The general protections under the Fair Work Act prohibit the taking of adverse action against an employee for a prohibited reason, which will generally require the decision maker (normally a judge) to make a decision about whether the making of a complaint or enquiry by an employee about his or her employment was an “operative and substantial factor” in the minds of the employee or employees of the employer who took the adverse action against the employee. This is of critical importance in the reverse onus of proof context.
“By this ground, RPS contends that the primary judge erred when finding that Ms Lamb’s complaint was an operative and substantial factor in the minds of those who took the decision to take the alleged adverse action because the finding was not reasonably open on the evidence and where the primary judge failed to address a large body of undisturbed evidence as to the decision-makers’ real reasons for the impugned decisions. It is trite to observe that an inadequacy of reasons challenge is a difficult one, given what was identified in Lopez v Gold Titan [2022] FCAFC 117 at [26] per Rares J and [90] per Stewart and Goodman JJ, quoting from DL v The Queen [2018] HCA 26; 266 CLR 1 at [32]:
In the absence of an express statutory provision, “a judge returning a verdict following a trial without a jury is obliged to give reasons sufficient to identify the principles of law applied by the judge and the main factual findings on which the judge relied”
53 Equally so, the joint judgment of Stewart and Goodman JJ in Lopez referred to AK v Western Australia [2008] HCA 8; 232 CLR 438 at [85] per Heydon J:
Ordinarily it would be necessary for a trial judge to summarise the crucial arguments of the parties, to formulate the issues for decision, to resolve any issues of law and fact which needed to be determined before the verdict could be arrived at, in the course of that resolution to explain how competing arguments of the parties were to be dealt with and why the resolution arrived at was arrived at, to apply the law found to the facts found, and to explain how the verdict followed.
54 These principles were identified in Lopez to apply equally to civil proceedings as they were applied in criminal proceedings: Lopez at [92].
55 However, challenges on the basis of adequacy of reasons remain open where significant bodies of evidence are not referred to and where, as RPS submitted, they either were not taken into account or, if they were taken into account, they were taken into account in a way which is flawed. Where a judge fails to refer to evidence that is critical to an issue in the case, this may constitute an error of law that is reviewable on appeal: Jess v Cooloola Milk Pty Ltd [2022] FCAFC 75 at [20]; State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (in liq) [1999] HCA 3; 73 ALJR 306 at [64], [94], [139] and [155]; Mifsud v Campbell (1991) 21 NSWLR 725 at 728; DL at [33]. The same is true for a failure to explain why evidence relied on by a party is rejected: Police Federation of Australia v Nixon [2011] FCAFC 161; 198 FCR 267 at [67]. Where a significant issue is resolved through an assessment of the credibility of witnesses, the judgment should refer to and analyse the parties’ arguments regarding credibility: Camden v McKenzie [2007] QCA 136; [2008] 1 Qd R 39 at [34]; Cooloola Milk at [21]–[22] per Rangiah and Downes JJ. Significant evidence should not be ignored or peremptorily shunted aside: Fletcher Construction Australia Ltd v Lines MacFarlane & Marshall Pty Ltd (No 2) [2002] VSCA 189; 6 VR 1 at [157], considered in Cooloola Milk at [20].
56 This ground is not made out for the following reasons.
57 RPS identifies the impugned finding to be that Ms Lamb’s complaint was an operative and substantial factor in the minds of those who took the decision to take the alleged adverse action. This ground is founded on an incorrect premise. There was no need for the primary judge to be satisfied on the evidence that each of those who were said to be decision-makers or relevant persons who made up the corporate mind of RPS (with respect to one allegation of adverse action) was actuated by the prohibited reason. The reasoning of the Full Court in Wong v National Australia Bank Ltd [2022] FCAFC 155; 318 IR 148 supports this view. In that case Ms MacLeod had the authority to remove Ms Wong from her role and to terminate her employment: at [14]. Ms MacLeod was not aware of any of the many complaints or inquiries made by Ms Wong that predated the removal decision: at [15]. The Full Court (at [24]) cited with approval Roberts v General Motors-Holden’s Employees’ Canteen Society Inc (1975) 25 FLR 415; 172 CAR 1073, which acknowledged that not all the considerations operating on the mind of every member (of the committee or group involved in the decision) would necessarily be known by the others, with the Full Court in Wong ultimately concluding that (at [26]):
The authorities show that in asking whether an adverse action was taken by a corporate entity, the Court should remain alert to the possibility that the answer may reside in the mind of more than one natural person. The state of mind of the human actor who said or did the thing that bound the corporation to the action will of course be important, and in many cases determinative. However, the cases illustrate that a person who does the act or thing constituting the adverse action may act on information or advice the provision or content of which is actuated by a prohibited reason. The adoption of such information or advice may necessitate the conclusion that the corporation’s reasons for the adverse action include that prohibited reason. In such cases, it matters not that the person providing the information and advice does not formally possess the authority or power to effect the decision based on the information and advice. Whether the person performing the act constituting the adverse action is aware that he or she is acting on information or advice given for a prohibited reason may not be relevant in cases of that kind.
