Andrew Douglas: Tom, I’m going to throw to you, this is the big case. So, we’re talking about director’s duties. We’ve talked about Whitmarsh case before which is AWB, which the builder who was fined $730,000. This is a yachting case. Do you want to talk us through the facts, a little bit of the facts ’cause this is about a director who pleaded not guilty. So the company pleaded guilty, fined $730,000, half of the maximum.

Tom Daly: Mm.

Andrew Douglas: What did the director do?

Tom Daly: Should we go through what happened first?

Andrew Douglas: Yeah, first.

Tom Daly: The accident?

Andrew Douglas: That’d be good.

Tom Daly: Yeah, so the builder, AWB, was using a crane to salvage a submerged yacht and in doing… So they’re using a crane, they’ve put the slings on. And in doing so, as they’re pulling it up, the mast is broken and hit a worker, fatally injuring them. The builder was charged with breaching sections of the Act for obvious safety breaches.

Andrew Douglas: Yeah.

Tom Daly: But the director, and that’s really what this case is about, has denied their liability as the officer in charge of the systems of work.

Andrew Douglas: As due diligent. Yeah, that’s right. Under the due diligence provisions. And what they’ve said is, “Well, I couldn’t have known the level of risk.” But what the court did, I think it was Justice Russell, when they went through it, said, “Well, there’s almost nothing of a safety system. You’ve got no risk assessments, you’ve got nothing at all that you would need as an organisation to undertake the dangerous work you undertake. And not only that, you’ve shown no remorse in any of the way through. You’ve constantly not accepted the responsibility.” And then, fined some $300,000 of maximum $357,000. Can I just say to you, we act, ’cause we act only for employers, so we’re always acting in the relation to prosecutions and we’ve done over 350 of them. And one of the things we always say to directors and people who are leading it is, “Can you just look factually at where your liability is? If you’re guilty, please plead as early as you can. There’s a big discount, 25%. And if you can show genuine remorse about it, and you can talk about what you didn’t know and you can explain it, but don’t try and weasel out of it. But whatever you do, don’t go on the attack. Because when you’re guilty, you’re guilty. And the more you attack, the more you excite the regulator, the more you frustrate the court in the process, the higher your fine goes, and that is damage of a very significant level that goes throughout the corporate world for you going forwards.” $300,000 out of $350,000 fine. I wouldn’t like to see this guy ever try and get reinsured. Does that make sense?

Tom Daly: Yeah, of course.

Andrew Douglas: He’s really dug a hole for himself. So, that’s our major case today. I’m highlighting it. Why are we both highlighting it so much? I don’t think anybody quite understands the level of focus that regulators have on offices at the moment, have on due diligence, and are now prosecuting at a much higher level for due diligence breaches and reckless endangerment breaches by offices of business. And our lesson remains the same. If you’re running a business as a director, you must know the nature of the hazards that exist in the organisation, the nature of the controls, you must stay up to date with the best law in relation to the work that you do, you’ve got to do an assessment of what resources need to be applied to achieve that. These are the basic due diligence obligations. When you have an incident, what happens is all that is tested and this case, none of it was present. So, it’s not hard to prevent a due diligence breach from being laid against you. It’s just a matter of knowing what you do, knowing the hazards and levels of risk, documenting a process, auditing to make sure it’s happening, staying up to date with the recent law and making sure your budget has the relevant resources and you’re completely safe. But go on the front foot like this guy and it’s tiger country, really.

Tom Daly: Mm.

Andrew Douglas: Why don’t we have a look at our case study today, okay? So Tom, I’ll let you do the reading, mate.

