2024 WAIRC 00870
UNFAIR DISMISSAL APPLICATION
CONTRACTUAL BENEFIT CLAIM
WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

CITATION : 2024 WAIRC 00870

CORAM
: COMMISSIONER C TSANG

HEARD
:
WEDNESDAY, 15 NOVEMBER 2023, THURSDAY, 16 NOVEMBER 2023, MONDAY, 27 NOVEMBER 2023

DELIVERED : FRIDAY, 4 OCTOBER 2024

FILE NOS. : U 28 OF 2023; B 28 OF 2023

BETWEEN
:
PHILLIP TRESTRAIL
Applicant

AND

CITY OF KARRATHA
Respondent

CatchWords : Industrial Law – Unfair Dismissal Claim and Contractual Benefit Claim heard together – Applicant dismissed for serious misconduct for entering into a pay banking arrangement – Breaches of employment contract, Code of Conduct, Award, Federal and State industrial relations legislation, taxation and superannuation laws – Procedural fairness – Failure to follow a lawful and reasonable direction not to discuss disciplinary proceedings – Dismissal not harsh, oppressive or unfair – Both applications to be dismissed
Legislation : Industrial Relations Act 1979 (WA), ss 29(1)(c), 29(1)(d), 29AA(3), 29AA(4), 29AA(5)
Industrial Relations Legislation Amendment Act 2021 (WA)
Industrial Relations (General) Regulations 1997 (WA)
Corruption, Crime and Misconduct Act 2003 (WA), s 4
Local Government Act 1995 (WA)
Minimum Conditions of Employment Act 1993 (WA), ss 17C, 17D
State Records Act 2000 (WA)
Fair Work Act 2009 (Cth), ss 323, 324
Income Tax Assessment Act 1936 (Cth)
Income Tax Assessment Act 1997 (Cth)
Superannuation Guarantee (Administration) Act 1992 (Cth)
Industrial instrument : Local Government Officers’ (Western Australia) Award 2021
Result : Applications dismissed
REPRESENTATION:

APPLICANT : MR M COX (OF COUNSEL) WITH MS T KOTUWEGODA
RESPONDENT : MR N ELLERY (OF COUNSEL) WITH MR H BEATON

Cases referred to in reasons:
BiLo Pty Ltd v Hooper (1992) 53 IR 224
Derkacs v Tetyana Podkas t/as Phoenix Podiatry [2020] WAIRC 00115
Federated Brick, Tile and Pottery Industrial Union of Australia (Union of Workers) Western Australian Branch v Bristile Ltd (1982) 62 WAIG 2926
Garbett v Midland Brick Company [2003] WASCA 36
Jones v Dunkel [1959] HCA 8
Miles v The Federated Miscellaneous Workers’ Union of Australia, Hospital, Service and Miscellaneous, W.A. Branch (1985) 65 WAIG 385
Minister for Health v DrakeBrockman [2012] WAIRC 00150
Parnell v The Roman Catholic Archbishop of Perth [2020] WAIRC 00420
Parnell v The Roman Catholic Archbishop of Perth [2021] WAIRC 00102
Rankin v Marine Power International Pty Ltd [2001] VSC 150
Shire of Esperance v Mouritz (1991) 71 WAIG 891
Trestrail v City of Karratha [2023] WAIRC 00926
Wilkinson v Wilson Security Pty Ltd (No 3) [2024] FCA 705

Reasons for Decision
Background
1 On 31 May 2023, the applicant (Mr Trestrail) lodged:
(a) A Form 2 – Unfair Dismissal Application (UFD claim) against his former employer, the City of Karratha (City), alleging unfair dismissal from his position as Director Corporate and Legal Services on 23 May 2023.
(b) A Form 3 – Contractual Benefit Claim (DCB claim) against the City, seeking a contractual benefit of $245,419 under clause 11.2 ‘Termination by the City at will’ of his written contract of employment made in April 2022 (Contract).
2 On 14 August 2023, I issued Directions ([2023] WAIRC 00689; [2023] WAIRC 00690) for the UFD claim and the DCB claim to be heard together, on 15–16 November 2023.
3 On 16 November 2023, the matter was adjourned to 27 November 2023 for counsel to make their closing submissions. After hearing the submissions, I reserved my decision.
4 On 28 November 2023, Mr Trestrail requested leave under s 26 of the Industrial Relations Act 1979 (WA) (Act) to make additional submissions via email to Chambers. The City objected to Mr Trestrail’s request on the grounds that he had not conferred with them prior to making the request, and neither party had obtained leave to file additional materials.
5 Mr Trestrail’s reliance on s 26 of the Act is unclear. It remains uncertain whether he relies on:
(a) Section 26(1)(a) requiring the Commission to ‘act according to equity, good conscience, and the substantial merits of the case’;
(b) Section 26(1)(b) that the Commission ‘must not be bound by any rules of evidence, but may inform itself on any matter in such a way as it thinks just’; or
(c) Section 26(1)(c) that the Commission must have regard for his interests as a party to the proceedings.
6 Seeking to make further submissions via email to Chambers after the hearing presents challenges. While s 26(1)(b) allows for discretion, I am empowered by s 27(1)(v) to ‘do all such things as are necessary or expedient for the expeditious and just hearing and determination of the matter.’ I do not find it necessary or expedient to grant leave for further submissions. Consequently, I have not considered Mr Trestrail’s 28 November 2023 email in these reasons for decision.
Jurisdiction
7 The parties agree the Local Government Officers’ (Western Australia) Award 2021 (Award) applies to Mr Trestrail’s employment with the City.
8 The Award is an ‘industrial instrument’ as defined by s 29AA(5) of the Act. Accordingly, I am satisfied that ss 29AA(3) and 29AA(4) of the Act do not prohibit me from determining the UFD claim and the DCB claim.
Filed documents
9 On 18 September 2023, the parties filed a Statement of Agreed Facts, stating:
[Mr Trestrail’s] employment with the [City]
1. [Mr Trestrail] was at all material times an employee of the [City].
2. [Mr Trestrail] commenced employment with the Shire of Roebourne (as the [City] was then known) in the position of Manager – Human Resources [(HR Manager)] on 25 June 2012.
3. On 16 April 2013, [Mr Trestrail] was promoted to the newly created role of Director – Corporate Services.
4. [Mr Trestrail’s] duties were outlined in part in a Position Description dated March 2013, which was the last position description agreed to by the parties, and which duties changed over time.
5. [Mr Trestrail] reported directly to the Chief Executive Officer (CEO). [Mr Trestrail] did not report to any other ‘senior employee’ within the [City].
6. [Mr Trestrail] acted as a [City] representative from time to time in the course of his duties.
7. [Mr Trestrail] had broad oversight of the following departments in his role with the [City]:
(a) Finance;
(b) Information Technology;
(c) Governance;
(d) Human Resources [(HR)] (until January 2023); and
(e) Marketing and Communications (until January 2023).
[Mr Trestrail’s] deferral of pay rises
8. In or around April 2019, [Mr Trestrail’s] pay increases were postponed (Pay Arrangement). [Mr Trestrail’s] request was not documented.
9. In an email of 17 March 2023, [Mr Trestrail] explained that he intended to receive the unpaid amount at a later stage in the form of backpay.
The termination of [Mr Trestrail’s] employment
10. The Pay Arrangement was the subject of an anonymous report to the City on 10 March 2023.
11. On 12 March 2023, [the City’s CEO, Virginia Miltrup (Ms Miltrup)] made enquiries with Ms Kayla Harrison ([HR Manager]) [(Ms Harrison)] in relation to [Mr Trestrail’s] pay.
12. On 14 March 2023, Ms Miltrup emailed [Mr Trestrail] to ask why he had made the request to defer his pay rises, and how this arrangement was documented and accounted for in the financials. Ms Miltrup requested a response by 17 March 2023,
13. [Mr Trestrail] responded to Ms Miltrup’s email on 17 March 2023.
14. On 26 March 2023, Ms Miltrup reported the matter to the Public Sector Commission [(PSC)] by way of a ‘Notification of minor misconduct’ form.
15. Ms Miltrup met with [Mr Trestrail] on 28 March 2023 to issue him with a letter dated 28 March 2023 with the subject line ‘Suspected Minor Misconduct’, which stated she had initiated a formal misconduct investigation and requested his response to a series of questions by 31 March 2023 (Suspected Misconduct Letter).
16. [Mr Trestrail] provided Ms Miltrup with his response to the Suspected Misconduct Letter on 3 April 2023, after being granted a threeday extension.
17. On 4 April 2023, Ms Miltrup received a letter from the [PSC] stating they had referred the matter to the Corruption and Crime Commission [(CCC)].
18. Ms Miltrup emailed Ms Michelle Reynolds, CEO of the City of Perth [(Ms Reynolds)], on 6 April 2023 to request she be part of a confidential panel reviewing [Mr Trestrail’s] response to the Suspected Misconduct Letter.
19. On 11 April 2023, Ms Miltrup emailed Ms Kelly Nunn, then acting Mayor of the City of Karratha [(Ms Nunn)], to request that she be part of the investigation panel. Ms Miltrup forwarded to Ms Nunn her previous email correspondence with Ms Reynolds.
20. Both Ms Nunn and Ms Reynolds were provided the following documents to review as part of the investigation:
a. Ms Miltrup’s notification to the [PSC] dated 26 March 2023;
b. the Suspected Misconduct Letter;
c. [Mr Trestrail’s] response to the Suspected Misconduct Letter dated 3 April 2023; and
d. the notification from the [PSC] dated 4 April 2023 that they have referred the matter to the [CCC].
21. On 11 April 2023, Ms Miltrup advised [Mr Trestrail] that the investigation panel would consist of herself, Ms Nunn and Ms Reynolds, who was to be an independent panel member.
22. In emails of 13 April 2023 and 14 April 2023, [Mr Trestrail] sought an update from Ms Miltrup as to the status of the investigation.
23. [Mr Trestrail] emailed Ms Miltrup on 21 April 2023 to confirm the points discussed in a meeting between Ms Miltrup and [Mr Trestrail] on 14 April 2023.
24. On 27 April 2023, Ms Miltrup advised [Mr Trestrail] via email that the investigation had closed, and he would be provided with a written response by no later than 28 April 2023.
25. That same day, the [CCC] informed the [City] that it had closed its file and referred the matter back to the [PSC] because it was unable to form a reasonable suspicion of serious misconduct on the basis that no corrupt intent was identified.
26. [Mr Trestrail] ceased to have IT access in the evening of 28 April 2023.
27. On 29 April 2023, [Mr Trestrail] received a show cause letter dated 28 April 2023 (Show Cause Letter) advising him that he was stood down and requiring him to show cause as the [City] had formed a preliminary view that his conduct may amount to misconduct warranting disciplinary action.
28. [Mr Trestrail] provided Ms Miltrup with a response to the Show Cause Letter on 4 May 2023 (4 May Response Letter).
29. On 5 May 2023, the [PSC] informed Ms Miltrup that it was referring the matter back to the [City].
30. [Mr Trestrail] received a letter on 11 May 2023 from Ms Miltrup advising him that the [City] had formed a preliminary view that his conduct amounted to serious misconduct justifying summary termination, and requesting a written response by 12 May 2023 (11 May Letter).
31. [Mr Trestrail] sought an extension to provide his response to the 11 May Letter, which was granted by Ms Miltrup.
32. [Mr Trestrail] provided his response to the 11 May Letter on 16 May 2023 [(16 May Response)].
33. On 22 May 2023, the Council of the [City] held a Special Council Meeting and it reported that it approved Ms Miltrup’s recommendation to terminate [Mr Trestrail’s] employment.
34. On 23 May 2023, [Mr Trestrail] was notified that his employment was terminated by the [City] effective immediately [(Termination Letter)].
35. On 2 June 2023, [Mr Trestrail] received payment of his unused leave entitlements and backpay.
10 The Statement of Agreed Facts outlines the alleged misconduct and the City’s conclusion that Mr Trestrail engaged in serious misconduct.
11 At its core, this matter revolves around a disagreement concerning the nature of Mr Trestrail’s conduct. He contends there was no misconduct in him entering the Pay Arrangement, whereas the City asserts that his actions constituted serious misconduct warranting his summary dismissal.
12 On 25 October 2023, Mr Trestrail filed an outline of submissions, contending:
(a) His intention for entering the Pay Arrangement was to achieve enforced savings in preparation for his retirement.
(b) Although the Pay Arrangement was not reduced to writing, his reduced pay appeared on payslips and his unreduced pay was documented in the City’s personnel records, budget and financial statements.
(c) The City did not conduct a ‘proper and as thorough an inquiry as was necessary in the circumstances’ nor had ‘reasonable grounds for an honest and genuine belief’ that he engaged in misconduct warranting his dismissal: Parnell v Roman Catholic Archbishop of Perth [2021] WAIRC 00102 (Parnell) [112]‍‍‍–‍‍‍[118], [292]; Parnell v Roman Catholic Archbishop of Perth [2020] WAIRC 00420 [87].
(d) There is no evidence he was motivated to improperly benefit himself or cause detriment to anyone else. No evidence of deceit exists; at most, his conduct was ‘ill advised’, stemming from ‘an error of judgment’ by failing to document the Pay Arrangement and perhaps not obtaining the CEO’s consent: Rankin v Marine Power International Pty Ltd [2001] VSC 150 (Rankin) [264].
(e) The CEO failed to conduct a proper inquiry and did not afford him procedural fairness by:
(i) Misrepresenting that she had appointed an independent panel to carry out the investigation, as she alone conducted it, without generating a written report and denied him the opportunity to address the panel and present evidence in his defence.
(ii) Withholding pertinent information and documents from the Council in the Special Council Report recommending his dismissal, including the 16 May Response, and denying him the opportunity to address the Council.
(f) He is seeking reinstatement and payment for loss of salary since his dismissal. If reinstatement is deemed impracticable, he is seeking compensation for the UFD claim, and full payment of the DCB claim in accordance with clause 11.2(3) of the Contract.
13 On 7 November 2023, the City filed an outline of submissions, contending:
(a) The Pay Arrangement was a bizarre, highly questionable course of action. It was instigated by Mr Trestrail and constituted a secret, undocumented, unique arrangement.
(b) The Pay Arrangement was a deliberate course of action that exposed the City to various serious compliance and governance risks, including:
(i) Breach of the Contract, which requires the City to pay his Remuneration Package and his Salary on a fortnightly basis.
(ii) Breach of s 323 of the Fair Work Act 2009 (Cth) (FW Act), which applied until 1 January 2023 when the Industrial Relations Legislation Amendment Act 2021 (WA) and associated amendments to the Industrial Relations (General) Regulations 1997 (WA) took effect.
(iii) Breach of superannuation legislation, which requires the City to make superannuation contributions at 11% of Mr Trestrail’s ‘ordinary time earnings’ each quarter.
(iv) Failure to fulfil its obligation to withhold the correct amount of PAYG tax every pay period.
(v) Breach of the Code of Conduct, particularly the obligations to work within legislative parameters, acting in an honest, lawful, professional, accountable and transparent manner; avoiding damage to the City’s reputation; properly managing resources; and ensuring sound financial management and accountability in relation to finances.
(c) When questioned about the Pay Arrangement, Mr Trestrail downplayed it, denied any misconduct, and vehemently rejected that it was inappropriate.
(d) The City had reasonable grounds for an honest and genuine belief that Mr Trestrail engaged in misconduct warranting summary dismissal. The City conducted a thorough and reasonable inquiry, afforded him procedural fairness, and the misconduct justified his summary dismissal.
(e) The inquiry was conducted largely by the CEO, which was appropriate considering Mr Trestrail’s seniority.
(f) The panel operated in accordance with the CEO’s objectives, which included critiquing her views, providing external advice, and ensuring an appropriate process was followed. There was no basis for Mr Trestrail to address the panel. The panel was not the decision maker; the CEO held that role.
(g) The CEO presented information to the Council, including the 4 May Response Letter. The 16 May Response contained similar information as the 4 May Response Letter. There was no reason for Mr Trestrail to directly address the Council.
(h) Reinstatement is not appropriate due to the fundamental and serious breakdown in trust and confidence between the City and Mr Trestrail, particularly between the CEO and Mr Trestrail.
(i) Mr Trestrail’s contact with Councillors during the disciplinary process, despite being given a lawful and reasonable direction not to discuss the matter with anyone, justifies summary dismissal on its own.
Principles
14 The parties agree that the following principles apply:
(a) The onus is on the City to demonstrate that circumstances existed to justify summary dismissal: Federated Brick, Tile and Pottery Industrial Union of Australia (Union of Workers) Western Australian Branch v Bristile Ltd (1982) 62 WAIG 2926 (Bristile), 2928.
(b) The question for the Commission is whether the City’s legal right to dismiss Mr Trestrail has been exercised so harshly or oppressively against him as to amount to an abuse of that right: Miles v The Federated Miscellaneous Workers’ Union of Australia, Hospital, Service and Miscellaneous, W.A. Branch (1985) 65 WAIG 385 (Undercliffe), 386.
(c) Summary dismissal arises as a result of ‘conduct which is repugnant to the relationship of employeremployee, before an employer may terminate the contract summarily’: Rankin [250].
(d) To justify summary dismissal, the City must have ‘something more than ill advised conduct or omission to act, as a result of an error of judgment’: Rankin [264].
15 The parties rely on the principles enunciated by the Full Bench in Parnell [112]–[118] that:
(a) BiLo Pty Ltd v Hooper (1992) 53 IR 224 (BiLo) and Garbett v Midland Brick Company [2003] WASCA 36 are authority for the principle that findings of fact must be made by the Commission as to what was the conduct which gave rise to the dismissal, what are the circumstances of that conduct and in making an assessment, regard should be had to the evidentiary onus on the employer: Minister for Health v DrakeBrockman [2012] WAIRC 00150 (DrakeBrockman) [65].
(b) The employer does not have to establish that the employee was actually guilty of the misconduct alleged, rather it must show that following a proper inquiry there were ‘reasonable grounds for believing on the information available at that time that the employee was guilty of the misconduct alleged and that, taking into account any mitigating circumstances either associated with the misconduct or the employee’s work record, such misconduct justified dismissal’: DrakeBrockman [66].
