Alexander v Cappello
[2013] FCCA 860
•14 November 2013
FEDERAL CIRCUIT COURT OF AUSTRALIA
| ALEXANDER v CAPPELLO & ANOR | [2013] FCCA 860 |
| Catchwords: HUMAN RIGHTS – Sexual harassment and victimisation – applicant harassed in the workplace and dismissed from her employment after reporting the harassment. |
| Legislation: Australian Human Rights Commission Act 1986 (Cth), s.46PO |
| Aldridge v Booth [1988] 80 ALR 1 Cooper v Human Rights & Equal Opportunity Commission [1999] FCA 180 Hall v A&A Sheiban Pty Ltd (1989) 20 FCR 217 Wattle v Kirkland & Anor(No 2) [2002] FMCA 135 |
| Applicant: | VICKI MICHELLE ALEXANDER |
| First Respondent: | EMANUELE CAPPELLO |
| Second Respondent: | NICK VEKIARELLIS |
| File Number: | SYG 18 of 2010 |
| Judgment of: | Judge Driver |
| Hearing dates: | 17-19, 23 July 2013 |
| Delivered at: | Sydney |
| Delivered on: | 14 November 2013 |
REPRESENTATION
| Counsel for the Applicant: | Mr Tanner |
| Solicitors for the Applicant: | Turner Freeman |
| Counsel for the First Respondent: | Mr Baxter |
| Solicitors for the First Respondent: | RJI Legal |
| The Second Respondent appeared in person |
ORDERS
The Court declares that Nick Vekiarellis unlawfully harassed Vicki Alexander in contravention of s.28B(2) of the Sex Discrimination Act 1984 (Cth).
The Court declares that Emanuele Cappello is vicariously liable for the contravention of the Sex Discrimination Act 1984 (Cth) by Nick Vekiarellis in that Nick Vekiarellis was an employee for the purposes of s.106 of the Sex Discrimination Act.
The Court declares that Emanuele Cappello unlawfully victimised Vicki Alexander in contravention of s.94(2) of the Sex Discrimination Act 1984 (Cth).
The Court orders that Nick Vekiarellis pay to Vicki Alexander damages in the sum of $24,300 by reason of his unlawful sexual harassment, and that Emanuele Cappello is jointly and severally liable for the payment of that sum.
The Court orders that Emanuele Cappello shall pay damages to Vicki Alexander in the sum of $75,000 by reason of the victimisation of her.
The Court orders that Nick Vekiarellis and Emanuele Cappello be jointly and severally liable to pay interest up to judgment on the sum payable pursuant to order (4) at the rate of 8 per cent from 8 August 2008.
The Court order that Emanuele Cappello pay interest up to judgment on the amount payable pursuant to order (5) at the rate of 8 per cent from 8 August 2008.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYG 18 of 2010
| VICKI MICHELLE ALEXANDER |
Applicant
And
| EMANUELE CAPPELLO |
First Respondent
| NICK VEKIARELLIS |
Second Respondent
REASONS FOR JUDGMENT
Introduction and background
The applicant (Ms Alexander) is a former employee of a company, Cappello Brothers Pty Ltd (Cappello Bros), now deregistered following liquidation. The company ran a takeaway food business known as Mobbs Lane Café (Takeaway). Ms Alexander’s supervisor (and the day to day manager of the Takeaway) was the second respondent (Mr Vekiarellis). Ms Alexander claims that Mr Vekiarellis sexually harassed her during the course of her employment. The first respondent is Mr Emanuele Cappello who, Ms Alexander claims, was responsible for the overall management of the Takeaway at the time the harassment occurred and who (as her real employer) is vicariously liable for the conduct of Mr Vekiarellis. Ms Alexander also claims that she was victimised by Emanuele Cappello by being sacked from her employment after she complained of the sexual harassment.
The claims are opposed by the respondents. Emanuele Cappello denies that he was responsible for the management of the Takeaway or that he was Ms Alexander’s employer. He denies that he was responsible for the decision to terminate Ms Alexander. He claims that the Takeaway was run by his brother John Cappello. He claims John Cappello terminated Ms Alexander’s employment. John Cappello was not a party to these proceedings (although he did give evidence). Ms Alexander’s complaint to the Australian Human Rights Commission (AHRC), which preceded these proceedings, was against Emanuele Cappello, Mr Vekiarellis and Cappello Bros. Proceedings were instituted against Cappello Bros as well as Emanuele Cappello and Mr Vekiarellis when the AHRC terminated the complaint but proceedings against Cappello Bros were terminated when it went into liquidation.
Mr Vekiarellis denies that any harassment occurred.
The proceedings were commenced in this Court by application filed on 5 January 2010 pursuant to s.46PO of the Australian Human Rights Commission Act 1986 (Cth). I referred the matter for mediation but it did not resolve. Progress in the matter was further complicated by the liquidation of Cappello Bros and by the fact that while Emanuele Cappello was legally represented, Mr Vekiarellis was not. Ms Alexander had also made a claim for workers compensation which the parties agreed warranted several adjournments on the basis that they thought that proceeding might potentially resolve the case, but it did not.
By Application in a Case filed on 30 November 2012, Emanuele Cappello sought to have the claims against him summarily dismissed. On 8 February 2013 I dismissed that Application in a Case with no order as to costs.
The pleadings and evidence
Ms Alexander relies upon her application and amended points of claim filed on 18 February 2013. Ms Alexander relies upon three affidavits made by her on 21 April 2010, 1 February 2013 and 15 April 2013. She was cross-examined on her affidavits. Ms Alexander also relies upon three medical reports prepared by Dr Parmegiani. He was cross‑examined on his reports.
Emanuele Cappello relies upon his defence to the amended points of claim filed on 7 March 2013 and upon three affidavits made by him on 4 December 2012 (two affidavits) and 29 April 2013. Emanuele Cappello was cross-examined upon his affidavits. Emanuele Cappello further relies on his brother John Cappello’s affidavit made on 27 November 2012. John Cappello was cross-examined on that affidavit.
Mr Vekiarellis relied on his own affidavits made on 11 January 2013 and 27 May 2013. He was cross-examined upon those affidavits.
I also received the following exhibits:
·A1 – Medico-Legal report by Dr Parmegiani, 16.12.2008;
·A2 – Letter from Dr Parmegiani to Turner Freeman, 20.02.2012;
·A3 - Letter of Recommendation of Vicki Alexander from Castle Hill Sports Centre, 23.08.2006;
·A4 - Response from Emanuele Cappello to Human Rights Commission, 23.07.2009;
·A5 – Spreadsheet of Mobbs Lane Takeaway Weekly Summary;
·A6 – Response filed in Federal Circuit Court, 21.01.2010;
·R1 – Response from Emanuele Cappello to Human Rights Commission, 23.07.2009;
·R2 – Title Search for Emanuele Cappello;
·R3 – Statement of Vicki Alexander, 10.10.2011;
·R4 - Statement of Ronald Lamplough, 03.11.2011.
Mr Vekiarellis made short oral submissions. Ms Alexander and Emanuele Cappello made detailed oral and written submissions.
Consideration
Ms Alexander’s claims rely upon the following provisions of the Sex Discrimination Act 1984 (Cth) (SDA):
Section 14(2):
(2) It is unlawful for an employer to discriminate against an employee on the ground of the employee's sex, marital status, pregnancy or potential pregnancy, breastfeeding or family responsibilities:
(a) in the terms or conditions of employment that the employer affords the employee;
(b) by denying the employee access, or limiting the employee's access, to opportunities for promotion, transfer or training, or to any other benefits associated with employment;
(c) by dismissing the employee; or
(d) by subjecting the employee to any other detriment.
Section 28A:
(1) For the purposes of this Division, a person sexually harasses another person (the person harassed ) if:
(a) the person makes an unwelcome sexual advance, or an unwelcome request for sexual favours, to the person harassed; or
(b) engages in other unwelcome conduct of a sexual nature in relation to the person harassed;
in circumstances in which a reasonable person, having regard to all the circumstances, would have anticipated the possibility that the person harassed would be offended, humiliated or intimidated.
(1A)For the purposes of subsection (1), the circumstances to be taken into account include, but are not limited to, the following:
(a) the sex, age, marital status, sexual preference, religious belief, race, colour, or national or ethnic origin, of the person harassed;
(b) the relationship between the person harassed and the person who made the advance or request or who engaged in the conduct;
(c) any disability of the person harassed;
(d) any other relevant circumstance.
(2) In this section:
"conduct of a sexual nature" includes making a statement of a sexual nature to a person, or in the presence of a person, whether the statement is made orally or in writing.
