Eggleton v Kingsgrove Medical Centre Pty Ltd
[1997] IRCA 50
•05 March 1997
DECISION NO:50/97
CATCHWORDS
INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - COMPENSATION - The word “REMUNERATION” in section 170EE(3) of the Workplace Relations Act, 1996, does not include superannuation payments made to a fund as a result of a statutory obligation, and in respect of which the obligation to make payments does not flow from the contract of employment - COMPENSATION for such superannuation payments is therefore not available - COMPENSATION ordered for the shock, distress and humiliation casued by a TERMINATION OF EMPLOYMENT which followed a history of physical and sexual harassment.
Industrial Relations Act 1988, ss: 170DC, 170EE(2)
Superannuation Guarantee (Administration) Act 1992
Aitken -v- The Construction, Mining, Energy, Timberyards, Sawmills and Woodworkers Union of Australia - Western Australian Branch 1995 63 IR 1
Brackenridge -v- Toyota Motors Corporation (Australia) (1996) 67 IR 162
Burazin -v- The Blacktown City Guardian, Industrial Relations Court of Australia, Madgwick J, 15 December 1995, unreported.
Burazin -v- The Blacktown City Guardian, Industrial Relations Court of Australia, Full Court, 13 December 1996, unreported
Melissa Eggleton -v- Kingsgrove Medical Centre Pty Ltd, Industrial Relations Court of Australia, Number NI 1700 of 1996, Patch JR, 1 November 1996, unreported
May -v- Lilyvale Hotels Proprietary Limited (1995) 68 IR 112
MELISSA EGGLETON v KINGSGROVE MEDICAL CENTRE PTY LTD
NI 1700 of 1996
Before: PATCH JR
Place: SYDNEY
Date/s of hearing: 30 OCTOBER 1996 & 1 NOVEMBER 1996
Written submissions complete: 27 NOVEMBER 1996
Date of judgment: 5 MARCH 1997
IN THE INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NI 1700 of 1996
BETWEEN:
MELISSA EGGLETON
Applicant
AND
KINGSGROVE MEDICAL CENTRE PTY LTD
Respondent
MINUTES OF ORDERS
5 MARCH 1997 PATCH JR
THE COURT ORDERS THAT:
The respondent is to pay the applicant within 21 days of today as compensation for the unlawful termination of her employment the sum of $5912.14.
Any amount paid by the respondent to the Commissioner for Taxation within 21days of today in respect of the sum in order 1 is to be regarded as having been paid in pro-tanto satisfaction of the judgment debt.
Note: Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules
IN THE INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
NI 1700 of 1996
BETWEEN:
MELISSA EGGLETON
Applicant
AND
KINGSGROVE MEDICAL CENTRE PTY LTD
Respondent
REASONS FOR DECISION
5 MARCH 1997 PATCH JR
On 1 November 1996, I delivered judgment on this matter, but reserved on the question of the quantum of compensation to be paid to the applicant. (See Melissa Eggleton -v- Kingsgrove Medical Centre Pty Ltd, Industrial Relations Court of Australia, Number NI 1700 of 1996, Patch JR, 1 November 1996, unreported).
This judgment should be considered together with that earlier judgment. I found that the termination of the applicant’s employment was unlawful, for a number of reasons, as follows:
There was no valid reason for the termination of the applicant’s employment.
The applicant’s employment had been terminated for reasons including her temporary absence from work.
The applicant’s employment had been terminated for reasons including the applicant’s sex.
The applicant’s employment was terminated in breach of s 170DC of the (then) Industrial Relations Act, 1988.
On 25 November 1996, the Workplace Relations and other Legislation Amendment Act 1996 received royal assent. Schedule 19 to that Act, which took effect immediately, changed the name of the Industrial Relations Act 1988 to the Workplace Relations Act 1996. In this judgment, therefore, any reference to “the Act” is a reference to the Workplace Relations Act 1996.
COMPENSATION FOR HURT FEELINGS, HUMILIATION AND DISTRESS
In my earlier judgment on this matter I expressed the view that compensation under s 170EE(2) of the Act was not available for hurt feelings, humiliation distress and the like arising out of the termination of employment, where those matters do not amount to a psychiatric illness or the exacerbation of an existing psychiatric illness.
