HWL Ebsworth lawyer told not to bite the hand that feeds the firm … The turbulent Dr Rumble’s criticism of his client … Bad for business … Grounds for termination … Managing partner Martinez intolerant of insubordination … Christmas party snub … No presents … Stephen Murray reports
A former consultant with major law firm HWL Ebsworth was not terminated for his political views but because he failed to adhere to the firm’s policy of not criticising clients in the media, the Federal Court has decided.
The court also ruled that an informal direction to not attend the firm’s Christmas party and the failure to receive a gift card at Christmas time were not adverse actions taken in response to the lawyer’s outspoken views.
In a judgment given on Tuesday (September 3) Justice Nye Perram also rejected contentions that the firm had breached its contract with the lawyer in reducing work assignments and in terminating his employment.
Dr Gary Rumble, a “well regarded” specialist in public law, was sacked by HWL Ebsworth managing partner Juan Martinez in February 2017. In response, Rumble took action under the Fair Work Act, maintaining that he was the subject of adverse action taken against him for unlawful reasons.
He contended the termination came about because he queried the firm’s failure to adhere to an undertaking to pay him a five percent uplift, and because of his political opinions.
He further submitted that prior to the termination, the firm had taken other unlawful action against him, namely decreasing the amount of work offered to him; instructing him not to attend the firm’s 2016 Christmas party; and singling him out by not giving him a $299 Coles Myer gift card given to other employees of the firm.
He also mounted a common law claim that the firm had breached an implied term of good faith in his contract by terminating his employment, failed to provide him with work opportunities and failed to provide him with the annual five percent uplift in a timely manner.
Rumble was among a group of lawyers who left firm DLA Piper to join HWL Ebsworth in 2011. He was engaged by HWL Ebsworth on a contract which included a retainer of $30,000 for 60 hours of promotional work with clients, and provided for $250 an hour to be paid for work billed to the firm. The contract gave each party the right to terminate the contract without cause on three months’ notice.
While with DLA Piper, Rumble had been engaged to lead work on a Department of Defence inquiry into allegations of historical abuse against defence personnel. He became dissatisfied with the subsequent response from governments of both persuasion to the inquiry, and appeared before Senate committees criticising the supposedly lethargic response.
He also made contact with journalists, including Laurie Oakes, making an appearance in an interview with Oakes in April 2014, in which he was critical of the Department of Defence and the Department of Veterans Affairs.
After Rumble’s criticisms were made known to the managing partner, Martinez had the media policy revised to require management approval for media appearances and an obligation not to criticise clients in the course of any approved appearance.
Rumble indicated he was not inclined to give an undertaking to adhere to the new policy. However, despite giving further subsequent evidence to a Senate committee and seeking to advance the cause with the assistance of crossbench senator Nick Xenophon, Rumble did not immediately breach the new policy.
In November 2016, however, Rumble made contact with a Sydney Morning Herald journalist, who subsequently reported his criticisms of the government’s inaction on his calls for a thorough-going Royal Commission into allegations of abuse in the defence forces.
He also authored an opinion piece on the subject for the Sydney Morning Herald, which published it online on December 8, 2016, and in the Canberra Times the following day.
Meanwhile, Rumble was also pursuing the matter of his annual five percent uplift for 2016, following efforts he had to make to obtain the increase in earlier years. Martinez had said he would take the matter under advisement, despite it being a clear term of the contract that Rumble was entitled to the increase.
Justice Perram describes the consequence of Rumble escalating the uplift issue in February 2017:
“What happened next – perhaps unsurprising to those schooled in the ordinary course of human affairs – is that Mr Martinez fired Dr Rumble.”
Perram concluded Rumble …
“… was not terminated because of his political opinion as to which the firm was at least indifferent and quite possibly in fact sympathetic. It terminated him because he repeatedly disobeyed a reasonable direction to cease from criticising the firm’s clients.”
Further:
“… no one at the firm cared about Dr Rumble’s political opinion about the adequacy of the government’s response to the 2011 Defence Review. What Mr Martinez (and Mr Will) very much cared about was Dr Rumble’s conduct in criticising the firm’s clients which they obviously regarded as a threat to its business. He had been directed not to do this and he continued to do so.”
The judge noted that HWL Ebsworth did not require any legal basis to terminate Rumble’s employment, which could be done without cause. He said:
“There was nothing therefore unlawful in the firm’s dismissal of Dr Rumble because he refused to cease from criticising the firm’s clients.”
Justice Perram rejected Rumble’s contention that he was dismissed because he had raised the issue of the five percent uplift with management. While conceding that the termination immediately followed Rumble raising this issue with Martinez, the judge said the managing partner’s concerns were “more pedestrian”:
“He held a perception that Dr Rumble was not bringing in much in the way of profit and he was infuriated by Dr Rumble’s refusal to comply with the media policy.”
