FEDERAL COURT OF AUSTRALIA Herbert v Star Aviation Pty Ltd [2019] FCAFC 136 Appeal from: Herbert v Star Aviation Services Pty Ltd [2019] FCA 239 File number: NSD 439 of 2019 Judges: KATZMANN, COLVIN & THAWLEY JJ Date of judgment: 14 August 2019 Catchwords: INDUSTRIAL LAW — adverse action — whether action taken against appellant because of his family or carer responsibilities — whether primary judge erred in various respects Legislation: Fair Work Act 2009 (Cth) ss 351, 360, 361(1), Part 3–1 Racial Discrimination Act 1975 (Cth) Cases cited: Aldi Foods Pty Ltd v Moroccanoil Israel Ltd [2018] FCAFC 93; 358 ALR 683 Board of Bendigo Regional Institute of Technical and Further Education v Barclay (2012) 248 CLR 500 Branir v Owston Nominees (No 2) Pty Ltd (2001) 2001 FCR 424 Fox v Percy (2003) 214 CLR 118 Date of hearing: 14 August 2019 Registry: New South Wales Division: Fair Work Division National Practice Area: Employment & Industrial Relations Category: Catchwords Number of paragraphs: 41 Counsel for the Appellant: The Appellant appeared in person Counsel for the Respondents: Ms L Saunders Solicitor for the Respondents: HWL Ebsworth Lawyers ORDERS NSD 439 of 2019 BETWEEN: STEPHEN NOEL HERBERT Appellant AND: STAR AVIATION SERVICES PTY LTD (ACN 160 093 630) AS TRUSTEE FOR THE STAR AVIATION TRUST First Respondent PETER GEORGIOU Second Respondent PETER CORNELL Third Respondent JUDGES: KATZMANN, Colvin & THAWLEY jJ DATE OF ORDER: 14 AUgust 2019 THE COURT ORDERS THAT: 1. The appeal be dismissed. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT (Revised from transcript) THE COURT: 1 Subject to certain exceptions, s 351 of the Fair Work Act 2009 (Cth) prohibits an employer from taking adverse action against an employee or prospective employee for various reasons, including race and family or carer responsibilities. "Adverse action" is defined in s 342 of the Act to include dismissing an employee and refusing to employ a prospective employee. A person takes action for a particular reason if the reasons for the action include that reason (s 360). These provisions appear in Chapter 3 Part 3–1 of the Act. If, in an application in relation to a contravention of this Part, it is alleged that a person took action for a particular reason and taking that action for that reason would constitute a contravention of the Part, then it is presumed that the action was taken for that reason unless the person who took the action proves otherwise (s 361(1)). 2 Stephen Herbert sued Star Aviation Services Pty Ltd (Star) and two others claiming that he had been dismissed from his employment with Star in contravention of s 351. 3 In November 2017, Mr Herbert applied for a position as a part-time fleet presentation officer with Star. He found out about the position because his daughter Elizabeth was working for Star and she told him that Star was recruiting new employees. On 17 November 2017, Mr Herbert met with Peter Cornell, a contractor retained by Star, to discuss his application. Mr Herbert says that he was offered a contract of employment at that meeting, that he accepted the offer by a handshake, and that the contract was thereby formed. His claim was and is disputed by Star. In any event, on 28 November 2017 Star sent him an offer of employment. The offer letter provided for acceptance by signing and returning a copy of the letter. It stated that the document was "the entire agreement of the parties on the subject matter" and that all previous representations, communications and agreements in relation to it were "merged in and superseded by this agreement". 4 The offer was expressed to be conditional on Mr Herbert obtaining a satisfactory pre-placement health assessment. It provided for a probation term of 6 months during which time Mr Herbert could be terminated on one week's notice. It also relevantly provided that, if any of the information provided in the application was misleading or incorrect, then the offer would be null and void. 5 On 6 December 2017, Star sent an email to Mr Herbert advising him that it was no longer in a position to offer him employment. Mr Cornell's evidence was that the email was sent because of serious concerns he had with Mr Herbert's conduct. Those concerns were said to include: (a) disclosure by Mr Herbert that things he had said about a previous work injury were not true; (b) disclosure that statements he had made about his access to a mobile phone were not true and his apparent refusal to let Star contact him on his personal mobile phone; (c) a failure to be properly prepared for his application for a security identification card; and (d) his argumentative and confrontational communication with a customer service officer on 5 December 2017 when dealing with his application for a security identification card. 6 Mr Herbert filed an application in this Court seeking compensation for the alleged