Andrew Douglas: Why don’t we kick over to the main topic, which is SafeWork New South Wales and the Goulburn Flight Training Centre. Kim, this is a case which I read it the first time and thought, well, it’s just another case. And then as I started to read it, I thought we’d very rarely get a good explanation of what is Section 144 in Victoria and Section 27, and they’re different, which are the director’s duties cases. So in Victoria, if you’re able to influence, if your decision, have your knowledge of risk able to influence an outcome that creates a level of liability in Victoria, very different from the objective test which sits elsewhere, which is do you exercise reasonable care to ensure that you provide a safe workplace by having knowledge of safety law, by knowing what the risks are, by having a system that’s in place, by resourcing. Very structured approach.

Kim McLagan: Yeah.

Andrew Douglas: So in Victoria, this case would be a different inquiry, but we would’ve ended in the same place. In other words, was he aware of the risk of a plane that wasn’t fit to be flown at the time for the purpose of which? Yes, he was.

Kim McLagan: Yeah.

Andrew Douglas: So in Victoria, did he have knowledge of a risk? Yes. Did he have capacity of influence? Yes. The fact of saying don’t fly it isn’t enough. You’ve got to be satisfied that that plane’s locked out or secured in a way that it can’t be used. He didn’t do that. By the way, that’s not his major failing in this process. The other one is the way people who are parachuters jump out and could get entangled, and there was an adjustment to a step which meant the two people actually ended up getting entangled and died fatally as a result of it. But what sits behind this judgement , which again is just a great judgement , is what is the role of a director where they have specialists undertaking work?

So people who are flying planes, doing all the things that are specialized. He didn’t have any flight skills or anything like that. That’s not what he had. But he ran a business. And to run that business, he had to be satisfied, and if we just go through them, that he’s got equipment, a plane which is safe to use. He knew it wasn’t, okay. In any jurisdiction in Australia, knowing you have something that is unsafe, and that you don’t have a safe method of preventing risk is a tick for director’s liability. Just like bullying is a tick for director’s liability. Second is, what is his knowledge of the law around that? Well, he knows or must know that the use of a dangerous piece of equipment is unacceptable. What was the resources that he threw behind that to prevent it? Nothing. What were the inquiries he made to be satisfied the system was working?

Kim McLagan: None.

Andrew Douglas: Didn’t do it. And so, although there was a massive fine that went to the company, the company didn’t have sufficient solvency to pay, so it was dramatically reduced. But his personal fine, which I think the company started off at a million and dropped back to about 100, 800 and something-

Kim McLagan: 400 per offence, dropped down to 50. And then he was 100 per offence, dropped down to 75,000.

Andrew Douglas: Yeah. He didn’t drop that much, did he?

Kim McLagan: No.

Andrew Douglas: And I think that represents the level of severity that the court found in respect of him. And I guess the warning for all directors is this is a nice, easy case to look at. Plane, not fit for use. Step, dangerous, known to be a risk. And the manner in which it was presented was a higher risk. No system, no vigilance, no decision making. Very easy. But on the day-to-day stuff we deal with every time, like bullying, like traffic management on sites. All the types of places, like mobile plant, like working at heights, all those major risks, every director is on notice of them. So if you’re looking at crisis, you know, not, sorry, crisis, critical risk management.

As a director, you must have knowledge that there is a system around those, and that there is integrity, and if you don’t, you end up in this case. So I thought it was, it’s not groundbreaking law, but it’s a beautiful description of where the law truly sits. And it’s a nice way to be able to say to a fellow director, “Hey, Kim, have you read this case? Because we know this person’s behaving badly. It’s been raised time and time again, and has anything been done?” And the answer is, “Oh, I’ve got alarm bells.” It should be alarm bells, okay. Do you want to do the case study?

Kim McLagan: That’s a nice segue into our case study.

Andrew Douglas: I think so, yeah.

Kim McLagan: Yes. Hang on. Might have to take it-

Andrew Douglas: We’re going to get to our case study. Here we go. So we got a bit excited in our last discussion. Go.

Kim McLagan: Okay, Bernie had had enough of the endless brusque and prickly communications from her boss. Day after day, she sat at her desk reviewing claims made by clients for loss and damage. Working in a call center was not easy. It had improved somewhat since she began working from home two days a week, but her performance was closely monitored.

