Andrew Douglas: Now let’s move on to our main topic, which Matt and I are making up as we go along.

Mathew Reiman: That’s fair. We are.

Andrew Douglas: Yeah, because we thought for old times’ sake, we do it other times.

Mathew Reiman: That’s right. Yeah. We do it one last time if I’d want to. But it’s completely ringing Andrew, yeah.

Andrew Douglas: So it really came, ’cause of the case was Rosenbaum that recently came through, which was an anti-intrementing bullying order that stopped performance management of an account where the owner’s wife, who was a director, had carried out some conduct which was incredibly ordinary in relation.

Mathew Reiman: Oh, I’ll shove it. I think that’s funny, yeah, so-

Andrew Douglas: But that had to drill down. But there was absolutely no doubt that there was no way she was going to act reasonable to this woman. She understood the woman was legally represented. There was workers’ compensation on foot. There’s a million things that should’ve told her to stop doing what she was doing. And then she sent a letter with eight or 12 allegations.

Mathew Reiman: 12 allegations. Yeah, yeah.

Andrew Douglas: For serious misconduct.

Mathew Reiman: She’d been off work for two months on unpaid leave. She’d already put the application for the stop bullying order in, had started the processes around the workcover claim.

Andrew Douglas: She got up to speed so fast.

Mathew Reiman: Hell, yeah, yeah, I used that five minutes very quickly.

Andrew Douglas: So only 12 minutes before would when we remember this guy. I remember the name.

Mathew Reiman: The name was good. The name was good. But in that context, it then sends the letter circumventing the lawyers, which everyone knew were engaged by the employee to not only try to do an investigation meeting, called in a disciplinary meeting, says, “You have to respond to these 12 things.” And it just set the whole thing off on an absolutely worst direction which is now you’ve got this interim order from the Fair Work Commission saying, “You cannot do these specific things.”

Andrew Douglas: Very funny, can I just say? There’s some observations from the Fair Work Commission, which are just lawfully not true. So in other words, when someone’s engaged a lawyer, there is no obligation to respect to the employer to write to a lawyer. And I was sort of reading-

Mathew Reiman: No.

Andrew Douglas: That and I thought-

Mathew Reiman: Yeah, yeah.

Andrew Douglas: You’ve got to be carried away. You just don’t like it.

Mathew Reiman: Yeah.

Andrew Douglas: So don’t read the judgement for law. That’s what I’m going to say.

Mathew Reiman: No, that’s a good point. We get asked that quite often. I think when employees are in a disciplinary or a performance management process, and then all of a sudden, the letter from the lawyer comes through. There’s always that distinction. If we’re dealing with something about the legal claim, yes, you must engage with the lawyer.

So if it’s about a settlement offer, if it’s about responding to something in that letter or about particular allegations and so on, you’ve got to respond to the lawyer. But it doesn’t mean that you don’t have an ability to continue to engage with your employee in the course of their employment in a lawful and reasonable direction sense.

So there’s some conflating of that, I think here. I think the issue was that the direction in the letter was not really a lawful and reasonable direction given the context of the nature.

Andrew Douglas: It was just petrol with a match really, wasn’t it?

Mathew Reiman: Absolutely. And then, I mean, look at… You know, I think an interesting part of this case, you know, the director’s wife sort of gets on the stand as part of the hearing.

Andrew Douglas: And it’s belligerent and angry and bans the employee.

Mathew Reiman: Oh, my goodness. Oh, my goodness. Couldn’t present themselves in any worse way. So this is perhaps an example of sort of the worst case.

Andrew Douglas: It’s the worst case.

Mathew Reiman: Scenario. And it is much deserved.

Andrew Douglas: And as I was reading through and I was giggling and I thought, you know, somebody would’ve said to her, when your defence is reasonable management action, at least you should act reasonably when you’ve been crossed.

Mathew Reiman: Yeah, that’s right. In front of the person who’s going to decide whether it is or not, Andrew. But, yeah.

Andrew Douglas: That’s it. The reason we raise the case is this, you often get red flag employees. There are people where, you know the bomb’s going to go off. You just dunno when it’s going to go off.