At the time of that earlier judgment, various Judges and Judicial Registrars of the Court had delivered conflicting judgments on the question of the availability of compensation under section 170EE(2) of the Act for hurt feelings, humiliation, and distress. See the decision of his Honour Justice Lee in Aitken -v- The Construction, Mining, Energy, Timberyards, Sawmills and Woodworkers Union of Australia - Western Australian Branch, 1995 63 IR 1, in which his Honour expressed a view that compensation under section 170EE(2) of the Act could be available for such matters. On the other hand, see the decision of his Honour, Justice Madgwick in Burazin -v- The Blacktown City Guardian, Industrial Relations Court of Australia, Madgwick J, 15 December 1995, unreported, and the decision of her Honour, Justice Beazley in Brackenridge -v- Toyota Motors Corporation (Australia) Limited (1996) 67 IR 162.
In the meantime, the controversy has been resolved by the Full Court of this Court. See Burazin -v- The Blacktown City Guardian Pty Limited, Industrial Relations Court of Australia, Full Court, 13 December 1996, unreported. In that case the Court said, at pages 27 and 28:
“The Court’s power under section 170EE(2) of the Act is to order payment of (“such amount, of compensation”) as the Court thinks “appropriate”. In making its assessment, the Court is obliged to have regard to lost remuneration, but is not limited to that item. If the evidence establishes other damage flowing from the unlawful termination, the Court is entitled to take into account in making its assessment, up to the limits prescribed by paras (a)and (b) of section 170EE(3). It follows that the shock, humiliation and distress suffered by Ms Burazin in respect of the unlawful termination of her employment are matters that Madgwick J (the trial Judge) was entitled to take into account in considering the proper amount of compensation to be ordered under section 170EE(2).”.
In considering the quantum of compensation to be awarded for the shock, humiliation and distress suffered by the applicant in that case, the Court went on to say:
“There is an element of distress in every termination. To ensure compensation is confined within reasonable limits, restraint is required. But in this case there were unusual exacerbating circumstances that make it appropriate to include in the compensation an allowance for the distress unnecessarily caused to Ms Burazin. These circumstances include Ms Burazin having to suffer the humiliating experience of being escorted from Blacktown’s premises by the police.”
THE QUANTUM OF COMPENSATION IN THIS CASE
Compensation for shock, humiliation and distress
The respondent submits that the shock, humiliation and distress suffered by the applicant in this case was “no more than that normally suffered” in respect of every termination of employment.
I do not agree. It has to be borne in mind in this case that there were a series of events leading up to the termination of the applicant’s employment.
Those events included occasions upon which the principal of the respondent, Dr Premarajah, approached the applicant and, without her permission, hugged her from behind, and put his chin and face on her shoulder and on the side of her face up against her ear, and rubbed his face on the side of her face whilst hugging her from behind.
From time to time, beginning from August or September 1994, Dr Premarajah approached the applicant from behind and massaged her neck and shoulders without her permission. This continued until early January 1996, shortly before the termination of her employment by Dr Premarajah. The applicant would stand up and move away, thus making it obvious to Dr Premarajah that he was doing that without her permission.
The applicant also said that, at Dr Premarajah’s birthday party in June 1994 (which took place at a Chinese restaurant), Dr Premarajah had, without her permission, grabbed her legs under the table, patted her knee, tapped her shoulder in a rubbing motion, and “grabbed, softly, the back of (her) neck.”
The Court has accepted the entirety of the applicant’s evidence in respect of these particular examples of physical and sexual harassment, and has accepted that they formed the background to the termination of her employment.
The termination of the applicant’s employment occurred on 21 January 1996.
On 8 January 1996, there was an incident between Dr Premarajah and the applicant during which, as the Court has already found, Dr Premarajah made an improper advance to the applicant suggesting, in effect, that she give up her boyfriend and begin a relationship with him, and threatening her with dismissal if she did not do what he said.
The Court found that this direct threat on 8 January 1996 was part of the history of sexual harassment of the applicant by Dr Premarajah. The applicant’s refusal of that improper advance on 8 January 1996 was a factor in the decision of Dr Premarajah to terminate the applicant’s employment.
The Court therefore found that the reasons for termination of the applicant’s employment included a reason to do with her sex.
The applicant was only 20 years old in January 1996. The ultimatum on 8 January 1996 was an attempt at a gross intrusion in her private life, and would have been, at the time, humiliating and distressing for her.
The termination of the applicant’s employment so soon after that incident on 8 January 1996 cannot be looked at in isolation.