Her manager was a clear micromanager, whose tone in communications was often unfriendly and at times challenging. Bernie had raised the issue with HR. The head of People and Culture Rachel said she was monitoring the situation and suggested accessing EAP. Her manager’s name was Chris. His behavior towards Bernie was not a one-off. There had been previous accepted claims regarding his conduct, and he’d even been nicknamed the Million Dollar Man by the CEO due to-

Andrew Douglas: I was going to say-

Kim McLagan: His impact on the worker’s comp.

Andrew Douglas: Steve Austin, but no one’s old enough know who the Million Dollar Man was. So, sorry.

Kim McLagan: Rachel had spoken to Chris, presenting examples of his emails and messages to Bernie, and highlighting how unhelpful both the content and volume of communication were. Chris responded that Bernie was an underperformer who required close supervision. Rachel rolled her eyes. It was the same explanation every time. Bernie submitted a flexible work request to start later in the morning, so she could drop her children at school, as her husband was on night shift for the next few months. She also requested an hour off in the afternoon for school pickup, with the intention of making up the time and still managing her caseload.

Chris immediately rejected the request, stating that the client demand fell within standard business hours. However, the call center operated from 8:00 AM to 10:00 PM, and other employees had flexible arrangements to manage caring responsibilities. Bernie raised the issue again with Rachel and asked for her intervention. Rachel escalated the ongoing concerns about Chris to the CEO and executive team. The CEO questioned why Chris’s behavior had not been addressed.

Rachel responded that his conduct always seemed to fall just below the threshold for formal action. Rachel did not follow up with Bernie over the next week, as she was uncertain how to proceed. Bernie began to feel hurt, isolated, and overwhelmed by her family responsibilities. When she spoke to Rachel again, Rachel said she was working on a solution. Bernie replied, “I can’t wait. My children must come first. I feel I have no choice but to resign.” That evening, Rachel received a certificate of capacity, and shortly after, a resignation letter stating that it was no longer safe for Bernie to remain at work.

Andrew Douglas: All right, so, interesting case, isn’t it?

Kim McLagan: Yeah. Good one.

Andrew Douglas: I liked it. And so is it a constructive dismissal case? Can she claim it’s a constructive, I had no choice?

Kim McLagan: No, no. She had other avenues. She could have pursued a stop bullying order through Fair Work. She could have gone to Fair Work for the rejection of her flexible working arrangement. So she did have other revenues.

Andrew Douglas: Yeah, she did. I reckon that she might run a chance.

Kim McLagan: Do you reckon?

Andrew Douglas: The reason is that there was, that there was a closing timeframe. So, she had children, she had to look after children. She had no way of looking after the children. Her request was not unreasonable because other people could work within those hours, and no action was being taken. So it was the absence of action that creates the constructive dismissal. So I think she’s got a 50/50 chance.

Kim McLagan: Okay.

Andrew Douglas: I agree with you there, and it’s such a good analysis to say, but there’s these other options. But it’s a beneficial jurisdiction, and they’re going to say, mom looking at children, unable to attend to her children. Office sitting on their hands with a known predator damaging her, and not providing her flexibility, which would cause no great impact on the business in real terms. What choice did she have?

Kim McLagan: Yeah.

Andrew Douglas: I agree with you, it would be a borderline decision, but I wouldn’t want to be the business who is running the argument.

Kim McLagan: Yeah, okay.

Andrew Douglas: But the other point is she’d never be reinstated. So as a business you’d run it. You know, in the terms that you and I chat to business, we regularly say, okay, so the person’s bringing complaint. Given the nature of their complaint, how do you want to manage it strategically? ‘Cause they can’t get reinstated because of their own behavior. So anyway, that’s probably a naughty part of the conversation I shouldn’t have thrown in. Would Bernie have a valid workers’ compensation claim, even though she’d resigned?

Kim McLagan: Yes, the resignation is irrelevant to that. It makes no bearing.

Andrew Douglas: Yeah, I just, it’s great to have you here ’cause people just don’t get that, okay.

Kim McLagan: But, oh-

Andrew Douglas: No, keep going, keep going. No, no.

Kim McLagan: No, no, I was just going to say because she can, there was no reasonable management action. No defence was available. Clear bullying, clear micromanaging, clear lack of response from the company.

Andrew Douglas: Yeah, and their argument after accepting maybe that they, you could argue that her conduct had led to the loss of, and they may seek a reduction benefits in weekly payments that they could argue.

Kim McLagan: No, that’s only if someone’s at work demonstrated a work capacity, and then they can apply Section 185 in the Victorian.

