Matthew Poll and Boomalli Aboriginal Artists Co-operative [2009] NSWIRComm 1047 (18 August 2009)

Last Updated: 16 October 2009

NEW SOUTH WALES INDUSTRIAL RELATIONS COMMISSION

CITATION :
Matthew Poll and Boomalli Aboriginal Artists Co-operative [2009] NSWIRComm 1047



FILE NUMBER(S):
IRC 520

HEARING DATE(S):
22 and 23 July 2009

DATE OF JUDGMENT:
18 August 2009

PARTIES:
APPLICANT
Matthew Le Breton Poll

RESPONDENT
Boomalli Aboriginal Arists Co-operative

CORAM:
Bishop C


CATCHWORDS: Unfair dismissal - applicant dismissed solely due to financial situation of organistion - funding withdrawn - no longer trading or operational - no issues as to work performance raised - compensation sought.
Held - financial situation serious - may have been avoidable - governance issues with Board - lack of consultation and co-operation with applicant's efforts to resolve situation - some unfainess in treatment of applicant - genuine redundancy - no option once funding withdrawn - no orders as to compensation in circumstances.

LEGAL REPRESENTATIVES

APPLICANT
Matthew Poll
RESPONDENT
Mr M Byrnes, Solicitor,
Clayton Utz

CASES CITED:
Bankstown City Council v Paris (1999) 93 IR 209
Outboard World v Muir ((1993) 51 IR 167

LEGISLATION CITED:
Industrial Relations Act 1996


TEXTS CITED:




JUDGMENT:

- 22 -

INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES

CORAM: BISHOP C

18 August 2009

Matter No IRC 520 of 2009

Matthew Le Breton Poll and Boomalli Aboriginal Artists Co-operative

Application by Matthew Le Breton Poll re unfair dismissal pursuant to section 84 of the Industrial Relations Act 1996

DECISION

[2009] NSWIRComm 1047

1 This is an application by Matthew Le Breton Poll against the Boomalli Aboriginal Artists Co-operative ("Boomalli") for a remedy pursuant to S.84 of the Industrial Relations Act,1996. Mr Poll was dismissed from his position of Artistic Director with Boomalli on the 25 March 2009. He sought monetary compensation in lieu of reinstatement or re-employment.

2 The matter was listed for conciliation and directions before Commissioner Macdonald on the 7 May 2009, at which time conciliation took place. As no settlement could be reached, directions as to the filing and exchange of witness statements were issued pursuant to Practice Direction 17. The file was returned to the Registry pending allocation of a hearing date. The matter was subsequently listed for hearing on the 22, 23 and 24 July 2009 before the Commission as currently constituted.

3 In correspondence to the Industrial Registrar, dated 26 June 2009, (Exhibit 5), Clayton Utz, representing Boomalli, advised inter alia as follows:

"We refer to the Employer's Reply to Application for Relief in Relation to Unfair Dismissal (the Reply) in the above proceedings, which the respondent filed on 4 May 2009. We advise that the Respondent will no longer be pursuing the misconduct allegations that were included in the Reply."

4 As a consequence of the withdrawal of those allegations the third day set down for hearing was not required.

5 At the hearing Mr Poll, the applicant, appeared on his own behalf and also gave oral evidence in addition to the witness statements he had filed (Exhibits 1 and 2).

6 Mr Byrnes, Solicitor, appeared on behalf of Boomalli and called Mr Robert Soewardie, Chairperson of Boomalli, to give evidence (Exhibit 3).

7 At the commencement of proceedings the Commission offered the parties the opportunity of further conciliation in an effort to reach a settlement, which was accepted. Unfortunately, despite goodwill and good faith on both sides, a settlement was unable to be achieved, due solely to the financial position of Boomalli. A situation which was the reason for Mr Poll's dismissal. This will be further dealt with below.

8 It should also be clearly indicated at the outset that Mr Byrnes had advised, during off record proceedings, that Clayton Utz was appearing pro-bono for Boomalli. The only reason that I take the unusual step of referring to this, is to make it clear that Boomalli was not, on the one hand saying its financial situation was such that it was unable to reach a commercial settlement of this matter, but yet, on the other hand expending money on legal costs in opposing Mr Poll's unfair dismissal claim. As I indicated above the only reason this matter did not settle was due to the current financial situation of Boomalli.

Background and Chronology - based on the evidence filed and the transcript.

9 Mr Poll's work experience over the last ten years has been in arts and related curating.

10 Mr Poll commenced in the position of the Artistic Director of Boomalli on the 8 April 2005, on an annual salary of $65,000. His employment was covered by the terms and conditions of an employment contract (Exhibit 1 - Q) signed off by the then Chairperson of Boomalli, Mr Jeffrey Samuels.