Tom Daly: So, Bess had not been well. She had contracted Ross River Virus after holidaying on the Murray River during Christmas 2024. Upon her return to work, she was lethargic, had trouble arriving on time, and experienced ongoing periods of malaise. Her manager, Roy, suggested she take time off to recover. Bess responded that she was improving. They agreed on a support plan: she would work from home, take an hour-long break each day to nap or rest for a month, and catch up on work later. However, her team soon raised concerns, reporting that they often could not reach her during work hours. Roy scheduled a Zoom meeting with Bess. He explained that the current arrangement was not working and that he needed to be in the office at least three days a week and to be responsive when working from home. He also told her not to work outside standard hours. Bess replied that she had to work outside of those hours due to her fragile health. Roy arranged for an Independent Medical Examination and the IME consulted Bess’s treating doctor. It was agreed that she would need at least one hour-long break per day for the next month and that working from home was appropriate. However, Bess’s work remained poor in quality, low in volume, and she was still unresponsive during work hours. Later, her GP confirmed she was fit to work full hours. As a result, Roy directed her to return to the office three days a week and to meet her work targets when working from home. He also reiterated that she should not shift work to outside hours to compensate. Bess then submitted medical certificates from a different GP at another practise, requested flexible working arrangements based on her disability and age, she was over 55, and continued to be difficult to reach during standard hours. She often contemplated work late at night, sorry, completed work late at night, which is still of poor quality and insufficient quantity. While the company was preparing a business reasons defence, a private investigator filmed Bess playing 18 holes of golf with other women, followed by drinks and dinner on a day she had submitted a medical certificate claiming she was unfit for work. When the footage was shown to the IME, the doctor stated that her activities were entirely inconsistent with any continuing symptoms of Ross River Virus. As a result, Roy terminated her employment.

Andrew Douglas: All right, Tom, my first question is, did she have a valid request for flexible working arrangements? So, can I break this down for you a little bit?

Tom Daly: Sure.

Andrew Douglas: When can I ask for an IME? Okay, when there is a sudden change in a person’s health or management, and it walks away from a position which is built on past evidence. So in Grant and BHP, it was where somebody was wholly unfit and then suddenly became wholly fit for work, and the court said, “Well, you’re entitled to understand what it is with this person because you’ve got to get ’em back to work safe.” Here we’ve got somebody saying, “No, I can only work within these limitations,” and prior to that saying she was completely fit for work. So, the limitations were one that suited the way that she wanted to work. So, under the original cases of Ramsey and Blackadder and Grant and BHP, it was appropriate to do the IME, okay? So, there we go, there’s the first part. Got the IME. Then she says, “Look, I’m not well,” then she sort of says she is well and it all gets messed around. Did she have a basis for flexible work? No, ’cause she went back to her GP and said, “Now I’m well,” and then go back to her GP, say, “No, I’m not.” But the answer is she’s produced no viable evidence and the only viable evidence that does exist is she’s well enough to do the job.

Tom Daly: Mm.

Andrew Douglas: Okay? So, and the things that she’s arguing about are lawful and reasonable directions about when she works.

Tom Daly: Mm.

Andrew Douglas: So, I don’t think she’s got enough for flexible work and certainly, the fact that she’s 55 does trigger a provision under the flexible work arrangements, but it must be at attributable to her age as to why she can’t work, not just simply she’s 55. So, I don’t think she’d succeed, and that’s before they did the private investigator stuff. So, probably not a valid one. Was Roy’s failure to conduct a risk assessment a breach of workplace laws?

Tom Daly: Yes.

Andrew Douglas: Now, the answer is yes, okay? Because the difficulty we’ve got with this person is he is creating a method by which she works without understanding and assessing whether she can do that. The IME would’ve informed that process. This would’ve been a lot better if a risk assessment had been done. No harm has been done. But it’s a psychological hazard. All codes require risk assessment, not done. It’s a breach of a primary duty. Not to, unlikely ever to be prosecuted, but I’ll just put it out there. Was Bess’s termination based on a protected attribute or workplace right, potentially forming grounds for discrimination or a general protections claim?

Tom Daly: Well, no, because she was terminated for dishonesty, in the end. She provided medical evidence that was shown to be false.

Andrew Douglas: Yeah.

Tom Daly: She’s off work on this basis.

Andrew Douglas: Well, this is Anderson and Crown. I was just telling Tom before we came in, very famous case of a Kevin Sheedy worshipper, there must be at least six of them out there now,

Tom Daly: Oh, yeah.