Mathew Reiman: That’s right.

Andrew Douglas: You’ve allowed a lot of behaviour to go in the past. There’s a lot of water under the bridge and condemnation. And you decide you’re going to take a stand.

Mathew Reiman: Yeah.

Andrew Douglas: At that stage, you’re normally hypersensitized to the person.

Mathew Reiman: Yes. That’s right.

Andrew Douglas: So you see small things as great, big things.

Mathew Reiman: Absolutely.

Andrew Douglas: It’s no surprise to you or shouldn’t be, that the person on the other side is equally highly sensitised to you.

Mathew Reiman: Yes. Yep.

Andrew Douglas: And that your actions and the manner in which you take actions before the formal performance management are all triggers for a successful workers’ compensation.

Mathew Reiman: Exactly. Yeah.

Andrew Douglas: So the person’s perception of the way that you’re managing them, doesn’t have to be reasonable. It just has to be their perception. It’s a subjective test and gives them a compensable claim, not where you want to be. When you want to get to the formal part of it where it’s an objective test towards management. That’s the first thing Matt and I want to talk to you about. Understand there is a period of time, the dance.

Mathew Reiman: Yes.

Andrew Douglas: You know, before you actually get to the game. Which is purely subjective tests.

Mathew Reiman: Exactly. Exactly. And if you’ve left it too late to start properly addressing those things there, you’re on a slippery slope to a bad outcome.

Andrew Douglas: Yeah, so that’s the workers comp part. Second, when the person gets scared, they’re going to raise, at some stage, they don’t feel safe. They’re going to raise protected attributes about their life. You know, they’ve got caring responsibilities that they’ve got a mental health issue.

Mathew Reiman: Yeah, right.

Andrew Douglas: So they’re going to start marking the ground like a naughty dog. Just to remind you, everyone, where they’ve gone. Then say, “You touched me now, and I’ve already marked that ground.” And then the moment you go to move, they say, “Well, now you are doing something which breaches my rights around this because of this. You’re doing it because…” And the truth is you are because it’s that thing that drove you crazy.

Mathew Reiman: Yeah, that’s right. It was the final, it was the straw. Broke the camel’s back. Yeah.

Andrew Douglas: Broke the camel’s back because of that hypersensitivity. So we’re going to do it through a quite complex problem. And it’s much more complex than it should be ’cause it started 3:00 AM this morning.

Mathew Reiman: Yeah, we started so early. 3:00 AM.

Andrew Douglas: Matt’s been giggling just turning page over.

Mathew Reiman: Oh my goodness.

Andrew Douglas: But what I want to remember is those comments of warning. We start from very easy to set up an anti-bullying order where that hypersensitivity exists. Where there’s repetitive conduct which is unreasonable, makes someone feel unsafe.

If the person says they’re unsafe, then you need to stop the process, step back, provide the support, and then build a formal process around it. And when someone puts their hand up and says, “I’m not feeling mentally safe to do this.” You actually need to start saying, “Well, how do I put a circle around that to make sure the person is safe and well?”

Mathew Reiman: Yeah.

Andrew Douglas: Or that you’ve made appropriate adjustments for that person. And remember the last part of this is, it’s an important part that a person’s capacity be managed as part of their inherent requirement of their job. So when a person says, “I can’t be managed,” they can’t be at work.

Mathew Reiman: That’s right.

Andrew Douglas: So I just put all that together before we go into the case study. And it goes for a while. I’m told it’s 11 slides.

Mathew Reiman: No, 13 slides, I think.

Andrew Douglas: Matt. I know it’s your last day, give me a break. But just try and remember everything because it is a fascinating and fun scenario.

Mathew Reiman: Yeah.

Andrew Douglas: And it’s… We’re going to be plaintiff lawyers. We’re going to come back at the end of this and all of us are going to be plaintiff lawyers. Hope you’re okay with it.

Mathew Reiman: That’s right. Different, different hats on, right.