11 Boomalli is one of Australia's longest running Aboriginal owned and operated art galleries, having been established in Chippendale in 1987. It operates to promote and foster Aboriginal and Torres Straits' artists. Membership of the Co-operative is confined to practising artists who can verify their aboriginality and demonstrate their connection to the NSW Aboriginal community. The governance of Boomalli is undertaken by a Board of Directors (Exhibit 2 - S). There were 4 Directors plus the Chairperson listed as at the last held Annual General Meeting in November 2007.

12 Mr Poll deposed, (Exhibit 1), as to some issues affecting the funding of Boomalli as follows:

"Throughout its 22 year history, Boomalli has been dependent on government funding to finance its operations. The amount of funding acquired and the ease with which it is obtained has varied according to shifts in government spending policy and other factors. Issues which had impacted on Boomalli's funding in recent times included:

· the abolition of the Aboriginal and Torres Strait Islander Commission (ATSIC) and the creation of the Indigenous Coordination Centres (ICC) as the key provider of arts funding has created new mechanisms by which to access funding
· the change in Federal governments has created a shot-term (sic) "vacuum" in some funding areas as the new government has sought to revise previous programs, fine-tune funding priorities and implement restructuring
· a greater focus on organisational independence from government funding and a drive to make funding provision more competitive
· the current global economic circumstances."

13 A second full time staff member was employed as Program Manager sometime during the 2007/2008 financial year. There was no evidence as to his duties or remuneration. There were also two other part time employees.
14 Mr Poll's position encompassed overseeing the "development and management" of Boomalli and the achievement of the aims and objectives of the Co-operative. He was responsible for the day-to-day running and administration of Boomalli which included full responsibility for budgets, management plans, policies, resources and assets and all funding arrangements. His role was also to "plan, develop and manage a range of quality exhibition programs" to both highlight the work of Aboriginal artists and to meet their needs. He was required to report on a defined, regular and periodic basis to the Board and he was also responsible for the preparation of the Annual Report (audited externally) for presentation to the Board. (Exhibit 3 - C).

15 The finalisation and adoption of the Annual Report by the Board (and incorporating an Auditor's Report) was an essential requirement of the various funding arrangements supporting Boomalli.

16 Mr Robert Soewardie is an Aboriginal artist and member of the Co-operative. He served as a Director and Chairperson of Boomalli from 2003 to early 2005 when he resigned and Mr Samuels took over as Chairperson. Mr Soewardie was not involved in the running of Boomalli from that time but remained an active member of the Co-operative and was submitting artworks. He was re-elected as a Director at Boomalli's Annual General Meeting in November 2007 and became Chairperson at the beginning of 2008, as that position had not been filled at the AGM.

17 During the course of Mr Poll's employment there had been no Director nominated to fill the position of Treasurer by the Board as provided for in the operational structure of Boomalli (Exhibit 2-AD).

18 By the time of Mr Poll's termination Mr Soewardie was effectively, the sole remaining active Director of Boomalli, other Directors having resigned or become inactive (it would appear) since that 2007 AGM with the positions not able (or yet) to be filled.

19 For various reasons (to be dealt with below) the Annual Report for the year ended 30 June 2008 was late in being finalised; an Annual General Meeting had not been held to enable the Report and audited accounts to be approved; a Directors' Report had not been prepared by Mr Soewardie and the Directors' Declaration had not been signed by Mr Soewardie as Chairperson. A "Draft Report" (but unsigned) was finally "released" by the Auditors, Grubers Beckett, Chartered Accountants, in March 2009 (Exhibit 1 - D).

20 The Draft Report listed a total tax liability for the end of that financial year of $87,449 a substantial increase from previous 2007 reported liability of $36,946.

21 On the 11 February 2009, Mr George Femia, Boomalli's external Bookkeeper, who had been undertaking the bookkeeping for the organisation since some time in mid 2008 (precisely what date is not clear from the evidence), sent Mr Soewardie the following email (Exhibit 3-E):

"Dear Jake,

Confirming our conversation the other day, wherein you asked whether Boomalli is currently insolvent and whether, therefore you should cease trading.

I advised that, while there was definitely a serious deficiency in the Company's Accounts, the fact that you are actively talking to

(A) the Federal and State Funding Bodies and (B) Donors, in an attempt to raise additional Funds and (C) the Australian Tax Office in an attempt to reduce the amount of the Company's debt to it and to enter into a Payment Arrangement, means that it is acceptable for you to keep operating Boomalli until you receive a result from the three avenues which you are pursuing.

