Jackie Henderson sues ARN for $82 million.

0:00Game changes radio with Irene Hume and Craig Bruce. No other company supports broadcasters at every stage with the trust, stability and innovation that define RCS. Irene Hume, another big day today, Reenie. Oh boy, yes. Just when we thought we were sitting back and having a nice few days off. We were sitting five days to long weekend. So Jackie Henderson has now officially taken legal action against ARN. She's filed a case in the federal court claiming her contract was terminated because she raised serious workplace complaints. Those complaints relate to her working relationship with car sandlands, including concerns around bullying and her health and safety at work. She's seeking more than 82 million in compensation. And on the other side of the ledger, ARN pushing back hard. They say they will dispute all of this and will defend the case. Michael Burns, hello, Michael. Hi, Craig, Irene. Michael, I have one word to syllables, wheelhouse. This is your wheelhouse, Michael.

1:00Yeah, it's very much in my wheelhouse. It deals with the Fair Work Act. So those three words I'd like to speak. Well, well within my area of empathy. All right. So where do we start with this thing? What's the kind of the overview that you'd like to kind of present as a starting point? So unlike Kyle, she's not seeking specific performance. This is not about Jackie returning to air. This is about damages. It's about compensation. A really interesting aspect of this claim is the Fair Work aspect. Her saying, her asserting that ARN have breached the general protections provisions of the Fair Work Act. And they've breached those provisions because she exercised workplace rights under the Fair Work Act by raising issues in relation to the conduct of Kyle. And that those issues created some sort of unsafe workplace. That there were psychosocial hazards arising from that conduct.

2:03There might have been bullying conduct. Something of that kind, creating an unsafe workplace. She made a complaint about it in doing so exercise the workplace right. And then ARN terminated the services agreement because she had made those complaints and exercised workplace rights. And a termination because you exercise workplace rights is a breach of or can be a breach of the general protections provisions of the Fair Work Act. That seems to be at the heart of her claim. How serious is that for ARN? It's very serious ARN in two respects. One is that it could lead to enormous, enormous compensation. Bearing in mind that if you breach the general protections provisions of the Fair Work Act, it can lead to compensation for economic loss, which could be enormous here, non-economic loss. So pain and suffering, hurt, distress, humiliation and the like.

3:07And also it constitutes, and it's referred to here, a pecuniary penalty. That is, there are also penalties under the Fair Work Act if you breach the general protections provisions. Although in this instance, those penalties would be really very much overshadowed by any likely compensation award for economic loss. It should be made clear as well that I don't think Jackie's putting all her eggs in this Fair Work Act basket. But she's also claiming that the agreement was wrongfully terminated as well. There wasn't a proper basis upon which ARN terminated the agreement. And so that also becomes a separate contractual damages claim. So in terms of common sense, it looks from where I'm sitting like a pretty strong argument in favour of Jackie. Is that how you're reading it at the moment? I know we haven't heard ARN in cyber, but it looks... We haven't heard ARN inside Craig, but you're right on the face of it from what we know in the public domain, both in the official statements, but also other news reports we've heard.

4:13It does strike me as a case that on the face of it has merit, has legs. It's not one that I think could be readily dismissed. It doesn't mean Jackie will ultimately prevail, but it does have ostensibly some merit. If there's Michael, if there's history just in terms of Carl's behaviour impacting Jackie, would there need to be evidence where she had put internal complaints through prior to that incident on February 20th? That would certainly assist her. It wouldn't be fatal to her if she hadn't done that. But that would assist her if the matter has been raised. It would beg this question. That is, if she has raised complaints internally before, what did ARN do? What have ARN done about it? One interesting aspect of Carl's first case management hearing, and I know we're focused on Jackie at the moment, but I think it does relate to Jackie's claim potentially,

5:13is ARN initially, in their first market statement, said that Carl's serious misconduct related to what occurred on air on 20th February. But in last Friday, this is not a criticism, it's merely an observation, and case theories can change over time and develop and evolve. But ARN's lawyers said that they are going to be looking at and bringing up matters that predate at 20th February. And I wonder whether some of these matters that Jackie had previously raised or ventilated, to the extent that she did, and ARN's reaction to them might become part of ARN's case against Carl, which might also, of course, and this was the tightrope I talked about last time, is tightrope that ARN has to walk between, and now it's not just hypothetical, it can manifest between Carl's case where they're arguing engaged in serious misconduct,

6:13but not serious enough to warrant Jackie saying she can't work with Carl anymore. So that's the tightrope that I think ARN may have to walk in this matter. So if Jackie has raised issues previously, that may be something that is raised in Carl's case, it might be something Jackie raises that this was a culmination of a pattern of behavior. She might also lead evidence, and this is, of course, just entirely speculative, but she might say I had a number of conversations with Kyle, where I told Kyle what the boundaries were, and he overstepped the mark, and I saw ARN's intervention on this occasion, because I felt I no longer could control his behavior or conduct like an ARN, rather than taking the complaint and addressing the issue and talking to Kyle and reprimanding Kyle, but I took my notice that must have included the words, did include the words, I cannot continue working with Mr. Carl Sandelons, took that as a repudiation by me, terminated my agreement, and then used it against Kyle, all to ARN's advantage.