Section 94(2):
(2) For the purposes of subsection (1), a person shall be taken to commit an act of victimization against another person if the first-mentioned person subjects, or threatens to subject, the other person to any detriment on the ground that the other person:
(a) has made, or proposes to make, a complaint under this Act or the Australian Human Rights Commission Act 1986 ; or
(b) has brought, or proposes to bring, proceedings under this Act or the Australian Human Rights Commission Act 1986 against any person; or
(c) has furnished, or proposes to furnish, any information, or has produced, or proposes to produce, any documents to a person exercising or performing any power or function under this Act or the Australian Human Rights Commission Act 1986 ; or
(d) has attended, or proposes to attend, a conference held under this Act or the Australian Human Rights Commission Act 1986 ; or
(e) has appeared, or proposes to appear, as a witness in a proceeding under this Act or the Australian Human Rights Commission Act 1986 ; or
(f) has reasonably asserted, or proposes to assert, any rights of the person or the rights of any other person under this Act or the Australian Human Rights Commission Act 1986 ; or
(g) has made an allegation that a person has done an act that is unlawful by reason of a provision of Part II;
or on the ground that the first-mentioned person believes that the other person has done, or proposes to do, an act or thing referred to in any of paragraphs (a) to (g), inclusive.
Section 105:
A person who causes, instructs, induces, aids or permits another person to do an act that is unlawful under Division 1 or 2 of Part II shall, for the purposes of this Act, be taken also to have done the act.
Section 106:
(1) Subject to subsection (2), where an employee or agent of a person does, in connection with the employment of the employee or with the duties of the agent as an agent:
(a) an act that would, if it were done by the person, be unlawful under Division 1 or 2 of Part II (whether or not the act done by the employee or agent is unlawful under Division 1 or 2 of Part II); or
(b) an act that is unlawful under Division 3 of Part II;
this Act applies in relation to that person as if that person had also done the act.
(2) Subsection (1) does not apply in relation to an act of a kind referred to in paragraph (1)(a) or (b) done by an employee or agent of a person if it is established that the person took all reasonable steps to prevent the employee or agent from doing acts of the kind referred to in that paragraph.
Was Ms Alexander sexually harassed by Mr Vekiarellis?
Ms Alexander alleges that Mr Vekiarellis sexually harassed her during the course of her employment by actions which included asking her whether she is offended by pornography, asking her for a massage and sex, touching her bottom, pushing his groin in her face, pointing at his penis and telling her to come back, he had something to show her and trying to grab her breasts and vagina. Ms Alexander gave detailed evidence of these alleged incidents of harassment. I found her to be an impressive witness. She gave her evidence in a calm and considered manner with apparently generally good recall. She was open and frank, including in making admissions against interest (relating to past drug and alcohol abuse and mental health care). She appeared to me to be a well-balanced and reasonable person who was not unduly sensitive or easily offended.
Ms Alexander, as conceded by Mr Vekiarellis, had no prior issues with him (or motive) that would explain why she would make false allegations against him.
There is no evidence of prior conduct on Ms Alexander’s part which might suggest a practice of making false allegations. Ms Alexander believes that she was sexually abused as a child by her father. That allegation was not tested and it is not necessary or appropriate for me to express any view about it. Emanuele Cappello acknowledged that Ms Alexander is not “a bad person”. He was critical of some aspects of Ms Alexander’s personal life, which I regarded as gratuitous and hardly relevant. He did not place her honesty and integrity in question. Mr Vekiarellis, likewise, provided no evidence as to her lack of honesty, and as to traits which would explain why she would make false allegations.
Ms Alexander’s evidence of the harassment and the context and aftermath involves significant detail regarding nine specific events, ranging from verbal comments, to physical contact. In particular:
a)Ms Alexander was born in New Zealand and adopted as a baby. She had a family history of bipolar disorder. She moved with her adoptive family to Australia as a child and lived in various locations before moving to Sydney in 1989. She worked in a number of cafés as a waitress as well as a kitchen hand and chef. She was diagnosed with bipolar disorder in her early 20s. She used marijuana socially. In 1990 she was diagnosed with Graves Disease and an overactive thyroid. In the 1990s she received psychiatric care on several occasions, apparently as a result of drug use;
b)in about 2005 Ms Alexander commenced work as a manager at a café in the Castle Hill Indoor Sports Centre. The café was operated by Emanuele and John Cappello and she was supervised by Emanuele. She resigned but left on good terms with the Cappello brothers in about 2007;
c)on leaving the Castle Hill Indoor Sports Centre Ms Alexander worked part time and also commenced operating a spray tanning business. She continued being treated for depression. She had several conversations with Emanuele Cappello in 2007 and 2008 concerning the possibility of working at a shop owned by the Cappello brothers in Carlingford. Ms Alexander accepted the offer of employment and was told that Mr Vekiarellis would be her supervisor;
d)Ms Alexander met Mr Vekiarellis on or about 20 June 2008 when she attended the Takeaway to assist in setting up the business. She commenced employment as a casual sandwich hand and barista on or about 3 July 2008. There were two other casual employees at that time who Ms Alexander knew as “Vicki” and “Stephanie”;
e)very early in her employment, Ms Alexander observed a man attending the Takeaway to drop off a package for Mr Vekiarellis. She asked what was in the package and Mr Vekiarellis said words to the effect, “some pornos. My wife doesn’t like them. I have a girlfriend but she’s overseas at the moment so I need this. Are you offended by pornos?”. Ms Alexander replied to the effect, “No, I have one in my car”. Mr Vekiarellis then said words to the effect, “Can you get it?”. Ms Alexander said words to the effect, “No, that’s disgusting”;
f)on or about 11 July 2008 Ms Alexander was bending over to pick up rubbish from the floor of the Takeaway. Mr Vekiarellis walked past and said words to the effect, “I can see your g-string”. Ms Alexander pulled her shirt down over black work pants and used words to the effect, “Why didn’t you tell me straight away?”. After this incident she started wearing higher waisted pants to work and attempted to ensure that her top was over her work pants;
g)on the same day Ms Alexander saw Mr Vekiarellis looking as if he was in pain and he kept on saying words to the effect, “Oh, my back. Oh, my leg”. Ms Alexander was worried that he had hurt himself and said words to the effect, “What’s wrong, Nick?”. Mr Vekiarellis said words to the effect, “You have to give me a massage”. At this point, Ms Alexander decided that Mr Vekiarellis was only pretending to be injured and said words to the effect, “No, that’s inappropriate”. Mr Vekiarellis then said words to the effect, “The other girls at my other work used to massage my back”;
h)Ms Alexander next worked at the Takeaway on or about 14 July 2008. Early in the shift Mr Vekiarellis approached her and said words to the effect, “If you have sex with me in my car, I can get you more work. You will enjoy it”. Ms Alexander said words to the effect in response, “No. Shut up. I do not want to have sex with you. You are being disgusting”. Mr Vekiarellis then said words to the effect, “Where do you live? I can come to your place and we can have sex there”. Ms Alexander responded to the effect, “I am not telling you where I live”;
i)Ms Alexander consulted her general practitioner on 14 July 2008 for stress and depression but she did not report the harassment;
j)on or about 17 July 2008, a delivery man called Ron Lamplough, who Ms Alexander knew from the Castle Hill Indoor Sports Centre, delivered some products to the Takeaway. Mr Lamplough said words to the effect, “Hey, sexy, how are you?” Ms Alexander replied, “Hey, you’re my man”. Mr Vekiarellis is said to have overheard this conversation with Mr Lamplough and, in Ms Alexander’s range of hearing, said words to the effect, “No. She’s my girl”. Mr Vekiarellis then took a pile of Takeaway menus and rubbed them on Ms Alexander’s bottom while Mr Lamplough was watching. Ms Alexander turned to Mr Vekiarellis and said words to the effect, “Stop it. Fuck off”[1]. Mr Vekiarellis then approached Ms Alexander while she was kneeling in the coolroom and pushed his groin in her face. She said words to the effect, “Stop, fuck off”. Ms Alexander left the coolroom. Mr Vekiarellis then pointed to his penis and said words to the effect, “Come back here, I have something to show you”. Ms Alexander said to Mr Vekiarellis words to the effect, “How would you feel if someone who worked with your wife or 15 year old daughter did this to them?”. He said in response, “No. They are good girls”;
[1] Mr Lamplough is now deceased. Prior to his death, he provided a statement, which I received in evidence. He admitted having a conversation with Ms Alexander along the lines she recounted but denied hearing the words said by Mr Vekiarellis or seeing him rub her bottom with the menus. Under cross-examination, Ms Alexander conceded that those incidents may not have occurred within his field of vision.