(c) The evidential burden ‘does not require the person upon whom it lies to establish anything. It imposes only an obligation to show that there is sufficient evidence to raise an issue as to the existence or nonexistence of a fact in issue’: Shire of Esperance v Mouritz (1991) 71 WAIG 891, 895.
(d) An employer discharges the evidential burden which falls to it if the Commission considers the process of investigation undertaken and the conclusions and belief of the investigator, and concludes that having regard to all of the circumstances and ‘the totality of what was before the Investigators and what is before the Commission, … it is open to draw inferences more probable than not, which support the holding by the employer of an honest and genuine belief, based on reasonable grounds, that the most serious allegation of misconduct complained of, occurred.’
(e) Where an employer investigates a serious allegation, and has good reason for its conclusion, it would be unreasonable for the employer to be required to continue to employ the employee.
Preliminary matters
16 On 7 November 2023, the City’s application for discovery orders was heard with discovery orders pronounced ([2023] WAIRC 00871) and reasons for decision issued ([2023] WAIRC 00926), requiring Mr Trestrail to discover the following documents:
All written representations or statements made, or records provided by [Mr Trestrail] to his wife in connection with anticipated divorce and family law proceedings, that in any way list, describe or identify the remuneration (including salary) [Mr Trestrail] received from the [City].
All written representations or statements made, or records provided by [Mr Trestrail] (or on his behalf, such as by a legal representative) in [Mr Trestrail’s] divorce and family law proceedings under the Family Law Act 1975 (Cth), that in any way list, describe or identify the remuneration (including salary) [Mr Trestrail] received from the [City].
17 On 9 November 2023, Mr Trestrail issued a summons for Ms Harrison to provide oral evidence at the hearing.
18 At the hearing, the City objected to Ms Harrison providing evidence on the following grounds:
(a) Procedural fairness and concerns regarding the orderly disposition of the proceedings: given Directions were issued on 14 August 2023 for parties to file material to be relied upon at the hearing, the City believed the case against them was in accordance with the documents filed.
(b) As a result of the documents filed, the City made forensic decisions regarding the evidence needed and prepared an outline of submissions based on Mr Trestrail’s evidence contending, ‘Notably Mr Trestrail has also not called the Human Resources Manager, who, it will be submitted, had worked with Mr Trestrail for many years, to support his explanation of this (or any other related) events. It can and should be inferred that her evidence would not assist [Mr Trestrail’s] case.’
(c) Summonsing a witness to rebut a Jones v Dunkel [1959] HCA 8 inference raised by the City would deprive them of procedural fairness, especially as this case focuses on whether the witnesses are telling the truth in important respects. The language used in the Show Cause Letter and Termination Letter such as ‘clandestine’, ‘deceptive’ and ‘deceit’, emphasises the significance of the witnesses giving evidence in support of or against Mr Trestrail’s account of events, and which documents support or contradict his version of events, which have always been central to the case.
(d) As a matter of policy: Ms Harrison was dismissed from the City for her involvement in the Pay Arrangement, and a deed of settlement and release was reached with her, establishing that the City and Ms Harrison should make no further claims against each other and agree to leave ‘each other alone’.
(e) It is an important matter of policy, concerning finality between parties in dispute resolution, that the Commission should not lightly interrupt what parties represented by lawyers have discussed, negotiated, and agreed upon through a formal deed of settlement and release.
(f) The decision of Derkacs v Tetyana Podkas t/as Phoenix Podiatry [2020] WAIRC 00115 (Derkacs) relied upon by Mr Trestrail is distinguishable in several respects. Firstly, Ms Derkacs was selfrepresented. Secondly, there was no deed of settlement and release in place between the witness and Phoenix Podiatry. Thirdly, Ms Derkacs made her request to summons the witness two months prior to the hearing.
19 In response to the City’s opposition, Mr Trestrail submitted:
(a) The need to call Ms Harrison arose from the hearing of the City’s discovery application, where the City confirmed it did not concede the date the Pay Arrangement ceased, requiring Mr Trestrail to call a witness to confirm this date.
(b) Compliance with Directions cannot be used as a sword to prevent him answering something raised by the City after he had filed his witness evidence and submissions.
(c) If there is any procedural fairness issue, Derkacs provides a means for addressing it through granting the City an adjournment to take instructions on Ms Harrison’s evidence.
(d) The questions Ms Harrison would be asked to answer would be limited to the date the Pay Arrangement ended, her relationship with Mr Trestrail, and other arrangements similar to the Pay Arrangement available at the City and their respective introduction dates.
20 After hearing from the parties, I pronounced that I would amend the time for the return of the summons to ensure Ms Harrison’s attendance complied with it. Additionally, I pronounced that I would amend the Directions to allow for Ms Harrison’s oral evidence to be given at the hearing.
21 I made these pronouncements because Ms Harrison’s evidence would be limited to the aspects specified by Mr Trestrail’s counsel; essentially restricted to the circumstances surrounding the Pay Arrangement, which I considered highly relevant to the issues to be determined.
22 I acknowledged there would be prejudice to the City. In applying Derkacs, I proposed to interpose Ms Harrison’s evidence and then adjourn her testimony until the next day, allowing the City’s counsel to take instructions before crossexamining her on the following day.
Mr Trestrail’s evidence
23 On 27 September 2023, Mr Trestrail filed an Outline of Evidence that was tendered into evidence, stating:
(a) He holds a Bachelor of Business (majoring in Local Government) and an MBA from RMIT University, a Bachelor of Laws from Charles Darwin University, and a Graduate Diploma of Legal Practice from the Australian National University.
(b) He was employed by the City for more than ten years with an unblemished employment record and consistently highly rated performance reviews.
(c) On 11 July 2022, he applied for the position of CEO but was ultimately unsuccessful. On 31 October 2022, Ms Miltrup was appointed as CEO.
(d) From 8 August 2022 to 1 October 2022, he acted up as Acting CEO.
(e) On 11 January 2023, Ms Miltrup informed him that the HR and Marketing departments would be removed from his directorate and report directly to her. These departments made up 40% of his directorate’s responsibilities, and he was caught by surprise. He suggested changing his title to ‘Director – Corporate and Legal Services’, and this title change took effect on 18 January 2023.
(f) In April 2019, he requested Ms Harrison to establish the Pay Arrangement to facilitate a form of enforced savings in preparation for his retirement. This was preferrable to him receiving the money in his bank account where it would effectively earn zero interest. Additionally, he chose not to contribute the amount into his superannuation fund as that would have attracted a tax penalty and was inaccessible until he reached 60.
(g) His request to Ms Harrison was made as an employee; he did not give directions or orders to Ms Harrison.
(h) In 2021, he was informed his pay rate had been adjusted by the Payroll Officer to incorporate his 2021 pay rise, meaning that the Pay Arrangement only deferred his 2019 and 2020 pay rises.
(i) He did not seek to hide the Pay Arrangement. His Personnel File and pay records detail the payment he was entitled to and the payment he actually received. He did not seek to alter or conceal these records.
(j) He openly discussed the Pay Arrangement in Corporate Services Managers Meetings and within the HR Department with HR staff present.
(k) The Pay Arrangement was not out of the ordinary or inappropriate given:
(i) His full salary was recorded in the City’s Annual Reports of 2019–2020, 2020–‍2021 and 2021–2022, such that his pay was not underreported.
(ii) The City’s employees regularly receive backpay in relation to deferred pay rises due to delays in completing performance reviews.
(iii) The City’s employees have utilised other mechanisms to facilitate enforced savings, such as purchasing leave, paying more tax than legally required to receive a refund, and delaying the lodgement of expense reimbursement claims.
(l) The CEO’s assertion that the Pay Arrangement caused the City to breach its superannuation obligations is incorrect, as superannuation is payable on wages paid. There would be no breach as long as the City correctly paid superannuation on the backpay linked to the Pay Arrangement.
(m) The CEO’s assertion that the Pay Arrangement caused the City to breach its taxation obligations, and that he sought to gain a tax advantage, is incorrect. Tax is assessed on the payment made to him. He paid the appropriate amount of tax and did not gain any tax advantage through the Pay Arrangement.
(n) There was nothing deceitful about the Pay Arrangement. He did not seek to hide it. The City’s auditors concluded in their Auditor’s Closing Report that they found no evidence of fraud.
(o) The CEO’s assertion that the Pay Arrangement caused the City to breach his employment entitlements and exposed the City to the risk of claims or prosecution is incorrect. This is because he initiated the Pay Arrangement and had no intention of making such claims.
(p) An email from Ms Harrison to Ms Miltrup sent on 14 March 2023 explains two underpayments that are separate to the Pay Arrangement. These arose from an incorrect calculation of his base pay on the change to the statutory superannuation amount in July 2022, and from the failure to adjust his pay following a pay rise he received in 2022. He was unaware of these underpayments at the time.
(q) In relation to the investigation process:
(i) Ms Miltrup first emailed him on 14 March 2023 while he was on leave, requesting a response by 17 March 2023, which was before he was due to return to work. This email did not advise him that she considered the Pay Arrangement could amount to misconduct or that his employment may be at risk.
(ii) Whilst Ms Miltrup reported the matter to the PSC on 26 March 2023, she did not inform him until 29 April 2023 that she had reported the matter. Neither Ms Miltrup nor the City informed him in advance that they intended to report the matter to the PSC.
(iii) He met with Ms Miltrup on 28 March 2023. At this meeting, he was issued the Suspected Misconduct Letter. He was advised at this meeting that the investigation was to be considered by a panel and finalised by 6 April 2023.
(iv) He sought a 3day extension to provide a response to the Suspected Misconduct Letter.
(v) Emails between Ms Miltrup and Ms Reynolds refer to him going through a ‘messy divorce’ as a suspected motivation for him to understate his pay. This allegation has never been raised with him. The divorce proceedings were not ‘messy’ and have been amicable.
(vi) Statements made by Ms Miltrup in her emails to Ms Reynolds were premature or prejudicial in circumstances where Ms Reynolds was invited to be a panel member, and the panel was formed prior to the PSC and CCC finalising their reviews.
(vii) On 11 April 2023, Ms Miltrup advised him that the investigation panel would consist of herself, Ms Reynolds and Ms Nunn.
(viii) In emails sent 13–14 April 2023, he raised concerns with Ms Miltrup regarding the lack of procedural fairness in the investigation process due to delays, lack of information about the material provided to the panel, and the premature and prejudicial referral to the PSC.
(ix) During the meeting on 14 April 2023, when he reiterated his reason for the Pay Arrangement was to facilitate enforced savings ahead of his retirement, Ms Miltrup did not question or contradict him. When he asked if the matter would impact their working relationship, she responded that she did not see it being an issue as she enjoyed working with him, considering him professional and good at his job.
(x) On 29 April 2023, he received the Show Cause Letter. This letter made no mention of serious misconduct or that his employment was at risk and did not mention the 3member panel. He responded with the 4 May Response Letter.
(xi) On receiving the 11 May Letter, he requested an extension to seek legal advice, and Ms Miltrup granted him a 2business day extension. He responded with the 16 May Response.
(xii) On 20 May 2023, prior to the Special Council Meeting, Councillor Dan Scott (Councillor Scott) informed him that he could not see how the conduct constitutes serious misconduct.
(xiii) Before and after the Special Council Meeting, Councillor Scott and Councillors Geoff Harris (Councillor Harris) and Margaret Bertling (Councillor Bertling) told him that there had been limited information provided to Council about his conduct. The documents tabled at the meeting were not provided to him.
(xiv) On 23 May 2023, he was notified his employment was terminated summarily. On 2 June 2023, he received payment of his unused leave entitlements and backpay.
(r) On 7 May 2023, he lodged a Code of Conduct complaint against Ms Miltrup. On 7 June 2023, Peter Long (the City’s Mayor) and Ms Nunn, informed him that the City had closed the complaint and concluded that Ms Miltrup had not breached the Code of Conduct.
(s) He seeks reinstatement for reasons including:
(i) He has worked in local government for over 30 years.
(ii) At 57 years old, he had intended to work for the City until his retirement in the next few years. His dismissal has resulted in insufficient funds for retirement, necessitating ongoing employment.
(iii) He faces significant challenges in securing a comparable position, as there are likely no more than 10 such roles in Western Australia, and even fewer in the Pilbara region.
(iv) Upon his dismissal, he was required to vacate the City’s housing and return the City’s vehicle. The cost of a private rental for the house provided by the City was approximately $2,000 per week. As a result, without housing, he and his partner have relocated to Perth.
(v) He was good at his job and wellliked by his colleagues and the City’s stakeholders. The CEO informed him that she had no problem working with him. He would have no problem returning to his job.
24 At the hearing, Mr Trestrail gave the following further evidence:
(a) The former CEO did not attend any Corporate Services Meetings. The former CEO introduced the purchased leave policy.
(b) After he returned from leave, Ms Miltrup informed him that she had received legal advice regarding a tenant at The Quarter. At the time, he believed advice had been sought about recovering the City’s debt from the tenant. Ms Miltrup committed to providing him with a copy of the advice and tasked him with preparing a report to Council regarding the debt recovery. However, upon being given a copy of the advice, he discovered that Ms Miltrup had sought advice on whether he had engaged in misleading and deceptive conduct by allowing the tenant to complete a fitout prior to the tenant’s eviction. Due to his dismissal, he did not have the chance to prepare and finalise the report to Council.
(c) During the meeting on 11 January 2023, Ms Miltrup did not mention anything about his relationship with Ms Harrison. He worked with Ms Harrison for 11 years and during that time they developed a friendship. He continues to remain friends with Ms Harrison and her husband. Karratha is a small town, and he formed close relationships including with people who reported to him directly and indirectly, and with the former CEO and other directors. Ms Harrison is one of his closer friends. Ms Miltrup did not express any concerns to him about his relationship with Ms Harrison.
(d) He considers Ms Harrison professional and highly ethical. They had a robust professional relationship. If Ms Harrison felt strongly about an issue, she would take the lead in the HR space as HR Manager. If Ms Harrison had an issue with the Pay Arrangement she would have raised it.
(e) He oversaw 52 staff members. He did not manage individual pay nor his own pay. The payroll department, which reported to him through Ms Harrison, handled payroll operations. On a daytoday basis, he had no direct involvement in payroll operations. He and the CEO typically authorised the City’s approximately 480 employees’ pay on a fortnightly basis. In the instance of a termination payment, payroll would provide a spreadsheet of the payment, which he would then review. Payroll did not provide details of ordinary pay. Hence, he did not review or recalculate ordinary pay.
(f) He was reasonably pedantic in his duties, particularly regarding grammar and the content of written work, such as Council reports and leases. However, he did not micromanage his staff or review the daily details of their work.
(g) His divorce was entirely amicable. He and his exwife agreed to the terms of their settlement. There was nothing messy or acrimonious about his divorce. Although he separated from his exwife in 2010, they did not formalise the divorce at that time as their children were still young. If they had divorced then, his exwife would likely have had to sell the family home, as he did not have many assets or income at that time. In late 2021 or early 2022, he and his exwife reached an agreement on the division of their assets.
(h) If he had wanted to reduce the amount his ex-wife received in the property settlement, he could have divorced earlier. His superannuation increased by approximately $120,000 between 2019 and 2021.
(i) It was an agreed fact in the property settlement that his earning capacity was approximately 3–4 times more than his exwife’s. As part of the property settlement, he obtained a www.redbook.com.au valuation for his HarleyDavidson. The price range obtained was $5,050–$6,000. In the Application for Consent Order Kit, he disclosed the highest valuation of $6,000. In the Application for Consent Order Kit, he inadvertently declared a superannuation balance that was approximately $20,000 greater than the sum of his three superannuation accounts.
(j) On 14 April 2023, he met with Ms Miltrup at around 6pm. After the meeting, he went home and immediately made a handwritten note of the meeting. The note states:
- VM called into my office @ approx. 6pm.
- Although VM had committed to provide an outcome she advised that she was still undecided & trying to work through the issue.
- VM advised that the PSC has reported to CCC but she is not planning to wait for the CCC.
- VM said she does not understand why I made my request. She said she has no idea why I would want to defer pay or ‘hide’ money (therefore accept my explanation).
- I asked if I was trying to hide money, for what and from who?
- I question if there was speculation about my divorce & pointed out that this would make no sense given the amounts (<$25K/$2M), pay rate corrected, agreement & no support requirement.
- VM advised she is not interested in speculation. She also said her brother tried to reduce his income but may have been paying child support?
- I said the matter needs to be resolved and that it is causing considerable stress for me, Josie, Kayla & staff generally.
- VM said lack of paperwork muddles the issue.
- I said I thought I did paperwork but if I forgot 4 years ago I did not think about it since especially after my pay was adjusted in 2021. Paperwork not my strong suit.
- I asked how this will impact our working relationship. VM stated she has no angst, enjoys working with me & considers me good at my job.
- I questioned the fact that the anonymous complainant did not report it to Chris Adams (bc he would not have seen it as an issue).
- I also noted that the current Payroll Officer does not see it as an issue and has herself not agitated for her overdue performance review to provide forced savings.
- VM agreed there is no evidence of dishonesty or corruption just doesn’t feel right.
- VM committed to consider over W/E and resolve asap.
(k) During the meeting, Ms Miltrup suggested for the first time that he was trying to hide money and referred to doing so in the case of a legal dispute. Instinctively, he assumed she was referring to his divorce. That was the reason he mentioned his divorce.
(l) Ms Miltrup has disclosed her notes from this meeting which notes that he said, ‘It is in the CEO’s prerogative to modify the arrangement going forward if I am not satisfied with it.’ By this, he meant that if Ms Miltrup was not happy with the Pay Arrangement, it was her prerogative as CEO to pay out the backpay owing under the Pay Arrangement. This was the second time he raised this with Ms Miltrup, the first being when he emailed her whilst on leave.
(m) He did not ask Ms Harrison or anyone else to keep the Pay Arrangement secret.
(n) In each case outlined in his witness outline, the Councillors either approached him or telephoned him. Councillor Harris approached him on two occasions, once prior to his dismissal, and once after his dismissal. Councillor Bertling approached him on two occasions when he was at the shopping centre. At least one of these approaches was after the dismissal. Councillor Scott sent him a text message on the Friday before the Special Council Meeting, asking if they could have a telephone conversation on the Saturday, about the disciplinary issue.