dismissal in excess of $1,000,000. He initially claimed discrimination on two grounds: race and family responsibilities. The claim based upon racial discrimination was never particularised and ultimately abandoned. Consequently, his claim of discrimination ultimately rested only upon the fact that his daughter worked for Star and his contention that he had been dismissed from Star's employment because he had made a complaint about the late payment of salary to his daughter. He said that his advocacy on behalf of his daughter was a matter of family responsibility for the purposes of s 351 of the Act. 7 Mr Herbert's claim was unsuccessful and his application was dismissed. An order was also made that he pay the costs of the application from a date when he had rejected an offer of settlement of the claim. Mr Herbert now brings an appeal in which he raises seven grounds. He filed submissions in support of the grounds and spoke briefly to those submissions at the hearing. 8 Before the primary judge, irrespective of the judge's determination on other matters in dispute, Mr Herbert would have failed if Star proved that its decision not to proceed with the employment offer was taken for reasons other than the reason that Mr Herbert alleged, namely his advocacy for his daughter, which he argued fell within the prohibited ground of "family or carer responsibilities" in s 351(1) of the Act. Star had the onus of proof on this question because of the reverse onus provision in s 361 of the Act. However, if Star established that its action was not undertaken for a prohibited reason, then Mr Herbert could not succeed. 9 The primary judge accepted Mr Cornell's evidence as to the reasons for the withdrawal of the offer of employment and held that Star had discharged its onus in that regard. In doing so, his Honour found that it was not necessary to consider Star's argument that the reason Mr Herbert alleged he had been dismissed could not, as a matter of law, fall within "family or carer responsibilities". 10 The primary judge's reasons for accepting Mr Cornell's evidence over Mr Herbert's are captured in [24]–[26] of his Honour's judgment. In substance, his Honour had "considerable reservation[s]" about the reliability of Mr Herbert's evidence, pointing to some apparent inconsistencies, whereas Mr Cornell's account was consistent with the contemporaneous documents. As his Honour put it at [25]: The account advanced by Mr Cornell, it is respectfully concluded, is to be preferred to that of Mr Herbert. Mr Cornell's account of the meeting sits more comfortably with the terms employed by both himself and Mr Herbert in the email exchange subsequent to 17 November 2017. Mr Cornell's account is also more consistent with an understandable necessity for Mr Herbert to satisfactorily pass a medical examination and obtain a security identification card before his employment could commence. 11 In order to succeed on the appeal, it is necessary for Mr Herbert to demonstrate error infecting the finding of fact that the adverse action was not taken because of "family or carer responsibilities": see, for example, Branir v Owston Nominees (No 2) Pty Ltd (2001) 117 FCR 424. It is not enough if the appellate court disagrees with the primary judge: Aldi Foods Pty Ltd v Moroccanoil Israel Ltd [2018] FCAFC 93; 358 ALR 683 at [55]. For the following reasons, no such error has been demonstrated and the appeal must be dismissed. 12 The notice of appeal contained seven grounds, to which we will come shortly. 13 Mr Herbert filed two sets of submissions. For the most part, neither addressed the various grounds. Rather, Mr Herbert maintained that he had entered into a verbal contract of employment with Star, shook hands on the deal with Mr Cornell, and insisted that his employment was unlawfully terminated because of concerns he had raised about the way in which his daughter had been treated by the company. He argued that the primary judge did not give the correct weight to his proposition that he had a verbal contract. In support of his argument that he had a verbal contract, he cited a passage from the Gospel of Matthew. 14 We will deal separately with each of the seven grounds raised. 15 First, Mr Herbert alleged that the primary judge did not interpret and give the correct weight to s 351 of the Fair Work Act. 16 In his written submissions he argued that the provision should have been interpreted literally. He repeated the proposition in oral argument. He was, however, unable to articulate what was wrong with his Honour's interpretation of s 351, and no error has been demonstrated in that regard. In short, the result did not turn on a contentious point as to the interpretation of s 351. It depended upon the factual findings of the primary judge about the reasons that the adverse action had been taken. 