k)at around 11.00am on that day another casual employee, “Stephanie”, attended the Takeaway to buy food. Ms Alexander had a conversation with Stephanie, in which she said to the effect, “Does Nick ever touch you when you work with him?”. She replied to the effect, “No, but you should tell Emanuele or someone after you finish your shift”. At around 12.00 noon, Will Cappello attended the Takeaway. Ms Alexander followed Will to his car as he was leaving and said words to the effect, “Nick has been touching my bottom and I feel bad that this is happening because you rely on Nick to run the business. I have told dad about the situation and I thought I could handle it but I can’t. Nick is scaring me”. Will responded, “You have to tell Emanuele. What Nick is doing is unacceptable behaviour. Don’t worry, we will be putting cameras up and that should slow him down”;
l)Emanuele Cappello telephoned Ms Alexander between 3.00pm and 4.00pm on the same day and said words to the effect, “You have no right to tell Will because Will does not own the shop”. He said further, “If Nick does anything again, tell him that you will tell me and if he does it again, you should then leave the shop immediately and call me”;
m)on the following day John Cappello attended the Takeaway at around 8.00pm. He took Ms Alexander outside the Takeaway and said words to the effect, “What’s going on?”. Ms Alexander responded, “Nick has been touching my bum and he asked me to have sex with him in his car if I want to get more shifts”. John Cappello then gave Ms Alexander his business card and said words to the effect, “What Nick is doing is unacceptable behaviour. If it ever happens again tell him you will tell me. You are then to leave the shop and call me”;
n)Ms Alexander’s next shift was on 21 July 2008. She perceived that Mr Vekiarellis was avoiding her, however, towards the end of her shift he said words to the effect, “Come on, why don’t you take your jacket off so I can look at your bum, you know your bum drives me crazy”. She said words to the effect, “Fuck off”. Mr Vekiarellis made no further advances or comments between 22 July 2008 and 25 July 2008. Ms Alexander was relieved;
o)Ms Alexander next worked on or about 31 July 2008 or 1 August 2008. During that shift Mr Vekiarellis slapped her bottom and she said, “Don’t!”. Mr Vekiarellis laughed and tried to grab her breasts and her vagina. Ms Alexander said words to the effect, “Don’t! I meant it!”. Mr Vekiarellis then said words to the effect, “What are you going to do? Tell John or Emanuale? I know they’re your friends. I can find someone to fill your job easily”;
p)Ms Alexander was afraid to go to work on her next shift the following Monday. She sent a message to Emanuele Cappello that she would not be attending work. Ms Alexander next worked on or about 7 August 2008. Mr Vekiarellis came up behind her while she was washing dishes and he squeezed her bottom several times while saying words to the effect, “No one can see and no one will know”. Ms Alexander did not react but after the end of her shift rang Emanuele Cappello and told him that Mr Vekiarellis had started grabbing her again. Emanuele Cappello told Ms Alexander that he would go to the Takeaway to confront Mr Vekiarellis and then he would call her;
q)that night Emanuele Cappello rang Ms Alexander and she enquired what had happened. He replied by saying words to the effect, “I don’t want to discuss this on the phone with you. Do not go back to work tomorrow. Just meet me at the Castle Hill Tavern at 10.00am”;
r)On 8 August 2008 Ms Alexander attended a meeting with Emanuele Cappello at Castle Hill Tavern, together with her friend Trudi Courtney at 10.00am. Emanuele Cappello said words to the effect, “I have spoken to Nick. I cannot discuss what we talked about. There are two sides to every story. I am aware that you are taking anti-depressants. You shouldn’t have told Will about what was happening. If you respect our friendship, you will not take this further. If you do, it will end up ugly for you”. He also said words to the effect, “You should look at the way you wear your top. I have told you before if you can’t work with Nick then I will have to let you go”. Ms Alexander replied to the effect, “This is not a personality clash, Emanuele. Nick has been touching me”. Emanuele Cappello then said words to the effect, “The shop is losing money and if we had to replace Nick I would lose a lot of money. I’m in debt and I have a family to feed. Just let it go, there are lots of jobs out there”;
s)Ms Alexander was very upset about losing her job and felt betrayed that Emanuele Cappello did not believe her. She started abusing alcohol and also took amphetamines and smoked marijuana;
t)on or about 22 August 2008 Ms Alexander was involved in a car accident when she blacked out. The following day her friend Ms Courtney took her to Blacktown Hospital Emergency Department and she was transferred to Bungarribee House, a psychiatric section of Blacktown Hospital. She was discharged on 4 September 2008;
u)following her discharge Ms Alexander consulted a psychiatrist, Dr Sloss. She also consulted her general practitioner, Dr Relan, concerning her depression. He referred her for counselling and prescribed anti-depressants. Dr Relan provided a Centrelink medical certificate advising that Ms Alexander was unfit for work for the next six months due to a psychological condition;
v)Ms Alexander started seeing a counsellor (Trisha Young) on 24 September 2008. She attended counselling once a week. Ms Alexander lost stable accommodation on 4 December 2008;
w)Ms Alexander commenced work at a business called “Hire a Box” in Seven Hills in August 2009. She was paid in cash;
x)on 24 December 2009, Ms Alexander was admitted again to Bungarribee House due to depression. She was admitted to the acute ward under the care of Dr Omar for two weeks and a non-acute ward for three weeks prior to discharge. She was heavily medicated during this admission. A social worker arranged accommodation for her with the Department of Housing; and
y)Ms Alexander has continued to receive psychiatric care and has experienced relationship problems. She has nevertheless commenced a new relationship in June 2011 which continues.
There is the ring of truth, both in the detail of the events complained of by Ms Alexander, and in her explanation that she thought initially that she could deal with the problem.
Mr Vekiarellis has obvious reasons for being untruthful. He acknowledged that the conduct which formed the subject of Ms Alexander’s complaints was shameful.
Mr Vekiarellis’ affidavit is inconsistent with admissions made in his response, in particular his later denial of having said "she's my girl" despite an admission to that effect in the response.
The manner in which Ms Alexander sought intervention from the Cappello family was spontaneous. She initially spoke to Will Cappello who happened to be at the premises. I accept her counsel’s submission that if her complaint had been contrived it is unlikely that she would have proceeded in that way.
Emanuele Cappello gave evidence that he did not know whether the harassment occurred or not, but he was inclined to disbelieve the allegations. His counsel focused on the absence of any record of the harassment in notes by general practitioners and by medical staff at Bungarribee House when Ms Alexander was admitted there. The crucial contemporaneous record of the complaint, however, is the report by Ms Alexander to Will Cappello, and to Emanuele Cappello and John Cappello on or about 18 July 2008, and the subsequent report to Emanuele Cappello on 7 August 2008.
There is also no dispute that Ms Alexander reported the harassment on 18 July 2008 and on 7 August 2008. Those reports were made before her dismissal. This is not a case of allegations being made retrospectively in the wake of a dismissal.
Similarly there is evidence of reports to others prior to her dismissal. Ms Alexander gave evidence that she spoke to another employee called Stephanie on 17 July 2008, as well as to her father, a flatmate and friends. Her evidence was uncontradicted.
Ms Alexander told a social worker at Bungarribee House on 29 August 2008 about her complaint of sexual harassment and her dismissal. She explained, when giving evidence, the difference between the social worker’s focus, on the background to her condition, and the focus of the medical staff on addressing her symptoms.
I have taken into account that Ms Alexander was in a very poor mental and emotional state in August 2008. She required three weeks hospitalisation and placement in an acute care facility.
Ms Alexander’s mental state at that time was plainly impaired. Her first written record of the history, which she apparently prepared without assistance, is her complaint to the NSW Anti-Discrimination Board on or about 16 September 2008, soon after being discharged from hospital. That complaint was not pursued and Ms Alexander later lodged her complaint with the AHRC.
The version on which Ms Alexander relied when lodging her complaint, drafted by her solicitors, with the AHRC in February 2009, differs in that it contains specific dates, and there are minor variations in respect of the sequence of events. Her counsel submitted that the discrepancies should be seen as adding to her credibility rather than detracting from it. I reject that contention but accept that the discrepancies have no material impact on Ms Alexander’s credibility.
Ms Alexander resisted attacks upon her credibility under cross-examination. I accept her explanation, that her later account is more reliable as she was no longer subject to strong medication that she had earlier been taking, as plausible.
Ms Alexander was challenged on the basis that she had not called, as witnesses, those people she says that she informed of the harassment. She says that she spoke to her father and flatmate and friends. It is understandable that Ms Alexander would not want to call her father to give evidence. The others were incidental.
Ms Alexander communicated her complaints of harassment to three of the four Cappello brothers (Will, Emanuele and John), and to a social worker. It is probable that she would also have spoken to people who were closer to her.