(o) On 9 October 2023, he secured a parttime, sixmonth contract, working in West Perth.
(p) He and his partner had both been employed by the City for approximately 11 years. However, his partner’s role did not include housing. Without equivalent employment, they could not afford to remain in Karratha. Consequently, they moved to Mandurah, leading to the sale of nearly half of their possessions. They split their time between a caravan and his partner’s property, which is used as an Airbnb to generate income.
25 Under crossexamination, Mr Trestrail gave the following evidence:
(a) He agreed he had oversight of various functions, including legal, finance, governance, and HR, and in all those roles he is required to be attentive to detail.
(b) He agreed the City is governed by the Local Government Act 1995 (WA) (LG Act), which imposes compliance and regulatory obligations on the City, including for the City to have a Code of Conduct. The City had a Code of Conduct. The latest came into effect in 2023. The prior one was broadly similar.
(c) He agreed legislation, including the LG Act, requires the City to keep records, requires financial records to be inspected by the Minister or Department of local government, and establishes an audit process. He agreed the City has a State Records Act 2000 (WA) compliant recordkeeping plan and recordkeeping practices and requires all new employees to undertake compulsory records management induction as part of their training.
(d) He agreed there was one position description for his role. He agreed that being a very senior employee meant that he was held to a higher standard of conduct compared to other employees. He further agreed that a serious breach of the Code of Conduct would constitute a serious matter and a serious breach of his employment.
(e) He purchased extra annual leave, and put his requests to apply for, and vary, the purchased leave in writing. In response to a question that it was important to put those types of requests in writing, he said, ‘in this case … it was appropriate to do so, so I could affect … these particular arrangements, but they could have been done in other ways.’
(f) In response to a question that it was appropriate to put the purchased leave request in writing, he said, ‘The … purchased leave arrangement required, in my case, CEO approval. That was … essentially, a policy requirement.’ When asked again whether it was appropriate to put it in writing, he said, ‘it was required, yes.’
(g) When shown the Purchased Leave form he completed on 14 May 2020 applying to purchase eight weeks of leave and asked if it was appropriate to put these things in writing, he said, ‘it was required under this scheme.’ When asked again whether it was appropriate to put these things in writing, he said, ‘insofar as it was required, yes.’
(h) When asked whether it would be appropriate without a requirement, he said, ‘it depends on the circumstances. There’s … other ways that these things can be achieved, but in this case there was a form … and a set of conditions that applied.’
(i) Two members of the executive team were required to authorise the fortnightly payroll, and if required, he acknowledged that he would review the documentation, particularly in the case of a termination payment. This involved checking and rectifying any errors. When asked if he agreed the details of that sort of thing are important, he said, ‘Well, if it’s put in front of me to sign off on, yes.’
(j) In relation to the meeting with Ms Miltrup on 11 January 2023:
(i) He denied Ms Miltrup discussed the changes with him and sought his input as to when the changes would commence. He maintained that she advised him when they would commence.
(ii) He denied Ms Miltrup sought his input and that he had responded that they should start straightaway because he was going away on extended leave.
(iii) He had organised for Ms Harrison to serve as Acting Director in his absence, as according to the rotation system, it was her turn to act up. He thought it made sense for Ms Harrison to keep reporting to him while she was acting in his role during his absence. However, Ms Miltrup reassigning the HR function to report to the CEO meant that Ms Harrison would no longer report to him. He was perfectly happy to have carriage of those areas while he was away and upon his return, but that option was not presented to him.
(iv) He agreed he said to Ms Miltrup, words to the effect that, he had seen this coming.
(v) He denied Ms Miltrup explained to him that one of the reasons for the change was the closeness in his relationship with Ms Harrison.
(k) He agreed Ms Harrison had reported to him for many years and that they had a close relationship. He was on the panel and was involved in the recommendation and decision to appoint Ms Harrison as the City’s HR Manager in 2013.
(l) He agreed Ms Harrison reported directly to him for 10 years and during that time he was responsible for providing her with directions on what to do and what to prioritise in her role. He also agreed he conducted Ms Harrison’s performance reviews and, aside from the years when the City fixed the increment, he agreed he had influence over her salary increases.
(m) He agreed he had extensively more experience, qualifications and training than Ms Harrison. When asked whether he would tell Ms Harrison what to do and not do in her role, he said, ‘Well, certainly, from time to time I’d give her guidance and advice, yes.’ When asked whether he was ultimately responsible for making decisions about what needed to be done or not done in her role, he said, ‘Some of, yes.’ When asked if there was a disagreement, given he was her superior that it was her obligation to do what he directed or required her to do, he said, ‘No, not always. Often I would defer to her. She was the manager HR. I could give her guidance, but I would not … insist that my view … always carried sway.’ When asked if he thought something was important and needed to be done in a certain way, he could direct Ms Harrison to do it that way, he said, ‘I could direct that she do it that way, and we might have consulted the CEO as a tie breaker.’
(n) When asked if he would normally expect that when he put a request to Ms Harrison for something to be done that she would refuse to do it, he said, ‘Yes, I would. … we frequently … well, we certainly regularly disagreed … as to an interpretation of the agreement or an approach to something … and had vigorous debates … about those issues.’
(o) When it was put to him that ultimately he was the boss, he said, ‘Yes. Ultimately I was the boss … and ultimately I had a boss … but that wasn’t the nature of the way either the City operated or I operated.’
(p) When asked if he spoke with Ms Harrison about the summons, he said, ‘No … yeah, I think I spoke to her about her being summonsed.’ When asked if he rang Ms Harrison, he said, ‘No, I … she was coming to Perth and we were going to catch up anyway, … and – so, yes, I might have spoken to her on the phone, but we talk quite regularly on the phone, so I don’t think I rang her specifically about that, but I think I might have said I heard she was being summonsed.’
(q) He spoke with Ms Harrison in very general terms about his case before he left Karratha in August 2023.
(r) The Corporate Services Managers Meetings took place weekly and the CEO did not attend. The CFO regularly attended these meetings. He agreed he did not formally discuss the Pay Arrangement at these meetings. He said he would, ‘shoot … a crack at … Ms Harrison … about … my backpay.’ When asked if the CFO is wrong in stating he did not recall anything about the backpay being mentioned, he said, ‘he may not have been there when that happened. He may simply not have understood the reference.’
(s) He agreed there is no written record or minute prepared or authored by him in relation to the Pay Arrangement. He also agreed he did not communicate about it via email to anyone.
(t) He agreed the Pay Arrangement did not cease at his request or initiative and he did not ask for it to stop. When it was put to him that when he discussed the Pay Arrangement with Ms Harrison that he did not tell her when it would stop or how it would stop, he said, ‘I certainly didn’t tell her when it would stop. I simply requested they not be paid, and that I be paid backpay at a later time. … to be fair, I don’t know that I had it in my head exactly when, because I was contemplating retirement, but I had not locked in … a date for that retirement.’
(u) When asked if he agreed that no other employee of the City had this same arrangement, he said, ‘I agree no one had it, but not that no one could have it if they had requested it.’ When it was put to him that he did not tell anyone that it was an option they could take up, he said, ‘No, but people weren’t told that they could take up paying extra tax either.’
(v) He agreed that if the Payroll Officer had not mistakenly terminated the Pay Arrangement it could have continued until he resigned. When asked if this meant that the tax on the payment would be treated differently compared to if the money was paid at an earlier date, he said, ‘Yes. I would have paid much more tax’ and ‘I think unequivocally as a – as a lump sum backpay, I would have paid more tax on it because there was more money.’
(w) When asked if he agreed by deferring payment, he deferred paying tax, he said, ‘Well, I – I wasn’t paid the money, so I didn’t pay tax on it before I was paid the money. That’s correct. I paid tax on it when I received the money.’ When asked again that he deferred getting the money and therefore deferred paying tax on the money, he said ‘yes’. When asked whether he delayed paying tax, he said, ‘Well, I didn’t delay paying tax, because I had no tax liability to pay.’ When it was put to him that he was not paying the tax when the money was originally meant to be paid to him, he said, ‘Because I hadn’t received the money. I can’t pay tax on money that I haven’t received.’
(x) When asked if he agreed delaying paying tax on money is a benefit, he said, ‘No. Absolutely not. I had not received the money. Therefore, I had not paid tax on it. If I had received the money and not paid tax on it, that might be a benefit … but there’s no benefit in not paying tax on money you haven’t received.’ When asked if Australian taxpayers delay indefinitely paying tax that there is no benefit to any of them, he said, ‘If they haven’t received the money, no, there’s not.’ When asked if taxpayers deliberately manufacture a situation to not receive money that he would still say they do not receive a benefit, he said, ‘That’s correct. If you don’t receive the money and – and don’t pay tax on the money that you haven’t received, there is no benefit.’
(y) He agreed three people knew about the Pay Arrangement: himself, Ms Harrison, and someone in payroll. When it was put to him that he did not tell anybody else about it, he said:
Ah - ah, I can’t say that I didn’t. I certainly didn’t make a secret of it, but, um - but I also didn’t go around - no, I - actually, I probably did go around broadcasting it in respect of the back pay but - but, no, I didn’t discuss the great detail of it with - with anybody in particular.
(z) When it was put to him that he did not tell the CEO about the Pay Arrangement, he said:
Well, I - I am certain that the same, um, banter about backpay, um, occurred, um, in the CEO’s presence, but, um, he doesn’t recall that, and I accept that he probably had no idea what we were talking about.
(aa) When it was put to him that he did not tell the CFO about the Pay Arrangement, he said:
According to his statement he doesn’t. I - and I’m sure that - I – I’m sure that if he doesn’t recall, he doesn’t recall.
(bb) When it was put to him that he did not ask Ms Harrison or payroll to ensure Finance made provision for the liability, he said, ‘There was no requirement to make provision for it.’ When the question was put to him again, he agreed he did not ask Ms Harrison or payroll to tell Finance to make provision for this liability. When it was put to him that he did not tell Finance himself to make provision for this liability, he said, ‘No. I wouldn’t, because there isn’t a requirement to do so.’ When it was put to him that this was clearly a liability that the City was accruing for an indefinite period, he said, ‘Yes. An immaterial liability, and you don’t make accruals, you don’t make provisions for immaterial liabilities. The auditors have confirmed that.’
(cc) When it was put to him that nobody knew about the liability apart from himself, Ms Harrison and perhaps someone in payroll, he said, ‘Yes, but all of the records for it were available for anyone to discover.’ When it was put to him that there is no email or form about it, he said, ‘No, but - - - all of my performance reviews, my pay rises, are all documented on my personnel file - - - and what I was paid is in the pay records.’
(dd) When taken to his affidavit produced in compliance with the Order for discovery of his family court disclosures, he agreed the disclosure of documents through his solicitors to his exwife’s solicitors included his 2020–21 tax return, which records a Gross payment from the City of $192,151 and Tax withheld of $61,776, totalling $253,927.
(ee) He agreed his payslip for the fortnight ending 23 June 2021, records a Gross Taxable figure of $192,151.14 and a Tax figure of $61,776, totalling $253,927.14.
(ff) He agreed the figures in the payslip correlate exactly to the figures in the tax return. He agreed the tax return accurately reflects what he was paid by the City, and the tax that was withheld by the City in that year. He agreed the 2020/2021 tax year was a year where the salary he was paid was affected by the Pay Arrangement. He agreed that by a salary review letter dated 28 May 2020 that his pay increased to $276,269 effective from 16 April 2020 but he did not receive that increase whilst the Pay Arrangement was in place. He agreed the effect of not receiving the increase at the time was that his tax return was lower than it otherwise would have been.
(gg) When it was put to him that the income his solicitors disclosed on his behalf to his exwife was lower than it otherwise would have been, he said, ‘Well, the – my solicitors didn’t disclose an income, but they did provide that tax return and a payslip, which was different again.’ When asked the question again, he said, ‘If – if I had been paid my increase, yes, the – the amount on the tax returns would have been higher.’
(hh) When it was put to him that the effect of this was that what his solicitors disclosed to his exwife is that his income was lower than it otherwise would have been, he said:
Ah, the effect of this is that, um - that what my solicitors provided was that my, um, income in that particular year, ah, was lower than what it could have been. That’s correct. Um, but as you saw yesterday, um, the lawyers recorded my earning capacity as being three to four times as much.
(ii) He agreed that he was employed under a contract of employment dated 20 March 2017 from 16 April 2017 to 15 April 2022, and under the Contract from 16 April 2022 to the date of his dismissal. He agreed both contracts contained the following terms:
5.1(1) The City must pay to the Director each year a Remuneration Package of the amount specified in item 8 of Schedule 1.
5.2 The Salary must be payable fortnightly, in arrears, by electronic funds transfer to an account nominated by the Director.
6.(1) The Remuneration Package must be reviewed annually.
(jj) He agreed the Contract requires him to be paid a Remuneration Package and that the Remuneration Package is defined in the Schedule as comprising a Salary (cash component). He agreed the Contract requires him to be paid his Salary fortnightly. He agreed the Contract provides for the Remuneration Package to be reviewed annually. He agreed the Remuneration Package was reviewed annually and in each year the Remuneration Package was increased but he was not paid that increased Salary. However, he does not agree that the Contract was breached.
(kk) He agreed he was responsible for HR and governance until January 2023. He agreed the City was operating under the FW Act until the City began operating under the Minimum Conditions of Employment Act 1993 (WA) (MCE Act). He was aware the FW Act required an employer to pay an employee in full. He accepts the MCE Act contains a similar provision. When asked if he sought advice about these provisions when he made the Pay Arrangement, he said:
Well, ah, that - I - on that basis, I raised it with the Manager of Human Resources, um, and again simply made a request. If the Manager of Human Resources said it was inappropriate or a breach, then, ah, I wouldn’t have done it.
(ll) When asked if he thought it was appropriate to check, he said, ‘Well, I checked it with the Manager of Human Resources who was our, um, expert in the field.’ When it was put to him that Ms Harrison does not have as many degrees as he does, he said, ‘No, she doesn’t, but, ah, she certainly - her experience in Human Resources is vastly more contemporary than mine.’ When it was put to him that he has extensively more experience than Ms Harrison in managing local government, he said, ‘Yes. I - I am on that basis aware of the number of times we don’t pay people in full, like purchased leave.’
(mm) He was aware the Award applies to the City. Clause 13.3.1 of the Award states:
Payment of salaries shall, at the discretion of the employer, be made at least fortnightly.
(nn) He agreed cl 13.3.1 states that salary has to be paid at least fortnightly. In answer to a question that his salary was not paid fortnightly, he said, ‘Yes, it was.’ In answer to a question that his full salary was not paid fortnightly, he said, ‘Well, no, it wasn’t for a whole range of reasons.’ In answer to the question that for two years his full salary was not paid fortnightly because of the Pay Arrangement, he said, ‘No, but it says: “Payment of salary shall be paid fortnightly” and I was paid fortnightly.’
(oo) He agreed that during the period of the Pay Arrangement, superannuation was deducted and remitted to his superannuation fund. He agreed the calculation was based on the money paid to him, and not on his actual salary.
(pp) He denied the Pay Arrangement had the effect of the Contract not being complied with, the Award not being complied with, tax being delayed, and superannuation not being calculated at the correct rate.
(qq) When put to him that the Pay Arrangement had the effect that his exwife, through the solicitors, was given information about his salary that was lower than it otherwise should have been, he said:
Well, ah, that was one of a number of issues that - that, um, were, as explained yesterday, incorrect, um, but in the final, ah, and agreed, um, arrangement, ah, everything was correct.
(rr) He denied that the Pay Arrangement failed to adhere to the following principles in the Code of Conduct:
We believe in good governance, working within legislative parameters.
Having integrity, and acting in an honest, lawful, professional, accountable and transparent manner.
We properly manage resources.
We ensure sound financial management and accountability in relation to finances.
(ss) He agreed he raised or initiated a discussion about his divorce being a motivating factor during the meeting with Ms Miltrup on 14 April 2023. He agreed the first mention of family law and divorce was from him. He said:
Well, the fact that the CEO referred to hiding money and a legal dispute, um, led me to believe she was alluding to my divorce - - - and hence - - - I responded - - - to that. I think she raised it, um, indirectly or covertly.
(tt) When taken to the following section of the 4 May Response Letter, he agreed he should have documented the Pay Arrangement:
2. A lack of documentation for the ‘pay banking’ arrangement minimises the accountability, transparency and governance of the City’s management practices and impacts the integrity of the City’s financial systems.
Whilst I acknowledge that I should have documented my request, as mentioned previously it was no more than an oversight …
(uu) He agreed he read the following passage in the 11 May Letter when he received it:
Again, you are directed not to discuss the contents of this letter with any of your colleagues. This constitutes a reasonable and lawful direction with which you must comply. Should you discuss the contents of this letter with anyone (other than a family member and/or your legal advisor), this will constitute separate serious misconduct and there will subsequently be implications for your employment, up to and including termination of employment.
(vv) He agreed he read the following passage in the Show Cause Letter when he received it:
Additionally, you are directed not to discuss the contents of this letter with any of your colleagues. This constitutes a reasonable and lawful direction with which you must comply. Should you discuss the contents of this letter with anyone (other than a family member and/or your legal advisor), this will constitute separate serious misconduct and there will subsequently be implications for your employment, up to and including termination of employment.
(ww) He said he was unsure he fully understood because of the inconsistency between ‘not discuss with your colleagues’ and ‘not discuss with anyone.’ He gave the example that he discussed the matter with his doctor in breach of the ‘not discuss with anyone.’ He said there appeared to be two separate conflicting directions.
(xx) He disagreed the direction was a simple one. He disagreed he discussed the contents of the letters with Councillors. He agreed he did not inform Councillors about his inability to speak with them due to the direction not to discuss the contents of the letters. He agreed he was aware of the potential disciplinary action, including termination. He agreed he gave evidence of discussions with Councillors, and Councillor Scott saying to him he could not see how his conduct constituted serious misconduct but denied discussing the contents of the letters with Councillors.