However, should bear in mind that Boomalli should NOT enter into any new or large debt arrangements while these negotiations are underway and while it's (sic) future status is currently uncertain.

I have discussed this issue with Michael Loom and he agrees that you are entitled to carry on with the basic day-to-day operations of the Company while you attempt to raise the extra funding/come to an arrangement with the ATO, which is required to make the Company viable into the future."

22 Michael Loom is from the firm of Gruber Beckett, the independent Auditors.

23 Mr Femia also communicated details of the "discussions/requests" with the ATO that he and Michael Loom had held, at the end of that same email.

24 On 12 February, Mr Poll forwarded by email a copy of a requested forward budget for Boomalli for 2009/2010 as prepared by Mr Femia to Ms Chestnutt of the ICC (Indigenous Co-ordination Centre) who was present at the meeting of 13 February.

25 On the 13 February 2009, Mr Soewardie, together with (apparently) a Ms Cathie Craigie, met with representatives of Arts NSW and DEHWA. Mr Poll was not asked to participate in the meeting but was aware that it was taking place and had provided information to Mr Soewardie for the meeting (however there was no precise evidence as to what information was provided apart from the evidence as to the projected budget). It is not clear why Ms Craigie was at the meeting, she was not on the Board but was providing assistance of some sort to Mr Soewardie - just what assistance and on what basis, is entirely unclear from the evidence.

26 Mr Femia, who was present, was called into the meeting towards its end and subsequently sent the following email concerning the meeting to Mr Soewardie (Exhibit 4):

"Hi Jake,

Just confirming our discussion earlier today.

Whilst I was not invited into your Meeting with Arts NSW and DEWHA, I was called in for about 10 minutes and, as you are aware, was told by Peter White (Arts NSW) and Sandra Chestnutt (DEWHA) that both bodies would NOT be funding Boomalli from this point on.

I pointed out to them that, without these Government Grants (even if the ATO will agreed to a minimal repayment plan for their debt) that

Boomalli could not (in my opinion) keep trading because it would be insolvent without those Grants. They understood this point.

Jake - on this point, you should seek your own urgent legal advice since, as a Director, there can be serious implications for you and the other Directors if you trade whilst the company is insolvent.

I also advised that I would not do any more work on the bookkeeping side nor would I continue any discussions with the ATO regarding a Payment Plan since, without the benefit of Grants, it would be irrelevant at this stage. I would, however, be happy to help in any way I can in future once this issue has been settled.

With regards to the completion of the Boomalli Audit Report for the year ended 30/06/2008, I think that you, as Director, should officially advise Michael Loom of the decision by the Funding Bodies so that he can, as the Auditor, form his own conclusions and finalise the Audit Report."

27 Mr Poll did not see a copy of this e-mail until it was tendered in evidence during proceedings.

28 On the 23 February 2009, Mr Soewardie, as Chairperson, sent the following letter to all staff (Attachment to s. 84 Application):

"Owing to the financial position and the lack of funding Boomalli has found itself being in the unfortunate position where we can no longer pay building insurance and workers compensation. Due to the fact that it is mandatory under State and Commonwealth law to have this insurance, we have no choice except to suspend all employees' positions at Boomalli immediately."

29 On the 25 March 2009, Mr Soewardie sent the following termination letter to Mr Poll (Attachment to s. 84 Application):

"As of today your position Artistic Director of Boomalli has ceased. Due the financial position of our organisation we cannot support this position any longer. Would you please hand in all Boomalli's property laptop computer, mobile phone, mailbox keys, safe keys and any paperwork belonging to Boomalli."

30 Mr Poll was not paid any entitlements that might have been owing as at his termination and a letter was subsequently sent to Boomalli on behalf of Mr Poll, (9/04/2009) seeking payment of alleged outstanding entitlements including payment in lieu of notice as per his contract (Attachment to s. 84 Application). Due to the financial situation of Boomalli there has not been able to be any agreement reached as to any settlement of that claim. The total amount claimed, in any event, is disputed by Mr Soewardie.

31 Mr Poll has since been able to obtain alternate employment (10 June) as an Assistant Curator at a large and "highly respected" institution and whilst he now earns less than he did in his former position, he deposed that he considered that the general conditions of the job and its relative security compensated for this.

The Evidence

32 Mr Poll deposed that when he commenced as Artistic Director in 2005 Boomalli had at that time an outstanding tax liability of some $40,000.

33 Towards the end of 2008, he had entered into negotiations with the ATO as to a Payment Plan to deal with the outstanding debt and also seeking a remission of interest charges. He set out some of the possible difficulties that led to the growth of the tax liability in his draft letter to the ATO (Exhibit 1-F). It is not clear on the evidence when, (or indeed whether) this letter was in fact sent.