7:28So yeah, it is a tightrope for ARN, I think. The normal process when this sort of complaint is made, usually obviously not something done in 24 hours, right? Essentially, they essentially repudiate at the contract within 24 hours. So there was an interesting aspect of what ARN said about Jackie's note to them, which was certainly it obviously included the words, I cannot continue with Mr. Carl Sandelons, because they're quoted in the market statement. So they're definitely there, but the real question was, what else was there? Was it just a case of, I no longer want to work with him, or I cannot, or I can't continue working with him, is it I'm unwilling or unable? And one assumes it was the latter, really, that he was unable to work with him, or might be unwilling because of what she's been subject to, but also unable to, and in that regard, what else is in that note? And it raises the spectre that what else is in that note, or in other correspondence from around the same time, was her saying, Kyle has treated me poorly, I've been subject to this misconduct from Kyle.

8:40I no longer feel safe in the workplace, and indeed at the time there were media reports that either Jackie or Jackie's representatives had raised or invoked this notion of safety in the workplace. And therefore, did I just forget that bit of what Jackie told them and latched on to the, I cannot continue working with Carl Sandelons, but to your question, Craig, ordinarily, when, when an issue of safety is raised, an employer, and in this case, the company will look at it and determine what made, whether there's any merit in it. And if there is any merit in it, there's usually an investigation of some kind, either internal or external, and then determine what steps need to be taken in order to ensure a safe workplace, because there are obligations not only under the Fair Work Act, but specifically under the Work Health and Safety Act in relation to a safe workplace, including as he's cited clearly in Jackie's pleading, which we haven't seen, but we've got the market statement that refers to it.

9:46But this notion of psychosocial risks and hazards in the workplace, and so mental wellbeing is, is very important, an employer or a, a controller or workplace ensuring that, that an employee's health, mental health, and wellbeing is protected. And query why ARN, if these issues weren't raised, didn't actually seek to address that issue, rather than, rather than taking Jackie's statement and using it as a basis to terminate her services agreement. Of course, a bit of speculation, we don't know what ARN did or didn't do, but query that, and I think that that's a piece of the jigsaw that still missing. Michael, what about the wider team who were in the same environment, some of them unemployed at the moment? Do they have the ability to bring similar claims against ARN? Potentially. Now, a breach of Work Health and Safety over the Work Health and Safety Act is not really a civil claim. It's more a matter where there's a prosecution brought by a regulator.

10:53So it's not really a civil claim, but certainly a failure to provide a safe workplace can lead to breach of duty of care type litigation. So that's a potential outcome if there was staff who were subject to conduct that rendered their workplace unsafe. But to be clear, of course, Kyle hasn't, you know, denies engaging in serious misconduct and denies engaging in such, such conduct. So we shouldn't assume it's occurred. Kyle has his own position and defense on this, but theoretically, ARN, that's certainly a possibility. So Kyle's asking for 88 million and Jackie is asking for 82, that's $6 million. So it must be 85, 85, 22, 82. So do you think Jackie may have received with the speculation, but did Jackie get a payout and is now coming back and revisiting that? No. Now, I'm certain there's no payout craig because if there was, that's something presumably one, it would be subject to a data release.

11:55So Jackie couldn't bring further proceedings of this kind. And secondly, if there had been a settlement or a resolution with Jackie, that is something that you would think ARN would need to dispose of that would want to disclose to its continuous disclosure obligations. Because up to today, there was this mystery, what's happening with Jackie? And there was a specter of not just Kyle's claim, but Jackie's claim as well. That's become manifest today that is eventuated today. And now they're facing 280 million plus dollar claims. Mark, what about the claim that ARN made misleading statements to the market? That was really interesting, Irene. So I think what that relates to is the part of the initial market statement that ARN made, which was to the ASX, that they've offered Jackie a show or the possibility of another show. On the network. And the reason I say that is because there was, there was then a statement a few days later from Jackie.