(yy) He agreed he had a lot of experience in HR matters. He agreed that serious misconduct potentially means termination of employment. He agreed Councillor Scott spoke to him about serious misconduct. When asked if he agreed he spoke to Councillors about matters referred to in the letters, he said, ‘no’. When it was put to him that he spoke with Councillor Scott about matters covered in the letters, he said, ‘Ah, no, I’m not sure I did.’
(zz) He agreed he made a Code of Conduct complaint against Ms Miltrup which required him to keep the contents of the complaint confidential until any resulting investigation had concluded. He agreed he told Councillor Scott about making the complaint. However, he disagreed he failed to comply with the confidentiality declaration. He said he did not discuss the contents of the complaint with Councillor Scott.
26 In reexamination, Mr Trestrail gave evidence, including:
(a) He sent the former CEO an email requesting purchased leave because there was a documented requirement to seek CEO approval. The purchase of leave would result in an extended absence from work and therefore required the CEO’s approval.
(b) He did not create the purchased leave form. The purchased leave arrangement did not exist at the time of the Pay Arrangement.
(c) He did not discuss with Ms Harrison the evidence he would be giving in the proceedings or the evidence she would be giving in the proceedings.
Ms Harrison’s evidence
27 At the hearing, Ms Harrison gave the following evidence:
(a) She commenced employment with the City in March 2010 as a Recruitment Officer.
(b) In July 2013, she was promoted to HR Manager. She had 11 employees reporting to her: HR Officers, Recruitment Offices, Training Officers, Occupational Health and Safety Officers, Admin Support and Payroll Officers.
(c) She has worked in HR for 17 years. She holds a Masters in Human Resources Management. She has been in a managerial position in HR since 2010.
(d) On 30 May 2023, she was dismissed for misconduct for her involvement with the Pay Arrangement.
(e) In 2019, Mr Trestrail made the request for the Pay Arrangement. He did not ask her to keep it secret. She cannot recall whether Mr Trestrail made the request directly to her or to the Payroll Officer. If she had been asked directly, she would have instructed the Payroll Officer to implement the Pay Arrangement. She did not ask the Payroll Officer to keep it secret.
(f) If Mr Trestrail, or any other employee, had asked her to do something ‘dodgy’, she would not do it. Depending on the circumstances, such requests might need to be escalated higher within the organisational hierarchy.
(g) When Mr Trestrail made the request, she considered whether there would be any tax implications and concluded that there would be none, as he would pay tax on the money upon receipt. She also considered whether there were any superannuation implications and concluded that it would be the same as tax, meaning that superannuation would be paid when the payment was made. She also considered whether any legislation required a pay increase to be paid at the time and was not aware of any such requirement.
(h) There was no occasion where she had to decline a request made by Mr Trestrail. However, there were times where they disagreed on a work scenario and she would ‘push back.’
(i) The Pay Arrangement ceased due to the mistake of the Payroll Officer. When updating the payroll system for purchased leave, the Payroll Officer modified Mr Trestrail’s rate to his actual 2021 rate, terminating the Pay Arrangement.
(j) Payslips record annual leave accrual and annual leave taken. They do not record leave purchased in advance.
(k) The purchased leave arrangement was introduced as a result of COVID. As employees were having to take leave because schools were not running, the arrangement was introduced so that employees that could not attend work due to COVID were able to purchase leave, so that they would not be on leave without pay.
(l) On 14 March 2023, she sent an email to Ms Miltrup that, with the Pay Arrangement, Mr Trestrail’s purchased leave arrangement, errors with his superannuation calculation and the nonpayment of his 2022 pay rise, while the full backpay calculation has not been completed a ‘quick calc shows a backpay amount of approximately $30,754 gross.’
(m) The administrative errors were not Mr Trestrail’s fault. The inaccuracies were made by the Payroll Officer. However, she was responsible for verifying, and she overlooked them. Mr Trestrail was not involved in the daytoday payroll processing.
(n) Mr Trestrail did not threaten action against the City in relation to these underpayments.
(o) She describes her relationship with Mr Trestrail as friends, having initially met at the City. She believes their friendship had a detrimental effect on her, as Mr Trestrail held her to a higher standard compared to the other managers that reported to him. This was because he wanted to avoid giving the impression that she received special treatment due to their friendship.
(p) Their friendship had no impact on what Mr Trestrail asked or directed her to do. She treated him the same as any other employee, director, and even the CEO. If Mr Trestrail gave her a direction that she disagreed with, she would question it, otherwise she would follow it. She did not question his Pay Arrangement request.
(q) She told Ms Miltrup that she would have agreed to the Pay Arrangement request if anyone else had made it.
28 Under crossexamination, Ms Harrison gave the following evidence:
(a) She was the City’s HR Manager from 2013. For the two years prior, she was a Recruitment Officer at the City.
(b) When serving as a Recruitment Officer, she acted as Acting HR Manager on a number of occasions. Apart from these instances, she did not have any experience in a HR management position.
(c) Mr Trestrail had been promoted from HR Manager to Director of Corporate Services. He played a role in her promotion to HR Manager and had influence over the decision to promote her to HR Manager.
(d) Mr Trestrail was her direct manager, supervised her work, had capacity to give her directions or instructions, possessed significantly more experience than her, and was her mentor. Apart from the period when she was the Acting HR Manager reporting to the CEO, Mr Trestrail was her only boss during her tenure as the HR Manager.
(e) While she might sometimes persuade Mr Trestrail that whatever he initially thought should be done should not be, she agreed that if Mr Trestrail wanted something to be done a certain way that he had the right to make that direction to her.
(f) When asked why she did not question the Pay Arrangement, she said she did not believe there was an issue with it. She said that given it was a personal matter, if Mr Trestrail had insisted on it and she had disagreed, she would have brought it to the attention of the CEO. She said she did not approach the CEO because she did not disagree with the arrangement.
(g) She agreed the Pay Arrangement was not extended to other employees, and that no one else at the City had requested it. She agreed that no one else deferred their pay in this manner.
(h) She agreed there was nothing in writing regarding the Pay Arrangement. She agreed she looked for something in writing but was unable to find anything.
(i) She agreed there was no instruction or requirement from Mr Trestrail that the Pay Arrangement was to end on a certain date. She agreed it was an ongoing arrangement. She agreed it was an indefinite arrangement.
(j) She agreed she did not ask Finance to accrue for the liability. When asked if she had asked someone else to arrange for the accrual, she said the City’s payroll exceeded $30 million, so she did not consider the amount material enough to warrant an accrual.
(k) She agreed she did not raise the Pay Arrangement with the CEO. When put to her that she did not seek advice from anyone about the Pay Arrangement, she said she did not believe she needed to. She agreed she did not seek an accountant’s advice regarding the tax implications, nor did she seek legal advice regarding the employment obligations.
(l) If payroll involved a termination payment, she agreed Mr Trestrail would question it at times if he believed there was an error. They would discuss it, and if there was an error, it would be fixed before the payroll released.
(m) She understood the City was governed by the LG Act, which imposed obligations on the City, including to keep records. She agreed there was no record kept of the Pay Arrangement. She agreed that, in hindsight, she wished there had been a record.
(n) She agreed she lost her employment because of the Pay Arrangement. She agreed that the following letters were exchanged:
(i) Letter from Ms Miltrup dated 11 April 2023 with subject ‘Suspected Minor Misconduct’.
(ii) Her response to Ms Miltrup dated 17 April 2023 with subject ‘Allegation of Suspected Minor Misconduct’.
(iii) Letter from Ms Miltrup dated 27 April 2023 with subject ‘Show Cause Letter’.
(iv) Letter from MDC Legal dated 12 May 2023 with subject ‘Ms Kayla Harrison | Response to Show Cause Letter’ (MDC Legal Letter).
(v) Letter from Lee Reddell (Ms Reddell), Director Development Services dated 30 May 2023 with subject ‘Termination of your employment with the [City]’.
(o) She agreed the MDC Legal Letter [21] states:
In hindsight, Ms Harrison acknowledges that the pay banking arrangement, and the former CEO’s knowledge of it, should have been confirmed in writing to ensure the veracity of and clarity within the City’s records. She has considered the City’s point of view on this matter and is committed to working with the City to ensure that her understanding of the appropriate process in such circumstances is accurate. To this end, she is prepared to complete any training or counselling that the City may deem appropriate.
(p) She agreed she had input into the MDC Legal Letter, and that she agreed with its contents at the time. She still agrees with the point in the MDC Legal Letter [21]. She agreed that it is a proper assertion that she stands by.
(q) She agreed she was hurt and disappointed by her dismissal; she was not happy about it. She thought the City had made the wrong decision; she did not agree with the City’s decision. She agreed that following her dismissal, there were discussions between her and the City, which led to her entering into a deed of release with the City.
29 In reexamination, Ms Harrison gave the following evidence:
(a) Payroll reports to her and has a number of duties and functions for which they are responsible for. There was no record of the Pay Arrangement, and she is not aware of anyone in payroll having taken any action to document the Pay Arrangement.
The former CEO’s evidence
30 On 27 September 2023, Mr Trestrail filed an outline of evidence for Chris Adams (Mr Adams), the former CEO. The City did not seek to crossexamine Mr Adams and the parties agreed for his outline of evidence to be tendered. The outline states:
1. I was employed as the [CEO] of the [City] for approximately 10 years from September 2012 to August 2022.
2. I worked closely with Mr Trestrail during my employment with the [City], and in that time, I viewed Mr Trestrail as an exceptional employee.
3. In my role as CEO, I completed Mr Trestrail’s performance reviews and approved his pay increases.
4. I was not aware of Mr Trestrail’s deferral of his pay increases until after I had left my role as CEO.
5. After completing Mr Trestrail’s performance reviews, I would send the notification of his pay increases to Human Resources. I did not know at the time that some of these had not been applied, but if I had known, I would have approved the deferral of his taking of pay increases as flexible arrangements for payment of remuneration were available at the City.
6. Where flexible pay arrangement were instigated some record keeping was applied to keep track the arrangement. This was usually done via something as simple as an exchange of letters or a simple deed of arrangement.
7. Although I believe Mr Trestrail should have undertaken a more formal process to approve the deferral of his pay increases that the email process that I understand he did with the Manager of Human Resources, I do not think that this is a significant issue and [wouldn’t] have led to summary termination if I became aware of it.
8. While I believe that Mr Trestrail should have been more diligent with paperwork on this issue I do not believe that his actions should be construed as serious misconduct. Based on the information available to me, I believe that he has been treated extremely poorly throughout this whole process.
9. I am not aware of any other employee deferring their pay increases in this way, but there were other similar arrangements to effect pay banking – where people purchased leave, went part time in lieu of fulltime work, cashed out annual leave and/or arranged flexible working arrangement. Given the difficultly in attracting and retaining staff, there was flexibility in the City of Karratha around these kinds of things.
10. With regard to performance reviews, my practice tended to be that I would complete the performance reviews for all four directors reporting to me at roughly the same time. Their pay increases, if applicable, were then backdated to the anniversary date of their employment. This is a standard practice at the City of Karratha, not just one that I undertook. For example, it was the approach the Council took when completing my performance reviews where my reviews were routinely done six months after my anniversary date.
11. In the management meetings which were held every 6 to 8 weeks, Human Resources would provide updates on relevant matters. Included in their report would be a table of any overdue performance reviews within each management team. There were regular reviews and updates on how many people had not yet had their annual performance review. As such, while there were performance reviews not being done routinely on the date they were due, there was monitoring and review. When overdue performance reviews were undertaken it was commonplace to back pay any pay increase to the staff members anniversary date.
12. Whilst I was CEO I never had any complaint from any employee about the delay in completing their performance reviews.
The CFO’s evidence
31 At the hearing, Raymond James McDermott (Mr McDermott) gave the following evidence:
(a) He is the Manager of Financial Services, CFO.
(b) He has been at the City for 15 years and in the role of CFO since 2011.
(c) He regularly attends the Corporate Services Managers Meetings.
(d) He first heard about the Pay Arrangement on 24 May 2023, in a conversation with Ms Miltrup.
(e) Prior to 24 May 2023, he had not seen any documents and was not aware whether the arrangement was approved or authorised in anyway.
(f) There was no provision made for the Pay Arrangement.
32 Under crossexamination, Mr McDermott gave the following evidence:
(a) He agreed he did not attend every single Corporate Services Managers Meetings.
(b) When put to him that when the increases to an employee’s salary is delayed because the performance review is delayed that there is no provisioning for the deferral, he said that there is no need for a provision.
(c) When put to him that there is no provisioning for the deferral arising from a purchased leave arrangement, he said that purchased leave is provisioned for in the Balance Sheet.
The CEO’s evidence
33 At the hearing, Ms Miltrup gave the following evidence:
(a) She has 30 years’ experience as a Senior Executive in Corporate and HR in large commercial organisations and in local government. She became CEO in October 2022. At the time, she had five direct reports, Simon Kot, Mr Trestrail, Ms Reddell, Arron Minchin (Mr Minchin), and Executive Assistant Tishka Hanlon.
(b) She received feedback from Council that one of the reasons for her appointment was her HR experience, which set her apart from the next candidate. After observing the City’s operations for several months, she made the decision in January 2023 to reorganise the HR function to report directly to her. This was based on feedback from staff and managers indicating a perception that Mr Trestrail and Ms Harrison were very close, which was affecting how HR matters were managed. She had discussions with both Ms Harrison and Mr Trestrail regarding this perception, and expressed her belief that creating separation in accountabilities would benefit them and bring more objectivity to the HR function.
(c) She discussed these issues with Mr Trestrail in a meeting in January 2023. Since Mr Trestrail was about to commence six weeks of long service leave, she met with him before his leave to present her intentions and explain the reasons behind them. During the meeting, Mr Trestrail said he was anticipating the change given her HR background. When discussing the transition, Mr Trestrail suggested that, given his upcoming extended leave, it made sense to implement the changes immediately. Sensitive to how the change would be perceived, they discussed changing his job title to enhance his oversight of the legal function, bolstering his focus on critical IT issues such as cyber security and implementing a new ERP system. Consequently, she and Mr Trestrail conducted individual meetings with each of his direct reports, answering their questions, and she also recorded a video message for all staff.
(d) In the first or second week in March 2023, she received an anonymous report, which she considered a whistleblowertype notification, of the Pay Arrangement. Therefore, she requested payroll to furnish her with the payroll reports for the executive team for the current financial year and their personnel files. She was able to reconcile the pay for each of the other three executives, but not for Mr Trestrail. Consequently, she sought an explanation from Ms Harrison of the anomaly in Mr Trestrail’s pay.
(e) From Ms Harrison’s email response of 14 March 2023, she understood there was documentation around purchased leave, there had been some issues around payment of superannuation, and there was some form of deferral of backpay occurring. Having not seen a situation where an employee let alone an executive requesting their pay increase not be paid in her 30 years’ experience in HR, she thought it was unusual. The other thing she found concerning was the lack of a document trail. It was very concerning to her that the City was accruing a liability but had no knowledge of the liability or the financial mechanism to measure or understand the liability.
(f) On 14 March 2023, she emailed Mr Trestrail about the Pay Arrangement, and he responded on 17 March 2023. Based on his response, she understood Mr Trestrail to say he had established the Pay Arrangement as a form of savings for his retirement. Mr Trestrail likened the arrangement to delays in processing performance reviews. However, she disagreed with this comparison, because pay increases follow a documented and accountable process, with budgets, approvals, and a paperwork trail. Even if there is a delay in the paperwork, the process remained fully regulated and accountable. The Pay Arrangement was not a fully transparent and accountable process.
(g) As she determined the Pay Arrangement was a way for someone to save up money without any accountability or paper trail, she was increasingly concerned about the arrangement. She telephoned the Auditor, explained the situation, and asked for advice on how to manage it. As the amount was not financially material it would have no impact on the current audit, so she formed a view the Pay Arrangement was more properly considered a misconduct and behavioural issue rather than a matter of financial impact to the City.
(h) On 26 March 2023, she reported the matter to the PSC in compliance with the mandatory reporting process for CEOs in local government, which requires reporting when there is a reasonable suspicion of conduct warranting investigation. CEOs are encouraged to proactively report any potential misconduct as early as reasonably practicable. She reported the matter because she believed she was adhering to the mandatory reporting procedures. She was not suggesting that misconduct had occurred; rather, she felt it necessary to consider the matter more seriously.
(i) On 4 April 2023, she received the PSC’s response, indicating the PSC had referred the matter to the CCC. On 27 April 2023, she received an email from the CCC, indicating the CCC’s assessment of the information. The CCC was unable to form a reasonable suspicion of serious misconduct due to the absence of identified corrupt intent. Consequently, the matter was referred back to the PSC, and the CCC concluded its involvement in the matter. Subsequently, the PSC referred the matter back to her, requesting that she continue the investigation and revert to them once the investigation process was complete.
(j) She was not comfortable with the responses Mr Trestrail provided in his 17 March 2023 email, so she sought to formalise the process. She provided Mr Trestrail with the Suspected Misconduct Letter, setting out her concerns and asking him to respond to them through the lens of misconduct. She wanted to get a sense of whether the conduct met the criteria for misconduct under the Corruption, Crime and Misconduct Act 2003 (WA) (CCM Act). In her mind was the fact that a senior person, in a position of power or authority over a process, had potentially manipulated that process for their own benefit. In this letter, she outlined that the Deputy Mayor and an independent public sector officer would review Mr Trestrail’s response with her. This was because she had already formed a view that this was a difficult situation to investigate due to her concern about the absence of information, and she sought to bring in two other sets of eyes to critically review the responses received and sense check whether she was perceiving the situation correctly. Given the highly unusual nature of the situation, she sought an external sounding board to gauge whether others perceived it as unusual and worthy of consideration under the CCM Act definition of misconduct.
(k) Mr Trestrail responded on 3 April 2023. His responses did not ring true to her, including his response that, ‘I have not obtained a benefit nor have I caused a detriment to any person.’ Why would he enter into the Pay Arrangement if he did not have some form of benefit to himself? She felt that an acknowledgment of the benefit would have been more clear and more honest. She felt a sense of dishonesty emerging. The response claiming his request was made as an employee and not in the performance of his functions as a director felt disingenuous, particularly considering his longterm role as a director to assert that speaking to the HR Manager or payroll person about his pay did not still entail being a director and their boss. His response that the Pay Arrangement did not involve him issuing directions or using his position or managing changes to his pay, did not make sense to her. He must have issued some form of instruction in order for the Pay Arrangement to have occurred, and he acknowledged he had requested it. In response to specific questions about the Pay Arrangement, he responded, ‘All other things being equal, it was my intention that the back pay be paid on my retirement.’ This once again highlighted the absence of documentation, other than his statement to say that that was what was understood and agreed. After reviewing the response, her concerns about whether an executive had used their power and position to gain a unique pay arrangement for themselves were not allayed, in fact, she felt her concerns were confirmed.