34 Mr Poll maintained that by March 2009, verbal assurances had in fact been given by an Official of the ATO as to a formal repayment plan to be put into effect.

35 Mr Poll attributed the delay in finalising the Annual Report for the year ending 2008 to a number of factors including the change in the external bookkeeper from the former bookkeeper to Mr Femia. There was also no Annual General Meeting held at the end of 2008. Lack of interest on the part of Directors was also raised, as was lack of support from the Board generally.

36 Mr Soewardie maintained that the main reason they didn't hold an Annual

General Meeting was because the audit wasn't finalised.
37 On 19 December 2008, Mr Femia forwarded by email to Mr Poll "Draft Boomalli Financials 2008 Audit" (Exhibit 3-D).

38 Mr Poll maintained that due to the closeness of Christmas and the end-of-year Christmas function, it was not possible to hold the AGM. He was then on leave over Christmas, returning to work at the beginning of January 2009. On 7 January he circulated by email the Draft Audit from Mr Femia for consideration before the holding of an AGM. (Exhibit 3 - D).

39 Mr Poll acknowledged that his position description contained parts dealing with financial and administrative duties but he saw the main financial responsibilities as being with the independent Bookkeeper and independent Auditor. He had requested on numerous occasions to the Board that he would like some assistance.

40 Mr Soewardie also acknowledged that the failure of Boomalli to have a Treasurer on the Board created difficulties for Mr Poll. Mr Soewardie also indicated that he himself received little support from other Directors. He also acknowledged that there were governance issues with the Board and that they had let Mr Poll down badly during his employment.

41 Mr Poll also raised that whilst he had given the necessary forms concerning the position as Director and Chairperson to Mr Soewardie to fill out for return to the Department of Fair Trading, they had not been returned to him and Mr Poll questioned whether in fact they had been since and whether Mr Soewardie was appropriately registered as Director and Chairman.

42 Mr Poll also had severe personal difficulties with the serious illness of his wife in the latter quarter of 2008 which necessitated his taking of some compassionate leave. There was no issue with the taking of this leave and Mr Soewardie was clearly sympathetic with his situation. Mr Poll did attend to Boomalli affairs from home during this leave and kept in regular email contact and visited the premises as needed. It is unclear from the evidence precisely what time off Mr Poll did have.

43 The principal delay seems to have been however, on the evidence, the absence of a Directors' report which would normally be completed, according to Mr Poll, by the Chairperson. Despite his approaches to Mr Soewardie he maintained that this was not completed. It would also have been standard practice for the Annual Report to have been ready for signing off by the Chairperson after approval of the Board at the Annual General Meeting.

44 Mr Soewardie maintained he wasn't presented with a Report.

45 Mr Poll acknowledged that he would have been the person to have provided the information contained in the Directors Report but also maintained it was Mr Soewardies's role to "compose" this. In the end he took the Directors Report completed by Mr Samuels for the 2007 Annual Report and appropriately updated it and that is the Report that appears in the document released in March 2009.

46 Essentially Mr Poll's evidence was that he made attempts to contact Mr Soewardie and deal with this issue and didn't at that stage compose a draft for him as he didn't want to put words in his mouth because he didn't feel Mr Soewardie trusted him in that way.

47 By the time a draft Directors Report had been prepared by Mr Poll in January, Mr Soewardie was not prepared to sign off on it as he said he was concerned that he was personally liable for the debts of Boomalli and could lose his house.

48 Mr Poll's evidence was that annual funding from the ICC (Indiginous Co-ordination Centre) was forwarded to Boomalli on a quarterly basis. This had been the practice in operation when he started in 2005 and he carried on that practice. His evidence was that the beginning of 2009 there was a further funding amount of $70,000 due to be released. He maintained that if this money had in fact it released then there would have been no need to terminate either him or the other employees.

49 Mr Soewardie said that the ICC froze that amount and would not release it because they said Boomalli broke its contract by failing to provide a proper 2008 Audit.

50 Mr Poll also indicated that he was endeavouring to secure funding and sponsorships from other sources. He maintained that had he been permitted to continue with this process then Boomalli would still be open and functioning as previously.

51 Mr Poll did not believe that Boomalli was insolvent at the beginning of 2009, although he acknowledged that in the correspondence he was sending out seeking financial assistance and also seeking Directors to come on the Board he did indicate the financial situation was dire. This was because essentially it was a forewarning of the situation, it didn't necessarily mean that would be the outcome.

52 Mr Poll also gave evidence that he had been requested by the ICC to prepare a projected budget for 2009-2010 as to how they would continue trading. This had been prepared by Mr Femia and included a proposal for the reduction of one full time position. On 12 February 2009, Mr Poll had emailed that report to Ms Chestnutt of the ICC (who was present at the 13 February meeting with Mr Soewardie).

