Dos Santos v Decjuba Enterprise Pty Ltd

[2015] FCCA 192

FEDERAL CIRCUIT COURT OF AUSTRALIA

DOS SANTOS v DECJUBA ENTERPRISE PTY LTD [2015] FCCA 192

Catchwords:
INDUSTRIAL LAW – General protections application – alleged contravention by reason of workplace right – adverse action – dismissal.

Legislation:  
Fair Work Act 2009, ss.341(1)(c)(ii), 342(1), 352

Human Rights and Equal Opportunity Commission Act 1986

Applicant: STEPHANIE DOS SANTOS

Respondent: DECJUBA ENTERPRISE PTY LTD T/AS DECJUBA

File Number: MLG 253 of 2013

Judgment of: Judge Riethmuller

Hearing dates: 31 October 2013, 1 and 8 November 2013 and 12 February 2014

Date of Last Submission: 12 February 2014

Delivered at: Melbourne

Delivered on: 30 January 2015

REPRESENTATION

Counsel for the Applicant: Mr Hooper of Counsel

Solicitors for the Applicant: Hentys Lawyers

Counsel for the Respondent: Ms Symons of Counsel

Solicitors for the Respondent: Aitken Partners

ORDERS

1. The Application filed 1 March 2013 and the Amended Statement of Claim filed 7 May 2013 be dismissed.

FEDERAL CIRCUIT COURT OF AUSTRALIA

AT MELBOURNE

MLG 253 of 2013

STEPHANIE DOS SANTOS

Applicant

And

DECJUBA ENTERPRISE PTY LTD T/AS DECJUBA

Respondent

REASONS FOR JUDGMENT

1. The Applicant was employed by the Respondent from 14 November 2012 until 3 January 2013 on terms set out in a written letter of offer, dated 8 November 2012, and the relevant Award provisions for the position.

2. On or about 26 December 2012 the Applicant made a complaint to the respondent concerning allegations of:

   a)bullying and harassment by her National Manager, Ms. Trevaskis;

   b)working in a threatening environment;

   c)lack of support from the head office of the Respondent, including not answering the Applicant's emails;  and

   d)alleged threats made to the Applicant by her manager.

3. The Respondent agrees that the Applicant was employed upon the terms that she alleges and that she made a complaint in the terms that she alleges. 

4. It is also admitted that the complaint by the Applicant constituted the exercise of a workplace right to make a complaint or enquiry in relation to her employment within the meaning of s.341(1)(c)(ii) of the Fair Work Act 2009.

5. The Applicant's employment was terminated on 3 January 2013, on one week's notice. It is admitted that the termination of the employment constituted adverse action within the meaning of s.342(1) of the Act.

6. The Applicant alleges that the adverse action was taken because of her exercising her workplace rights and, alternatively, because she was absent from work because of illness or injury and therefore the termination was in breach of s.352 of the Act.

7. The Respondent denies that the termination was as a result of the Applicant exercising a workplace right, and says that the termination was due to the Applicant's poor performance and poor behaviour in the workplace, in particular:

   [7] …

   (a) failing to comply with directions given;

   (b) failing to manage the Armadale store and its personnel in accordance with instructions and directions;

   (c) failing to comply with the Respondent’s DMG manual;

   (d) initially refusing and then taking objection to preparing the Armadale store, which the Applicant managed, for the Boxing Day sales;

   (e) initially refusing and then taking objection, to doing the work required to be done to comply with the DMG manual;

   (f) failing to dress in accordance with the Respondent’s policy as to dress standards;

   (g) behaving in a threatening manner to her immediate managers, Cat Riley and the National Retail Manager, Suzanne Trevaskis;

   (h) failing to attend work on 26 December without good reason;

   (i) failing to attend work from 27-30 December without notification or providing any reason for her absence;

   (j) behaving in a threatening manner and introducing an unknown male who behaved in a threatening manner at the Respondent’s premises on 31 December 2012.

8. Initially a complaint was also pleaded with respect to the Human Rights and Equal Opportunity Commission Act 1986 however this was not pursued at trial.