(Emphasis added.)
58 The impugned finding is said to not have been reasonably open on the basis that: (a) the decision-makers gave credible sworn evidence to the contrary; (b) the relevant and probative evidence of the three decision-makers about what their real reasons were for the impugned conduct was not contradicted; and (c) the finding that Mr Stamatoudis had an alleged conflict of interest by reason of him being the subject of Ms Lamb’s complaint was irrelevant.
59 I do not accept that the mere fact that the decision-makers gave sworn evidence to the contrary and/or were not contradicted necessarily results in the impugned finding not being open. The Court must attend to the task of answering the question of why the adverse action was taken. As French CJ and Crennan J observed in Board of Bendigo Regional Institute of Technical and Further Education v Barclay [2012] HCA 32; 248 CLR 500 at [45]:
This question is one of fact, which must be answered in the light of all the facts established in the proceeding. Generally, it will be extremely difficult to displace the statutory presumption in s 361 if no direct testimony is given by the decision-maker acting on behalf of the employer. Direct evidence of the reason why a decision-maker took adverse action, which may include positive evidence that the action was not taken for a prohibited reason, may be unreliable because of other contradictory evidence given by the decision-maker or because other objective facts are proven which contradict the decision-maker’s evidence. However, direct testimony from the decision-maker which is accepted as reliable is capable of discharging the burden upon an employer even though an employee may be an officer or member of an industrial association and engage in industrial activity.
(Footnotes omitted.)
60 Accordingly, just like the primary judge’s task was to not only consider the objective facts, the obverse is true: The primary judge’s task was to not only consider (and accept) the evidence of the decision-makers. The primary judge’s reasons identify why he found the decision-makers’ positive evidence was not reliable because of contradictory evidence.
61 The primary judge approached the question of whether the complaint formed a substantial and operative reason for the decision to demote Ms Lamb correctly. The primary judge understood that this required him to identify the decision-maker(s) and consider what was in their mind(s) at the time of the decision. His Honour also correctly observed that Ms Lamb would succeed unless he could be positively satisfied that the complaint was not a substantial and operative reason for the decision.
62 The correctness of the primary judge’s approach (and the adequacy of the reasons) is evident from the structure and detail of his reasons. The primary judge did summarise the crucial arguments of the parties. There is no dispute in this respect. Further, his Honour resolved any issues of law and fact that arose with respect to the identification of the adverse action, the identification of the complaint and whether it fell within the meaning of “complaint”. Further, the primary judge then set out the competing arguments of the parties. His Honour then considered in some detail the evidence of Ms Lamb and then the evidence of each of RPS’s witnesses and, particularly, the evidence of each of the three decision-makers and his credit observations with respect to them. His Honour’s logical, sequential identification of the relevant questions and the way he answered them demonstrated that he had turned his mind to the relevant matters which needed to be taken into account: Did Ms Lamb make a complaint (considered at J[185]–[193])? Was the complaint a workplace right (considered at J[194]–[203])? Did RPS take adverse action (considered at J[204]–[213])? Did the adverse action constitute dismissal (considered at J[214]–[223])? Was the complaint a substantial and operative reason for the adverse action (considered at J[224]–[232])?