17 Second, Mr Herbert alleged that the primary judge did not give the correct weight to the Racial Discrimination Act 1975 (Cth). 18 The Racial Discrimination Act was irrelevant. It did not arise for consideration on the pleading. In any event, any claim of racial discrimination was expressly abandoned at the hearing. Once the claim of discrimination based on race was withdrawn, there was no basis for such a claim. In any event, the unchallenged finding of the primary judge was that Mr Cornell did not consider Mr Herbert's race when deciding to withdraw the employment offer. 19 Third, Mr Herbert alleged that the primary judge did not correctly apply the Federal Court Rules 2011 and the Evidence Act 1995 (Cth) equally and equitably. 20 This proposition was not expanded upon in oral argument, but it appears from the written submissions that these points were directed to findings about Mr Herbert being required to undertake a medical examination and about whether Mr Herbert had to sign the written offer in order to accept it (albeit that he claimed the agreement arose earlier on a handshake). These findings concern the decision of the primary judge as to whether there was a contract of employment, but his Honour went on to consider whether Mr Herbert had a claim based upon being a prospective employee. Consequently, these complaints do not go to the heart of the case, which turned on the reason why Mr Herbert was not employed or any contract was brought to an end. The claim was confined to a complaint about discrimination and it was necessary for discrimination to be established as a matter of fact. The third ground of appeal does not impugn the finding by the primary judge that the action of Star was not taken for the reason that was alleged to be discriminatory. 21 Fourth, Mr Herbert alleged that the primary judge did not adhere to the dictates of natural justice. No particular complaint was raised that might support this general claim. 22 Fifth, Mr Herbert alleged that the primary judge did not give the correct weight to case law as to contracts and promises. 23 As we have already indicated, it is not necessary to consider this allegation unless error has been demonstrated in the key factual finding. Put another way, even assuming (but not deciding) that error was demonstrated in the primary judge's findings as to whether there was a binding employment contract, Mr Herbert could not succeed in the appeal without demonstrating error in the key factual finding about the reason for the adverse action. 24 Sixth, Mr Herbert alleged that the decision was unreasonable and biased. 25 Dealing with the unreasonableness question first, Mr Herbert made clear in oral argument that the allegation that the decision was unreasonable was conclusory. It was merely an expression of his position that the decision was wrong because the primary judge was not persuaded by his version of events. 26 The separate claim of actual bias is improperly raised. It is a serious allegation made without any foundation. It is said that the bias arose because Star had access to a major law firm and solicitors and barristers, but it is common for judges to decide cases where one party has legal representation and the other does not. It is not a matter that provides a foundation for a claim of actual bias or, for that matter, ostensible bias. 27 Seventh, Mr Herbert alleges that the primary judge neglected to mention that Mr Georgiou, the managing director of Star, and the second respondent, did not attend the trial and it is said that he gave false and misleading information. The latter claim was unsupported by any details and is no more than a general assertion. As for the former claim, Mr Georgiou was not required to attend in person for all of the hearing. Mr Herbert applied for a summons to issue for Mr Georgiou to attend to give evidence. Mr Georgiou did give evidence and was cross-examined. Consequently, these allegations demonstrate no error on the part of the primary judge. 28 Mr Herbert relied upon the biblical parable of the workers in the vineyard, where the landowner, at the end of a day's work, pays all his workers a day rate irrespective of when they were hired in the course the day. He seemed to advance the parable in support of his submission that a handshake deal should be upheld or possibly that a worker should be paid irrespective of the amount of work undertaken. However, the primary judge did not reject the legal possibility that an agreement may be made verbally with acceptance of the offer communicated by a handshake. Nor did he reject the possibility that a claim under s 351 could be made out even if Mr Herbert had not started work. Rather, his Honour dismissed Mr Herbert's action because he accepted the account given by Mr Cornell of the reasons Star had taken adverse action. 