9. The Respondent also alleges (in its defence) that the adverse action was as a result of illness on the basis that the medical certificate provided related to the period 31 December 2012 to 4 January 2013, alleging that the Applicant's absence was 27, 28 and 29 December 2012, but this was not persisted with at trial.

10. Whilst there was an issue pleaded as to the period of notice the Applicant required, that was not pursued at trial.

11. At the hearing of the matter the Applicant and one witness gave evidence on her behalf.

12. The Respondent called a number of witnesses including the effective owner of the business, Ms Austin, the regional manager, Ms Riley, the national manager, Ms Travaskis and the human resources and payroll administrator, Ms Gray.

13. The letter of termination sent on 2 January 2013 states:

    I regret to inform you that you have not been successful in completing your probationary period with us.  Your employment with Decjuba Enterprises Pty Ltd is terminated with immediate effect.

    We feel that the ongoing performance issues that we have been unable to resolve with you have prevented us from continuing your employment with us.

    You will receive, as part of your termination, one week's pay in lieu of notice, payment for hours worked in the last fortnight and any annual leave owing.  This will be paid to you on Tuesday, 8 January 2013.

14. The Applicant had undertaken a period of work with a related company as a store manager in New Zealand.  At the end of this period she obtained a positive reference from her manager and obtained a position in Australia, managing one of the Respondent's stores, in Armadale in Melbourne.

15. The Applicant had not been rostered to work over the period from 27 December 2012 to 3 or 4 January 2013.  She came to Australia from New Zealand in around October or November 2012 to take up a position as the store manager in Armadale, an eastern suburb of Melbourne.

16. On 14 November 2012, at a "People in Progress" meeting, conversation occurred between the regional manager and the Applicant.  The regional manager had asked the Applicant how she was settling in and asked her if she had lost weight and whether she was "okay".  The Applicant did not take this as a positive inquiry.  The regional manager gave evidence that she had asked the Applicant to adjust her top to a more demure look. 

17. Both the Applicant and the owner gave evidence that the owner had told the Applicant that she looked good, or a similar comment, although it seems clear that this was a polite social comment in a similar vein to what the owner would have said to many of the people in attendance.

18. In late November 2012 the supervisor and regional manager attended at the store at a time when the Applicant was about to take a cigarette break.  The supervisor asked her to delay her break and the Applicant was initially annoyed about this request.  The Applicant said she felt bullied by this.

19. On 30 November the supervisor again visited the store, on this occasion to speak to the Applicant about the clothing she had chosen for a styling event to be held the following day at Doncaster.  The supervisor was of the view that the Applicant had not complied with the styling of the dress standards of the store, although perhaps more accurately described as presenting in the "style" of the clothing of the business.

20. The evidence of the Applicant and the supervisor was starkly different with respect to this event.  The supervisor took the view that the Applicant had to be advised to wear a camisole instead of a transparent top, whereas the Applicant says that the supervisor was extremely cold and negative and overruled her previous approval of the clothing that the Applicant intended to wear. She also says that the supervisor had made comments about her figure and the size of her breasts although this was denied.  The Applicant, following this meeting, advised the regional manager that she would not be attending the Doncaster event as she was upset and distressed as a result of the interactions.

21. On 3 December 2012 the regional manager attended at the Armadale store after she says an employee had contacted her to remark about the Applicant not contributing to the running of the store.  She says she found the stockroom in a state of disarray and that this confirmed her concerns as to the conduct of the Applicant in the position.  The Applicant denied this and on this issue the parties' evidence is not able to be reconciled, save for the fact that the Applicant was not actually present at the store on that day, making it possible that, at least with regards to the state of the stockroom, both could be giving accurate evidence.

22. On 24 December 2012 the regional manager attended at the store to check on the Boxing Day set-up arrangements being made.  The evidence is to the effect that the Boxing Day sales are a significant day of sales for the clothing industry.  The regional manager had many criticisms of the lack of preparations that had occurred.  She asked the Applicant and a casual employee to stay back to finish the set-up, which she says the Applicant refused as she had an arrangement to Skype her sister.  The regional manager then called the national manager to seek assistance at the store.  She also gave evidence of a difficult interaction with the Applicant.