53 Mr Soewardie's evidence was that he was not aware of the full extent of the financial situation of Boomalli and was shocked when he received the draft audit from Mr Poll by e-mail on 7 January 2009. As a consequence he immediately telephoned Mr Femia and obtained the financial records for the year ended 2008. It was his view, based on the draft audit that that Boomalli was insolvent and he could not understand why the Board had not been alerted about the financial situation and the substantial ATO debt much earlier. Mr Soewardie maintained that he received an email from Mr Femia on 11 February 2009 (Exhibit 3 - E) which confirmed that Boomalli was insolvent and advised that it should cease trading.

54 Subsequently, as a result of the e-mail from Mr Femia, he was forced to suspend all Boomalli staff without pay. He then met with Mr Poll and told him they could not pay his wages any more than he would have to be terminated and Mr Poll indicated he would work voluntarily from then on. Mr Soewardie maintained however that Mr Poll continued to withdraw wages from the Boomalli bank account.

55 Mr Poll denied that he said he was prepared to work voluntarily. He said he wasn't in a position to do this due the his wife's health and that of their young daughter.

56 Mr Poll also denied as factual the reason given in the letter of suspension as being that Boomalli couldn't pay its building insurance and workers' compensation. Mr Poll maintained that the building insurance had already been paid by another organisation.

57 Mr Soewardie maintained that he was forced to terminate Mr Poll and all employees on the 25 March 2009 because there was just no money in the bank to pay wages.

58 Mr Soewardie was also unsure of just who were still remaining as Directors as at the time of Mr Poll's termination, as it was confusing and he felt everyone was deserting a sinking ship.

59 Mr Soewardie deposed that at the time of making his witness statement (26 June 2009) Boomalli had no funds available to it to operate. Auditors were currently analysing the Co-operative's financial position and were expected to provide audited accounts in late July 2009 and once these had been provided the decision would be made as to whether Boomalli would be wound up.

60 There was no real evidence about what had transpired in the crucial meeting held on 13 February 2009 between Mr Soewardie and Arts NSW and DEWHA apart from the subsequent email of Mr Femia (Exhibit 4).

61 Both Mr Poll and Mr Soewardie each generally expressed during their evidence, their appreciation of the difficulties confronting the other and that they respected and bore no ill will towards each other and it was nothing personal.

62 Mr Soewardie also generally indicated that looking back he would have done things differently.

63 There was also some evidence from the parties (albeit conflicting) concerning amount of money that might have been available from Tullugulla an apparent parent Aboriginal organisation. This organisation evidently owned the land/and or premises at Leichhardt from which Boomalli operated. The evidence as to this relationship and its relevance is unclear and it has not been referred to for that reason.

Submissions

64 The submissions of the parties can be succinctly summarised as follows below.

65 Mr Poll expressed bitterness and a sense of betrayal at the manner of his termination. He did not consider that his termination was necessary. It was harsh and unjust. The issue of redundancy was only a recent concept that had been raised.

66 His termination was carried out without consultation with him as to the financial situation of Boomalli, what he was endeavouring to do and could have done in relation to that situation. Also there was no consultation with him as to alternatives to termination. He proposed a number of options to avert this situation.

67 He had also been quite successful over the previous four years in generating income apart from government funding and this was considering that they were one of 15 art galleries in Sydney. His job as Artistic Director was to work on projects that brought income into the place and he had been prevented from doing that.

68 The situation that developed in February wasn't so dire that it could not have been fixed properly by listening to his ideas.

69 Mr Poll rejected any notion that his claim could be the tipping point for Boomalli, rather it would actually reinforce the governance provisions that need to be implemented to its ensure effective running in the future.

70 Mr Poll raised concerns about the second email from Mr Femia (Exhibit 4) and not seeing it before the hearing, when it was the key basis of Mr Soewardie's allegations. These were allegations that, whilst now dismissed by the respondent, he felt they were at the heart of the unfairness. The withdrawal of the funding had been on the basis of false allegations.

71 Mr Poll said he had "walked a tightrope" in numerous situations in acting in the best interests of the members. He also pointed out that technically they were not a community organisation but an artists' organisation and priority for being a member was being an artist. In some ways community politics had been allowed to enter what was essentially an arts organisation and there had been no consultation with the stakeholders which were the artists which generated the income.

72 He also expressed concern at the involvement and interference of outsiders, with vested interests, in the events leading to his termination.