Ms Alexander explained why, notwithstanding what she had experienced as a child, she turned to her father for advice. She became emotional under cross-examination when giving evidence about this. She otherwise gave her evidence calmly.
The respondents provide no explanation for Ms Alexander’s sudden deterioration in mental health, following her experience at the Takeaway. I accept that Ms Alexander was profoundly affected by her experience, and by the response of Emanuele Cappello. Her excessive alcohol and marijuana consumption in the immediate wake of what occurred at the Takeaway, and her hospitalisation shortly thereafter, marked a drastic change in her condition.
Dr Parmegiani testified that Ms Alexander’s condition prior to the events at the Takeaway and her dismissal would have been assessed as unimpaired. Subsequently she has been assessed at 7 per cent and 17 per cent whole person impairment. There is in my view a connection to what Ms Alexander experienced at the Takeaway. The timing of her decline is consistent with her complaints and the response to them.
It was suggested to Ms Alexander that her complaints were motivated by a desire for monetary gain. Her evidence is that she complained to the Cappello brothers because she wanted the conduct to stop. Her explanation is plausible. It is only when she failed in that regard, that she sought compensation to address the consequences of her harassment and dismissal.
Mr Vekiarellis denied any acts of sexual harassment. His denials were short and emphatic. His evidence was clear, notwithstanding that it was given through a Greek interpreter. There is no doubt that he fully understood the gravity of the allegations made against him. He presented a picture of himself as a clean living (even somewhat prudish) man who was offended by what he saw as Ms Alexander’s provocative dress. He had no plausible explanation of why Ms Alexander had made such serious allegations against him. Late in his evidence, he suggested that Ms Alexander might have been delusional or affected by drugs. He suggested that the situation could have been entirely avoided if Ms Alexander had worn a uniform (which presumably would have been more conservatively cut than the clothing worn by Ms Alexander).
I prefer the evidence of Ms Alexander to that of Mr Vekiarellis. While Ms Alexander was frank in making admissions, Mr Vekiarellis would not concede the slightest fault on his part. His blanket denials did not have the ring of truth about them. Ms Alexander had no motive for concocting a story against Mr Vekiarellis. I do not accept that she was delusional. I have concluded that the events of harassment alleged by Ms Alexander happened.
I find that Ms Alexander has established her claim of sexual harassment against Mr Vekiarellis pursuant to s.28A of the SDA.
The employment relationship
Ms Alexander’s claims in relation to sex discrimination under s.14(2) and vicarious liability under s.106 of the SDA rely on Emanuele Cappello being her employer. She bears the onus of proving that Emanuele Cappello was her employer.
Emanuele Cappello’s response to the AHRC dated 23 July 2009 and his response in these proceedings dated 21 January 2010, are consistent. Having accepted his role in the business in those responses to Ms Alexander’s claim, he then sought to change his version. The explanation for the change, in my view, lies in the liquidation of Cappello Bros, and the loss of that corporate veil.
Emanuele Cappello is the trustee of the Cappello Family Trust. He is the oldest of the Cappello brothers.
The ultimate beneficiaries of that trust are Emanuele himself, Will, Pep, and John (the youngest brother). Their mother enjoys benefits for her lifetime.
Emanuele Cappello’s responsibilities as trustee are to ensure that the interests of all beneficiaries are secured and advanced.
The trust owned the property at Mobbs Lane, and it was Emanuele Cappello’s responsibility to ensure that rental was derived from the property. To that end, it was decided to undertake construction work at the premises, and conduct a takeaway business in those premises.
Prior to 2008, another tenant paid rent to occupy the premises. Similarly, after the business in which Emanuele Cappello and John Cappello had an interest ceased to operate, the premises were let to Sou Eng Heng[2].
[2] the Title Search (Exhibit R2) shows Emanuele Cappello in the First Schedule and Sou Eng Heng in the Second Schedule.
John Cappello described Emanuele Cappello as being like a father. The age gap is 12 years.
The suggestion by John Cappello in his oral evidence that Emanuele Cappello played a subservient role, running errands and conveying messages at John Cappello’s behest, is wholly unpersuasive.
The evidence of Emanuele Cappello is that it was decided that the interests of the trust should be furthered by conducting a takeaway business.
Before that decision, John Cappello’s prior experience had been mainly as a chef, as a developer of a handful of properties, and as a real estate agent. There is no evidence that he had any experience running a café or takeaway business.
John Cappello’s lack of relevant business experience became obvious during the course of his oral evidence. He displayed no understanding of the elementary responsibilities of a retail businessman, in particular the need to take a direct interest in the weekly detail of income and expenditure.
Significantly, it emerged at the trial that Emanuele Cappello, with the assistance of his wife, was monitoring the income and expenditure of the Takeaway. This involved collecting documentary records from Mr Vekiarellis, and entering them in a spreadsheet, in order to ascertain the actual performance of the business.
The fact that John Cappello took no interest in those details, and was not even supplied with them, suggests that his role was limited. I accept that he was consulted on major decisions but at a day to day practical level his role was limited to having input on catering issues. As Ms Alexander recorded in her affidavit material, John Cappello was involved in the set-up of the kitchen, and the development of the menu. I accept that evidence.
John Cappello’s characterisation of Emanuele Cappello’s role as being limited to paperwork, as if that were something inconsequential, suggests:
a)a lack of understanding of the importance of keeping proper business records and maintaining a basic accounting system;
b)a failure to appreciate that Emanuele Cappello’s role was of critical importance to the management of the business, and
c)that it is unlikely that a person so lacking in business acumen could be closely involved in running such a business.
Mr Vekiarellis referred to Emanuele Cappello and John Cappello as his “bosses”. Emanuele Cappello was the person he provided with the business documents. Emanuele Cappello was the person who had “more time”, consistently with Ms Alexander’s evidence that he was there most days and sometimes twice a day.
Emanuele Cappello denied under cross-examination that he had attended to “project management and payroll issues” when working for BFW Constructions Pty Ltd, his brother Will Cappello’s company. Nevertheless his work experience indicates that he was qualified to take responsibility for the running of the Takeaway. He also had experience in running a similar business, the café at the Castle Hill Indoor Sports Centre, where Ms Alexander had also worked.
John Cappello’s role at that previous business had been to set up the kitchen and devise the menu. I find that John Cappello did the same in relation to the Takeaway.
Emanuele Cappello was present at the induction day for staff at the Takeaway on 20 June 2008. He told all staff that they could call him if they had any problems. Besides illustrating his responsibilities as the person in charge, that communication is relevant to Ms Alexander’s complaint to him on 7 August 2008.
On 8 July 2008 Emanuele Cappello signed Ms Alexander’s Tax File Number Declaration which recorded, in the portion of the form headed “To be completed by the PAYER”, that the payer’s “contact person” was Emanuele Cappello. In signing the form, Emanuele Cappello declared that the information he had given “is true and correct”.
On 23 July 2009, Emanuele Cappello (not John Cappello) drafted the response to the complaint lodged with the AHRC requesting a response to the allegations. He made his role in the business clear, explaining his daily presence at the premises, interaction with staff, and his reassurances in the absence of formal harassment policies. He did not mention John Cappello.
Emanuele Cappello purported to investigate the complaint of sexual harassment by attending at the premises with John on 18 July 2008. In his response to the letter from AHRC, he stated (at [5]):
I questioned both Vicki and Nick. Their stories had similar time lines but with different outcomes.
At [15] of his statement of 8 November 2011, Emanuele Cappello acknowledged his central role in the business, stating that in the “first four or five weeks, he and John Cappello “were regular visitors”, that he “spoke to all the casuals telling them what was required of them”, and was “regularly on site, almost every day, testing food, and checking with staff to make sure everything was running as it should”. I accept that these are the activities of a person with a direct interest in the performance of the business.
At [16] of his statement of 8 November 2011, Emanuele Cappello stated that after Ms Alexander’s complaint was reported to him, he “immediately told John and [they] went to the Takeaway to investigate”.
At [17] of his statement of 8 November 2011, Emanuele Cappello stated that after Ms Alexander’s second complaint on “6 August 2008” [sic, 7 August], he went to the Takeaway and had a discussion with “NV” (Mr Vekiarellis). John Cappello did not investigate the second complaint.
In his response, filed in this Court on 21 January 2010, Emanuele Cappello stated, that “At all times, the Second Respondent [ie he], investigated and dealt with each complaint and allegation fairly and appropriately”. He stated moreover that he “was unable to find any proof in support of any of the Applicant’s complaints or allegations”.
In that response he made no mention of John Cappello.
Emanuele Cappello also took responsibility for staffing levels, and the scaling back of the business. At [9] he stated:
Since the Business started trading, the Second Respondent [i.e. he] gradually scaled back the business because it was not performing well as the Second Respondent had expected.