23. It was brought to the attention of the owner that two of the senior managers had spent the afternoon at the Armadale store at a significant trading period in the year, and of having received numerous telephone calls during that day as a result of the incident.

24. The Applicant's evidence was that the set-up of the store was ahead of schedule and that the regional and national managers were aggressive and threatening.

25. Whilst my impression from the managers was that they had never wanted the Applicant to be employed, and were unlikely to have provided any real support to her, it is difficult to accept the Applicant's version as to the state of readiness of the store given that the two managers did remain there for a significant period (which was accepted by the Applicant) to assist in the set-up of the store.

26. It was on 26 December 2012 that the Applicant sent the email making the complaint of bullying.  The owner asked the human resources employee, Ms Gray, to contact the Applicant although it appears that the national manager undertook that task even though she was alleged to be one of the perpetrators of the bullying.  The national manager gave evidence that she was less worried about how it may impact upon her and more immediately concerned about the Applicant.  To the extent that the tenor of her evidence contained expressions of concern about the Applicant’s wellbeing, in the context of the case as a whole, I do not accept that she held such concerns.

27. Entirely predictably, the conduct of the national manager in contacting the Applicant, in circumstances where the Applicant had made a complaint against her about bullying, resulted in an extremely poor outcome.

28. A new regional manager had taken over on 26 December and, after speaking with the Applicant, arranged for her not to have to work until the New Year.  The Applicant had provided a medical certificate to her on 31 December.  On 31 December, the Applicant attended at the head office of the company to provide that certificate, in the company of a male companion, who also gave evidence.  The receptionist is alleged to have found the presentation of the Applicant and her companion as threatening.  However, the receptionist was not called to give evidence.  The Applicant’s companion was called to give evidence and corroborated her claims. 

29. It is clear that the receptionist then contacted the owner by email, raising concerns about the attendance.  This resulted in discussions between the owner, the national manager and the human resources employee, Ms Gray.  It was resolved to terminate the Applicant’s employment.  It is clear from the evidence that the real decision-maker was the owner, in that the owner’s evidence is that had she wished to terminate an employee, she would do so, even if the other two did not agree with her.  Similarly, it appears clear that the decision to hire the Applicant was made by the owner, and was not the preference of others in the company.  This is entirely consistent with the business structure, and I have no reason to doubt her evidence in this regard. 

30. The human resources employee was given the task of terminating the Applicant’s employment, for which she prepared notes or a “script” in advance.  In these notes, there were three dot points identified as the reasons for termination, being:

    (a) Inappropriate dressing,

    (b) issues related to managing the Armadale store, with specific reference to 24 December 2013;  and

    (c), working with and taking direction from management – each time a manager has attempted to give constructive criticism, give you a direction or discipline, you would become angry, quite unreasonable in your response to the situation, and display what we deem as unacceptable behaviour for a manager.

31. Ms Gray went on in her notes to say that the Applicant seemed:

    …to take it as a personal attack.  And because we cannot find a solution and the conversation continues to be had, you believe we are harassing you.  You are defensive and angry when spoken to.  And we find it very difficult to have a conversation with you.  Then, when you don’t want to speak about it, you refuse to talk, or go off on leave.

32. I accept that the notes prepared by the human resources person represent what she understood from the meeting as being the reasons for the termination of the Applicant’s employment.  When giving evidence, I found the human resources employee to present as a straightforward and relatively uncomplicated person; simply carrying out the duties that form part of her role at the company.  I generally accept her evidence. 

33. The evidence of the owner, Ms Austin, was quite direct and forthright.  When cross-examined about why she would employ the Applicant when the Applicant’s employment in New Zealand had not been a high standard on all aspects, Ms Austin explained that she has seen employees move between different environments and believed that the particular store would play to the Applicant’s strengths, which she took to be customer service.  It appears that the business figures confirmed the owner’s views in this regard, in that the sales improved considerably when the Applicant was employed in that store.