In my opinion, there are “unusual exacerbating circumstances” (see Burazin) in this case, which are the history of physical and sexual harassement. The appropriate amount to order by way of compensation for the shock, humiliation and distress suffered by the applicant in respect of the unlawful termination of her employment is $3000. I bear in mind, in deciding on that sum that the Full Court referred to the need for restraint. This will be in addition to any compensation for economic loss.
Compensation for economic loss suffered by the applicant as the result of the unlawful termination of her employment.
The applicant’s employment was terminated without notice from 21 January 1996. Prior to the termination of her employment, her hours of work varied and, as a consequence, so did her weekly remuneration. However, she was paid a basic rate of $10.97 per hour, and her gross income per week averaged $453 in the six months prior to the termination of her employment.
On 7 March 1996, the applicant commenced new employment. She was therefore out of work for a total period of 45 days. Dividing 453 by 7, to reach the daily rate, and multiplying the resulting figure by 45, the applicant’s economic loss during that 45 day period is shown to be $2,912.14. The applicant is entitled to an order for compensation for that amount.
Compensation for unpaid superannuation payments
The applicant also submits that she is entitled to be compensated for lost superannuation over that 45 day period, based on what the applicant says is the statutory rate of 5% per annum. This would be a sum of $145.61.
The applicant submits that “superannuation is a matter to be taken into account in assessing compensation” and relies on the remarks of Wilcox CJ in May -v- Lilyvale Hotels Propriety Limited (1995) 68 IR 112. “(May -v- Lilyvale)”
In May -v- Lilyvale, at page 117, Wilcox CJ referred to what he had described as “a company’s superannuation contribution equal to 5% of salary”. His Honour then proceeded to take those superannuation contributions into account in assessing what the “remuneration” of the applicant was for the purposes of the calculation of compensation under section 170EE(3) of the Act.
His Honour said, at pages 116 to 117:
“Plainly the word remuneration was chosen for section 170EE(3) in order to denote a concept wider than wages. Non monetary benefits are not wages: see Ardino -v- Count Financial Group Pty Limited (1994) 1 IRCR 221 at 228 -229; 57 IR 89 at 94-95. But they fall within the concept of remuneration.”
In my opinion, what his Honour was referring to is superannuation payments other than those superannuation payments made compulsory by virtue of the Superannuation Guarantee (Administration) Act 1992.
In my opinion, the word “remuneration” does not include superannuation payments made to a fund as a result of a statutory obligation, and in respect of which the obligation to make payments does not flow from the contract of employment between the employer and employee.
I accept, of course, with respect, what Wilcox CJ said in May -v- Lilyvale concerning the meaning of the word “remuneration.” I accept that it is not confined to cash payments, and can, in any particular case, include a wide range of non-pecuniary benefits. Common examples of such benefits include the provision of accommodation, board, and a company car, and the payment of superannuation in addition to that required by the contract of employment
But the common thread running through both remuneration in cash and in kind is that the remuneration, in some way, is payment by the employer as a result of the employer’s obligations under the contract of employment. That is not so in respect of a statutory obligation, which exists quite independently of the contract of employment.
Compensation for now being required to do more weekend work
The applicant also submits that she is entitled to compensation for the fact that she is now required to work both Saturday and Sunday. ie. She now works considerably more on weekends than she had in her previous employment with the respondents.
However, her average earnings since commencing her present employment are approximately the same as she would have earned had she continued with her employment with the respondent. She is therefore, as a practical matter, not suffering an ongoing enconomic loss. In my view, the fact that she now works both days on the weekend is not the sort of factor for which an employee is entitled to compensation under the Act.
Taking into account the amount that the Court will order for shock, humiliation and distress, and the economic loss suffered by the applicant until the commencement of her new employment, the amount of compensation to be ordered by the Court will be in the gross sum of $5912.14
ORDERS
The orders that the Court makes are as follows:
The respondent is to pay the applicant within 21 days of today as compensation for the unlawful termination of her employment the sum of $5912.14.
Any amount paid by the respondent to the Commissioner for Taxation within 21 days of today in respect of the sum in order 1 is to be regarded as having been paid in pro-tanto satisfaction of the judgment debt.
I certify that this and the preceding 10 pages
are a true copy of the reasons for decision of
Judicial Registrar Patch.
Associate: Debra Scott
Dated: 5 March 1997
APPEARANCES
Counsel for the Applicant: Ms C Howell Solicitors for the Applicant: McNally & Co Counsel for the Respondent: Mr C Sandrasegara Solicitors for the Respondent: Morgan Ardino & Co Dates of hearing: 30 October 1996 & 1 November 1996 Written submissions complete: 27 November 1996
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