Eirwen was the executive assistant to the CEO of Good Traps Pty Ltd, a plumbing supply business. Eirwen had been the EA and previously PA to Gordon Gutter, the original owner and more recently the CEO of GT, after it was bought out by a group of venture capitalists. Gordon stayed on after the sale for 12 months as agreed in the sale agreement to bed down the purchase and handover to the VC’s appointed CEO, Nancy.

Eirwen started when the business was just three people in 1985. She was an old-fashioned secretary. She had perfect English, typed everything before PCs on an electric typewriter in triplicate with interleaving carbon paper, rarely resorting to white out to fix the errors on the three sheets. She was a rule complier and requirer. She was deeply loyal to Gordon. Described herself as his work wife. Arranging his day, making his coffee, and buying his lunch.

Her reward was a gruff nod of the head and a wage that was barely above the award for the first few years of her working life. She didn’t mind. She had the work ethic, and she knew behind closed doors, he marvelled at her capacity to knock both him and his day into shape. The business grew from a small suburban business in Geelong West to a national business that competed with Reece. Even the executive team members before the VC buy-out feared her. She was a fierce gatekeeper for Gordon.

The VC had undertaken a global search to replace Gordon. Nancy was the senior exec at McKinsey and specialised in distribution networks development, exactly what GT needed to break into the Asian market. She consulted with Gordon for the first three months after the buy-out, then went on payroll as CEO in waiting.

Nancy worked closely with Gordon, was inclined to do her own documentation and diary work, was brought into Gordon’s confidence, who really liked her, and she quickly rebuilt an executive team and virtual work groups not supported by admin. She worked lean. Although she was kind to Eirwen, she shared no confidences with her. Didn’t want coffees and lunch, just wanted her travel, accommodation and meetings arranged.

On the 12th of April 2023, Nancy spoke to Eirwen and explained they were adopting an internal social media platform for team communication. She wanted Eirwen to help lead the change. Eirwen bristled. All her life, she sat for Gordon at 7:30 AM and they mapped out the days ahead, she took shorthand and actioned his needs. She realised now that what Nancy would be doing would be directly socialised with work groups and she would make it work without the gatekeeper role she’d enjoyed for 38 years.

Eirwen went to the training and built a rollout process that was very formal, required classroom-like training, and signed off competency, a Gordon way of doing things. Nancy looked at her 12-page summary, emailed back four lines 15 minutes later, saying, “No need for classrooms, we will use an online process and copied in a link.” Eirwen was deflated, lost and hurt.

She felt her accrued value and authority was lost. She went in to see Nancy to talk her through her concerns. Nancy said, “Hi,” excused herself, and three minutes later, sent a message with a contract to set up the online process, and was gone. Eirwen went to HR, complained Nancy had treated her unfairly. She didn’t feel safe with Nancy who didn’t consult around major changes with her and others. And everyone felt very uncomfortable with her leadership style.

HR spoke to Nancy, who was blown away. She didn’t get it. She was lifting a load off Eirwen, liked her, but felt she was a bit of a mother and dinosaur and wasn’t sure how to use her. When she got back into the office, she asked Eirwen to come in, explained she didn’t mean to hurt but thought she was helping Eirwen. But explained clearly that she needed a faster, more transparent process of managing her team and couldn’t have Eirwen managing access to her.

Eirwen broke down in tears, apologised as she had never cried in her life and said but her job was managing Nancy. Nancy said, “I’m good at managing myself.” And told her to take a couple of weeks off, on special paid leave, not from her accruals, and relax. Eirwen went to a plaintiff lawyer.

Andrew Douglas: There you go. Now we’ve become the plaintiff lawyer. I don’t know what sort of hat that means to be put on.

Mathew Reiman: I don’t know, I mean-

Andrew Douglas: Imagine, the pointy one.

Mathew Reiman: Oh, I was just say, like a training conductor hat. I’m not sure why that came to mind but I know what sort of hat-

Mathew Reiman: You mean by that’s pointy one. The D for plaintiff. Yeah.