Justice Perram said his view of Martinez was that he is “a man accustomed to instinctive obedience.” He observed:
“I am abundantly persuaded that Mr Martinez’s concern was the media policy and Dr Rumble’s continued defiance of it. Indeed, I rather suspect that the real driver was not so much what Dr Rumble was doing but rather that he was not doing what Mr Martinez was telling him to do.”
“In truth, Mr Martinez did not care about Dr Rumble’s views on the Government’s implementation of his recommendations to which he was most likely indifferent. What he did care about was the earning of fees and the elimination of insubordination.”
Citing the “once controversial” reasoning of the court in CFMEU v BHP Coal, Justice Perram said that while there might be multiple characterisations of Rumble’s behaviour, namely expression of political opinion or breach of the media policy, it was only necessary to consider which factor actuated Martinez’s thinking in dismissing Rumble:
“Mr Martinez could have decided to terminate Dr Rumble’s employment because he had expressed a political opinion but that is not, as a matter of fact, what Mr Martinez did. He dismissed Dr Rumble because he disobeyed instructions and a policy not to discuss the firm’s clients in public without first getting permission.”
As for the Christmas Party, HWL Ebsworth submitted that Rumble had not been asked to not attend, instead he had been asked to reconsider attending because Martinez had said he would not attend if Rumble was present.
This was said to be driven by Martinez finding Rumble to be “most aggravating” as The Canberra Times article had been published that day.
Justice Perram saw echoes of Henry II’s tempestuous relationship with Thomas Becket in how Martinez’s wishes were handled:
“Mr Martinez denied that he had ever instructed that Dr Rumble not be invited but given Mr Martinez’ stature within the Firm he, like Henry II, can have been under no illusion about what his statement to Mr Will would mean or what the consequences for the turbulent Dr Rumble were likely to be.”
While Perram said it was difficult to avoid the conclusion that Rumble was discriminated against by being effectively excluded from the Christmas party, he did not accept that it mounted to adverse action. He said that Martinez was “actuated by his annoyance” at Rumble for flouting the media policy that very day.
The judge found that Rumble had not received the $299 gift card because it was given only to permanent employees with the firm, and he was a casual employee.
The firm acknowledged that it had erred in failing to pay Rumble the annual uplift for 2016, and this was back paid to him.
Perram said that had he made the connection between the drop-off in Rumble’s work for the firm, and unlawful adverse action by management, he would have calculated the loss to be about 30 percent.
However, he said, while the drop-off in work was attributable to the “negative attitude” of Martinez and Canberra managing partner, Michael Will, it was not the result of Rumble’s political opinions or his inquiries into his unpaid uplift. He attributed the attitude to Rumble’s “continued criticism of the firm’s clients and a question mark about his value to the firm”.
Addressing Rumble’s future economic losses, he said:
“To the extent that there has been a reduction in Dr Rumble’s attractiveness in the Canberra legal marketm – there is no easy way to say this – a realistic appraisal of the cause of that reduction must surely be Dr Rumble’s ill-advised decision publicly to criticise the Minister, the DART, and the Departments of Defence and Veterans’ Affairs after the completion of his report.”
He went on to observe:
“The view that one ought not to bite the hand that feeds loses none of its truth just because the biter believes himself to be acting on a principled basis. This is the way of the world.”
He ventured that there had been no reduction in the market’s views as to Rumble’s competence as a lawyer “which remains untarnished”:
“What has been damaged is Dr Rumble’s reputation for judgment and the person who has damaged it is Dr Rumble, not the firm. In areas of law not calling for the exercise of judgment or circumspection, which will include much advice work, my perception is that Dr Rumble remains perfectly employable.”
In support of his claim that the firm had breached its contract with him, Rumble maintained there was a duty to co-operate in achieving the contractual objects of the employment relationship, and that this was breached by not giving him work and by the termination.
Justice Perram rejected this submission:
“Co-operation is two-way street and Dr Rumble was not co-operating. I do not think that any implied term would require the firm to co-operate with Dr Rumble by not terminating his employment when he was not co-operating with it by directly breaching repeated instructions not to criticise the firm’s clients publicly. This part of Dr Rumble’s case seems to me to be wholly unrealistic.”
As a fall-back position, HWL Ebsworth submitted that had it acted on Rumble’s political opinions, this was not unlawful because “political opinion” was not a ground for action in anti-discrimination legislation in New South Wales, where Rumble was living.
While the Fair Work Act makes it unlawful to discriminate against a person because of their political opinion, there is an exemption from its operation where the relevant conduct was lawful under the law of the place “where the action is taken”. The firm argued that the place where the action was taken was Rumble’s home base of Nambucca Heads.
Justice Perram rejected the firm’s submission that the “place where the action is taken” is the place of the receipt of the termination notice. He said this could give rise to contrived situations to escape coverage of applicable laws. He said the termination of the employment relationship was defined by an employment contract that was centred on the Australian Capital Territory (where it is unlawful to discriminate on grounds of political opinion).
Oh, and the price of the humiliation of being excluded from a Christmas Party, if it came to an award? Justice Perram put that at $10,000.