73 If the $70,000 in funding held by the ICC had been released and he had been allowed to finalise the arrangements with the ATO then Boomalli would have continued operating. There were also other monies available from the Tullagalla accounts.

74 He also pointed to the fact that Mr Soewardie now acknowledged that in looking back, he would have done things differently.

75 Mr Poll also said that the emails he sent out about the financial situation were sent after he had been suspended and was attempting to help Mr Soewardie, who had also been sent a copy of the email.

76 Mr Poll also expressed concern with the gossip and innuendo that had arisen about him following his termination.

77 Mr Byrnes, on behalf of Boomalli, submitted that the dismissal of the applicant was made on the basis of genuine redundancy born out of the dire financial circumstances the Co-operative found itself in at the time. The applicant's $65000 per year position simply became untenable given the financial circumstances.

78 Mr Soewardie had expressed it in a number of different ways but indicated, when asked why, that the bank statements made the decision. Mr Soewardie had been frank and "disarming" in his evidence.

79 Whereas the applicant had spoken with a "forked tongue" in saying that nothing was really wrong and they could have traded out of the situation, but had sent out an email and correspondence in February raising the alarm in very strident terms. This was an inconsistency in his position.

80 It was submitted that where there was a genuine redundancy there could be no unfairness. There was no selection process involved as the other employees were also made redundant. That it was a dismissal based on redundancy was made clear in the termination letter. There was no money and the Co-operative's trading operations were wound down and that remained the case even now, on all evidence and indications, and likely to remain the case in the future.

81 It was unfortunate that it was often the case generally, in relation to community organisations, that when these things happened fingers would be pointed at management and gossip and innuendo would arise, but it was submitted that this was a genuine redundancy.

82 The tenor of the applicant's submissions and much of the evidence concerned the reputational damage done to him and the applicant restoring his reputation to the extent that he believed it had been damaged. It may well be that that the best relief the applicant could obtain was a decision referring to the 24 June letter where any allegations were not pressed.

83 Mr Byrnes further submitted that were an order of monetary compensation made, then "any chance, any small or slim chance it might have of resuscitation is completely blown out or extinguished". Indeed the Commission could find that there had been unfairness but decline to make an order of compensation. Any order made could be futile in the sense that the applicant would have to line up with other creditors and there was a genuine concern that any hope at all for the Co-operative would be extinguished in the event of an adverse compensatory order.

84 It was to the applicant's credit that that he had secured other employment. This was a good silver lining in the dark cloud of this matter and the difficult circumstances that both the applicant and the Chairperson found themselves in. Thus the applicant had effectively mitigated his loss and limited the financial exposure arising from his termination.

85 In conclusion, Mr Byrnes submitted that it was the respondent's primary submission that there was no unfairness but a genuine redundancy. The financial circumstances of the Co-operative compelled that step. Even though the execution of the termination was not perfect it should be kept in mind that this was a small community organisation and it should be viewed through that prism rather that of a large sophisticated organisation with HR support and advice.

86 If there was a finding of unfairness then the best approach was one that sought to restore the applicant's reputation and didn't make compensatory orders against the Co-operative which would further damage the Co-operative and extinguish any hope of resuscitation.

Consideration

87 I have carefully considered the relevant evidence and submissions of the parties in this most unfortunate matter.

88 I have used the wording "most unfortunate matter" because that is exactly what it is.

89 It is abundantly clear to me that the only reason Mr Poll (and the other employees) were terminated on 25 March 2009 was because of the financial situation of Boomalli that existed at that time.

90 It is also abundantly clear to me, and most unfortunate, that that situation perhaps need not have arisen but for the following events:-
· the lateness of the 2008 audited report which was not forwarded to Mr Poll until 19 December 2008,
· the failure by Mr Soewardie to complete a Directors Report together with the failure by Mr Poll to provide a rough draft for Mr Soewardie to assist him in this regard,
· the consequent failure of Boomalli to hold an AGM to approve the draft Annual Report that was prepared which included a draft Directors Report as prepared by Mr Poll,
· Mr Soewardie not being prepared to sign the draft Annual Report (including the draft Directors Report) due to concerns that he might be personally liable for Boomalli's debts,
· Mr Soewardie's interpretation of the 11 February 2009 e-mail from Mr Femia and his conclusion that that the email indicated that Boomalli was insolvent (to be commented upon further below),
· what seems to have transpired in the meeting between Mr Soewardie (and those who accompanied him) and ARTS NSW and DEWHA which resulted in those bodies advising Mr Femia at the end of the meeting that they were now withdrawing/freezing funds for Boomalli,
· this action by the funding bodies precipitated the subsequent e-mail sent to Mr Soewardie later that same day by Mr Femia in which he advised that because of that withdrawal of funding the organisation would be insolvent without those funds and further there was no point to further discussions with the ATO.