63 The primary judge considered each of the three decision-makers’ asserted reasons for why the impugned decision was not made for the prohibited reason. This can be seen from the primary judge’s specific consideration of Mr Stamatoudis’s purported reasons: at J[99], [101], [107] and [111]. The same can be said with respect to Ms Sullivan and her purported concern for welfare at J[126]. Lastly, Ms Christensen’s express denial was referred to at J[131], though, I accept with Ms Christensen, no reference is made to her specific evidence about her purported reasons for Ms Lamb’s termination. However, it is clear that the Court understood the express denials of each of the decision-makers and, in particular, in the critical portion of its reasons dealing with whether the complaint was a substantial and operative reason for the action RPS took, identifies at J[226], again, that all three decision-makers state that the complaint was not a substantial and operative part of the decision-making process and then goes on to explain why the Court had “considerable concerns” with the position taken by each of them in this regard.
64 Further, and critically, the comparative attention given in the judgment to the evidence of Mr Stamatoudis over that of Ms Sullivan and Ms Christensen is unsurprising and logically explainable: Whilst the primary judge found that each of them were decision-makers, his Honour found, in effect, that Mr Stamatoudis was the instigator of, author of and proponent for the adverse action, and made specific adverse credit findings against him: at J[225]. Accordingly, it is unsurprising that greater attention was given to his evidence. Ms Sullivan’s and Ms Christensen’s involvement in the decisional process fell into a different category by comparison. As observed by Smithers, Woodward and Evatt JJ in Roberts (at 1079) (cited in Wong at [24]):
It is apparent that, when a decision is made by a committee, different considerations may have operated on the minds of the various members of the committee, and not all the considerations operating on the mind of every member would necessarily be known to the others. In addition it could well be that, in the decision-making process, the influence of one or more members may, for various reasons, have been greater than that of others. The effective decision may even have been made by a person who was not a member of the committee. In any particular case, a recommendation of one man may have been rubber-stamped by others without their giving the matter independent consideration. In another case a person actuated by improper motives may have overborne the minds of others who were not so motivated. Or a person improperly motivated may have presented a dishonest case to others.
Of course there may be cases in which it would not be proper to go behind the proceedings of a formal meeting of a particular body. But in the circumstances of this case it is our view that the problem should be approached through an analysis of the motives and parts played by the individual actors.
65 The primary judge found that their evidence should not be accepted on a number of bases. The first was that Ms Lamb’s complaint was with respect to Mr Stamatoudis’s own conduct, and therefore there was an obvious conflict of interest: Mr Stamatoudis was the instigator of and party to the decision-making process leading to her demotion in a short period after the complaint was made.
66 RPS challenged this portion of the reasoning on the basis that Ms Lamb’s complaint was “low level” and of no significant moment because Ms Lamb suggested she and Mr Stamatoudis could talk about it. I do not accept this characterisation. Ms Lamb expressed her written complaint in a clear and unequivocal way, deploying a sophisticated command of language. Hers was a direct challenge to his managerial style and process. Ms Lamb called him out on his conduct. Ms Lamb expressed her belief that he was not in fact engaging with her about the matters that he should be as her supervisor, but was rather harassing her about details of a relationship she had with another member of the organisation who was a close friend of his, and who had come over with him from a predecessor company. The incontrovertible evidence was that Mr Stamatoudis was concerned about the complaint: He conceded the same multiple times under cross-examination.
67 RPS’s second attack is with respect to the primary judge’s identification of an apparent conflict of interest on the basis of relevance. Mr Stamatoudis instigated and propounded the demotion in the immediate wake of a complaint being made about him. I do not accept that the primary judge’s consideration of this conflict was “irrelevant” by reason of the purported uncontradicted justification by Mr Stamatoudis that the “decision to adjust the applicant’s role to accommodate her absence for study in England was within Mr Stamatoudis’ role as the applicant’s direct supervisor” (ground 3(c)(i)). It was open for the primary judge to have “considerable concerns” (at J[226]) about the clear conflict where “Mr Stamatoudis was a supervisor, who had a serious allegation raised against him in relation to harassment, taking an active part in a process that led to the applicant being demoted”: at J[228]. Further, I do not accept the underlying premise of this attack – including Mr Stamatoudis’s purported “uncontradicted claims” as to his reasons. Mr Stamatoudis’s evidence was challenged at length under cross-examination. The primary judge concluded that he was “a defensive and evasive witness” and that “[m]any of his answers were in conflict to the positions articulated by Ms Sullivan and Ms Christensen”: at J[116]. The question of whether adverse action was taken for a prohibited reason is a factual one, answered by a consideration of all of the facts and circumstances in the proceedings. As observed by the Full Court in Alam v National Australia Bank [2021] FCAFC 178; 288 FCR 301 at [14(h)], even if the reasons advanced by the respondent as to the actual reasons for the decision were accepted, the absence of evidence that there were no proscribed reasons may nonetheless result in a failure to rebut the presumption. The primary judge did not accept that RPS had discharged its burden arising from the statutory presumption.
