Zhang v The Royal Australian Chemical Institute Inc. [2004] FCA 1392

FEDERAL COURT OF AUSTRALIA

Zhang v The Royal Australian Chemical Institute Inc. [2004] FCA 1392

INDUSTRIAL – termination of employment – unlawful reason – complaint – no complaint made PRACTICE AND PROCEDURE – strike out – frivolous application

Accident Compensation Act 1985 (Vic) Workplace Relations Act 1996 (Cth) ss 170CK(2)(e), 170CR, 170CQ Federal Court Rules O 20, r 2

General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 followed He, in the matter of an application for Writs of Mandamus and Certiorari or Constitutional Relief against Lewin [2004] FCAFC 161 followed Jennings v Salvation Army [2003] FCA 1193 followed HILDA ZHANG v THE ROYAL AUSTRALIAN CHEMICAL INSTITUTE INC. V 340 of 2004 FINKELSTEIN J 29 OCTOBER 2004 MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY V 340 of 2004

BETWEEN: HILDA ZHANG

Applicant

AND: THE ROYAL AUSTRALIAN CHEMICAL INSTITUTE INC.

Respondent

JUDGE: FINKELSTEIN J

DATE OF ORDER: 29 OCTOBER 2004

WHERE MADE: MELBOURNE

THE COURT ORDERS THAT:

The application be dismissed.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY V 340 of 2004

BETWEEN: HILDA ZHANG

Applicant

AND: THE ROYAL AUSTRALIAN CHEMICAL INSTITUTE INC.