91 Whilst I appreciate the very serious personal difficulties that Mr Poll was operating under in the latter part of 2008 I have to say that I find it difficult to understand why Mr Poll could not simply have prepared a draft Directors Report for Mr Soewardie at the outset. It is apparent that he was aware of some of the difficulties Mr Soewardie might have had in completing such a report. Mr Soewardie would have had to have signed such a similar report when he was a Director and Chairperson of the Board in the period 2003 to 2005. There was no evidence as to who might have been the author of such an earlier report in that period.

92 There does seem to have been some difficulty between when Mr Poll and Mr Soewardie at that time. Mr Poll did not push Mr Soewardie and considered it was Mr Soewardie's job to "compose" the Directors Report, notwithstanding that he acknowledged he would have had to have provided the necessary information to enable Mr Soewardie to complete the Report.

93 Mr Soewardie likewise appears to have had some difficulties with Mr Poll as evidenced by what apparently transpired in the crucial meeting of the 13 February 2009 with representatives of the funding bodies.

94 Mr Femia's e-mail of 11 February did not say that Boomalli was insolvent at that time and could not continue trading. Indeed he highlighted the discussions that were underway, and that it was acceptable to keep operating until there was a result from the avenues being pursued but cautioned that there should be no new or large debt arrangements entered into. He referred to the future status as being "uncertain".

95 It seems to me that Mr Soewardie (and whoever was advising him) have panicked somewhat and taken this to be the death knell of Boomalli and as a consequence financial matters (and other possible unknown issues) appear to have been subsequently discussed in the meeting of 13th February in such a way as to result in the funding bodies withdrawing/freezing funds for Boomalli. Funds which would have enabled it to carry on, albeit in a difficult financial situation that would still have had to have been addressed.

96 However when Mr Soewardie's evidence says that it was as a result of this email that he had to take the drastic action that he did, it seems to me that he is confusing this email with the more relevant and damning email from Mr Femia of 13 February which was sent as a consequence of the meeting earlier that day. This later email did not apparently surface until shortly before the hearing.

97 Mr Soewardie maintained that it was the failure of Boomalli to present audited accounts for 2008 that resulted in funds being withdrawn/frozen.

98 In a way it becomes a chicken and egg argument.

99 Whilst the 2008 Annual Report was woefully late, if Mr Soewardie had signed the draft Directors Report that had finally been prepared by Mr Poll then it would seem at least there would have been an Annual Report (with audited accounts) that could have been endorsed by an Annual General Meeting, and then forwarded to the funding bodies to satisfy their requirements and thus enable funding to continue.

100 That Mr Soewardie was not prepared to sign the draft Directors Report as prepared by Mr Poll does not appear to have been because he had not made any contribution to it or written it himself, but because of his concern as to his personal liability for the debts (and in particular the ATO debt) of Boomalli.

101 This may well have been a legitimate concern on the part of Mr Soewardie but his action had critical consequences for Boomalli.

102 I also note that the 2007 Annual Report and audited accounts showed a tax liability of almost $40,000. This does not seemed to have prevented the previous Chairperson and Board from endorsing the 2007 Annual Report so presented.

103 It is apparent that Boomalli had been operating with some level of debt (including a substantial but albeit lesser tax liability) for a considerable period of time. The employment of an additional full time employee in 2008 cannot have assisted that situation.

104 It is also apparent from the evidence that Boomalli had had significant problems with how it was dealing with fairly basic tax issues on an ongoing basis. This gets back in part to governance issues related to the Board and the absence of Treasurer.

105 The further obstacle was the failure to hold an AGM to consider the draft Annual Report, although it would appear that at this stage that the general lack of interest of just what members of the Board were actually left would seem to suggest that the holding any AGM was a problematic exercise in any event.

106 There have been no real criticisms levelled at Mr Poll in relation to the work and efforts he expended for and on behalf of the aboriginal artists who are members of the Boomalli during his employment.

107 I was left with the impression of a dedicated and hard working employee but one who was more focussed on the artistic side of his position than the more mundane but essential financial and administrative tasks required.

108 It also seems to me that what was being asked of Mr Poll, as set out in his position description, was particularly onerous in relation to the financial and administrative management of Boomalli in the absence of there being any Director of the Board carrying out the function of Treasurer.

109 I have to say that in all the years I have had any dealings with voluntary/community organisations, both prior to, and since dealing with the various matters that come to this Commission from such organisations, I have never encountered one that did not have a person from the Management Committee/Board carrying out the role of Treasurer, even in circumstances where there was a person employed specifically to carry out the day-to-day administration and ensure the functioning of the organisation.