Andrew Douglas: who wanted time off from Crown, wanted personal leave, so he’d go and see Kevin’s last game. I think it was in WA. They said no, so he got a doctor’s certificate that said he wasn’t fit and Channel 7 swept across the ground and there he was with his jacket in the air like everybody else. And Crown terminated employment because clearly it had nothing to… His medical certificate was not true,

Tom Daly: Yep.

Andrew Douglas: the facts that sat behind it. So here the question is, was the nature of what she’s doing inconsistent with her argument about Ross River Virus? Well, yes it was because her capacity to undertake work, the vigorous nature of what she was doing, the drinking, all those things, they’re not things that a person who’s unable to work eight hours a day can do.

Tom Daly: Yeah.

Andrew Douglas: It puts a lie to what she’s saying. So, I would say that it’s a proper basis.

Tom Daly: Yeah.

Andrew Douglas: So, the next question was, was the employer legally permitted to use surveillance in this way?

Tom Daly: Yeah, it’s hard to sort of intuit what the answer to this would be, and you told me that it depends a lot on the jurisdiction.

Andrew Douglas: So, it’s certainly… In four jurisdictions, there’s surveillance devices legislation. Victoria’s the only one that permits covert surveillance of someone who is a participant in something, but all of them allow it in circumstances where it is reasonable to do so, where it would otherwise, you would not be able to obtain evidence or it would be falsified or at risk of falsification. But you’ve got to be aware, in a workplace, there are very strict rules around covert surveillance.

Tom Daly: Things like at home with

Andrew Douglas: Yeah.

Tom Daly: mouse trackers and stuff like that.

Andrew Douglas: And all that sort of stuff. You’ve got to make sure the person is aware it is occurring, they’ve got to consent to it or as part of their employment, acknowledge they must comply with it. But this is outside… There’s a case called Kerrigan and I can’t remember the name of the Port Authority that was dealt with where the Fair Work Commissioner was concerned by the nature of what’s doing, but here, this was an appropriate course all insurers would undertake. This was workers’ compensation. Yeah, it’s permitted and you’re allowed to do it, but the evidence is not a lie ’cause you think it’s a lie. You must take that evidence and present it to an IME who can satisfy you that the nature of what that person is doing is inconsistent with the nature of what their claim is.

Tom Daly: So, you don’t see them playing golf and just immediately jump to the conclusion, right, we’ve got what we need.

Andrew Douglas: Yeah.

Tom Daly: You have to get the doctor to certify that that is not consistent with the claim.

Andrew Douglas: Yeah, so I.. Tom, I think it was my first personal injury case as counsel. I argued, these are the bad old days of personal injury, where the private investigator went and let down the guy’s tyre and he went outside with a back injury and pumped up his tyre, and he saw him moving a rock in the backyard. And so, I presented the evidence before Justice Crawford, who was a great judge, and Crawford said to me, “Well, Mr. Douglas, is there any evidence of what he was like the day later?” I just cringed. And the guy just said, “Yeah, actually, you can go and speak to my GP. Pumping up the tyre-”

Tom Daly: Destroyed my back.

Andrew Douglas: “For about three weeks after. So, I was lying in bed and I had to move the rock ’cause it was on top of one of the kids, such-and-such.”

Tom Daly: Oh.

Andrew Douglas: “Once again.” And yeah, we lost. We sort of settled after my brilliant piece of cross examination, actually. But the point was, I hope the client’s not out there now, for MMI I’m not sure it exists, I’m not sure anymore. But my point about it is you’ve got to be able to demonstrate that it is impossible and that the nature of what occurred didn’t cause them an injury or suffer as a result of it, which was reflective of their injury. So, it’s actually quite complex. Surveillance is not just catching someone doing the wrong thing. You’ve got to be able to prove, A, they couldn’t do it with their illness, B, if they did do it, that there was no sequelae as a result of doing that that caused them the type of damage. So, interesting case and a sad day for me. I think that’s it, mate.

Tom Daly: Yep.

Andrew Douglas: Good to have you along.

Tom Daly: Yeah, thanks.

Andrew Douglas: And see you all next week. Give us a thumbs up.