(l) She provided Mr Trestrail’s response to Ms Reynolds and Ms Nunn. On 13 April 2023, she discussed the matter with Ms Reynolds and the takeaway from that discussion was a confirmation that it was a highly unusual pay practice and her concerns about it were valid. Further, as the PSC had referred the matter to the CCC, it would be prudent to make a report to the CCC on a proactive basis to demonstrate her openness and transparency in reporting. The takeaway from the discussion with Ms Nunn, was validation that her concerns were validated and that it was appropriate to continue with an investigation process.
(m) She had committed to revert to Mr Trestrail after considering his response and after her conversations with the panel. At that point, she felt conflicted in terms of how to proceed. She felt very uncomfortable with the Pay Arrangement. She did not feel she had clarity as to the best way forward. On 14 April 2023, she met with Mr Trestrail and they had a 45–‍60 minute meeting where she frankly laid out her concerns. She said her concerns remained. The essence being that if someone had wanted to hide money, then the Pay Arrangement would enable that, and while she could not make any assumptions as to his intentions, without there being documentation and approvals, accountability and transparency, she felt really uncomfortable with the Pay Arrangement and what that meant. Mr Trestrail volunteered that it was an example of poor paperwork, which he said was fairly common at the City. He suggested that she may have heard about the Pay Arrangement from a disgruntled former payroll employee to suggest the source of the information should be discredited. She responded that she did not think the source concerns her because she was looking at the facts as they sit in front of her. Additionally, Mr Trestrail volunteered that she might think the arrangement related to his divorce, and said the amount was financially immaterial in the context of his divorce, so it would not be worthwhile to use the Pay Arrangement to hide money for that purpose. He said that if part of her objective was to make him leave the organisation, they could come to an agreement, she just had to pay his notice period and he would happily walk away. She told him that this was not her intent and had never been. She said she actually had a good working relationship with him, so the investigation was not coming from a sense of conflict or adversity but was necessitated by her belief that the situation was incongruent with good practice and her expectations for someone of his seniority. She asked him for time to reflect on his comments, and the meeting concluded without a resolution.
(n) Following the meeting, she sought legal advice on the situation. The legal advice assisted her to crystallise her own views and articulated in a more complete form her thoughts. Subsequently, she concluded it was necessary to progress with a show cause process and issued the Show Cause Letter. She included a direction not to discuss the letter. As the matter was transitioning into a formal grievance and show cause process, she believed it was important for the process to be handled professionally and efficiently. The direction was aimed at maintaining a professional exchange between her and Mr Trestrail, and at ensuring they worked through the process in an expedient way. The letter also notified Mr Trestrail that he was being stood down on full pay.
(o) She received the 4 May Response Letter, which did not alter her perspective on the matter. She felt Mr Trestrail was reiterating the same points of contention. The only thing they seemed to agree on was that the Pay Arrangement was undocumented. Other than that, she did not feel she received a response that gave her any comfort.
(p) She issued the 11 May Letter. She included the direction not to discuss the letter. She believes it is appropriate to have a confidentiality requirement in this type of process. It ensures a respectful process between the employer and employee and creates the best environment to resolve the matter.
(q) She received the 16 May Response. She felt this response was very consistent with the 4 May Response Letter. It covered very similar, if not identical, grounds. The key themes remained the same. At paragraph 10, he said the difference in his rate was approximately $1.50 per hour, which she felt was a minimising or deflecting of the true nature of the issue. He refers to the CCC not forming a reasonable suspicion of serious misconduct, which she agrees with. It was the PSC that referred it to the CCC, and the CCC referred it back. That was all part of the process. He concluded the 16 May Response by outlining the personal impact on him, as it would be for any of us in terms of having our employment terminated. She did not see anything in the 16 May Response that provided her with new or different information to what she received in the 4 May Response Letter.
(r) After considering the 16 May Response, she considered the nature of the Pay Arrangement, the fact she had never seen it in her career, that it could be a process used to hide money; she put herself in the shoes of working for Rio Tinto or the Department of Health and whether it would be an acceptable practice for a director to go through this kind of process and her feeling was ‘no’. She considered the fact the arrangement was not offered to any other person, that she only became aware of it through a confidential process, that there was no financial provision made or any clarity as to how the process was going to work, and that the CEO did not know about it. All of these facts aggregated in her mind that not only was this not acceptable, but not acceptable for someone at Mr Trestrail’s seniority. On that basis, she decided to take the matter to Council to review her decision that he be dismissed and spoke with the Mayor about organising a Special Council Meeting.
(s) At the Special Council Meeting on 22 May 2023, she briefed the Council on the issue, spoke about the process she had undertaken, spoke about the contractual and legal issues of concern to her, the investigation she had undertaken, and what her outcome was. She prepared an Agenda paper and provided the Council with a number of documents, including the 4 May Response Letter. She chose that document because she felt it was a very full and complete response to each of her concerns and encompassed in one document Mr Trestrail’s key responses. She addressed the Councillors’ questions and at the end they took a vote on whether or not to endorse her recommendation, and unanimously agreed to Mr Trestrail’s dismissal.
(t) The decision to dismiss Mr Trestrail was hers to make. Council does not reprosecute or reinvestigate. Council sits in the role of a board of directors to provide a governance function. They review and identify that an appropriate decision has been made by the CEO following an appropriate process. Council had in front of them the 4 May Response Letter, which was Mr Trestrail’s detailed response in his own words, which she felt was an adequate view of his position that Council could review and consider whether the CEO was approaching this in the appropriate way. She is informed by the LG Act of the CEO’s role and the Council’s role.
(u) The Special Council Meeting was on a Monday evening. The next day, she issued the Termination Letter, advising Mr Trestrail that his dismissal was effective immediately. As she formed the view there was a degree of deception in the manner the Pay Arrangement had been managed, the letter reinforced the breakdown in the implied duties of good faith and fidelity.
(v) Within a couple of hours of issuing the Termination Letter, the Acting Mayor notified her that Mr Trestrail had made a Code of Conduct complaint against her.
34 Under crossexamination, Ms Miltrup gave the following evidence:
(a) She agreed a central feature of her concerns was the lack of documentation, which she considers to be deceit. She agreed she was responsible for giving instructions on the City’s behalf in the proceedings and was responsible for the calling of witnesses. She said she did not call the person who brought the Pay Arrangement to her attention because there was a degree of fear on their part, which she sought to protect. The anonymous report she received was a verbal one and was not from payroll. She did not ask the person who made the disclosure to put anything in writing.
(b) In relation to Councillors, it was Mr Trestrail who mentioned speaking with them in his witness outline. She has not spoken to the Councillors about it and agreed that she cannot dispute that the Councillors approached Mr Trestrail. In answer to the question whether she could object to Councillors approaching Mr Trestrail, she said she would object as while the process was under way, they were in breach of the LG Act by involving themselves in administrative matters, and in employment matters which are the clear remit of the CEO. Further, Mr Trestrail has the choice of whether to engage in the conversation with the Councillors. It was poor judgment on his part to enter into the discussions with them. She agreed that Councillors are not colleagues.
(c) She agreed the purchased leave arrangement has the effect of reducing an employee’s pay and defers the pay until they take leave at a future date. She agreed that if the employee’s employment is terminated before they take the leave, they get paid out the deferred amount, and superannuation is paid on the backpay. She agreed that during the purchased leave period, the employee receives a reduced amount of pay and pay tax at the reduced amount. She agreed the employee’s motivation or intention for purchasing leave is irrelevant to whether their application would be approved.
(d) In response to a question about a meeting with Mr Minchin prior to starting as CEO, she said she met with each director before she started to get to know them, hear their views, and understand what they were doing. One of the things Council said to her upon her appointment was that they had concerns around HR. She recalls Mr Minchin saying the relationship between Ms Harrison and Mr Trestrail was problematic, and she recalls asking him if he was suggesting it would be better if HR reported to her, and him replying that he felt that would be a popular change. She had not made any decisions on the reporting lines for HR at that time and was still keeping an open mind on how to manage the HR function going into the organisation but had been put on notice effectively by a senior person in the business of their views.
(e) She did not speak to the former CEO in her investigation into the Pay Arrangement.
(f) On termination, Mr Trestrail received approximately $46,000 in backpay. Of this, approximately $26,000 related to the Pay Arrangement. When she wrote her outline of witness evidence, payroll had informed her that the Pay Arrangement had caused the City to underpay Mr Trestrail from 2019 to March 2023, but they subsequently provided her with clarification that the Pay Arrangement ceased in 2021.
(g) When put to her that the crux of her finding of serious misconduct was deceit, and asked if deceit is a separate ground or related to the finding that Mr Trestrail used his position or embarked on the Pay Arrangement for personal gain, she said it is in addition to and combined with the other ground.
(h) When asked what the personal benefit is, she said that it is fair and reasonable to say you would not enter into a pay banking arrangement unless there is a personal benefit.
(i) When asked if she agreed that saving money is not wrong, she said that using the City’s bank accounts to save money is wrong.
(j) She agreed that purchasing annual leave is for personal gain. When asked how that differs from the Pay Arrangement, she said that firstly, the purchasing leave arrangement is time bound; the rules say that if it is not complete within 12 months it will actually be cleared. Secondly, there is clearly a debit and credit; it is very transparent; pay is reduced on one hand and annual leave goes up on the other; there is a reconciliation between the two. With a purchased leave arrangement it is very clear and transparent as to how the transaction operates. There is no transparency with the Pay Arrangement.
(k) When put to her that Mr Trestrail’s payslips show he received the reduced amount, she said that there was no counter transaction recorded. When put to her that there is correspondence from the City showing an entitlement to a pay increase, she said that she disagreed because from the City’s financial perspective on its Balance Sheet they were now incurring a liability.
(l) When put to her that the City incurs a liability when pay increases are deferred following a delay in completing performance reviews, she said that they are budgeted for; the framework within the City is already in operation.
(m) In response to a series of questions regarding relying upon employees to do the things within their function, she said that when an executive makes a request concerning changes to their pay, it is the executive’s responsibility to ensure that it is properly documented and approved. When asked if Mr Trestrail is entitled to assume that when he is directing or asking someone to do something, he is entitled to assume that role or function will carry out the request in a manner that conforms with their function, she said that that was one of the reasons why she found the Pay Arrangement so unusual.
(n) When taken to her notification to the PSC, she agreed the form states, ‘Kayla Harrison was the HR Manager who instructed payroll to withhold his pay and did not document the arrangement or seek approval.’ When asked if Mr Trestrail is entitled to assume that Ms Harrison will document the arrangement, she said she believes there is an obligation on both parties. When asked again, she said she thinks the onus is on Mr Trestrail. When asked again, she said that in terms of issuing the instruction, in the same way the purchased leave request was documented in an email from Mr Trestrail to the former CEO, she would expect that there is an onus on Mr Trestrail to make that instruction very clear, and then there is an onus on the HR Manager to ensure that it is likewise fully documented and calculated; so that it is ‘agreed on both parts’.
(o) When taken to a spreadsheet prepared by the payroll officer showing a series of backpay calculations from 17 April 2019 to 16 February 2022, she said she first became aware of the spreadsheet at the time she processed the termination pay for Mr Trestrail; that was the first time she saw it.
(p) She agreed she sought legal advice on the defaulting tenant at The Quarter and providing it to Mr Trestrail. She also agreed seeking legal advice on the compliance issues arising from the Pay Arrangement. When asked why she did not share the advice with Mr Trestrail, she said she did, it was put to him in the letters. When put to her that she put allegations in the letters that he had put the City at risk of breach of laws without sharing the advice on those risks, she disagreed. She said the wording of the letters actually articulates the nature and type of compliance breaches the City potentially faced. When asked if the way in which she phrased the issues in the letters was based on the legal advice, she said, ‘yes, I would agree with that.’ When asked if the disciplinary letters reflect the full extent of the legal advice with respect to the noncompliance concerns that she found against Mr Trestrail, she said, ‘yes’.
(q) When shown her email to Councillor Nunn sent on 11 April 2023 attaching her notification to the PSC, and put to her that she elevated a suspicion of minor misconduct to a ‘likelihood’ of minor misconduct, she said:
Mm. Um, look, I think, um - ah, yeah. I - I don’t - when I read that, I wasn’t suggesting it was a likelihood. I was suggesting - I think the context of the entire email and the entire premise of the conversation was that it was, um - I was investigating whether or not there was misconduct, so, um, potentially, um, that particular word was, um, not appropriate, but I think if you read it in its entirety, I think it’s still open for discussion.
(r) When taken to the sentence in this email that, ‘However, there is no documentation of these pay requests or transactions’, and put to her that the statement was wrong because of the payroll officer’s spreadsheet and payslips, she said that the pay banking arrangement is not in the payslips and:
Well - well, what was interesting at that time, I had asked both Kayla Harrison and Phil Trestrail where the documentation and calculation was, and neither of them were able to produce that for me, which is one of the reasons why at that stage even payroll didn’t know that there was a spreadsheet in existence.
(s) When responding to a series of questions that the statement in the email that, ‘The quantum of pay owed is in the range of $30K to $50K’ is a significant overstatement, includes underpayments unrelated to the Pay Arrangement, and is unqualified by stating it is an estimate or still to be checked, she agreed she did not state it was an estimate and agreed the statement was not qualified.
(t) When responding to a series of questions that the statement in the email that, ‘In November 2022 I discussed and agreed with him that HR and Marketing would report to me’ contains two misrepresentations, she said the date was meant to be January 2023, and said that she told Mr Trestrail in January 2023 that her preference was to make the change for HR and Marketing to report to her and that they had had a conversation and ‘an amicable exchange where we agreed what was actually going to occur going forward’.
(u) When put to her in relation to the statement in the email, ‘It is a highly unusual pay practice’ that something being unique or unusual does not make it wrong, she agreed and said that statement was intended to be part of an aggregate view.
(v) When questions were put to her of the statements in the email, ‘He wouldn’t have instructed payroll to make this change if he did not personally benefit’ and ‘The idea of withholding a pay increase as “enforced savings ahead of retirement” doesn’t make sense’, she said that if Mr Trestrail has gone into a pay banking arrangement then he believes there is a benefit to him. She does not think it makes sense for Mr Trestrail to use the City’s bank accounts for his savings program, as typically people have their own savings programs. Further, she considers it wrong, without an approved mechanism, for him to use the City’s bank accounts to save money.
(w) When taken to the statement in the email to Ms Reynolds sent on 6 April 2023, ‘While he will never state it, he is going through a messy divorce and I think the motivation is to understate his pay’, she said that at that stage she was trying to understand why someone would want to hide money, and agreed that at that stage it was speculation.
(x) She agreed that on 14 April 2023 she had a meeting with Mr Trestrail where she made the comment about him hiding money. She agreed that in response, he raised his divorce proceedings. She agreed she did not ask him directly about his divorce proceedings, because she felt he had raised it himself and his comment provided her with the information that she needed. Namely, that one of the potential reasons for someone wanting to hide money may be because they were going through a divorce. However, she resolved that she could not determine if Mr Trestrail was motivated to hide money because of his divorce, only that if he wanted to hide money, then the Pay Arrangement was a mechanism that allowed for him to hide money.
(y) She agreed the Show Cause Letter does not mention the divorce, and said:
Ah, well, we’re talking now about, um, some time later. Um, we’re now talking in a show cause letter 28 April. Um, you know, I - this has been - this was not a process where I set out with one particular view in mind and sought to back up the, um - try and back it up. I was actually going through a process of trying to understand what was in front of me, and there was definitely a progression in, um – in how I saw the issue and why I felt concerned about the issue. Absolutely.
(z) She agreed the statement in the email to the Auditor sent on 14 April 2023 that, ‘No financial provision has been made for his backpay entitlement, which is estimated to be in the range of $30,000 to $50,000’, incorrectly attributed the range entirely to the Pay Arrangement without distinction of the errors outlined in Ms Harrison’s email of 14 March 2023.
(aa) She disagreed that the statement in the same email, ‘This is still an open investigation. It has been reported to the [PSC] as suspected minor misconduct. The [PSC’s] assessment indicates this matter may include allegations of serious misconduct’, is incorrect because the PSC made no assessment. She said the PSC received her report, assessed it and, taking her report at face value, considered it warranted them forwarding it onto the CCC.
(bb) When taken to the letter from the PSC dated 5 May 2023 and the statements, ‘I refer to a notification you made to the [CCC] regarding the conduct of Mr Trestrail’, ‘The CCC forwarded your notification to the [PSC] on 27 April 2023’ and ‘As the allegations indicate Mr Trestrail may have engaged in minor misconduct as described in section 4(d)’, and put to her that there is no assessment, determination, judgment or evaluation by the PSC that there may be minor misconduct; the PSC is simply repeating the allegations made by her and the steps that they have taken, she said:
Um, I disagree with that, cos I think that the language there is: ‘These allegations indicate’ - and I think the word indicate, um, is where their judgment comes to the fore in that they are take - if you - I have stated facts and they are now saying, ‘Those facts indicate that this person may have engaged in minor misconduct’, and they have drawn that conclusion from the facts that I outlined, which I think - I don’t think those facts are in dispute, so I think the fact that they’ve read those facts and then said that they - that indicates misconduct, I think, is, um, their assessment process.
(cc) When taken to notification to the PSC and the question, ‘How often did this occur?’ and the answer, ‘More than once’, she said her understanding was that the Pay Arrangement occurred over multiple years; there were multiple annual reviews; each time a salary review letter was received there was an inherent request following that letter not to apply the increase; and she knew it applied to more than one salary review letter.
(dd) She agreed she did not produce any notes of the conversations she had with the panel or produce any report by the panel. She said the advice she sought from the panel was for her benefit, and she used their input to determine her views as to the direction she wanted to take; otherwise she would be writing a report for herself.
