once one of those grounds has been made out, the judge must consider for himself or herself whether or not it would be appropriate to order costs. 58 In my opinion, the ground mentioned in s 170CS(1)(b) was made out and, in those circumstances, the judge was entitled to exercise his discretion to order costs against the appellant. 59 In my opinion, nothing has been shown to suggest that he erred in the exercise of that discretion. 60 In my opinion, the second appeal should also be dismissed. I certify that the preceding fifty-eight (58) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lander.