I find that Emanuele Cappello was not a subordinate functionary running errands for his brother John. He had expectations as to how the business might perform, and acted to restructure the business when his expectations were not realized. He, not John Cappello, was keeping track of the performance of the business by having income and expenditure recorded on a weekly basis. It follows that he would be the person who scaled back the business, as he stated in his response.
At [11] and [12] of the response, Emanuele Cappello took further responsibility for the staffing levels of the business, explaining that he “called each casual to work in the Business” and how he “stopped calling 3 casual employees to work in the Business”[3].
[3] Emanuele Cappello’s allegation that he stopped calling three casual employees “before 7 August 2008” is unfounded. Prior to that date, the only casual employee to cease working was Stephanie M, who last worked in the week ending 2 July 2008.
At [27] of his statement of 8 November 2011, Emanuele Cappello stated that he “did assist [his] brother John with paper work, hiring staff, setting rosters, and [he] sometimes spoke to staff on his behalf”. John did not do any “paperwork”. As he said, that was Emanuele Cappello’s role. By “assisting” his brother, Emanuele Cappello took responsibility for allocating work to the casual employees.
Emanuele Cappello asserted at [23] and [24] of his longer affidavit of 4 December 2012, that he was not Ms Alexander’s employer, an employee, a commission agent, a contract worker, or a partner in a partnership, or Ms Alexander’s direct supervisor.
In purporting to substantiate that assertion, Emanuele Cappello said, “I ran an occasional message for my brother John”. He stated that it was John’s “enterprise, and he [i.e. John] made the decisions”, not Emanuele Cappello.
At [6] of his shorter affidavit of 4 December 2012, Emanuele Cappello stated that he “was not at any time the Applicant’s manager for her Mobbs Lane Takeaway employment, and [that he] did not have any role in managing or conducting that business”. He added at [7] that “he occasionally ran a message for [his] brother, John”.
I reject that evidence.
Ms Alexander filed an affidavit on 1 February 2013 providing further contradictory evidence. Emanuele Cappello did not directly dispute her statements:
a)at [9] that he stated he and his brothers were opening a takeaway shop and he wanted Ms Alexander to manage it;
b)at [12] that at the induction on 20 June 2008, most of the time was spent talking to Emanuele Cappello, and that Ms Alexander spoke to John Cappello for no more than 20 minutes, when he took her and Mr Vekiarellis through the menu, showed them the chicken oven and the set up of the Takeaway, and discussed prices;
c)at [12] that Ms Alexander’s conversations with Emanuele Cappello were more general about how he hoped the Takeaway would operate, the hours she would work, the rate she would be paid, and how often she would be paid;
d)at [14] that Emanuele Cappello told them the days that they would work;
e)at [16] that Emanuele Cappello attended the Takeaway almost every day, and sometimes twice a day, and that when he came in he spoke to them and took money from the till;
f)at [17] that Emanuele Cappello was responsible for paying Ms Alexander and did so directly from the takings: counting out her pay and giving her cash;
g)at [18] that Emanuele Cappello would discuss with Mr Vekiarellis and Ms Alexander any issues to do with the running of the Takeaway: quantities, what was on the menu, and shifts; and
h)at [18] that Mr Vekiarellis was being paid a very small wage and was going to do lots of hours. He worked a 70-hour week, and was not paid overtime.
Ms Alexander was not challenged under cross-examination regarding that evidence.
Under cross-examination, Emanuele Cappello did not dispute that he paid Ms Alexander from the till. He stated merely that he could not recall that.
Emanuele Cappello did not dispute by affidavit the following elements of Ms Alexander’s affidavit of 1 February 2013:
a)at [18] that Emanuele Cappello stated that if Ms Alexander had any problems she could come and see him, and that he would “deal with the problems”; and
b)at [21], that Emanuele Cappello said that he was Ms Alexander’s boss, that Will Cappello was not her boss, and that if she had problems with Mr Vekiarellis she should speak to Emanuele Cappello;
It was suggested to Ms Alexander under cross-examination that her evidence regarding Emanuele Cappello being her boss was a “recent invention”. It should be noted that Emanuele Cappello had not prior to the liquidation of Cappello Bros disputed his role in the business[4]. On 4 December 2012, he sought in his affidavit evidence to distance himself from the business. It became necessary, thereafter, for Ms Alexander to specifically address his role.
[4] see his response to the AHRC and in these proceedings.
Relevantly, Mr Vekiarellis also considered Emanuele Cappello to be his boss.
Ms Alexander commenced Workers Compensation proceedings against Cappello Bros but as no one had taken out Workers Compensation Insurance at the relevant time, the Workers Compensation proceedings were taken against the Nominal Insurer. John Cappello applied and was successfully joined to the Workers Compensation proceedings[5]. I see no particular significance in that, given the timing of it.
[5] Workers Compensation Result Exhibit in John Cappello’s affidavit of 27 November 2012.
I find that Emanuele Cappello played the dominant role of the Cappello brothers in the running of the Takeaway.
The relevance of Cappello Bros Pty Ltd
I accept that the Takeaway was nominally conducted by Cappello Bros. However there is no document in evidence in these proceedings which shows a transaction between Cappello Bros and anyone else in the conduct of the Takeaway. A company can only act through human agents.
There is evidence of Emanuele Cappello and John Cappello taking money from the till, and of Emanuele Cappello running the business.
Emanuele Cappello had known Ms Alexander for many years. He had worked with her at the Castle Hill Indoor Sports Centre Café in 2005/2006. They became friends there and stayed in contact over the years.
After she left the Sports Centre Ms Alexander would call Emanuele Cappello and he would put her in touch with people who may be looking for staff. There had been discussions about opening a takeaway at the premises at Mobbs Lane that were owned by the Cappello family. The premises comprise two shops and two accommodation units that had been left to the four Cappello brothers by their father, with their mother having a life interest. Emanuele Cappello was the sole trustee of which the premises were a trust asset. In 2008 the brothers decided to establish a new takeaway in one of the shops at the premises.
John Cappello became the sole director and company secretary of Cappello Bros on 10 June 2008 and Cappello Bros traded under the registered business name Mobbs Lane Takeaway. This is established from ASIC statements attached to John Cappello’s affidavit. Emanuele Cappello was removed as a director of Cappello Bros on the same date. This change was said to enable John Cappello to commence the Takeaway and be solely responsible for it. I accept the fact but not the alleged purpose.
I find that, prior to its liquidation, Cappello Bros was probably the legal owner of the Takeaway business. However, the controlling minds of the Takeaway were Emanuale Cappello and John Cappello and Emanuele Cappello played the dominant day to day role in the management of it.
At all material times when Ms Alexander was employed at the Takeaway, by Cappello Bros, the fact that John Cappello was the sole director of the company did not make him her employer in fact. Emanuele Cappello was her employer in substance. Mr Vekiarellis was her direct supervisor as Ms Alexander admits in her affidavits[6], but Emanuele Cappello, in consultation with John Cappello, had overall management responsibility for her.
[6] [3] of 21 April 2001 affidavit, [47] of 15 April 2013 affidavit and [19] of Ms Alexander’s Workers Compensation Statement (Exhibit R4) and also her Anti-Discrimination Board Form attached to 15 April 2013 affidavit.
Vicarious liability – s.106
Emanuele Cappello claims that reasonable steps were taken to prevent Mr Vekiarellis from doing the acts alleged by Ms Alexander.
Under s.106(2) if reasonable steps were taken by a person to prevent the employee from carrying out acts of sexual harassment then subsection (1) does not apply.
The Takeaway was not a sophisticated business. It had one permanent employee (Mr Vekiarellis) and up to six casual staff working there. It was a start-up Takeaway selling chickens, hot food, coffee and sandwiches.
There were no formal policies in place to deal with harassment when the issue was raised by Ms Alexander. However, both John Cappello and Emanuele Cappello gave evidence that steps were taken to investigate the complaint. Ms Alexander has also given evidence that she was spoken to by John Cappello. An investigation was conducted by John Cappello and he checked with all staff including Ms Alexander when he came to the shop following Ms Alexander’s initial complaint[7].
[7] [31] of the John Cappello evidence exhibit.
Emanuele Cappello discussed the allegations with Mr Vekiarellis separately during which he denied any wrong doing[8]. John Cappello also spoke with Mr Vekiarellis, who denied the allegations, and told him that “that sort of behaviour would be totally inappropriate and would not be tolerated by me.”[9]
[8] [16] at page 5 of the exhibit to Emanuele Cappello’s affidavit sworn on 4 December 2012.
[9] [33] at page 11 of the exhibit to John Cappello’s affidavit sworn on 27 November 2012.