34. The owner’s evidence was that the bullying complaint was a complete surprise, and she would have expected to have heard something earlier if these types of concerns were being raised.  From her perspective, there continued to be difficulties with managing the store according to the company guidelines, and keeping the backroom of the store in good order.  She gave evidence that she saw the backroom of the store in disarray on one occasion herself.  She said in evidence (trans. pp.96-97), when asked about the problems leading to the termination, that they were:

    The ongoing, you know, poor management, not responding to then repeatedly – like, the same request repeatedly about getting the store right, getting the stock right, all those things.  Ultimately, as well, it was the feedback on that day, when Chloe rang me from the office and was quite shaken about what had just happened.  When I asked the office to, you know, then called the police.  All those things.

    It was like, you know, I am ending up with quite a few senior staff here saying, “We’re anxious.  We’re feeling threatened.  We’re looking the door at the office because we’re concerned, you know, about this aggressive behaviour.”  I wasn’t there, but I could – these staff have worked with me for a long time. 

35. The owner denied that the complaint by the Applicant with respect to bullying had any bearing upon her decision. 

36. On the whole, I found the owner an impressive witness, and I generally accept her evidence. 

37. This case became difficult to hear and determine, as the issues relating to whether or not the conduct of the regional and national managers was reasonable or vindictive became a central feature of the trial.  However, this was not a case about unfair dismissal, but brought under the adverse action provisions.  An unfair dismissal case would have to have been pursued elsewhere.

38. The Applicant’s case as summed up in counsel’s submission, in his written outline at para.33 is as follows:

    33. The Applicant submits that Ms Austin’s evidence that the complaint had no part to play in her decision to terminate the Applicant should not be found to discharge the reverse onus of proof, for reasons including:

    a. Ms Austin’s evidence in relation to deciding to terminate for performance is questionable in circumstances where the Applicant had an extended period of successful service in New Zealand and Ms. Austin had decided to continue to employ the Applicant in a Store Manager role a few weeks earlier;

    b. Ms. Gray emphasized that the Respondent was dissatisfied that the Applicant had alleged she was being “harassed” in the termination script she wrote shortly after discussion with Ms. Austin and the direction to terminate from Ms. Austin.

    c. Ms Austin’s evidence in deciding to terminate because of the events of 31 December 2013 lacks credibility in circumstances where she, as the owner of the Respondent, has failed to call Ms. Davey as a witness.

39. In addition, there were two further matters that were relied upon.  The first is that the receptionist was not called to give evidence;  and secondly, that in the pleadings, the Respondent had relied upon absences of the Applicant from work, while at trial this absence was accepted as not being any misconduct on the part of the Applicant (indeed, days off work approved by the then manager). 

40. It is therefore important that I specifically deal with each of these matters. 

41. I do not find Ms Austin’s evidence, as to the reasons why she would provide the Applicant with an opportunity to work as a store manager in Armadale, questionable.  It is clear that the Applicant has very strong interests in fashion (even having self-published a small book of her own fashion concepts).  The Applicant also demonstrated skills in customer service and selling, which bore fruit in her conduct in the Armadale store.  Whilst these are valuable skills, which clearly were valued by the owner, they must be seen in the context of the owner running a company with many stores, and the obvious importance of rigour and boundaries with respect to store appearance, stock control, and other matters that, to the ordinary customer, would seem mundane incidents of the store. 

42. Similarly, with the large number of stores, it is not difficult to see why an owner would not wish to persist with an employee where difficulties had arisen between them and their line manager and the national manager.  The argument that Ms Gray’s comment that the Applicant’s reaction of feeling harassed or bullied, as a result of criticisms or direction from management, as being in the Applicant’s favour, does not appear to me to necessarily flow.  Many employees do not react well to criticism or correction from managers or bosses.  If these feelings were resulting in an inability to communicate with the Applicant, and have the Applicant effect changes in her behaviour to meet the needs of the employer, then this presents a legitimate problem that is different from a decision to terminate based in whole or in part upon a complaint about bullying. 