(ee) When asked about the panel, she said the panel offered her advice and their opinion, but ultimately the decision as to whether or not misconduct occurred rested with her. She said their advice supported her conclusion that serious misconduct had taken place.
(ff) When put to her that the Suspected Misconduct Letter does not contain the words ‘serious misconduct’, she said the letter talks about misconduct as defined in s 4 of the CCM Act.
(gg) She agreed that at the conclusion of the process, she concluded that the allegation that Mr Trestrail had taken advantage of his position to obtain a benefit for himself or for another person or to cause a detriment to any person, was substantiated.
(hh) When questioned that if there is no wrongful obtaining of a benefit, then the lack of transparency and documentation does not equate to the hiding of money, she said that given Mr Trestrail was coming up with a unique pay arrangement for himself that it is fair to say that he was seeking to obtain a benefit out of it. That it is wrong for him to hide money to suit himself and to use the power of his position to enable that to occur. That the Pay Arrangement lacked transparency and accountability, and rigour in financial accounting. In that context, he was seeking to hide money. She had asked Mr Trestrail, Ms Harrison and the payroll department to produce documentation demonstrating the documentation and accounting of the Pay Arrangement, but they were unable to provide any such information.
(ii) When taken to Mr Trestrail’s filenote of the meeting on 14 April 2023, she denied she raised her brother trying to reduce his income in a family dispute; she denied her brother has been in a family dispute, or that he had tried to reduce his income.
(jj) When asked a series of questions about providing the 4 May Response Letter but not the 16 May Response to Council, and her rationale for doing so, she said that she felt the 4 May Response Letter covered the matter in full and the 16 May Response substantively covered the same content as the 4 May Response Letter.
35 In reexamination, Ms Miltrup gave the following evidence:
(a) The point made in paragraph 1 under ‘Background’ on page 1 of the 16 May Response, are largely the same as the point made in paragraph 1 under ‘My Response to the Alleged Conduct’ on page 2 of the 4 May Response Letter.
Consideration
36 It is not in dispute that the City, a local government governed by the LG Act, is a highly regulated employer, subject to the scrutiny of the Office of the Auditor General, the PSC and the CCC. The City is a large local government employer. The City’s annual report for the year ending 30 June 2021 reports revenue of $105,950,409, total equity of $771,416,056, and total employee costs of $37,214,925. The City’s annual report for the year ending 30 June 2022 reports revenue of $108,174,220, total equity of $826,009,593, and total employee costs of $36,634,734.
37 It is not in dispute that Mr Trestrail was a highly experienced senior employee who had been employed within the local government sector for many years and by the City since June 2012. He held numerous qualifications including a Bachelor of Business majoring in local government, an MBA, and a Bachelor of Laws. Mr Trestrail commenced his employment with the City as its HR Manager, and was subsequently promoted to Director – Corporate Services, overseeing the Finance, IT, Governance, HR and Marketing departments: [23(a)–(b), (e)], [28(c)], and [33(c)] above.
38 Mr Trestrail acknowledged that as a senior employee, he was held to a higher standard of conduct. He agreed to the City’s obligations under the LG Act to maintain proper records. Mr Trestrail also confirmed his understanding that there were legal requirements for an employer to pay an employee in full. He provided evidence regarding his knowledge of the relevant taxation legislation applicable in this matter: [25(v)–(x), (bb), (kk)] above.
39 The City argues that Mr Trestrail, in his role as Director – Corporate Services with responsibilities for Finance, Governance and HR, would have understood when it is appropriate to properly document and record matters. The City submits that Mr Trestrail’s entry into the Pay Arrangement must be viewed within the context of his employment. It contends that, within this context, his entry into the Pay Arrangement was a secretive, deliberately undocumented practice, which involved an abuse of his role and position of power. The City asserts that Mr Trestrail was fully aware of the City’s recordkeeping obligations under the LG Act and deliberately chose to disregard them in this instance.
40 The issue in dispute, as outlined at [11] above, pertains to the characterisation of the Pay Arrangement. As set out at [14]–[15] above, the parties concur that the question for determination is whether Mr Trestrail’s entry into the Pay Arrangement constituted conduct repugnant to the employment relationship, such that it would warrant his summary dismissal.
41 The City maintains that, following the CEO’s receipt of an anonymous report regarding the Pay Arrangement, it conducted a thorough investigation into the matter. The City concluded that the Pay Arrangement was secretive and undocumented, exposing the City to various compliance and governance risks. Consequently, the City asserts that Mr Trestrail’s conduct in entering into the Pay Arrangement amounted to serious misconduct justifying his summary dismissal: [13(a)–‍(b)] above.
42 Mr Trestrail says:
(a) The Pay Arrangement is a form of enforced savings in preparation of his retirement, and that there is nothing wrong with it: [12(a)] above. It did not involve:
(i) A breach of the City’s superannuation, taxation and financial reporting obligations, the Contract or the Code of Conduct: [23(l)–(o)] and [25(ii)–‍(pp), (rr)] above.
(ii) Him deriving a benefit: [12(d)], [25(v)–(x)] and [25(dd)–(hh), (qq)] above.
(iii) An abuse of his position: [23(g)] above.
(iv) Any secrecy: [23(i)–(j)], [24(m)] and [25(y)–(cc)] above.
(b) The Pay Arrangement is akin to employees: [23(k)] above:
(i) Receiving backpay on deferred pay rises resulting from the City’s delay in completing employee performance reviews.
(ii) Purchasing annual leave.
(iii) Paying more tax than legally obliged to in order to receive a greater tax refund.
(iv) Delaying the lodgement of their expense reimbursement claims.
(c) While the Pay Arrangement is undocumented, the City’s liability to him under it was documented via the City’s letters to him notifying him of his pay increase and via the payslips the City issued to him recording the amount he received in each pay cycle: [12(b)], [23(i)] and [25(cc)] above.
Does the Pay Arrangement involve a breach of the City’s superannuation, taxation and financial reporting obligations, the Contract or the Code of Conduct?
43 The City submits that the Pay Arrangement exposed the City to various risks: [41] above. Mr Trestrail denies the Pay Arrangement exposed the City to these risks: [42(a)(i)] above.
44 The City argues that while I may make findings based on the available material, for it to succeed, it does not necessitate that all of the Pay Arrangement’s potential breaches of superannuation, taxation and financial reporting obligations, the Contract, and the Code of Conduct be established. Instead, for the City to prevail, it suffices if I find that there was a real and substantial risk that the Pay Arrangement breaches some or all of these legislative and corporate obligations.
45 As outlined at [14]–[15] above, the parties agree on the principles applicable to determining this matter, and applying these principles I agree with the City’s submissions at [44] above.
The Contract, FW Act and MCE Act, and the Award
46 As outlined at [25(ii)–(jj)] above, there is no dispute that clauses 5.1(1) and 5.2 of the Contract requires the City to pay to Mr Trestrail his Remuneration Package each year and to pay his Salary fortnightly.
47 It was not disputed that the Contract stipulates the amounts specified as the Remuneration Package and Salary are subject to annual review, and that following each annual assessment, Mr Trestrail received annual pay increases in accordance with this provision: [25(ii)–(jj)] above.
48 In his outline of evidence (Exhibit A1 [12]), Mr Trestrail states that he requested Ms Harrison to defer his pay increases in order to implement a form of ‘enforced savings’ which he considered ‘preferrable to getting paid the money and putting it in the bank’.
49 Implicit in Mr Trestrail’s statement at [48] above and inherent in the entire purpose and nature of the Pay Arrangement from his perspective, is that he would not receive his Remuneration Package annually, nor would he be receiving his Salary on a fortnightly basis.
50 As the Pay Arrangement led to Mr Trestrail not receiving his Remuneration Package each year and not being paid his Salary fortnightly during the relevant years, I find that the Pay Arrangement breaches clauses 5.1(1) and 5.2 of the Contract. Should my finding on this matter be incorrect, then in the alternative, I find there was a real and substantial risk that the Pay Arrangement breaches clauses 5.1(1) and 5.2 of the Contract.
51 It is immaterial to the finding at [50] above, that Mr Trestrail had no intention of pursuing the City for the breach, ‘because I had requested the arrangement, I had no intention of making any such claims, and it would have been disingenuous of me to do so, given that I was the person who sought the arrangement’: Exhibit A1 [25].
52 Mr Trestrail’s intention may be relevant to an assessment of the likelihood of him pursuing the City for a breach of the Contract but is irrelevant to determining whether the Pay Arrangement itself breaches the Contract.
53 In the context of [48]–[49] above, I find Mr Trestrail’s refusal to concede the minor point that the Pay Arrangement had the effect of the Contract not being complied with (at [25(jj), (pp)] above) to be inexplicable and a factor weighing against his credibility as a witness. This matter will be revisited later in these reasons for decision.
54 As outlined at [25(kk)] above, Mr Trestrail agreed the City was operating under the FW Act and subsequently the MCE Act, and that both the FW Act and MCE Act contain a provision requiring the City to pay him in full.
55 Sections 323(1) and 324 of the FW Act state:
323. Method and frequency of payment
(1) An employer must pay an employee amounts payable to the employee in relation to the performance of work:
(a) in full (except as provided by section 324); and
(b) in money by one, or a combination, of the methods referred to in subsection (2); and
(c) at least monthly.
Note 1: This subsection is a civil remedy provision (see Part 4-1).
Note 2: Amounts referred to in this subsection include the following if they become payable during a relevant period:
(a) incentivebased payments and bonuses;
(b) loadings;
(c) monetary allowances;
(d) overtime or penalty rates;
(e) leave payments.
324. Permitted deductions
(1) An employer may deduct an amount from an amount payable to an employee in accordance with subsection 323(1) if:
(a) the deduction is authorised in writing by the employee and is principally for the employee’s benefit; or
(b) the deduction is authorised by the employee in accordance with an enterprise agreement; or
(c) the deduction is authorised by or under a modern award or an FWC order; or
(d) the deduction is authorised by or under a law of the Commonwealth, a State or a Territory, or an orders of a court.
Note 1: A deduction in accordance with a salary sacrifice or other arrangement, under which an employee chooses to:
(a) forgo an amount payable to the employee in relation to the performance of work; but
(b) receive some other form of benefit or remuneration;
will be permitted if it is made in accordance with this section and the other provisions of this Division.
Note 2: Certain terms of modern awards, enterprise agreements and contracts of employment relating to deductions have no effect (see section 326). A deduction made in accordance with such a term will not be authorised for the purposes of this section.
(2) An authorisation for the purposes of paragraph (1)(a):
(a) must specify the amount of the deduction; and
(b) may be withdrawn in writing by the employee at any time.
(3) Any variation in the amount of the deduction must be authorised in writing by the employee.
56 It was not disputed that s 323(1) of the FW Act imposed a requirement on the City to pay Mr Trestrail amounts payable to him in relation to the performance of work in full, in money and at least monthly.
57 In a recent decision, Colvin J states that the s 323(1) requirement to pay ‘in full’ is contravened where the employer only pays part of the amount payable to an employee in relation to the performance of work: Wilkinson v Wilson Security Pty Ltd (No 3) [2024] FCA 705 (Wilkinson) [104] (emphasis added):
[W]here an employer has identified an amount to be paid but withholds payment or pays only part or defers payment so that the obligation to pay monthly is not performed, then there is a contravention of s 323(1).
58 In light of the matters at [48]–[49] above, and despite the matters at [44]–[45] above, applying Wilkinson at [57] above, I find that the Pay Arrangement breaches s 323(1) of the FW Act.
59 The Pay Arrangement would not breach s 323(1) of the FW Act if the deduction was authorised in writing by Mr Trestrail pursuant to s 324(1)(a) of the FW Act. However, it was an agreed fact that Mr Trestrail did not document his request for the Pay Arrangement: Statement of Agreed Facts [8] at [9] above.
60 From 1 January 2023, following the proclamation of the Industrial Relations Legislation Amendment Act 2021 (WA), the MCE Act applies to local governments instead of the FW Act.
61 Sections 17C(1) and 17D of the MCE Act state:
17C. Employee’s pay, methods of payment
(1) An employee is entitled to be paid in full and payment and payment is to be made –
(a) in cash; or
(b) by cheque, postal order or money order payable to the employee; or
(c) by payment into an account, specified by the employee, with a bank or financial institution; or
(d) in any other manner authorised or required under the employer-employee agreement, award or contract of employment.
17D. Authorised deductions from pay
(1) Despite section 17C, an employer may deduct from an employee’s pay –
(a) an amount the employer is authorised, in writing, by the employee to deduct and pay on behalf of the employee; and
(b) an amount the employer is authorised to deduct and pay on behalf of the employee under the employeremployee agreement, award or contract of employment; and
(c) an amount the employer is authorised or required to deduct by order of a court or under a law of the State or the Commonwealth.
(2) The employee is entitled to have any amount so deducted paid by the employer in accordance with the employee’s instructions or in accordance with the requirements of the employer-employee agreement, award, contract of employment, court order or law of the State or the Commonwealth (as the case may be).
(3) Nothing in this section requires an employer to make deductions requested by an employee.
(4) An employee may, by giving written notice to the employer, withdraw an authorisation under subsection (1)(a).
62 Sections 17C(1) and 17D of the MCE Act are on relevantly similar terms to ss 323(1) and 324 of the FW Act. For the same reasons as outlined at [58] above, I find that the Pay Arrangement breaches s 17C(1) of the MCE Act. This is because the City was not authorised to pay Mr Trestrail in part and not ‘in full’ as required by s 17C(1) of the MCE Act because the Pay Arrangement was not documented in accordance with s 17D(1)(a): Statement of Agreed Facts [8] at [9] above.
63 As outlined at [25(mm)] above, there is no dispute that the Award applies to the City and that clause 13.3.1 of the Award states, ‘Payment of salaries shall, at the discretion of the employer, be made at least fortnightly.’
64 As outlined at [7] above, the parties agree the Award applies to Mr Trestrail’s employment. If it did not, the Commission would have no jurisdiction to hear the UFD claim and the DCB claim: ss 29AA(3) and 29AA(4) of the Act at [8] above.
65 Therefore, I find it inexplicable for Mr Trestrail to challenge the applicability of the Award under cross-examination (emphasis added):
And 13.3.1 reads:
“Payment of salaries shall, at the discretion of the employer, be made at least fortnightly.”
You agree that’s what it says?---Yes.
That means salary has got to be paid fortnightly at least, doesn’t it?---Yes. Your salary wasn’t paid fortnightly, was it?---Yes, it was.
Your full salary wasn’t paid fortnightly, was it?---Well, no, it wasn’t for a whole range of reasons.
Yes, well, for two years because of your pay banking arrangement - at least two years, your full salary wasn’t paid to you fortnightly, was it?---No, but it says:
“Payment of salary shall be paid fortnightly” –
- and I was paid fortnightly.
But your full salary wasn’t paid to you, was it?---And apparently this [Award] doesn’t apply to me.
66 I find Mr Trestrail’s challenge to the applicability of the Award to be indicative of his demeanour whilst answering questions under cross-examination, appearing argumentative and sometimes evasive; refusing to concede minor points, which detracts from his credibility as a witness.
67 Based on the matters at [48]–[49] above, I find Mr Trestrail’s refusal (at [65] above) to concede under crossexamination the minor point that the Pay Arrangement meant he was not paid his full salary at least fortnightly to be a factor weighing against his credibility as a witness.
Code of Conduct
68 As outlined at [25(b), (d)] above, there is no dispute that the Code of Conduct applied to Mr Trestrail’s employment and that a serious breach of the Code of Conduct would be a serious breach by him in his position. As outlined at [25(rr)] above, Mr Trestrail denies the Pay Arrangement breaches the Code of Conduct.
69 The City submits that the Pay Arrangement breaches the provisions of the Code of Conduct applicable at the time of Mr Trestrail’s dismissal (at [25(rr)] above) and the following provisions of the Code of Conduct that applied at the time the Pay Arrangement commenced: Exhibit R27:
1.4.1 (e), (f), (j): The following are the guiding principles of this Code:
(e) We believe in having pride in our integrity and acting in an honest, lawful, professional, accountable and transparent manner.
(f) We avoid damage to the reputation of the local government.
(j) We work with reasonable diligence in the interests of the City and the community.
2.5.3 (b), (c), (f): In fulfilling the various roles, employee’s activities will focus on:
(b) acting within legislative parameters at all times;
(c) properly managing resources in which they have either direct or indirect responsibility and custodianship;
(f) ensuring sound financial management and accountability in relation to the Council’s resources.
4.1.1 (a): Councillors, Committee Members and employees shall:
(a) act, and be seen to act, in accordance with the requirements of the law, Council Policies and Guidelines, and the terms of this Code;
4.3.1 (a) and (f): Councillors and employees will:
(a) observe the highest of standards of honesty and integrity, and avoid conduct which might suggest any departure from these standards; and
(f) lead by example in order to maintain and strengthen the public’s confidence in the integrity of the Council;
4.8.1 (a): Councillors, Committee Members and employees will ensure:
(a) compliance with proper and reasonable administrative practices and conduct;
7.1.2 (a): Councillors, Committee Members and employees must:
(a) ensure that there is no actual, potential or perceived conflict of interest between the impartial fulfilment of their public or professional duties and their personal interests or those of closely associated persons;
10.1.1(a): Councillors, Committee Members and employees must:
(a) be honest in their use of the City’s resources (including but not limited to tangible property, money, intellectual property, official services, expertise and facilities) and not misuse or damage them, or permit their misuse (or the appearance of misuse) or damage by any other person or body;
70 As outlined at [58] and [62] above, I have found that the Pay Arrangement breaches s 323(1) of the FW Act, and from 1 January 2023, s 17C(1) of the MCE Act. It therefore follows that the Pay Arrangement breaches paragraphs 1.4.1(e), 2.5.3(b) and 4.1.1(a) of the Code of Conduct (at [69] above), which require Mr Trestrail to act, and be seen to be acting, lawfully and within legislative requirements.
71 Whether these breaches are a serious breach of the Code of Conduct and whether the Pay Arrangement breaches other provisions of the Code of Conduct are matters I will return to when addressing the documentation of the Pay Arrangement later in these reasons for decision.