John Cappello asserts that he regularly spoke to staff members and enquired as to whether there were any issues and following the incident checked with all female staff, including the applicant on each visit to see if there were any further complaints[10].
[10] [31] at page 10 of the exhibit to John Cappello’s affidavit sworn on 27 November 2012.
Emanuele Cappello submits that in the event that I find he was Ms Alexander’s employer under s.106(2), if he took reasonable steps to prevent Mr Vekiarellis from conducting acts of sexual harassment he is not vicariously liable for the acts of Mr Vekiarellis.
I reject that submission. Emanuele Cappello took no steps at all to prevent sexual harassment occurring at the workplace prior to Ms Alexander’s complaints. He, together with his brother John, attempted an investigation of her first complaint but made no findings. The warning apparently given to Mr Vekiarellis was an appropriate one but there was no effective monitoring of the situation subsequently. After Ms Alexander’s second complaint, Emanuele Cappello and his brother John appear to have simply decided that the problem was too difficult to resolve and that the best solution would be for Ms Alexander to quit her employment. This was a wholly inappropriate and ineffective response to the alleged harassment.
The reason for the dismissal of Ms Alexander
The timing of Ms Alexander’s dismissal indicates that it was an immediate reaction to her second complaint. She was not permitted to work after that complaint.
Emanuele Cappello explained[11] that John Cappello gave Ms Alexander “specific instructions to contact his mobile phone so any alleged repeat conduct could be dealt with immediately”. According to Emanuele Cappello, “this protocol was not followed, and Vicki’s refusal to allow John to deal with sexual harassment complaints immediately was a significant factor in her dismissal…”
[11] at [29(f)] of his longer affidavit of 4 December 2012.
Emanuele Cappello sought in his oral evidence to downplay the relevance of that rationale for Ms Alexander’s dismissal, by denying that it was a significant factor.
Emanuele Cappello’s and John Cappello’s construction of an alleged breach by Ms Alexander of John Cappello’s “protocol” is unpersuasive because:
a)Emanuele Cappello accepted that on 20 June 2008, at the induction, he told Ms Alexander (and other staff) that if they had any problems they could call him;
b)Emanuele Cappello accepted in his submission to the AHRC on 23 July 2009 that Ms Alexander has always had his contact details, and has called him many times over the years, but “on this occasion she chose not to contact [him] immediately”; he was referring to the first complaint when Ms Alexander spoke to Will Cappello, and not to him. He clearly expected that she should have called him first;
c)at [16] of his statement of 8 November 2011, Emanuele Cappello said, in relation to his attendance at the takeaway on 18 July 2008, that: “[He] made sure before [he] left that Vicki knew she could contact [him] on [his] mobile at any time if she had issues with Nick”; that is what she did on the next occasion. Emanuele Cappello provided no explanation for seeking to change his evidence in this regard. And why would he not, as her friend, and as the brother who was most active in the business, have extended that invitation?
d)John Cappello’s evidence that Ms Alexander should call him, and nobody else, is hard to understand. There is no reason why he would have sought to exclude access to his brother unless he thought that Emanuele Cappello was too closely involved to be objective;
e)John Cappello gave evidence that he gave Ms Alexander his business card. The fact that John Cappello handed Ms Alexander his card illustrates that they did not have a previous line of communication. Ms Alexander saw his gesture as adding support, not substituting himself for Emanuele Cappello as the person with whom she would communicate;
f)if John Cappello was exclusively responsible for dealing with allegations of harassment, why was it that both brothers went to the Takeaway on 18 July 2008, and Emanuele Cappello went to speak to Mr Vekariellis on 7 August 2008?
I also find unpersuasive Emanuele Cappello’s contention that Ms Alexander’s dismissal was related to a decline in business and a need to reduce staff. In particular, the following claim at [28] of his statement of 8 November 2011 is unfounded:
At the time of her dismissal, there were only Nick and the two Vicki’s working there, and after her dismissal Nick ran it alone except for Friday and Saturdays when the other Vicki worked a shift, and Tuesdays from 2pm to 8pm when my cousin, Will Musso, stood in for him.
The spreadsheets comprising Exhibit A5 show more staff working, and that Will Musso’s hours were greater than merely a Tuesday afternoon shift. The following summary illustrates the number of staff who worked after Ms Alexander’s dismissal, and the volume of hours collectively worked:
Week ending
2/8
9/8
16/8
23/8
30/8
6/9
Staff
4
3
4
5
5
6
Total hours
119
110
108
114
113
110
The week ending 9 August was the week in which Ms Alexander’s employment was terminated.
After Ms Alexander’s dismissal, a person identified as “Russell S” was engaged in the week ending 16 August, “Clem H” was engaged in the week ending 23 August, and “Carina” was engaged in the week ending 6 September 2008.
Ms Alexander was not offered that work. Further, “Vicky S” continued to work for the business.
The alleged overstaffing of the business as the reason for Ms Alexander’s dismissal needs to be considered in the context of Emanuele Cappello’s variety of explanations. In his AHRC response he stated that it was because Ms Alexander had ended a trial period, had inadequate transport, her “state of mind" and business going slow. In the response in these proceedings it was because the business was not performing as well as had been expected. In his affidavit evidence it was because “things had not worked out” which included various elements including that the business was overstaffed. The only consistent reason provided, the overstaffing of the business, is inconsistent with the business records which show no reduction in staff, and only a marginal reduction in hours overall after the termination of Ms Alexander’s employment.
I reject the proffered explanation for Ms Alexander’s dismissal. Further, I find it improbable that communication of a decision to terminate Ms Alexander’s employment on the grounds of a staff reduction would have taken place away from the workplace and without provision of notice. That is particularly so given that Ms Alexander was considered to be Emanuele Cappello’s friend.
John Cappello sought to justify the dismissal of Ms Alexander was because the business was not doing well. He also stated that he took into consideration other things as well, the fact that she did not adhere to his “direction” to contact him and only him if there were any further complaints, not to smoke in front of the Takeaway and to dress appropriately. I reject that explanation.
John Cappello’s evidence was that the Takeaway struggled and he kept having to fund it through his credit cards. He claimed the business was not going well because he had to find the money to purchase stock and pay employees. However, in truth he left it to Emanuele Cappello to monitor the financial performance of the Takeaway. He had neither the interest nor the capacity to do so.
Ms Alexander submits that the Court should find that the reason Ms Alexander was terminated was because she complained about Mr Vekiarellis’ harassment of her. I accept that submission. However, for the reasons discussed below, it is unnecessary to make a finding on whether the termination was an act of sex discrimination.
Termination as discrimination
Ms Alexander submits that the Court should find that in terminating her employment, her employer discriminated against her on the grounds of her sex.
This conclusion is open and I would have been minded to adopt it if I were not satisfied on the issue of victimisation.
In Thompson v Orica[12], the Federal Court found that a characteristic that applies, for the most part, to one sex is a characteristic that appertains generally to that sex. Ms Alexander submits that it is, for the most part, women who are sexually harassed in the workplace, and consequently, for the most part, women who make complaints about being sexually harassed in the workplace. In this sense, it is a characteristic (as that word is used in the SDA) that generally appertains to women. It would follow that a termination because of the making of complaints about being harassed is sex discrimination.
[12] [2002] FCA 939.
This reasoning is consistent with the finding of Mansfield J in Poniatowskav Hickinbotham[13]. In that case, his Honour found that the applicant, who was provided with warning letters and ultimately dismissed because she had made complaints about sexual harassment, had been discriminated against under the SDA.
[13] [2009] FCA 680 (23 June 2009).
A similar conclusion might be reached by employing a comparison with a hypothetical male employee that would involve consideration whether, had a hypothetical male employee reported to Emanuele Cappello that Mr Vekiarellis was engaging in unlawful conduct towards him, without undertaking a thorough review of the allegations, and without reaching a conclusion as to whether the allegations were true, Emanuele Cappello would have terminated the employment of the hypothetical employee. Rather, as was the case in Poniatowska, the evidence reveals that Emanuele Cappello viewed Ms Alexander not as “a victim of sexual harassment but as a problem to be dealt with”. In Poniatowska, in support of the conclusion of harassment his Honour found that “the employer then determined that she was a person who did not “fit” its work environment because she was a female who would not tolerate sexual harassment and the robust work environment”. In this case, Ms Alexander submits that the employer reached a similar conclusion.
The argument is a strong one but, because of my conclusion on the victimisation claim it is unnecessary for me to form a concluded view.
Harassment as discrimination
I accept the submissions of counsel for Ms Alexander on this issue. Mathews DCJ considered the relevance of harassment under the Anti‑Discrimination Act 1977 (NSW) in O’Callaghan v Loder & Commission for Main Roads[14].
[14] [1983] 3 NSWLR 89.