68 Furthermore, RPS contended that such a finding of there being a “conflict” was not open where there was the “involvement of the other two decision-makers, namely Ms Sullivan and Ms Christensen, who occupied more senior roles relative to Mr Stamatoudis” who “nullified any practical effect of any alleged conflict” (ground 3(c)(ii)). Whilst the involvement of other purportedly neutral actors in a decision may nullify the effect of any conflict, it was for the primary judge to determine the respective and relative involvement of each of those in the decision. The primary judge determined that Mr Stamatoudis was the instigator and primary agent. This was evident from the incontrovertible evidence: It was Mr Stamatoudis’s idea that Ms Lamb “step out” of her role: at J[225]. It was Mr Stamatoudis who provided to Ms Christensen and Ms Sullivan the purported “performance issues” he had regarding Ms Lamb, first, on 29 January 2020 and then on 7 February 2020: at J[63], [112], [207] and [225]. It was Mr Stamatoudis who led the discussion on 6 February 2020 with Ms Lamb regarding her stepping down. As recorded in Ms Christensen’s affidavit, Ms Christensen deferred to Mr Stamatoudis during the meeting with respect to whether the decision regarding Ms Lamb “stepping down” was “final” in the following exchange:
Ms Lamb asked if a decision about her stepping down from her National Lead role while completing her study had already been made. I felt that the discussion was at an impasse. In an attempt to bring the matter to an end, I said to Mr Stamatoudis: “Is the decision final?”. Mr Stamatoudis said: “Siobhan if you keep on insisting on meeting with Meegan then we can do that, but as I’ve said, she is aware and in agreement with what I’ve said.”
(Emphasis in original.)
69 Ms Christensen maintained the same under cross-examination. Ms Christensen then left this critical discussion before it concluded, leaving Ms Lamb with Mr Stamatoudis on her own and thereafter left Mr Stamatoudis to reiterate the decision that she “step down” the following day.
70 The primary judge was obviously perplexed by RPS’s unorthodox approach to the circumstances – the apparent failure on the part of RPS to deal with Ms Lamb’s complaint and to allow Mr Stamatoudis to drive Ms Lamb’s demotion and to not follow its own processes regarding performance management. It may be accepted that a claim under Pt 3-1 of the Act is not “a broad inquiry” as to whether the employee has been treated in a procedurally fair manner or in accordance with the employer’s policies or procedures: Ermel v DuluxGroup (Australia) Pty Ltd (No 2) [2015] FCA 17 at [48] per Bromberg J. However, procedural anomalies might warrant the rejection of the respondent’s evidence as to why it did what it did and a finding that the respondent failed to rebut the statutory presumption, as occurred here.
71 In this context, the primary judge noted the first procedural anomaly, the absence of any evidence that Ms Lamb’s complaint about Mr Stamatoudis was ever the subject of investigation where Ms Christensen had conceded that RPS had not followed its own policy in this regard: at J[229]. The primary judge had earlier referred to Ms Sullivan’s concession under cross-examination that the appropriate procedures in dealing with a grievance had not been followed: at J[125].
72 The primary judge then turned to the second anomaly, the open disjunction between Ms Lamb being given a “generally satisfactory” performance report, with a three out of four rating overall and then, “immediately after the lodgement of the complaint performance issues arose”, and the purported performance issues “were so serious as to justify the removal of the applicant from her position”: at J[230]. On the one hand, Mr Stamatoudis conceded, under cross-examination, that he had no issues with Ms Lamb being able to do her role as at 22 January 2020. But then, a week after Ms Lamb made the complaint, on 29 January 2020, he proffers a list of performance issues to Ms Sullivan and Ms Christensen, as providing part of his “conclusion” to “recommend” that Ms Lamb “steps out of [the] NSL role due to time management challenges both from a leave and demonstrated performance perspective” (my emphasis).