Respondent

JUDGE: FINKELSTEIN J

DATE: 29 OCTOBER 2004

PLACE: MELBOURNE

REASONS FOR JUDGMENT 1 The applicant, Ms Zhang, was employed as an accountant by the respondent, The Royal Australian Chemical Institute Inc. Her employment commenced in December 2000 and was terminated by the respondent in December 2003. Ms Zhang alleges that the termination of her employment was for a reason prohibited by s 170CK of the Workplace Relations Act 1996 (Cth). Part VIA, Div 3 of the Workplace Relations Act, where s 170CK is located, makes unlawful the termination of an employee's employment by an employer for certain reasons and provides for remedies appropriate to the case. One reason which cannot motivate the termination of an employee's employment is "the filing of a complaint [by the employee], or the participation in proceedings, against an employer involving alleged violation of laws or regulations or recourse to competent administrative authorities.": s 170CK(2)(e). The applicant says that her employment was terminated for this reason. She has brought an action in the Federal Court seeking appropriate relief under s 170CR. Her application is supported by two affidavits, with exhibits, which detail the history of her employment and the circumstances in which it came to an end. Her application is assisted by s 170CQ which, speaking loosely, reverses the onus of proof in relation to the reason for a dismissal. 2 The respondent asserts that the action against it is doomed to failure because, the applicant's allegations, assuming them all to be true, and taking into account the effect of s 170CQ, are incapable of establishing a contravention of s 170CK(2)(e). Rather than wait for the trial to make this submission, the respondent has moved to have the application dismissed as being frivolous or vexatious. It is entitled to bring such a motion under O 20, r 2 of the Federal Court Rules. To succeed the respondent has a heavy onus. An action will not be dismissed before trial unless it is clearly hopeless: General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125, 129-130. If there is any doubt about the matter, that doubt should only be resolved at a final hearing, at which point the judge will have before him (or her) much more material than he (or she) will have on a strike out application. 3 The point upon which the respondent bases its argument is quite simple. Three acts of an employee can attract the operation of s 170CK(2)(e). They are: (1) the filing of a complaint; (2) the participation in proceedings; or (3) recourse to competent administrative authorities. In each instance the act must involve or arise out of an allegation that the employer has violated some law or regulation. According to the cases, the principal one being He, in the matter of an application for Writs of Mandamus and Certiorari or Constitutional Relief against Lewin [2004] FCAFC 161 at [44], a case in which the applicant's husband was the prosecutor, the filing of a complaint must be made to "outside authorities" who have power to investigate the allegations made against the employer. Thus, section 170CK(2)(e) does not apply where the complaint is made directly to the employer. This puts the first of the three conditions on the same plane as the other two. 4 In this case the applicant had not participated in any legal proceedings against the respondent and had not sought recourse to any "competent administrative authority". She rests her case on having filed complaints against the respondent, and that this was the reason for her dismissal. However, the complaints, at least according to her affidavits, were made to the respondent itself; she did not suggest that she had made any complaints to "an outside authority". This founded the respondent's motion. It argued that, however one considers the applicant's case, her evidence does not bring her within s 170CK(2)(e). The respondent also contended that the transfer of onus provision, s 170CQ, could not assist the applicant in any way. 5 This submission appeared to me to be irresistible, and I think that it also appeared to be irresistible to the applicant's husband who, by my leave, appeared for his wife. With hindsight, I think that I erred in allowing Mr He to represent his wife. It was of no assistance to the applicant and may have prejudiced her case. It was also unfair to the respondent. The applicant would have been better served if a lawyer acted on her behalf. Be that as it may, during the course of the hearing, I allowed the applicant (through her husband) to tender three documents, none of which had been discovered, which were said to constitute complaints made to an outside authority so that the applicant could repair her claim. To determine whether any of the documents could arguably amount to a complaint for the purposes of s 170CK(2)(e), it is necessary to go into a little detail about the events which led to the termination of the applicant's employment. I do not propose to record everything that appears in the applicant's affidavits; merely sufficient to enable the reader to gain a proper understanding of the nature of the complaints upon which she now relies. 6 At a very early stage of her employment the applicant was involved in a dispute with Mr Smallridge, the respondent's National Treasurer and Chairman of its Investment Committee. The dispute concerned a stock market investment of about $1.5 million. The applicant was concerned about the investment. Why it was a matter of concern for the applicant is not clear, but she formed the view that it was "an over budget investment" which was "performing badly". She prepared reports to the respondent's board which records her view. Mr Smallridge allegedly removed that information from the board papers. In due course he instructed the applicant to stop doing any work in relation to the investment. 7 There was also a dispute between the applicant and Mr Smallridge about her hours of work and her rate of remuneration. She complained that she was overworked and underpaid. Her affidavits explain her concern in some detail. Apparently they were not addressed by Mr Smallridge or, at least, not addressed to the applicant's satisfaction. 8 In October 2003, the respondent's auditors queried the manner in which the applicant was preparing certain accounts. The applicant did not accept the criticism and initially refused to prepare the accounts in the manner suggested by the auditors. Unsurprisingly, the applicant was directed to meet the auditor's requirements, but she still believed they were wrong, and wrote to various of the respondent's employees advising them of her opinion. 9 Towards the end of 2003 things really got out of hand. The applicant made a statement which, it was alleged, implied that Mr Smallridge was dishonest or lacked personal integrity. At a meeting held on 10 November 2003 with senior management of the respondent, the applicant was told to sign a statement (a copy of which was provided to her) that she regretted the accusations that she had made about Mr Smallridge. The applicant was also told that it was the board's expectation that she would follow Mr Smallridge's instructions as and when given. 10 The meeting did not overcome the problems with the applicant's continued employment. The respondent formed the view (whether correct or not I cannot say) that the applicant refused to carry out lawful directions, in particular "a cheque run" which she had been instructed to do. Accordingly, she was directed "to attend a formal disciplinary counselling meeting" on 25 November 2003 that was held at the offices of the Victorian Employers Chamber of Commerce and Industry (VECCI). She was advised that "the purpose of the meeting [was] to address [those] concerns and to provide [her] with an opportunity to discuss [the] matters at the meeting." She was invited to have a union or other personal representative present at the meeting. 11 On 25 November 2003 the respondent wrote to the applicant informing her that she was not required to attend work until 1 December 2003 and that in the meantime, she would be considered to be on leave with full pay. The letter advised that "[t]he reason why [the applicant] will not be required to attend work or any work related activities [was] because of [the applicant's] continued refusal to comply with a lawful instruction which is potentially putting the organisation at risk." 12 The applicant provided an outline of what was said at the meeting in her affidavits. It is not necessary to repeat what was said save to indicate that the matters discussed included the allegations that were levelled against her and her answer to those allegations. According to the applicant "[a]t the end of the meeting … Ms Libby O'Connor, the Senior Workplace Relations Consultant of VECCI required me to provide a formal respond (sic) to explain why my employment should not be terminated in writing within 36 hours." 13 On 8 December 2003 there was a further meeting at VECCI's offices. According to the applicant, at that meeting she was informed that the respondent "do not value me as a good employee and do not trust me any more; however [the respondent] would happy (sic) to provide me an offer for parting away". She replied: "I would not trade my principle for money; I required an apology and resuming my work." 14 On 12 December 2003 the respondent wrote to the applicant advising that her employment was terminated. The applicant received the letter a few days later. 15 I can now come to the documents which the applicant says constitute her complaint for the purposes of s 170CK(2)(e). The first is a copy of a completed application form for compensation under the Accident Compensation Act 1985 (Vic). The application form was signed by the applicant on 11 December 2003 and by her witness on 12 December 2003. The evidence is unclear as to when the claim for compensation was lodged with Workcover; whether or not it came to the attention of the respondent before 12 December 2003 is also not known. Even if it had, the claim is not a complaint for the purposes of s 170CK(2)(e): Jennings v Salvation Army [2003] FCA 1193 at [35]. 16 The next document is an e-mail communication dated 24 November 2003 from the applicant to the Occupational Health and Safety Officer at the Victorian Trades Hall Council. The applicant emailed the Officer, Ms Musolino, as follows: "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!" Likewise, this communication is not a complaint for the purposes of s 170CK(2)(e). It is no more than a request for assistance from the VTHC. This is how Ms Musolino understood the e-mail. She 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." Ms Musolino also suggested the names of "some labour lawyers" who may provide the applicant with an initial consultation free of charge. The request does not improve the applicant's case. 17 The final document is an email dated 25 November 2003 from the applicant to the Australian Taxation Office. It is appropriate that I set out the text of this email in full. It reads: "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 June 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." 18 Here again I cannot regard this email as a complaint alleging that the respondent has violated any law or regulation. The principal purpose for the communication, as the applicant herself makes clear in the penultimate paragraph, is her request "to delete [her] name as an authorised contact person about the [respondent's] GST information because [she] don't want to accept any GST related authorisation from Andrew Smallridge." In any event, even if the communication could amount to a complaint for the purposes of s 170CK(2)(e) that of itself does not advance the applicant's case. Section 170CK makes certain reasons for dismissal unlawful. In this case the applicant must show that any complaint she made led to her dismissal, or was at least a partial cause of it. Here there is simply no evidence that the applicant forwarded a copy of the email to the respondent or even informed the respondent of the e-mail's contents. In this regard, I observe that the applicant's affidavit deals in quite some detail with the discussions between herself and officers of the respondent in the final days of her employment. She makes no mention of informing the respondent of any communication with the ATO. If she had passed on that information, I am sure that she would have said so. And if she thought it relevant in any respect it would have been discovered. In any event, the ATO appears not to have acted on the email because on 15 December 2003 the applicant sent another email to the Taxation Office stating: "Would it be possible for you please let me know the processing of my complaint? Thank you very much!" 19 In the result, I am convinced that the applicant's case is utterly hopeless and should be dismissed. An order to that effect will be made. I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finkelstein .