The complainant, a female, was employed as a lift driver with the Department of Main Roads. She complained that she had been sexually harassed by the Commissioner, Mr Loder.
There was, at that time, no reference to sexual harassment in the NSW Anti-Discrimination Act, and no statutory definition of the term.
Mathews DCJ defined “sexual harassment” in the widest possible terms and said at 92[D] that “a person is sexually harassed if he or she is subjected to unsolicited and unwelcome conduct by a person who stands in a position of power in relation to him or her.”
Mathews DCJ referred to the provisions of discrimination on the grounds of sex and said at 93[E] that in order to establish a contravention of the Anti-Discrimination Act, the complainant who alleges sexual harassment must establish:
a)that he or she has been treated less favourably than in the same circumstances, or in circumstances which are not materially different, a person of the opposite sex would have been treated;
b)that the ground upon which he or she received that treatment was either his or her sex, or a characteristic appertaining generally to persons of that sex, or a characteristic that is generally imputed to persons of that sex;
c)that the person committing the act of harassment was either the employer of the complainant or a person made liable by s.52 (aid, abet) of the Anti-Discrimination Act; and
d)that the alleged harassment gave rise to one or more situations referred to in s.25(2) (the employment discrimination provision – that is unlawful to discriminate re terms and conditions of employment, denying access to …. or dismissing the person or subjecting the person to any other detriment).
Mathews DCJ found less favourable treatment being the unsolicited and unwanted sexual advances.
In Hall v A&A Sheiban Pty Ltd[15], French J (as he then was) considered “Sexual Harassment – A species of Sex Discrimination”[16].
[15] [1988] FCR 217.
[16] at 274.
His Honour considered sexual harassment to be a form of discrimination and referred to Aldridge v Booth[17].
[17] [1988] 80 ALR 1 at 6.
At page 276, his Honour stated:
There is nothing in the concept of discrimination in s 14 of the Sex Discrimination Act (Cth) to suggest that it should not extend to sexual harassment in the workplace in the same way that it has been extended by the American and British Courts.
His Honour referred with approval to the reasoning of Mathews DCJ in O’Callaghan v Loder.
At page 277, his Honour stated that the discriminatory element is implicit in the very nature of sexual harassment. The implication is also to be found in the concept of sexual harassment covered by s.28.
His Honour stated:
That section puts beyond doubt that sexual harassment in employment is a species of unlawful sex discrimination. The requirements of section 14 relating to discriminatory treatment in the terms and conditions of employment or subjection to detriment are subsumed in the nature of the prohibited conduct. The definition in s 28(3) is not intended to be exhaustive, but facultative. The language of the subsection is consistent with that view and in a remedial act should not be given an exhaustive and therefore restrictive meaning.
Liability under s.105 of the SDA
If Ms Alexander had failed to establish that her employer was Emanuele Cappello, but that that employer (whoever that was) discriminated against her in terminating her employment, it would have been necessary to consider pursuant to s.105 of the SDA, whether Emanuele Cappello should be taken to have also done the act and be liable for the damage caused by the act. Section 105 provides:
A person who causes, instructs, induces, aids or permits another person to do an act that is unlawful under Division 1 or 2 of Part II shall, for the purposes of this Act, be taken also to have done the act.
The phrase properly extends liability to a person who aids or permits an unlawful act under Division 1 or 2 of Part II. These acts include discrimination. They do not include sexual harassment or victimisation.
In order to succeed on a claim under s.105, Ms Alexander must prove that Emanuele Cappello was in a position within the Takeaway where he influenced John Cappello into terminating Ms Alexander’s employment. The object and purpose of this section is to capture situations in organisations where the management of the organisation or others in a position of authority or control within the organisation permit a person to be discriminated against.
Section 105 of the SDA provides a means of bringing about lawful conduct by rendering liable a person who could prevent unlawful conduct from occurring or continuing or who assists, directly or indirectly, in its performance. “A person can prevent unlawful conduct by not creating a situation where it will or may take place or altering a situation so it will not continue”[18].
[18] Elliot v Nanda & Anor (2001) 111 FCR 240 as per Moore J at 293.
The meaning of the word “permit” was considered in Cooper v Human Rights & Equal Opportunity Commission[19], Justice Madgwick refers to the case of Corporation of the City of Adelaide v Australasian Performing Right Association Ltd[20]. He refers to Isaacs J who states that in the context of the dispute, that:
a person is considered to have permitted an act, if having the legal power to prevent it, nevertheless disregards that power and allows his property to be used for the purpose.
[19] [1999] FCA 180 at 41.
[20] [1928] HCA 10; (1928) 40 CLR 481.
It is uncontroversial that Emanuele Cappello communicated the termination discussion to Ms Alexander. Ms Alexander submits that it is also clear that it was Emanuele Cappello who made, or was party to, the decision to terminate her employment. I accept that such behaviour would amount to aiding in, and permitting, a discriminatory termination.
Again, however, the issue is hypothetical given my finding that Emanuele Cappello was in substance Ms Alexander’s employer.
Victimisation– s.94(2)
In order to prove the allegations under s.94(1) and 94(2)(g) (victimisation) of the SDA, again Ms Alexander must prove that Emanuele Cappello was her employer. For complaints of victimisation the test is that the grounds for carrying out the act of victimisation must be the substantial and operative factor and Ms Alexander bears the onus in proving this[21]. She has done so.
[21] Walker v Victoria [2012] FCAFC 38 as per Gray J at 96.
There are three separate components to the victimisation claim and each needs to be supported with appropriate evidence in order for the victimisation claim to succeed:
a)the first component is that the person must be “subject to” or “threatened to be subjected to a detriment”;
b)the second is establishing a detriment; and
c)the third is demonstrating the causal nexus between any detriment and one of the matters listed in paragraphs s.94(2)(a) to (g) of the SDA.
The detriment Ms Alexander suffered was the loss of her job. Emanuele Cappello subjected Ms Alexander to the detriment of losing her job because he was her employer and he made the decision to dismiss her, albeit in consultation with John Cappello. Emanuele Cappello communicated the decision to Ms Alexander. I reject the assertion that the decision was made by John Cappello alone.
In communicating the decision to Ms Alexander, Emanuele Cappello, in their conversation at the Castle Hill Tavern, told her that she was no longer required at the Takeaway and referred to the situation ending up “ugly” for Ms Alexander if she pursued her complaints further. This was intended to deter any further complaint or action by Ms Alexander. Ms Alexander had already been informed that she had been dismissed so this did not materially add to the existing detriment to which Emanuele Cappello subjected her to.
There was no detriment suffered by Ms Alexander as a result of the use of those words by Emanuele Cappello, as they did not prevent Ms Alexander from making a complaint to the AHRC or from commencing Workers Compensation proceedings or proceedings in this Court. Nevertheless the attempt by Emanuele Cappello to deter Ms Alexander from taking further action was irresponsible and should be condemned. Further, the threat of a detriment (in terms of things ending up “ugly” for Ms Alexander) would probably have been actionable in the absence of the dismissal.
I have already rejected the explanations proffered by Emanuele Cappello and John Cappello for Ms Alexander’s dismissal. The substantial and operative factor why Ms Alexander was dismissed was not the poor performance of the Takeaway, but because she had made the sexual harassment complaints. Her dismissal was unfair. There is a causal nexus between the complaints and the dismissal for the purposes of s.94(2)(g). I find that the claim of victimisation has been established.
Compensation and damages
Ms Alexander has succeeded in proving breaches of the SDA by both Mr Vekiarellis and Emanuele Cappello. She should be compensated by way of an award of damages. The award of damages should be designed to place Ms Alexander in the position that she would have been in had the unlawful conduct not occurred[22].
[22] Haines v Bendall (1991) 172 CLR 60 at 63.
Damages in proceedings under the SDA are generally modelled on the principles used in awards in tort[23]. The fact that the task of determining the appropriate amount of damages is difficult does not mean that it should not be done[24]. The Court should do its best on the basis of the evidence available to it.
[23] Hall v A&A Sheiban Pty Ltd (1989) 20 FCR 217.
[24] Ibid at 256.
Damages awarded are in three classes: special damages covering economic loss and out of pocket expenses; general damages covering non-economic loss; and exemplary or aggravated damages. Ms Alexander does not seek an award of exemplary or aggravated damages.
In terms of an award of general damages, there are three classes of claims:
a)Claims where there is no medical or expert evidence of damage, and where the damages awarded are generally modest, often less than $5,000. The award in such cases should, as stated in Wattle v Kirkland[25] “recognise the principle that general damages should not be so low as to diminish respect for or trivialise the public policy implicit in human rights legislation”.
b)Claims where there is medical or expert evidence of damage, but that damage does not result in significant psychological trauma or associated limitations on the capacity to work. In Richardson[26], Buchannan J observed[27]:
cases where the award of general damages for sexual harassment fell outside the range of $12,000 to $20,000 (such as Poniatowska and Lee v Smith [2007] FMCA 59) involved features of aggravation such as psychological trauma and resulting incapacity for work, which do not feature in the present case.