–Andrew Douglas:Yeah. Okay. So how would the lawyer position her change in role? The policy from GT was two weeks severance pay for each year of service and a week extra for employees of greater than 10 years for GT. That’s a very common American course, I might say, from South America, the southern part of US. Eirwen had worked for about 38 years and never taken long service leave. Nancy had no intention of making her redundant. Eirwen was on 120,000 annual salary and a defined bonus that had to be paid out of around 50,000 annum. Put this question in a way because there’s no way it’s redundancy.

Mathew Reiman: No, no. But the language.

Andrew Douglas: But this has to be the end game, doesn’t it?

Mathew Reiman: That’s right. That’s right. I mean, the thing is, is that a plaintiff lawyer’s going to pick up on this and use the classic language that no longer needs the job to be performed by anyone because of changes in the operational environment of the business. Changes in the operational environment of the business at the top end. And in the specifics of what she was doing. Changes in the role. Just like you do.

Andrew Douglas: Prior to consult.

Mathew Reiman: All of these things.

Andrew Douglas: Yeah.

Mathew Reiman: All of these things.

Andrew Douglas: Arbitrary changes and what she’s doing. But one thing the plaintiff lawyer’s not going to do is say, “Well, now you’ve done it.” I say it’s a repudiation.

Mathew Reiman: No, no.

Andrew Douglas: No, because the plaintiff lawyer now knows they’ve got to cause pain. But the end result is getting this great outcome.

Mathew Reiman: Yeah.

Andrew Douglas: Which is the redundancy.

Mathew Reiman: That’s right. That’s right.

Andrew Douglas: And getting everything working together. And the longer she’s there, the long service lead will accrued at a higher and higher rate.

Mathew Reiman: Oh, my goodness. Yeah. She’s never taking it. It’s going to be a ridiculous amount of weeks.

Andrew Douglas: You can see the plaintiff’s lawyer is not about resolving this now.

Mathew Reiman: No. No.

Andrew Douglas: An employee job is to cause pain at this stage, okay? And all of us who’ve worked with the pointy-hatted plaintiff lawyers know at this stage, you don’t get a letter of demand. You get a stressed and sick worker who seems to be writing very well-written emails to you about how they feel emotionally.

Mathew Reiman: That’s right. That’s right. Making their complaints.

Andrew Douglas: So now we’ve got the change in how she was treated, how it impacted her mental health. She felt lost, ambivalent, had no motivation. She was depressed. How would the lawyer use this and her forced special leave to Eirwen’s advantage? There’s a couple different questions about this. Remember, all these people do feel like that.

Mathew Reiman: That’s right. Yeah.

Andrew Douglas: And they are depressed.

Mathew Reiman: Yes.

Andrew Douglas: And they’re sad because their role in life has just been taken away and you-

Mathew Reiman: Yeah, it’s not made up. Yeah.

Andrew Douglas: It’s not made up. And I wanted to say that. And the special paid leave is meant to be look curative but in a way, it’s sort of punitive.

Mathew Reiman: It is. It does come across as punitive.

Andrew Douglas: Punitive. So, you’ve got-

Mathew Reiman: She’s raised the complaints about it.

Andrew Douglas: And then, she’s been sent on leave.

Mathew Reiman: Yeah, sent on leave.

Andrew Douglas: So there, we have our first general protections issue that’s coming in.

Mathew Reiman: Absolutely.

Andrew Douglas: And that’s, you know, at the end of this leave, she’s going to say, “Look, I feel like I’ve been isolated. I feel that I’ve been pushed out of the business when I raise a complaint.” So you can see, not a winning argument but it’s a great start to it.

Mathew Reiman: Oh, it’s laying the foundation for it, for sure.

Andrew Douglas: Let’s go to the next slide.

Eirwen can identify subtle but repeated changes in how Nancy let her do her job that took away authority, functions, and eroded actions taken by her to align with Nancy’s preference for online engagement, not formalised process. She felt hurt and humiliated by the change. And others have noticed and commented upon it. How would a lawyer use this course of conduct?

Now, I just want you to remember, as you introduced change without proper consultation, as it just happens by force of will, there is a very reasonable perception from the person who’s on the other side of that, that they’re being excluded from.