12:57Because people had assumed that she had sort of just resigned or walked away. And she issued a statement, I think on the Friday. So the a few days later, where she said something to the effect, I didn't, I didn't resign. I didn't walk away. This, my contract was terminated. And I feel heartbroken about that. And I'm looking at my legal options. So I was clear she was in dispute with ARN. And also she made the comment that there was a statement in the market statement that she'd been offered another show on the network. And she said, no, I was not offered another show on the network. I think it relates to that for the sake of completeness of the ARN at the time said, no, that statement is correct. And indeed, they've indicated they're going to defend the claims in their market statement today. But I think that's what it relates to. You've talked about this before, Michael, but I mean, how risky is it for a company to make a public ASX announcement in the middle of something like this and get it wrong? I mean, that's pretty, that's pretty serious, isn't it? It is serious and it is a serious matter. So it's something that they, you know, they really would work to get right and want to get right. These things are often done in a bit of a hurry.

14:07I mean, indeed, that's reflected in today's statement that has some different spelling of Jackie's name, I might have. As I am a bit of a smart ally about these things, but no, Craig, they really would exercise whatever you might say about ARN and its management faults or whatever, they would take ASX statements very, very serious governance and compliance very seriously. So I'm not suggesting Jackie's wrong in what she's asserting, but we certainly shouldn't assume that ARN have in any way misled the market in that regard. And it might just be, too, they could just have a different understanding as what was, as to what was meant by that, it could just be a different interpretation as well to be fair to both sides. But no, they would take governance and compliance very, very seriously, and they would ensure that they're compliant to the best of their ability. Could there be some jail time? I can't think of that question. I don't think so, Irene, although we, the Fair Work Act claim, if there's a breach of the Fair Work Act, that's, there's a pecuniary, there are pecuniary penalties attached to that.

15:17So there's no one, no one needs to pack their toothbrush and they're not off to, you know, off to jail. We're not going to see a rerun of prison or a Wentworth or something like that with ARN executives or alike. But obviously it's not a good, good look and it's a pressure point that Jackie can apply in relation to the market statement. But also, in relation to the Fair Work Act, that's a breach of the act and pecuniary penalties can arise, although the pecuniary penalties, why they're hefty, are really overshadowed by the amount of money involved in relation to the services agreement itself, the only possible. Can we just still man this for ARN? We haven't heard from them yet in any great detail. Could they say they didn't terminate because Jackie raised a bullying complaint, which is how Jackie is sort of arguing this. But rather, they terminated because she just couldn't work with Kyle anymore. So the difference is it was not relevant what the reason was for her not wanting to work with him. It was her refusal to continue to work with him. Is that possible that that could be their position?

16:18Very likely. I think that's a very likely response. What they're going to be saying, I think is, is well, that's, it's irrelevant the reason why the contract contemplates Jackie services is being fundamental to the contract. She is, for whatever reason, unwilling or unable to perform those services, that is a repudiation of the contract. And that repudiation we can accept and then terminate the contract. And that's on a construction of the contract. So I suspect ARN are going to be saying, this is about the contract. This is about the terms of the contract, what it requires. Jackie was no longer able, for whatever reason, to provide those services. And therefore it gave us a right to, well, she repudiated the contract and it gave us a right there to accept that repudiation, terminate the contract. And they'll downplay these other issues and I suspect try and keep it very simple. Now, I imagine they will be doing more than that. They will be endeavoring or will be addressing this specter of the safety matters that were supposedly or has been asserted or been raised.

17:28But at its heart, that may will be their case theory, Craig, the contract, the services agreement, a commercial agreement. In my, neither Carl nor Jackie were employees, a services agreement, a commercial services agreement. Once the ability of Jackie to provide services fell away, then that provided us a legitimate appropriate trigger to terminate her contract. Michael, given how intertwined all of this is, is there a scenario where Kyle Seuss, Jackie? I don't think so, Irene, unless I don't think so, unless there might be a defamation claim or the large Jackie gave a magazine interview and talked about the way in which Kyle allegedly treated her and Kyle took issue with that and wanted to sue for defamation. But I don't, I don't really see there as being a claim by Kyle against Jackie directly.

18:28It may will be that there's outcomes of their cases that impact the other case or evidence given by either Kyle or Jackie that impacts the other. But as for a direct cause of action, I don't think so. I think that's, that's unlikely and one doesn't readily come to mind. So we haven't heard from ARN yet. We know Kyle's position, we know Jackie's position now. How do you view it as a whole as we look at it at the moment because she doesn't want to be reinstated. She wants damage. No, as you said famously the other week, Kyle and Jackie, I was a brand that they're legally dead and they are. I mean, this is, and this is not a 10 minute argument that happened on the air. This is clearly a pattern that has played out over a long period of time. And Kyle set outside court the other day on Friday. He said, well, I haven't spoken to Jackie contrary to what has been reported. There was this idea that they were talking that they've not spoken apparently since the 20th of February as I understand.