Cases such as Richardson, Bishop v Takla & Ors[28] and Wattle v Kirkland likely fall into this category although the damage suffered by the applicants in Bishop and Wattle was more significant than that suffered in Richardson.
c)Claims where the medical or expert evidence demonstrates significant psychological trauma. These cases have led to awards in excess of $20,000 and up to $100,000. Cases such as Poniatowska and Lee along with VCAT decision Tan v Xenos[29] are cases of this kind.
[25] Wattle v Kirkland & Anor (No 2) [2002] FMCA 135.
[26] Richardson v Oracle Corporation Australia Pty Limited [2013] FCA 102.
[27] at [243].
[28] [2004] FMCA 74.
[29] Tan v Xenos (No 3) (Anti-Discrimination) [2008] VCAT 584
I accept that Ms Alexander’s damage is in many ways comparable to that in the more serious cases referred to by Buchanan J. In Poniatowska, the applicant was subject to harassment in the workplace (which involved sexually explicit messages and statements, but no physical contact), and was then dismissed because of the harassment. She found alternative employment but was unable to maintain it. Her condition deteriorated (although there was no indication in the decision of periods of hospitalisation). By the time of the decision three years later there had been significant improvement in her condition. She was awarded general damages of $90,000 which was not disturbed on appeal[30].
[30] Employment Services Australia Pty Ltd v Poniatowska [2010] FCAFC 92 at [117]-[119]
In Lee v Smith[31], the applicant was subjected to a pattern of sexual harassment which culminated in rape by one of the respondents. The Court found she suffered significant pain, suffering, hurt, humiliation and was unable to work or enjoy a relationship with her partner for a period of five or six hears. Her social functioning with her son and family was impaired and she had suicidal thoughts. She was awarded $100,000[32].
[31] [2007] FMCA 59
[32] Ibid at [215]
Ms Alexander submits and I accept that this case belongs in the third category set out above. The pain, suffering, hurt and humiliation that flowed from the harassment and termination included the facts that:
a)Ms Alexander was unable to work for an extended period, and remains unable to hold down ongoing employment;
b)Ms Alexander was severely depressed which led to alcohol and drug use;
c)Ms Alexander developed panic attacks, insomnia and severe incontinence;
d)Ms Alexander was admitted on a voluntary basis to a psychiatric hospital between 22 August and 4 September 2008. Ms Alexander had a second admission to the psychiatric hospital when she was admitted involuntarily between 24 December 2009 and January 2010;
e)Ms Alexander lost stable accommodation in late 2008/early 2009. She remains in housing commission accommodation;
f)Ms Alexander was prescribed strong antipsychotic medication that left her feeling detached as though the period from 2008 to 2011 was “like a blank”;
g)Ms Alexander’s relationship with her partner deteriorated and ended. Her relationship with her children was significantly damaged, particularly that with her son with whom she had a close relationship but is now significantly estranged; and
h)Ms Alexander’s current relationship continues to suffer.
These events may be contrasted with her life before the events at the Takeaway and her dismissal. While Ms Alexander had previously taken anti-depressants, they had never impeded her ability to work or look after her children. She had maintained consistent employment (including conducting her own business) and had primary care of her children over many years. Her performance at the Castle Hill Indoor Sports Centre had been sufficiently good for her to be promoted, described in glowing terms on termination and ultimately asked to join the Takeaway. She had received psychiatric care for the consequences of drug use, and had pre-existing conditions but she had maintained consistent accommodation.
Dr Parmegiani examined Ms Alexander and provided reports and was cross-examined. He expressed his opinion that her symptoms in the period since the Takeaway were attributable to the harassment and subsequent termination of employment and the sequelae of those events. The unlawful conduct set off a downward spiral in Ms Alexander’s life from which she was only recovering at the time of the trial of this matter.
Ms Alexander submits the appropriate award of general damages is $40,000. I agree. Indeed, I would have seriously considered awarding a higher figure if a larger amount had been sought.
Ms Alexander’s economic loss is to be gauged with reference to her employment prior to her discriminatory treatment. She had the capacity to earn $14.00 per hour, and to work 38 hours per week. She worked without interruption, for 18 months, at the Castle Hill Indoor Sports Centre. She also had the capacity to start her own business, a mobile tanning business and a beauty salon.
Income at the relevant Award rate of $16.50 per hour for a 37.5 hour week would be $618.75. There is no reason to question that this was her earning capacity prior to her dismissal from the Takeaway.
However, Ms Alexander did not work full time at the Takeaway. Confining her future earnings to the hours she worked at the Takeaway, Ms Alexander would expect to earn $16.50 per hour for 19 hours per week. That indicates a weekly income of $313.50. To this should be added income from her tanning business and salon.
If one were to take a middle point of $450, which I accept she would have had the capacity to earn, Ms Alexander’s future earnings would be $23,000 per annum.
Ms Alexander was born on 20 June 1968. She was 40 at the time of her dismissal. In the five-year period from 8 August 2008 to date, she would have earned $115,000, on this reasoning.
Ms Alexander worked at a business called Hire-a-Box for 11 months in 2009 and gutting chickens at another business called Supreme Poultry for eight weeks in 2010. Those periods should be deducted from her claims for 2009 and 2010.
Assuming those earnings for the remainder of her working life to age 66, the relevant quantum would be $598,000. The liability of the respondents must be qualified, however, by the fact that Ms Alexander’s capacity to lead a normal life is improving. She is not permanently disabled.
Further, Dr Parmegiani stated in his report of 20 February 2012 that Ms Alexander’s impairment was no longer related to the events of 2008. He accepted when testifying that the harassment and dismissal were the trigger for at least her former impairment, and that there was a causal relationship.
I find that Ms Alexander’s condition was no longer related to her experience at the Takeaway when Dr Parmegiani saw her in February 2012. Her claim is therefore for a closed period which ended in about December 2011. The relevant loss would be from August 2008 to December 2011, a period of 41 months, producing a quantum of $78,583. As she worked for 13 months during that period, her loss was $53,666. That is the best assessment of her loss of income for which the respondents are liable. I will round the figure down to $53,000.
Dr Parmegiani stated that Ms Alexander requires 18 sessions of specialist psychiatric treatment. He testified that the relevant cost is $350 per session. Ms Alexander claims $6,300 for such treatment. I accept that claim.
As between Mr Vekiarellis and Emanuele Cappello, both bear a heavy liability. The conduct of Mr Vekiarellis was outrageous and merits a substantial award of general damages. But it was the refusal of her trusted friend and employer Emanuele Cappello to believe her, and the dismissal in consequence of her complaints of harassment which almost destroyed Ms Alexander. She properly viewed that as a betrayal. Emanuele Cappello should bear directly the major burden of compensating Ms Alexander for her economic loss, as well as not less than half the burden of general damages.
Conclusion
I have found that Mr Vekiarellis has engaged in serious sexual harassment of Ms Alexander in the course of her employment. Ms Alexander complained to the person she understood was her employer, and mentor, Emanuele Cappello but she was not believed. Instead, Ms Alexander was dismissed from her employment. That dismissal constituted victimisation of Ms Alexander. Emanuele Cappello was a party to the dismissal of Ms Alexander. Emanuele Cappello was also involved in the management of the Takeaway and acted substantially in the position of employer. His involvement is sufficient to engage the vicarious liability provisions of the SDA. Nothing was done on the part of the business to either protect Ms Alexander from that harassment or to deal with the situation appropriately once it was brought to attention. Emanuele Cappello is vicariously liable for the conduct of Mr Vekiarellis. Ms Alexander should receive substantial compensation for the serious harassment which has been established as well as the victimisation of her by Emanuele Cappello.
Ms Alexander seeks interest on damages that are awarded. I agree that interest up to judgment should be paid at the average rate that would be payable in proceedings in the Federal Court of Australia. Interest on the judgment is payable pursuant to rule 26.01 of the Federal Circuit Court Rules 2001 (Cth) and s.77 of the Federal Circuit Court of Australia Act 1999 (Cth). Ms Alexander also seeks an apology. While that would no doubt be of benefit to her, I will not compel the making of an apology as it would be unlikely to be sincere if it is compelled.
I will hear the parties as to costs.
I certify that the preceding one hundred and sixty-eight (168) paragraphs are a true copy of the reasons for judgment of Judge Driver
Associate:
Date: 14 November 2013
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