Mathew Reiman: Yes, that’s right.

Andrew Douglas: That they areMathew Reiman: Something’s changing towards them. And no one’s told ’em about it.

Mathew Reiman: That’s right. That’s right.

Andrew Douglas: So you’ve got also the beginnings of a bullying argument. Not enough, I don’t think.

Mathew Reiman: No, no, I don’t think so. Not it’s, you know, reasonable management action question. Is it repeated, unreasonable… It’s a little bits and pieces.

Andrew Douglas: It’s just on the edge. But if you stick it with the general protections issue, if you’d stick it with a mental health issue-

Mathew Reiman: Absolutely.

Andrew Douglas: You’ve now got a pretty good, solid general protection claim coming.

Mathew Reiman: Yeah, agree, agreed, agreed.

Andrew Douglas: So you’ve got much more leverage and you’ve got two or three other witnesses say, “Yes, she’s not being treated the same. No, she’s not allowed to do the job she used to do.” So you’re getting the smell of repudiation. It’s becoming ugly. And yet Nancy’s a good person.

Mathew Reiman: Yeah. Yep.

Andrew Douglas: She’s just trying to get from point A to B without too much problem.

Mathew Reiman: Yep.

Andrew Douglas: She’s bumped into a dinosaur. He’s sinking around the swamps and won’t come out.

Mathew Reiman: That’s right. Yeah, the tar pits are there.

Andrew Douglas: I’m going to miss you, man. Oh. And thought of the tar pits.

The day before Eirwen returned from leave, she received a text from HR stating there was a meeting with Nancy at 9:00 AM the next day. That’s the first day back to discuss how they would work together going forward and it was a lawful and reasonable direction to attend.

The lawyer sent her to a GP who said it was not safe for her to return to work and that she was suffering from depression.

How would the lawyer use these circumstance to frustrate the inevitable change Nancy was seeing and best serve Eirwen as a client?

Mathew Reiman: Yeah, I mean, this is the classic example, is that failure to communicate across that break. You know, if this is something that’s legitimate, which again, we can take from the factual scenario that Nancy does legitimately want to find a way forward. Albeit, she’s got a particular way that she sees that happening. The dropping it on at Eirwen in circumstances where she would knew that Eirwen was so stressed as to require leave to feel better. It’s just compounding. Yeah.

Andrew Douglas: So what had happened here is a plaintiff lawyer would tell her to take personal leave.

Mathew Reiman: Yep. Yep.

Andrew Douglas: The smell of workers’ comp would be running at you.

Mathew Reiman: Oh yeah, definitely.

Andrew Douglas: The premium impact of her on a business and this size. We’re talking five, $600,000. And then you get a letter of demand from plaintiff lawyer in respect to the GP.

Mathew Reiman: Yep.

Andrew Douglas: And the settlement you’d be looking at is 250 to $300,000.

Mathew Reiman: Oh, this one for sure.

Andrew Douglas: And the payout.

Mathew Reiman: Yeah. Absolutely.

Andrew Douglas: And you wouldn’t end up doing the two or 300, you’d do about 80 to 100 in general damages as a payment, and then you’d pay out.

Mathew Reiman: Yep.

Andrew Douglas: Now just imagine if you could do the right way. Nothing.

Mathew Reiman: That’s right. That’s right.

Andrew Douglas: Nothing at all. And a useful woman who redirected and given the right strength would want to stay and improve.

Mathew Reiman: That’s right. And add value most likely as well.

Andrew Douglas: Yeah. So look, that’s a story we both sort of wanted to tell.

Mathew Reiman: Yeah.

Andrew Douglas: It was our last day story for Matt, miss Matt greatly.

Mathew Reiman: Yeah, there you go. Yeah, thank you very much.

Andrew Douglas: It’s tar pit.

Mathew Reiman: It’s been hard for me like a tar pit, yeah. I’m getting stuck in there.

Andrew Douglas: Okay, thumbs up, guys. See you later.

Mathew Reiman: Thanks, everyone.