29 Mr Herbert's only claim was based on alleged discrimination. It did not matter whether he was an actual or a prospective employee. His claim failed, not because no contract of employment had been entered into, but because the primary judge accepted as reliable direct evidence from the decision-maker that the adverse action was not taken for a prohibited reason. 30 The question of why an employer took adverse action against an employee or, for that matter against a prospective employee, is a question of fact: see Board of Bendigo Regional Institute of Technical and Further Education v Barclay (2012) 248 CLR 500 at [41]. To answer the question it is necessary to consider the reasons that actuated the decision-maker: Barclay at [42]. Direct evidence of a decision-maker as to state of mind, intent or purpose will bear upon the question: Barclay at [44]. Of course, the court is not bound to accept such evidence. It may be unreliable because it is contradicted by other evidence given by the decision-maker or "because other objective acts are proven which contradict the decision-maker's evidence". Where, however, direct evidence is given by the decision-maker which the primary judge accepted as reliable, that evidence is capable of discharging the employer's burden of proof: Barclay at [45]. 31 That was the position here. 32 There is no reason to disturb the primary judge's factual findings. The evidence given by Mr Cornell as to the reasons for the adverse action was not contradicted by any of his other evidence. Unlike Mr Herbert's evidence, Mr Cornell's evidence was not internally inconsistent. Moreover, as his Honour observed, it was consistent with the contemporaneous records. No objective acts were proven to contradict Mr Cornell's account. Mr Herbert merely urged the Court to believe him over Mr Cornell. That is not enough to establish error. Mr Herbert insisted that he has always told the truth, but the primary judge's findings on the reason for the adverse action were substantially based on his Honour's assessment of the credibility of the witnesses' competing accounts. 33 Findings of this nature can only be overturned if the appellate court is satisfied that the evidence upon which the primary judge acted was inconsistent with incontrovertible facts or the conclusion the primary judge reached was glaringly improbable or contrary to compelling inferences: Fox v Percy (2003) 214 CLR 118 at [26]–[29]. For the reasons given above, the evidence upon which the primary judge acted in the present case was not inconsistent with incontrovertible facts. Neither was his conclusion glaringly improbable or contrary to compelling inferences. 34 During the tail end of his oral argument, Mr Herbert complained about the costs orders that were made by the primary judge, but this aspect of his Honour's decision was not covered by the notice of appeal. 35 Mr Herbert also complained that the decision that was taken by Star was harsh, unjust and unreasonable, but this is not an unfair dismissal case, and whether or not Star's conduct was of that order is immaterial to the issues for resolution on the appeal. It may well be the case that Star's action against Mr Herbert was taken after he raised the issue of his daughter not having been paid, as he put to this Court, but the mere fact that there is a temporal connection between his complaint to Mr Cornell and the adverse action does not establish that the adverse action was taken for that reason, and nothing that he said in his oral argument today cast doubt upon the correctness of the primary judge's reasons. 36 It follows that the appeal must be dismissed. 37 The respondents applied for costs. 38 The ordinary rule is that costs follow the event, but the ordinary rule is displaced by s 570 of the Fair Work Act, which relevantly provides in subs (2) that the party may be ordered to pay the costs only if: (a) the Court is satisfied that the party instituted the proceedings vexatiously or without reasonable cause; or (b) the Court is satisfied that the party's unreasonable act or omission caused the other party to incur the costs. 39 In this case, the respondents submitted that the proceedings were brought without reasonable cause. The nub of their argument was that the centrepiece of the appeal was a complaint that no contract of employment had been entered into when that was not the reason why Mr Herbert failed. In addition, they submitted that Mr Herbert's complaints turned on questions of fact when no appealable error had been demonstrated. 40 The Court has considered the arguments but ultimately is not persuaded by them. We are not satisfied, in other words, that the appeal was instituted by Mr Herbert without reasonable cause. 41 Consequently, there will be no order as to costs. I certify that the preceding forty-one (41) numbered paragraphs are a true copy of the Reasons for Judgment herein of Honourable Justices Katzmann, Colvin & Thawley. Associate: Dated: 22 August 2019