Andrew Douglas: I know, but see how dangerous it is if people learn this art of I’m going to put it in and I resign, your hands are tied behind your back, aren’t they? Because even if she loses her unfair dismissal claim, it has no effect on workers’ compensation legislation. Hard, isn’t it? Yeah, yeah. So I’m not teaching, by the way, if any of you out there employees, don’t do that. All right, given the rejection of her flexible work request and the increased scrutiny from Chris followed her complaint, would Bernie have a strong general protections claim alleging dismissal?

Kim McLagan: Yes.

Andrew Douglas: So first of all-

Kim McLagan: We’ve got-

Andrew Douglas: She’d have a jurisdictional argument around the dismissal. She may lose on that for the reasons you’ve asked.

Kim McLagan: Yeah, that’s a question one, yep.

Andrew Douglas: But would she have a good GP claim?

Kim McLagan: Yeah.

Andrew Douglas: The answer is a hard one to choose, because she’s got to make a decision, dismissal or non-dismissal. If she makes non-dismissal and undermines a constructive dismissal argument that she has. But she then has a very powerful general protections claim.

Kim McLagan: Yeah.

Andrew Douglas: So her difficulty is really the choice of claim, and she may get struck out now in the Fair Work Commission around that jurisdictional argument. She will win every day in a GP claim that she was constructively dismissed because they will not destroy her potential for the claim. So you won’t win on a jurisdictional argument on a GP claim. You would on a normal dismissal claim. Does that make sense?

Kim McLagan: Yeah, yeah.

Andrew Douglas: Okay.

Kim McLagan: Okay.

Andrew Douglas: All right, so let’s go for the next one.

Kim McLagan: Should Bernie’s complaints have been formally investigated? And should Chris have been stood down during that process?

Andrew Douglas: Well, this is the example of what you must investigate, isn’t it? Because you’ve got a course of conduct. And by the way, there should be two investigative processes. There should be both privileged and non-privileged. The reason it’s got to be privileged is the employer has caused most of the problem.

Kim McLagan: Yeah.

Andrew Douglas: So you want to get some feedback, but you desperately don’t want that in the public domain. But her allegations must be investigated because the decision maker cannot see the behavior, so invest. Should he be stood down? Absolutely. On the basis of what you’ve seen, what are the two basis? One, the nature of the conduct is so serious, he could harm people in his presence. Absolutely true.

Kim McLagan: Yeah.

Andrew Douglas: Secondly, will it interfere in the evidence collection that’s going on? Absolutely, again. So he’s got to go, he’s got to be stood down. And can I say at the end of it, he’s got to go. He’s a terrible creature.

Kim McLagan: Yeah.

Andrew Douglas: Okay, was there a breach of safety law?

Kim McLagan: No, no, we missed one.

Andrew Douglas: Oh, did I miss one?

Kim McLagan: Was Bernie’s flexible work request reasonable?

Andrew Douglas: I think it probably was.

Kim McLagan: Yes, yeah.

Andrew Douglas: Yeah, I think subject to the data around when calls come through and the nature of what burden it places on other, because part of a flexible work request looks at the burden it placed on other people. I suspect knowing the call centers we work for who operate those types of hours, I think you’d struggle to argue it wasn’t a reasonable flexible work request, particularly when it’s looking at a brief period of time. So it’s looking at three to four months, yeah.

Kim McLagan: And was there a breach of safety law? And if so, who would be responsible?

Andrew Douglas: There is absolutely a breach of safety law. So there is an individual breach, what’s the name of the toxic creature who was doing? Chris?

Kim McLagan: Chris.

Andrew Douglas: Chris is in trouble under the Section 25 individual liability in Victoria, and the similar provisions elsewhere. CEO’s in deep strife.

Kim McLagan: Yeah.

Andrew Douglas: Okay, if we were to lose Bernie, the CEO would lose, I mean, not, you know, she disappeared under a carpet, but if she should die as a result of what have occurred, CEO’s facing workplace manslaughter. Because the CEO knew of the problem, had said, “Why aren’t you doing anything about it?” Then like our director’s case had the capacity to ensure something was being done and did nothing. And that’s so wanting in care that it triggers, but certainly reckless endangerment. And of course, the organization will be liable. So there you go. There’s some interesting stuff. Is that it for us today?

Kim McLagan: It’s a good one. Yep, that’s it.

Andrew Douglas: Well done. God, it’s fun doing it with you.

Kim McLagan: Yeah.

Andrew Douglas: Okay. See you later. Cheers.

Kim McLagan: See ya.