19:30Well, that's what Kyle said the other day. So I think both Kyle and Jackie seem to have credible cases in different ways. You know, I'm not dismissing their cases. I think they've got credible cases. We obviously haven't seen all of ARN's case yet. They gave an outline of their position the other day where I think ARN are really strong and Kyle is really weak is on orders for specific performance. The notion that Kyle, which he seems wedded to, the notion that he will be back on ARN, back on kits or, you know, one of their stations broadcasting again. Ah, pursue it to the contract. I don't, I don't see that happening. I don't have to happen. Not because of any inherent weakness or deficiency in his case, but rather just the way that generally the principles of specific performance for personal services work. They don't, they don't court, don't grant it. And indeed, the lawyer for ARN made that point in court on Friday.

20:31And I agree with him entirely in that regard that this is really, Kyle's case is really one of damages. Ah, even though it's been framed as one of specific performance. So I think Kyle's position there is weak, but on the serious misconduct point seems to me, he's got a credible argument. It's by no means unassailable. We won't necessarily prevail, but it seems credible. And now Jackie's case, as advanced, obviously we don't know as much about Jackie's case. I haven't seen the pleadings or anything else. There hasn't been a first mentioning court as that has been for Kyle's, but on the face of it ostensibly, it seems to make sense. We raised safety issues and rather than addressing the safety issues, ARN has, it seems seized on the opportunity to terminate her services agreement. It might turn on the words that she used to ARN in her notices to them. It might be the case. I think we've discussed this before that rather say to ARN, I currently can't work with Kyle because of the work environment.

21:38And you need to do XYZ to remedy that. And I want you to remedy that. And then maybe I can reconsider working with him. The statement might have been completely unqualified, emphatic, that I cannot continue working with him. Ever again, no matter what, I will not work with that man cannot work with that man. And that might be what, and I'm obviously extrapolating from what we know Jackie said in the notice. But if something like that, then it may will be that ARN ARN will say, well, that gave us the basis to terminate Jackie's contract legally. We've been here from our good friend Tim Burrows from umbrella. What are the chances of the two cases being joined under one judge? I don't think so. There are certainly factual, factual overlap. But they deal with different, of their different in different divisions. Now, Jackie's case is in the fair work division because she cited the fair work act and breaches of that.

22:43The case has been run on more commercial lines, both approaches are legitimate having regarded their different situations. I think it is highly unlikely that they'll be joined in that way. And the timing on Jackie's will be slower than Kyle's. No, actually, I think it'll be similar. Just like, Kyle's lawyer seeking specific performance, sped the thing up. It was just a damage as case. It would have been 2027. That strategy of seeking specific performance and saying the contract is on foot, sped it up. So it's now going to be heard. Well, it's tentatively being set for 22 from five days from 22 June, I think from 22 to 26 June. Yes. On memory. I think you'll find Jackie's case will be on fairly quickly as well because it's a fair work breach case. And they tend to be given a degree of expedition, maybe not to the same, not to the same extent. But it's a case that will be perhaps a little faster than might that if it was just a pure contractual damages type case.

23:47Michael, are you any good at a Venn diagram? Yes, I am. Well, I think I am. Might be well. I think you would disagree with you on that. I think I am. Well, we need one, I think, to make sense of it all. So if you just send one over, that would be very handy. Yeah, that would be helpful. And you need to know those dates as well, Michael, because I'm pretty sure we're sleeping in your spare room from the 20th to the 26th. So I hope you've got bunk beds. We'll be at your place and we'll be in Sydney for the week. You're more than well. You're only saying that we know that. Is there anything we're missing? What do we need to know now in terms of key dates or anything that we need to be looking for? Perhaps look out for when Jackie's case first case management hearing is set. Have a look out for that. And also, if before then, because usually the court documents remain confidential until that first case management date in order to provide ARN in this instance with an opportunity to seek any non publication orders or the like that they might want to seek to give them a fair opportunity to do that.

24:57So it's to look out for that date and then we get it as we saw with cars matter. We get a deeper insight and glimpse into the respective case theories, the way the case is going to be run by both sides. Also, if the court documents do become available in some way prior to that date, whether, you know, if they're available, have a look at those and see how the case is developed in more detail in those documents. Because I'm obviously not necessarily doing the case justice on the basis of the, you know, the market statement. But I think certain things can be gleaned and discerned from that. We'll be testing you next week. Hey, Michael Burns from Swabb in Sydney. Thank you so much for your time again today. And I'm sure we'll be talking again in the next few days or weeks. Thanks Craig. Thanks Irene. Game Changers Radio is edited by our good friends at Aves Audio. If you've got any feedback or questions about the podcast, shoot us an email at mail at gamechangersradio.com and follow us at Game Changers Radio.

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