43. That the Applicant reacted in the way she did to her feelings flowing from the interactions with the middle managers, as outlined by Ms Gray, is consistent with a genuine difficulty of an employee unable to accept feedback and direction.  However, it is clear that however Ms Gray cast the terms of the termination reasons, it was the conduct of Ms Austin that must be considered.  That is, it is the reasons operating on Ms Austin’s mind that are relevant.  What Ms Gray said is evidence that must be considered in determining what is accepted from Ms Austin’s evidence, and is weighty evidence in this regard.  However, it must still be considered along with Ms Austin’s testimony and the reality that Ms Gray may not have precisely captured Ms Austin’s thoughts.  With respect to the middle managers, it seems clear that the Applicant’s substantive case is that the middle managers had taken a set against her from the outset and treated her unreasonably throughout, with the goal of having her leave the employment or to ultimately persuade the owner to terminate her employment.  On the Applicant’s case, this course of conduct had commenced well before any allegation with respect to bullying and continued regardless of the bullying complaint.  If the Applicant is correct in such a case, she nonetheless faces the difficulty that it was not the bullying complaint that was the cause, or a significant cause, of her termination in the context of this case. 

1. The failure to call the receptionist as a witness is a difficult issue in this case.  The witness was clearly available, and no adequate explanation was given for failing to call her to give evidence.  This allows an inference to be drawn that her evidence would not have assisted the Respondent in its case.  Whilst that inference is open, the failure to call the witness does not require the court to necessarily draw such an inference.  If the receptionist’s responses to the owner were true and correct, her evidence would take the matter nowhere.  In this case, although it is clearly open to me to draw an adverse inference from the failure to call the receptionist, I nonetheless accept that the owner accepted the veracity of the receptionist’s statements, and acted upon them. 

2. If the receptionist had concocted the events, or overreacted to them, then the Respondent may be left with accepting responsibility for the conduct of one of its employees.  However, that conduct goes no further than arguably misrepresenting the conduct of the Applicant when she attended upon the store on that day.  That, of itself, would not bring the case within the ambit of termination for a prohibited reason, although it may provide a solid foundation for an unfair dismissal claim.  It appears that realistically it would only be if the receptionist had conspired with the middle managers, to create a false version of events, which was part of a goal that one or more of them held of having the Applicant terminated as a result of having made the bullying complaint (or partly as a result of that), that the evidence of this witness would ultimately assist the Applicant’s case.  In the context of the case, even bearing in mind the fact that this witness was not called and the ready availability of inferences in the circumstances, I am not persuaded that I should draw such an inference here.

3. Finally, the pleading point has been raised to support the argument that one of the reasons given for termination was failing to attend work, which was not persisted with at trial.  In this regard, it is again open to the Court, and ordinarily the Court would, draw the inference that the pleadings are based upon instructions given to the Respondent’s solicitors.  The Respondent’s solicitors did not give evidence.  In the circumstances, I accept that these pleadings were drawn in accordance with the instructions given.  In this sense, they cast some shadow upon the evidence of Ms Austin, who, on her version of events, did not have regard to the work attendance issues.  In some cases, this may be significant.  In this case, having seen Ms Austin give evidence in person, and having had regard to the overall circumstances of the case, it does not appear to me that the attendance at work was ever a reason that played upon Ms Austin’s mind, and that, if anything, the pleadings represent a version of events (probably from an employee of the Respondent), which did not accurately reflect the operative reasons playing upon the owner’s mind at the relevant time. 

4. Whilst this may provide a modicum of evidence to support the Applicant’s general case theory with respect to the conduct of the middle managers, it does not ultimately provide any significant assistance to her case with respect to the adverse action claim. 

Conclusions

1. I have stepped back and considered the circumstances of this case as a whole, lest dealing with many of the items individually led me to overlook the overall effects of the evidence.  When looking at the evidence as a whole, it appears to me that the owner of the business has discharged the onus of showing that the termination of the Applicant (which is the relevant conduct within the meaning of adverse action) was not undertaken for a prohibited reason as defined in the Act.  Whether the Applicant’s employment termination was an unfair dismissal is not a matter for me to make a determination about, as I do not have jurisdiction to deal with an unfair dismissal claim.

2. In the circumstances, I must therefore dismiss the application. 

I certify that the preceding forty-nine (49) paragraphs are a true copy of the reasons for judgment of Judge Riethmuller

Associate: 

Date:  30 January 2015