Taxation and superannuation legislation
72 It was not disputed that an employer has an obligation of paying and reporting to the Australian Taxation Office (ATO) payasyougo (PAYG) withholding on an employee’s income on each occasion the employee is paid.
73 It was also not disputed that an employer has an obligation of contributing to an employee’s superannuation fund employer superannuation contributions based on the employee’s ordinary time earnings (OTE) each quarter.
74 The City submits that the Pay Arrangement resulted in the City breaching their PAYG withholding obligation each fortnightly pay period and their obligations under the superannuation legislation over a number of quarters: [13(b)(iii)–‍‍(iv)] above.
75 Mr Trestrail claims that the City is only obliged to pay and report to the ATO PAYG withholding calculated on the amount he was paid, and only obliged to remit to his superannuation fund a contribution based on the amount he was paid. Since he received a lesser amount during the Pay Arrangement, Mr Trestrail argues that the Pay Arrangement does not contravene the City’s taxation obligations nor its superannuation obligations: [23(l)–‍‍(m)] above.
76 It appears from the Income Tax Assessment Act 1997 (Cth) (ITA Act) that a person’s taxable income for the income year is derived from their assessable income (s 415(1)). Their assessable income includes income according to ordinary concepts, which is called ordinary income (s 65(1)), and includes the ordinary income derived directly or indirectly from all sources (s 65(2)).
77 Consequently, it appears that whether the Pay Arrangement breaches the City’s taxation obligations may depend on whether Mr Trestrail’s full salary (as understood in the context of [48]–[50], [58], [62] and [67] above) equates to the ‘ordinary income derived directly or indirectly’ from the City. The parties did not provide comprehensive submissions on this point, and therefore, I am unable to make a definitive finding of a breach under the ITA Act. It is certainly arguable that Mr Trestrail’s full salary equates to the ‘ordinary income’ he derived from the City. Based on this rationale, I find there was a real and substantial risk that the Pay Arrangement breaches the City’s PAYG withholding obligations.
78 The question of whether the Pay Arrangement led to Mr Trestrail deferring the payment of taxation is a matter that will be revisited later in these reasons for decision when addressing whether he obtained a benefit through the Pay Arrangement.
79 Section 6(1) of the Superannuation Guarantee (Administration) Act 1992 (Cth) (SGAA) defines ‘ordinary time earnings’ as ‘the total of: earnings in respect of ordinary hours of work’.
80 SGR 2009/2 notes that the SGAA does not define the expression ‘earnings in respect of ordinary hours of work’. SGR 2009/2 [12] states:
Meaning of ‘earnings’
12. An employee’s ‘earnings’, for the purpose of the definition of OTE, is the remuneration paid to the employee as a reward for the employee’s services. The practical effect for superannuation guarantee purposes is that the expression ‘earnings’ means ‘salary or wages’.
81 Consequently, it appears that whether the Pay Arrangement breaches the City’s superannuation obligations may depend on whether Mr Trestrail’s full salary (as understood in the context of [48]–[50], [58], [62] and [67] above) equates to the ‘remuneration paid to [him] as a reward for [his] services’ to the City. The parties did not provide comprehensive submissions on this point, and therefore, I am unable to make a definitive finding of a breach under the SGAA. It is certainly arguable that Mr Trestrail’s full salary equates to the remuneration payable to him as a reward for his services, and based on this rationale, I find there was a real and substantial risk that the Pay Arrangement breaches the City’s superannuation obligations.
82 The question of whether the Pay Arrangement led to the City undercontributing to Mr Trestrail’s superannuation fund and him obtaining a benefit is a matter I will return to later in these reasons for decision.
Is the Pay Arrangement akin to the arrangements at [42(b)] above?
Backpay arising from the City’s delay in completing performance reviews
83 The Pay Arrangement is not at all akin to employees receiving backpay arising from a delay in the City completing performance reviews.
84 Firstly, the performance reviews are documented: Mr Adams’ outline [5] and [11] at [30] above, and [33(f)] above.
85 Secondly, the backpay arising from a delayed performance review is budgeted for: [33(f)] and [34(l)] above.
Purchasing annual leave
86 The Pay Arrangement is not at all akin to employees purchasing annual leave.
87 Firstly, the purchased leave arrangement is fully documented. It is the subject of a written policy and employees apply for purchased leave by completing a written form: [24(a)], [25(e)–(h)] and [26(a)–‍(b)] above, and Exhibit R7.
88 Therefore, the purchased leave arrangement is authorised by s 324(1)(a) of the FW Act and s 17D(1)(a) of the MCE Act, such that there is no breach of s 323(1) of the FW Act and s 17C(1) of the MCE Act: [55] and [61] above.
89 Further, the purchased leave arrangement complies with ss 324(2) and (3) of the FW Act and s 17D(4) of MCE Act (at [55] and [61] above) as evidenced by Mr Trestrail’s written request to suspend the arrangement while he was Acting-CEO: Exhibit R6.
90 Secondly, there is a transparent debit and credit record between an employee’s pay and leave, and the purchased leave is provisioned for in the City’s Balance Sheet: [34(j)] and [32(c)] above.
91 Thirdly, the purchased leave arrangement is timebound ([34(j)] above) as evidenced by the following conditions: Exhibit R7:
· The arrangement will commence from the pay period following the application being approved and conclude after 26 pay periods.
· Any unused purchased leave will be paid out in a lump sum in the pay period following the 12 month Purchased Leave Arrangement at the pay rate at which it was accrued.
Employees paying more tax than obliged to in order to receive a greater tax refund
92 Mr Trestrail stated in his outline of evidence (Exhibit A1 [21], summarised at [23(k)(iii)] above) that he was aware of employees utilising the mechanism of facilitating enforced savings by ‘paying more tax than legally required to get a refund each year’.
93 How an employee would go about doing so was not advanced at the hearing. However, under crossexamination, Mr Trestrail stated that ‘people weren’t told that they could take up paying extra tax either’: [25(u)] above. By this statement, I understand Mr Trestrail to mean that while the City did not actively encourage employees to pay more tax in order to receive a larger tax refund, he is aware that some employees may choose to engage in this practice on their own accord.
94 If it is true that an employee requests the City to pay and report to the ATO a higher PAYG withholding than the City is otherwise obliged to pay and report based on the employee’s income, while this mechanism may result in enforced savings through a refund from the ATO, it bears no resemblance to the Pay Arrangement.
95 Firstly, as a PAYG withholding, it would be an authorised deduction under ss 324(1)(a) or (d) of the FW Act and under ss 17D(1)(a) or (c) of the MCE Act: [55] and [61] above.
96 Secondly, the arrangement is timebound in that the employee would receive the tax refund upon completing their tax return, which they are obliged to file each year.
97 The circumstances in [95]–[96] above, necessarily implies that the employee’s reported income and taxation liability for the relevant income year is not altered.
Employees delaying the lodgement of expense reimbursement claims
98 The Pay Arrangement bears no resemblance to employees delaying the lodgement of expense reimbursement claims.
99 Firstly, it is reasonable to assume that any expense claim would not be accepted unless the claim was made in writing and supported by evidence that the expense was reasonably incurred in the performance of the employee’s functions.
100 Secondly, an expense reimbursement claim necessarily involves an employee having first expended their own funds, and subsequently lodging a claim with the City seeking that the City reimburse them for that expenditure.
101 This means that the employee’s delay in lodging an expense claim only places themselves at risk of the City refusing to reimburse them if their lodgement is not made in accordance with the City’s requirement for timely lodgement of such claims.
102 Moreover, this means that the employee’s income, income tax liability and superannuation for the financial year are not affected. Consequently, the employee has not, through an alteration in their reported income and consequentially their superannuation balance, obtained a benefit.
Does the Pay Arrangement involve Mr Trestrail obtaining a benefit?
103 As outlined at [48] above, Mr Trestrail has stated that he requested the Pay Arrangement to facilitate a form of enforced savings. Taking this into account, it is difficult to understand why he has vehemently denied obtaining any benefit from the Pay Arrangement.
104 In the response to Suspected Misconduct Letter and 4 May Response Letter, Mr Trestrail states, ‘I have not obtained a benefit nor have I caused a detriment to any person.’ In the 16 May Response, he states, ‘I have not gained any benefit from the arrangement’.
105 Ms Miltrup states at [33(k)] and [34(h), (v), (hh)] above, that Mr Trestrail would not have entered into the Pay Arrangement if he did not obtain a benefit. Further, she felt an acknowledgement of the benefit would have been more clear and honest: [33(k)] above.
106 I concur. It is perplexing for Mr Trestrail to assert on the one hand that he is endeavouring to achieve enforced savings through the Pay Arrangement, yet on the other hand, adamantly deny that he obtains any benefit from the Pay Arrangement.
107 As outlined at [48]–[49] above, the Pay Arrangement had the consequence of Mr Trestrail not receiving his full salary in the 2019/20 and 2020/21 income years.
108 This resulted in the income he declared to the ATO in those years being lower than his actual income.
109 This meant he obtained a benefit by paying less income tax in those income years.
110 In spite of Mr Trestrail’s denials (at [25(w)–(x)] above):
(a) The Pay Arrangement meant he was deferring or delaying the payment of income tax.
(b) The deferral or delay in the payment of income tax is a benefit which he obtained through the Pay Arrangement.
(c) Australian taxpayers receive a benefit through a delay in their payment of tax.
(d) Taxpayers receive a benefit if they deliberately create a situation to not receive their income.
111 The acquisition of a tax benefit, which would not have been available if the scheme had not been entered into, arguably triggers the application of the anti-avoidance provisions in Part IVA of the Income Tax Assessment Act 1936 (Cth). Tax avoidance is a serious matter. A matter that I did not receive comprehensive argument on, and therefore a matter on which I make no findings.
112 However, I do find that Mr Trestrail’s refusal to concede that the deferral or delay of paying tax being a benefit weighs against his credibility as a witness.
113 As Mr Trestrail’s income that was declared to the ATO in the 2019/20 and 2020/21 income years was lower than his actual income, this also meant that the income he disclosed to his ex-wife in their property settlement was lower than his actual income.
114 As the City made superannuation contributions based on Mr Trestrail’s reduced income in these income years, this meant the City made a lower employer contribution to his superannuation fund than what would have been required if it had been based on his actual income during these years. Consequently, the superannuation balance he declared to his ex-wife during their property settlement could also have been understated.
115 The necessity for accurate disclosures in family court proceedings and the implications for inaccurate disclosures were not matters on which the parties made comprehensive argument. Consequently, whether Mr Trestrail obtained a benefit from the property settlement by disclosing to his ex-wife a lower income and a lower superannuation balance than would have been the case but for his entry into the Pay Arrangement is not a matter that I make any findings on.
116 However, I do find that Mr Trestrail’s refusal to concede the point that the Pay Arrangement impacted his disclosures to his ex-wife in their property settlement (at [25(dd)–(hh), (qq)] above) weighs against his credibility as a witness.
117 Mr Trestrail’s submissions that if he had the intent of denying his ex-wife a fair asset division in their property settlement, he could have pursued their divorce earlier as his superannuation grew over the years, and that he overstated the value of other assets including inadvertently overstating his superannuation balance (at [24(h)–(i)] above), is irrelevant to this finding. The fact is his income reported to the ATO and his superannuation balance were lower than his full income and resultant superannuation balance as a result of the Pay Arrangement. His refusal to concede this point weighs against his credibility.
118 As outlined at [115] above, there is no requirement to make findings about Mr Trestrail’s conduct in the family court proceedings. However, I note that Mr Trestrail’s evidence about his divorce proceedings, including whether they were amicable, were uncorroborated. In circumstances where I have made findings that weigh against his credit as noted at [53], [66]–[67], [112] and [116]–[117] above, any such assertions made by Mr Trestrail cannot be accepted where unsupported by other evidence.
Does the Pay Arrangement involve an abuse of Mr Trestrail’s position?
119 As outlined at [23(g)] and [42(a)(iii)] above, Mr Trestrail submits there was nothing wrong with the Pay Arrangement as it was made to Ms Harrison in his capacity as an employee, and not in his capacity as her manager, or as the Director – Corporate Services with oversight over HR.
120 In Mr Trestrail’s response to the Suspected Misconduct Letter and in the 4 May Response Letter, he says:
· [A]ny pay request I make in relation to my pay is made as an employee and is not made in the performance of my functions as Director;
· [T]his matter did not involve me issuing any directions, using my position or managing the changes to my pay.
121 In the 16 May Response, Mr Trestrail says:
6 My request was made as an employee, not in the performance of my functions as a Director, and I did not use my position or issue any directions in relation to my pay. If the Manager Human Resources objected to my request I would not have pursued it further. As such, my conduct did not involve a breach of the trust placed in me by reason of my position as Director.
122 Ms Harrison gave the following evidence under cross-examination (emphasis added):
And - so that’s why when he raised his pay deferral, pay banking arrangement with you, you didn’t question or debate that with him, did you? I didn't question or debate it with him because I didn’t believe there was an issue with it, not because he’s the one that asked.
And if he had insisted on it being done, he had the power to insist on it being done, didn’t he? He did, but he - but given it was a personal matter, if he insisted on it and I disagreed with it, I would have taken it to the CEO.
But you didn’t take it to the CEO, did you?---No, because I didn’t disagree with the issue.
And this option or - or - or procedure, you never suggested to anybody else at the City that they take this up? You never promoted it to anybody else? No, because it wasn’t something that I had suggested. It was a - a request made by an employee, so we followed through with that, but it wasn’t something that we then offered to people.
123 As outlined at [28(p)] above, Ms Harrison agrees she had input into the MDC Legal Letter and she agreed with its contents at the time. The MDC Legal Letter states: Exhibit R17 (emphasis added):
19. While Ms Harrison does not seek to suggest that it was not open to her to question Mr Trestrail’s request, it is a relevant consideration that at the time of the request, Mr Trestrail was Ms Harrison’s direct line manager and a Director.
124 There is an inherent inconsistency in Ms Harrison’s oral evidence at [122] above that she did not question Mr Trestrail on the Pay Arrangement because she did not consider there was an issue with it, not because he was the one that requested it, and her statement in the MDC Legal Letter that a relevant consideration for not questioning Mr Trestrail’s request was his managerial role as her direct line manager and a Director.
125 There is a further inconsistency in Ms Harrison’s oral evidence when compared to the MDC Legal Letter. Ms Harrison stated under re-examination that she was unaware of payroll documenting the Pay Arrangement (at [29] above). However, the MDC Legal Letter details her monitoring a spreadsheet created by the then payroll officer recording the withheld amounts: [8], [15].
126 The inconsistencies between Ms Harrison’s oral evidence and the MDC Legal Letter prepared by her solicitors on 12 May 2023, weigh against her credibility. This is particularly significant given that, by the time of the hearing, she had been dismissed by the City, which she disagreed with, and was hurt and disappointed by: [28(q)] above. These circumstances call into question the reliability of her testimony.
127 Considering the MDC Legal Letter’s contemporaneity to the events, and Ms Harrison agreeing under cross-examination that she had input into and agreed with its contents at the time, I find her statement at [123] above as reflecting her true position. She states that a ‘relevant consideration’ for her was Mr Trestrail’s managerial role as her direct line manager and Director when he requested implementing the Pay Arrangement. This finding is based on the weight given to the MDC Legal Letter and Ms Harrison’s agreement with its contents under cross-examination.
128 The Suspected Misconduct Letter highlights the City’s concerns about the Pay Arrangement that Mr Trestrail had ‘taken advantage of your position to obtain a benefit for yourself or for another person or to cause a detriment to any person’, and the Show Cause Letter states that the City considers ‘the Alleged Conduct may also amount to fraud by way of deceit and dishonest act’.
129 In the face of this, Mr Trestrail made the statements he made at [120]–[121] above and further says in the 4 May Response Letter:
As stated previously, my personal request regarding my pay is not part of the performance of my duties. I have not breached my duty of fidelity or duty of care to the City, my actions were not inimical to the interests of the City nor have they brought the City into disrepute or caused damage to the City.
130 In characterising the Pay Arrangement as a request to Ms Harrison, which he would not have pursued if she objected (at [121] above), and distinguishing it from a direction in his role as Director (at [120]–[121] and [129] above), Mr Trestrail’s perspective misses the core issue. The key consideration is the power dynamic and hierarchical relationship between him, as her manager and Director, and Ms Harrison, rather than the nature of the request or her potential objection to the request.
131 As outlined at [123] above, Ms Harrison considered Mr Trestrail’s position a relevant consideration. 
132 Agreeing with Ms Miltrup (at [33(k)] above), I find Mr Trestrail’s assertion that he made the Pay Arrangement request solely in his employee capacity to be disingenuous. It is difficult to comprehend how he can maintain that his request to Ms Harrison can be disconnected from his roles as Director and her line manager. The power dynamics and hierarchical relationships between them cannot be overlooked when assessing the true nature of the arrangement.
133 I agree with Ms Miltrup (at [33(k)] above), that the fact that the Pay Arrangement was implemented necessarily meant that Mr Trestrail gave an instruction for the Pay Arrangement to alter the pay that he received in each pay cycle.
134 The Termination Letter states:
Throughout the process, the City has formed the view that you have sought to gain an advantage for yourself (tax advantage or otherwise) through an arrangement that is not available to any other employee of the City and was deliberately undocumented. This view is maintained and the City does not accept your justifications for the ‘pay banking’ arrangement.
…
In the City’s view, aspects of your responses throughout the show cause process have been disingenuous and deliberately manipulative.
135 In the context of [127]–[133] above, and considering my findings at [103]–[118] above that the Pay Arrangement involved Mr Trestrail obtaining a benefit, I concur with the City’s conclusion in the Termination Letter that he sought an advantage for himself. Furthermore, that his responses throughout the disciplinary process, maintained consistently up to the hearing, are found to be disingenuous. This assessment is based on the weight given to the evidence and findings discussed in the previous sections of these reasons for decision.
Does the Pay Arrangement involve any secrecy?
136 I find the Pay Arrangement involves secrecy for the following reasons:
(a) Mr Trestrail and Ms Harrison agree that the Pay Arrangement was known to themselves and the then payroll officer: [25(y), (cc)] and [27(e)] above.
(b) The former CEO had no knowledge of the Pay Arrangement: Mr Adams’ outline of evidence [4] at [30] above.