110 I frankly think the total job expected of Mr Poll in such circumstances was unrealistic and it seems to me he received little support or assistance from the Board.

111 There were, and are, real governance issues that need to be addressed in the future by the members of Boomalli.

112 Mr Poll made a very cogent point. Boomalli is not a community organisation.

It is a co-operative of Aboriginal artists. It is the members who need to take an active interest in their own organisation and ensure that it functions in the way they wish it to.

113 The killer blow that was delivered to Boomalli by the funding bodies as a result of the meeting on 13 February meant that any of the actions and attempts by Mr Poll and Mr Femia (who was also active in discussions with the ATO) to address the quite clearly critical and serious financial situation of Boomalli were doomed to failure and Boomalli's fate, and hence that of all employees, was irrevocably sealed.

114 There is insufficient clear evidence as to whether any funds that might have been available from Tullagulla would have been sufficient to allow Boomalli to continue operating particularly in the light of the withdrawal/freezing of funds by the relevant funding bodies.

115 All parties must share the blame for the demise of Boomalli as an operational entity. Mr Poll, Mr Soewardie, Mr Femia, the Board, and the members.

116 Clearly there was little or no consultation with Mr Poll by Mr Soewardie and the Board about the financial situation and what was or could be done about it. Indeed it is unclear when exactly the Board had last met.

117 Perhaps if there had been such consultation and a co-operative approach between the Board (such as it was), and Mr Poll then the situation the Boomalli now finds itself in may not have arisen.

118 However I also acknowledge that Mr Soewardie was clearly genuine and well intentioned in the efforts he expended on behalf of Boomalli. He was seriously let down by other members of the Board and the wider Boomalli membership.

119 Turning now to consideration of whether or not the dismissal of Mr Poll was

harsh and/or unjust and/or unreasonable or any combination thereof and sufficiently so as to warrant the intervention of the Commission, I have been mindful of the relevant provisions of the Act and in particular s. 88.

120 I have also been mindful of the long line of authorities that are usually of relevance in such a consideration such as Bankstown City Council v Paris (1999) 93 IR 209.

121 Mr Byrnes has submitted that because the termination of Mr Poll involved a genuine redundancy then it could not have been unfair. True it is that there was no need to test whether any selection criteria applied was fair, as all four employees of Boomalli were initially suspended and then terminated on 25 March 2009. The organisation has also ceased to trade and labours under considerable debt, with no funding available to it.

122 However, Outboard World v Muir (1993) 51 IR 167 and any number of other cases, have still found that just because there is a genuine redundancy that that does not automatically mean an employee may not have been treated unfairly within the meaning of s.84 and applying the various relevant authorities, nor that the intervention of the Commission, in the light of the particular circumstances of the case, is not warranted.

123 Mr Byrnes has also urged that even if the Commission finds that the termination of Mr Poll was unfair, that no intervention by way of a compensatory order in Mr Poll's favour should be made due to the financial situation of Boomaalli and further that any such order could well be the tipping point that would result in Boomalli not being able to be resuscitated.

124 I have also given consideration to Boomalli's situation as at the time of Mr Poll's termination and as at the date of hearing (the only relevant times before me).

125 I have to say that I do think Mr Poll was treated most unfairly in the lack of consultation and co-operation that occurred. Boomalli's situation, as I have indicated above, could have been addressed and if that had been done in a timely way then it may not have then reached the dire circumstances that it did.

126 The reality is that Boomalli's financial situation had been difficult, to say the least, for some time. It was now clearly very serious and was going to require some drastic action and concerted attention from an active and engaged Board.

127 That situation became irretrievable as a result of the failure to finalise an audited and endorsed Annual Report in satisfaction of funding requirements. Boomalli had, at that time, considerable debt that could no longer be dealt with as a consequence of withdrawal/freezing of that funding. It is hard to see what else Mr Soewardie or the Board could have done at that point other than let go all employees and cease trading.

128 In that event, although I consider there was unfairness in how Mr Poll was treated and indeed in the manner in which he was actually terminated at the end, the reason for termination was genuine and, at the end, unavoidable. It could clearly have been handled better and that has been acknowledged.

129 The fact that Mr Poll was terminated should in no way be a reflection of the hard work and dedication he brought to his position of Artistic Director of Boomalli. The fact that he has secured other employment so soon in what is a more secure and eminent environment is all to the good.

130 I do not consider it appropriate to make an order for compensation in all the circumstances that have been taken into consideration and balancing the competing interests of the parties.

131 I decline to make the orders as sought. This application is therefore dismissed.

Elizabeth Bishop

Commissioner




LAST UPDATED:
14 October 2009