73 Relevantly, the primary judge had noted earlier in his reasons Ms Christensen’s numerous concerns as to this course in her email on 1 February 2020 (five days before the demotion course was adopted) (at J[212]): Another National Service Lead role was being performed part-time (and therefore a purported justification for requiring that Ms Lamb “step out” because of a concern she could not fully commit to the pressures of the role because of study commitments might appear inconsistent); if Ms Lamb’s performance “was so bad” (as to justify her being required to “step out”) then they would (ordinarily) require her to go on a performance improvement plan; and she queried whether Ms Lamb would go back to the National Lead role after completion of her studies. His Honour observed that “no clear evidence [was] … provided by the respondents in answer to these particular issues”: at J[212].
74 Despite these concerns, Ms Christensen accepted under cross-examination that even though the meeting of 6 February was planned a week before, Ms Lamb was given no warning before the meeting that performance issues would be raised and nor did Ms Christensen speak to her independently about these purported concerns. There was lengthy cross-examination of Ms Christensen about this issue.
75 In these circumstances, it is apparent from the reasoning in J[227]–[232] that there was an intertwining of the consideration of Mr Stamatoudis as the author and instigator of the plan to demote Ms Lamb and, at the same time, the lack of any explanation regarding the failure to follow company policy: Ms Sullivan and Ms Christensen did not follow RPS’s grievance processes regarding Ms Lamb’s complaint and at the same time allowed Ms Lamb to be demoted where there were no performance issues of any substance immediately before the complaint and no performance improvement process was put in place and completed before the demotion.
76 RPS’s challenge concerns the primary judge’s findings as to the states of mind of these three decision-makers. An appellate court ought to interfere with such findings only in “exceptional circumstances”: Wong [109] citing Nocton v Lord Ashburton [1914] AC 932 at 945, 949 and 957; Clark Boyce v Mouat [1994] 1 AC 428 at 436–7; Barclay at [141] per Heydon J. I am not satisfied that the circumstances are exceptional.
77 RPS sought to challenge his Honour’s reasoning by claiming that, to the extent that he, in his reasoning at J[232], referred to Ms Lamb’s performance issues as only occurring in late January and early February 2020, his Honour had mistakenly understood that the performance concerns had arisen only at that time, when in fact they had arisen on and off since 2018. I do not accept this reading of his Honour’s reasons. The impugned finding, at J[232] – Mr Stamatoudis “had issues in relation to some aspects of the applicant’s performance in late January and early February 2020” – describes her performance at that particular time and says nothing about whether there had been performance issues in the past or not. His Honour’s evaluation of the relevant events involved a keen focus on the critical period immediately before and after Ms Lamb making the complaint. The fact that there had been general performance issues on and off since 2018 was not to the point. As at 22 January 2020, Ms Lamb had just received a three out of four performance rating and Mr Stamatoudis conceded under cross-examination that he had no concern as to Ms Lamb’s ability to perform her role. The issue was as to the second anomaly: Why the sudden “performance issues” (a week after the complaint) and, if these concerns existed, why did they not result in a performance improvement plan being instituted?
78 In essence, the primary judge’s decision can be understood in this way. First, he must find in Ms Lamb’s favour unless he is positively persuaded that a complaint did not form a substantial and operative part of the decision to take the action against her. Secondly, he noted and had regard to the fact of each of the three decision-makers disavowing or disclaiming having acted for the prohibited reason. Thirdly, notwithstanding their evidence, he was not positively persuaded (given his concerns of the kind identified at J[227]–[232]): Barclay at [44]–[45] per French CJ and Crennan J. I find no error in this approach.
79 Consistent with what French CJ and Crennan J say in Barclay is required, in an entirely orthodox way, the primary judge compared the decision-makers’ denial and their evidence of what they asserted to be their real reasons against the objective circumstances and was not persuaded that the statutory presumption had been discharged.
80 The effect of this position is that it is possible for Ms Sullivan and Ms Christensen’s reasoning to have been infected by information or advice provided Mr Stamatoudis such that, even if their personal contribution to the decision was not actuated by a prohibited reason, the reasons for the adverse action include that prohibited reason.
81 For these reasons ground three is not made out.”
RPS AAP Consulting Pty Ltd v Lamb [2023] FCA 1310 delivered 31 October 2023 per Raper J
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