(c) Despite cross-examination, Ms Miltrup’s evidence that the City only learned about the Pay Arrangement through a whistleblowertype notification remained undisturbed: [33(d)] above.
(d) The CFO testified that he had no knowledge of the Pay Arrangement until informed by Ms Miltrup on 24 May 2023, and this testimony was not disturbed under crossexamination: [31(d)–(e)] above.
(e) There was no provisioning for the Pay Arrangement: [31(f)] above.
(f) No other employee had an arrangement similar to the Pay Arrangement: [25(u)] above.
(g) Mr Trestrail did not inform anyone that they could take up an arrangement like the Pay Arrangement: [25(u)] above.
(h) The Pay Arrangement was not extended to other employees; no one else deferred their pay in this manner: [28(g)] above.
137 Mr Trestrail asserts that he made no secret of the Pay Arrangement, openly discussing it in Corporate Services Managers Meetings and within the HR Department with HR staff present: [23(j)] above.
138 Considering the credibility findings made at [53], [66]–[67], [112] and [116]–[117] above, as well as the unchallenged or undisturbed matters outlined at [136] above, I find Mr Trestrail’s assertion at [137] above to be improbable and not credible. This conclusion is reached because Mr Trestrail’s assertion lacks corroboration and, given the credibility findings, cannot be accepted unless supported by other evidence.
Was the Pay Arrangement deliberately undocumented?
139 There is no dispute that the Pay Arrangement was undocumented: Statement of Agreed Facts [8] at [9] above, and [25(s)], [28(h), (m)] and [34(r)] above.
140 The facts are clear that Mr Trestrail and Ms Harrison were asked by Ms Miltrup to provide documentation supporting the Pay Arrangement. However, despite being requested, they were unable to produce any such documentation: Mr Trestrail’s response to the Suspected Misconduct Letter [c], [28(h)] and [34(r), (hh)] above.
141 During crossexamination, Ms Miltrup testified that she became aware of the spreadsheet prepared by the former payroll officer for the first time when processing Mr Trestrail’s termination pay: [34(o)] above. This further supports the fact that the Pay Arrangement and its documentation had not been previously disclosed to or known by Ms Miltrup, despite her requests to Mr Trestrail and Ms Harrison.
142 In light of [139]–[141] above, I find Mr Trestrail’s suggestion that the Pay Arrangement was documented via the spreadsheet to be an obfuscation of the lack of documentation, rather than a genuine attempt to provide evidence to support the Pay Arrangement.
143 Further, I find it unreasonable for Mr Trestrail to contend that the City can reverse engineer the liability created by the Pay Arrangement through a process of ‘discovering’ the Pay Arrangement from his performance review letters and payslips: [25(cc)] above.
144 I find Mr Trestrail’s contention that the Pay Arrangement was documented through his pay increase letters and payslips (at [12(b)], [23(i)], [25(cc)] and [42(c)] above) to be a further attempt to obscure the true nature of the issue. While these documents may potentially allow the City to calculate any backpay owing once notified by Mr Trestrail about the Pay Arrangement, they cannot reasonably be considered as actual records or evidence of the Pay Arrangement itself. The pay increase letters and payslips are merely records from which the City can calculate the financial consequences arising from the Pay Arrangement, rather than any actual documentation of the Pay Arrangement itself. These documents do not provide any insight into the terms, conditions or existence of the Pay Arrangement, and are therefore not sufficient to establish the fact of the Pay Arrangement.
145 I find Mr Trestrail’s attempts to obfuscate the lack of documentation at [142]–[144] above undermines his credibility and casts doubt on the validity of his claims.
146 As outlined at [36]–[38] above, there is no dispute that the City is governed by the LG Act which requires the City to keep records. Furthermore, it is undisputed that Mr Trestrail, as a senior employee of the City, was well aware of these obligations to keep proper records. Despite this knowledge, no documentation was ever produced to support the Pay Arrangement, raising questions about why Mr Trestrail failed to fulfill his obligations to keep proper records.
147 Mr Trestrail gave evidence under cross-examination of his knowledge under legislation, including under the LG Act, to keep records: [25(c)] above.
148 Ms Harrison gave evidence under cross-examination that she understood the City was governed by the LG Act which requires the City to keep records. She agreed there was no record of the Pay Arrangement and that she wished there had been: [28(m)] above.
149 In the circumstances of [146]–[148] above, it was appropriate for Mr Trestrail to concede that his application to purchase extra annual leave should be documented: [25(e)] above. It was also appropriate for him to concede that there was a requirement for requests relating to applying for and varying extra annual leave to be made in writing. Consequently, it was appropriate for Mr Trestrail to put his requests in writing, as evidenced by his admissions: [25(e)–‍(g)] above.
150 In the circumstances of [146]–[148] above, it was unreasonable for Mr Trestrail not to concede during cross-examination that it is appropriate for him to have put requests relating to his pay arrangements, such as his request to purchase extra leave even where there is no specific form to be completed, in writing: [25(h)] above.
151 Mr Trestrail’s refusal to concede the point at [150] above is inconsistent with his statements in the 4 May Response Letter and the 16 May Response where he states, ‘I acknowledge that I should have documented my request’.
152 Mr Trestrail agreed under cross-examination that he had oversight over the City’s legal, finance, governance and HR departments, and in all those roles he was required to be attentive to detail: [25(a)] above.
153 Given the matters at [146]–[147] and [152] above, I agree with the City’s contentions that Mr Trestrail understands when it is proper and appropriate for him to keep records: [39] above.
154 Despite Mr Trestrail’s assertions in the 4 May Response Letter and the 16 May Response that the lack of documentation for the Pay Arrangement ‘was no more than an oversight’, for the reasons at [153] above, I find it more likely that the Pay Arrangement was undocumented because Mr Trestrail deliberately left it undocumented. This conclusion is supported by the evidence discussed in the previous paragraphs, which indicates that Mr Trestrail understood the importance of proper documentation, and made efforts to obfuscate the lack of documentation, thereby raising concerns about the legitimacy of the purported reason for the Pay Arrangement’s undocumented status.
155 In addition to the breaches outlined at [50], [58], [62] and [70] above, the failure to document the Pay Arrangement constitutes a further breach of the provisions of the Code of Conduct requiring compliance with legal requirements and policies and guidelines, which includes adherence to the LG Act and the obligations to keep records at [25(rr)] and [69] above.
156 A deliberate lack of documentation by Mr Trestrail would constitute a further breach of the provisions of the Code of Conduct requiring him to act with honesty and integrity, professionally, and with accountability and transparency at [25(rr)] and [69] above.
157 I have found at [103]–[118] above, that Mr Trestrail obtained a benefit from the Pay Arrangement. The City submitted that Mr Trestrail entered the Pay Arrangement not for a charitable reason or for someone else’s benefit, but for his own personal gain. I agree with this submission.
158 It is not disputed that if the former payroll officer had not inadvertently ceased the Pay Arrangement, that it would have continued indefinitely. It is also not disputed that Mr Trestrail did nothing to address the City’s ongoing liability under the Pay Arrangement: [25(t), (v)], [27(i)] and [28(i)] above.
159 In the context of [154]–[158] above, I find it unlikely that Mr Trestrail’s entry into the Pay Arrangement was an ill advised act or omission, or the result of an error of judgment: Rankin [264] at [14(d)] above.
160 Instead, I agree with the City’s contentions that the Pay Arrangement was a secret, deliberately undocumented arrangement that exposed the City to various compliance and governance risks.
161 As outlined at [155]–[156] above, in entering into the Pay Arrangement, Mr Trestrail engaged in serious breaches of the Code of Conduct.
162 The findings at [159]–[161] above, indicate Mr Trestrail’s conduct were not merely errors but serious misconduct.
163 Given this, I am satisfied the City has discharged the onus of establishing that Mr Trestrail engaged in serious misconduct in entering into the Pay Arrangement and that his misconduct justifies his summary dismissal from his position with the City: Bristile 2928 at [14(a)] above; DrakeBrockman [66].
Procedural fairness
164 Mr Trestrail says there was procedural unfairness in the investigation process: [12(c), (e)] and [23(q)] above.
165 The City says:
(a) The CEO conducted a comprehensive investigation: [13(d)–(f)] above.
(b) Mr Trestrail was not transparent during the investigation: [13(c)] above.
(c) It held an honest and genuine belief that Mr Trestrail engaged in misconduct justifying his summary dismissal: [13(d)] above.
166 Having observed Ms Miltrup giving her evidence in chief and being cross-examined, I find that where there is a divergence of Ms Miltrup’s evidence and that of Mr Trestrail and Ms Harrison, that I prefer the evidence of Ms Miltrup. I find she gave her evidence in a straight-forward and consistent manner and was prepared to make minor concessions where appropriate, as noted at [34(b), (q), (s), (u), (w), (z)] above.
167 By contrast, and as noted at [53], [66]–[67], [112], [116]–[117], [126], [138], [145] and [150]–‍[151] above, I have found inconsistencies and refusals to concede minor points where appropriate in both the evidence given by Mr Trestrail and Ms Harrison.
168 In light of the circumstances outlined above, I find that there is no merit in Mr Trestrail’s contentions regarding the alleged procedural unfairness of the City’s investigation. The evidence presented demonstrates that the City’s investigation into the Pay Arrangement was thorough and conducted in accordance with proper procedures. The investigation was fair, impartial and based on reasonable grounds.
169 I am satisfied that the CEO’s decision to initiate an investigation into the Pay Arrangement was reasonable and properly justified by the whistleblower-type notification received. The investigation was a necessary and legitimate response to concerns about the Pay Arrangement and I am satisfied there was no unfairness or procedural irregularity in the decisionmaking process.
170 I am satisfied there was nothing procedurally unfair in Ms Miltrup’s reports to the PSC and the CCC: [33(h)–‍(i)] and [34(n), (cc)] above. As a senior public servant, Ms Miltrup was required to report concerns about the Pay Arrangement to the relevant authorities, and her reports were not procedurally unfair. Furthermore, I am satisfied that Mr Trestrail did not have a right to be informed of these reports before they were made.
171 I am satisfied that the City conducted a comprehensive investigation, and that Mr Trestrail was given every opportunity to understand the allegations against him and an opportunity to put his case in response. He was issued with the following:
(a) Suspected Misconduct Letter, to which he responded on 3 April 2023.
(b) Show Cause Letter, to which he responded with the 4 May Response Letter.
(c) 11 May Letter, to which he responded with the 16 May Response.
(d) Letter of termination dated 23 May 2023.
172 I am satisfied that there was nothing procedurally unfair in the investigation undertaken by Ms Miltrup.
173 Firstly, Ms Miltrup had the discretion to undertake the investigation in the manner in which she chose. I am satisfied that she was not obliged to involve the panel more extensively than she did and that her communications with them did not undermine a procedurally fair investigation: [33(j)–‍(l)] and [34(q)–‍(w), (ee)] above. Additionally, I am satisfied that Ms Miltrup did not have a statutory or administrative obligation to produce a written report of her discussions with the panel: [34(dd)] above.
174 Mr Trestrail had no right to address the panel nor to address the Councillors.
175 The decision to undertake the investigation and its conclusions were for Ms Miltrup, as the CEO, to make. This was within her authority and discretion as the City’s CEO.
176 Therefore, I find that nothing turns on the statements that Ms Miltrup made to the panel nor to the Councillors. Likewise, nothing turns on the statements that Ms Miltrup made to the Auditor: [34(z)–(bb)] above.
177 Furthermore, I am satisfied that there was nothing procedurally unfair in Ms Miltrup not sharing the legal advice she obtained during the investigation with Mr Trestrail: [24(b)] and [34(p)] above.
178 I find that Ms Miltrup had reasonable grounds for reaching the conclusion that Mr Trestrail engaged in serious misconduct, and she arrived at this conclusion honestly and genuinely: Parnell [112]–[118] at [15(d)] above.
179 The City treated Mr Trestrail’s and Ms Harrison’s conduct in a consistent manner, as both their actions were investigated. Following the respective investigations, both of their contracts of employment were terminated.
180 Mr Trestrail contends that the Show Cause Letter does not mention his employment being at risk: [23(q)(x)] above. He contends that he was only informed of this risk in the 11 May Letter. The significance of this contention is that it suggests it would have been procedurally unfair for the Council not to have been provided with the 16 May Response, where Mr Trestrail claims he addressed the prospect of his employment being at risk for the first time.
181 As found at [174]–[176] above, Mr Trestrail had no procedural right to address the Council directly, and furthermore, the information that Ms Miltrup presented to the Council was a matter for her professional discretion and judgment.
182 I am satisfied there was no procedural unfairness in Ms Miltrup providing the Council with a copy of the 4 May Response Letter but not the 16 May Response, for the following reasons.
183 Firstly, although there are differences between the 4 May Response Letter and the 16 May Response, I agree with Ms Miltrup’s assessment that Mr Trestrail’s responses across both documents are largely similar in their overall tenor: [34(jj)] and [35(a)] above.
184 Secondly, there is no basis for Mr Trestrail’s contention that he was not previously notified before the 11 May Letter that his employment was at risk, considering the 4 May Response Letter directly responds to the Show Cause Letter, which states (emphasis added):
NEXT STEPS
Before the City makes any final decision in relation to your employment, it invites you to provide a written response to the matters raised in this letter and any other matters of relevance you may wish to raise. Any response should be provided by no later than 4pm on Thursday, 4 May 2023.
In the meantime, you are stood down with pay and not to attend the office during or perform any duties until otherwise directed.
The City will carefully consider your response (if any) together with all the information available to it in order to determine the appropriate course forward. Please note that in the event you do not provide any written response it will be open to [the] City to make a decision about your ongoing employment based on the information before it (which may include termination of employment).
185 As outlined in the Statement of Agreed Facts (at [9] above), Mr Trestrail began working for the City in 2012 in the position of HR Manager and was later promoted to Director – Corporate Services in 2013, with responsibility for various departments, including HR. Given his background in HR, and undisputed seniority, it is difficult to understand why Mr Trestrail would argue that he did not comprehend the statement in the Show Cause Letter at [184] above as notification that his employment was at risk. Mr Trestrail’s HR background and seniority suggests that he would have been well aware of the implications of the Show Cause Letter. The statement in the Show Cause Letter that a decision will be made ‘about your ongoing employment … which may include termination of employment’, was likely to be a familiar statement for someone with his HR background. As such, I find his claim that he was unaware of the implications of the Show Cause Letter and was therefore unfairly surprised by the statement in the 11 May Letter that his employment was at risk to be implausible.
186 I find that Mr Trestrail was given an adequate opportunity to answer to the allegation that he had committed misconduct and that the City considered it warranted his dismissal, and that he was not deprived of an opportunity to make representations or to provide material to the City centrally relevant to the allegations: DrakeBrockman [113].
187 As to a consideration of the mitigating circumstances at DrakeBrockman [66], the Termination Letter states that the City considered Mr Trestrail’s conduct in the context of his work record and personal circumstances. The Termination Letter states:
The City has carefully considered the matters raised in the Further Response, including with respect to the personal impact on you of the termination of your employment with the City.
We note the financial impact which you are likely to experience in the event that the City decides to terminate your employment. The City has taken this into account in reaching a decision and regrets the personal impact it is likely to have on you.
188 Based on the matters outlined at [163]–[187] above, I find that Mr Trestrail was provided with procedural fairness, as part of the obligation on the City on instituting disciplinary action, to ensure he received a fair go: DrakeBrockman [113].
189 I find Mr Trestrail to have been afforded both substantive and procedural fairness in relation to the dismissal: Bi-Lo, 229.
190 I am satisfied that the City did not exercise its legal right to dismiss Mr Trestrail so harshly or oppressively as to amount to an abuse of that right: Undercliffe.
191 Consequently, I am satisfied that Mr Trestrail has failed to discharge the onus upon him to establish that his dismissal was harsh, oppressive or unfair.
Mr Trestrail’s contact with Councillors during the disciplinary process
192 Mr Trestrail says:
(a) He read the directions in the Show Cause Letter and the 11 May Letter to ‘not discuss the contents of this letter with any of your colleagues’ or with ‘anyone (other than a family member and/or your legal advisor)’, but says he did not understand it as it was internally inconsistent: [25(uu)–(xx)] above.
(b) He did not discuss the contents of the Show Cause Letter and the 11 May Letter with Councillors, and in any event, his discussions with Councillors arose because they approached him: [24(n)] and [25(xx)–(yy)] above.
193 The City contends that Mr Trestrail’s conduct in discussing the contents of the disciplinary letters with Councillors, in contravention of a reasonable and lawful direction not to discuss the contents of the letters, constitutes separate misconduct warranting his summary dismissal: [13(i)] above.
194 Considering Mr Trestrail’s background in HR and his undisputed seniority as stated in the Statement of Agreed Facts (at [9] above), it is difficult to comprehend why he would argue that he did not understand the direction given to him in the disciplinary letters to maintain confidentiality concerning the contents of those letters.
195 It is difficult to understand why Mr Trestrail would contend that discussing his alleged serious misconduct with a Councillor does not, in fact, constitute a discussion of the contents of the disciplinary letters: [25(xx)–(yy)] above.
196 In the circumstances of [194]–[195] above, I am not satisfied that Mr Trestrail’s conduct was ill advised or the result of an error of judgment: Rankin [264] at [14(d)] above.
197 Instead, I find it more likely that Mr Trestrail’s conduct represents an act of defiance against a reasonable and lawful direction for him to maintain the confidentiality of the disciplinary proceedings.
198 Consequently, I find Mr Trestrail’s conduct to be repugnant to the employment relationship: Rankin [250] at [14(c)] above.
199 In light of these findings, I agree with the City’s submissions that Mr Trestrail’s conduct in discussing the disciplinary proceedings with Councillors constitutes separate misconduct justifying his summary dismissal.
Conclusion
200 For the reasons outlined in the preceding paragraphs, I find that Mr Trestrail has failed to establish that he was harshly, oppressively or unfairly dismissed.
201 I am satisfied that the City has discharged the onus of establishing that Mr Trestrail engaged in serious misconduct, enabling it to summarily terminate his employment under clause 11.3(1) of the Contract.
202 Accordingly, applications U 28 of 2023 and B 28 of 2023 will be dismissed.