Fowler v Australian Manufacturing Workers Union

[1996] IRCA 392

DECISION NO:  392/96

INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY

VI 1256 of 1996

B E T W E E N :

VICKI ANNE FOWLER and
AUSTRALIAN MANUFACTURING WORKERS UNION
Applicants

AND

PRINTING ACTIVITIES PTY LTD
Respondent

Before:          Judicial Registrar Murphy
Place:            Melbourne
Date:              23 August 1996

REASONS FOR JUDGMENT

This is an application under s170EA of the Industrial Relations Act (“the Act”) wherein the first applicant sought a remedy alleging that her employment had been terminated for reasons that included reasons proscribed under s170DF(1) of the Act. She alleged that her employment had been terminated for reasons that included temporary absence from work due to illness or injury (s170DF(1)(a)), and for reasons that included pregnancy (s170DF(1)(g)). It was also alleged that the respondent had breached s170DE(1) of the Act on the basis that it had no valid reason to terminate her employment. The respondent’s defence to this claim was that as a result of an agreement between the parties, the applicant’s full time position with the respondent ended on 21 December 1995 and thenceforth she reverted to casual employment.

The applicant also claimed an amount, not quantified, pursuant to s179 of the Act on the basis that her wage classification should have been as a packer/despatcher rather than as a bindery hand. The respondent denied any under payment of wages.

Background
The applicant in April 1995 was aged 23 and at that stage had over six years experience in the book binding/printing industry.  At that point she joined the respondent in its bindery department as a bindery assistant.  The respondent is a small printing business employing about a dozen people.  The applicant’s duties over the period of her employment included binding, stapling, folding, collating, and packing and despatching orders.  In addition she would, on occasion, sign for incoming goods to the factory.  The applicant gave unchallenged evidence that Mr Davis, the Managing Director of the respondent, several times complimented her on the running of the bindery.

In July or August 1995 the applicant found that she had fallen pregnant with an expected confinement date of 24 April 1996.  In late August she told Mr Davis.  He gave evidence that he was told in early July.  During August the applicant had to attend for various tests associated with her pregnancy.  Her absences, the precise details of which did not emerge in the evidence, caused some disruption to the respondent.  The applicant gave evidence that on one occasion in late August she had a medical appointment during the day.  She was unable to recall whether she told Mr Davis or Mr Azera, the production manager.  When she returned to work she was handed a warning letter (Exhibit A1) about her punctuality.  The letter required her to give 48 hours notice of medical appointments.  Prior to that she had no knowledge of this requirement.  Further, prior to that there had been no concerns raised about any aspect of her performance, including her punctuality.  Clock card records in evidence indicate that in the months prior to late August the applicant had been late for work on a number of occasions.  Neither Mr Davis nor the applicant could recall any conversation associated with the delivery of the warning.

The applicant continued working.  She arranged her medical appointments for after work.  The clock cards revealed that in the next month there were a few occasions that she was late.  Over that period, however, she was working, on virtually a daily basis, considerable periods of overtime.

In late October her advancing pregnancy caused a flare-up of an old back injury and she was unable to work on 30 and 31 October.  The applicant telephoned Mr Davis on each of those days to advise him of the position.  She attended work on 1 November and handed Mr Davis a medical certificate for the previous two days.  Shortly after that the applicant received a further warning (Exhibit A2) from Mr Davis.  She was still in pain at that stage and had to leave work that day.  She did not work the following two days and returned on Monday 6 November.  On 1 or 2 November the applicant arranged for her doctor to contact Mr Davis to discuss her back condition.  Mr Davis could not recall any such conversation.  Apart from what her doctor had told her, the applicant had no first-hand knowledge that the telephone call was actually made.

The disputed conversation.
The applicant gave evidence that in around November Mr Davis had a discussion with her about her position.  In the course of the discussion Mr Davis referred to the fact that his spouse had had three children and that he understood what the applicant was going through with her pregnancy.  The applicant accepted in cross-examination that may have been friendly advice but said that pregnancy health issues were raised in the conversation with Mr Davis.

Mr Davis told her that he wanted her to leave work at the end of the year.  He said that there was a possibility of casual work after that.  The applicant’s reply had been that she wanted to work until the end of March if she was physically able to do so.  She said she hoped to work right until that time.  Mr Davis insisted that she finish at the Christmas close down of the factory due 21 December 1995.  The applicant was not happy about this.

Mr Davis gave evidence that he “was concerned about her pregnancy”.  He said that the two had a discussion in late October or early November and came to a mutual agreement that the applicant would finish with the factory close-down on 21 December. Mr Davis said that the discussion took place in his office rather than, as alleged by the applicant, in the tea room.  He felt that he had to talk to the applicant regarding her pregnancy to make arrangements so that the respondent had sufficient notice.  He also said “I was concerned about her”.  He said it “seemed to me to make more sense that she would finish”.  He maintained however that it was a mutual agreement and it made more sense for her to finish up completely and to no longer be employed full time.   Mr Davis denied that he forced the applicant to leave on 21 December.  He said that the applicant did not make known to him that she wanted to work until March. The respondent first advertised for a replacement for the applicant on 3 November.

The applicant gave evidence that at one stage Mr Davis made a comment that he did not want her “waddling around the factory like a duck”.  Mr Davis denied making that comment but said that the word “waddle” was one way to describe the gait of a pregnant woman.

The applicant ceased work on 21 December 1995.  Around that time she was asked to complete a form that was an Application for Maternity Leave.  This leave was to commence from the time she ceased work.  The applicant declined to complete the form.  The applicant gave evidence that Mr Davis told her to contact him on 8 January 1996 to see about casual work.  She did so but was advised that there was no work available at that stage.  She attended the factory on 9 January and received the same information.  She telephoned on 12 January.  At that stage she had contacted the applicant union, and the union organizer overheard the conversation.  There were a number of other telephone calls by the applicant to Mr Davis and to Mr Arera during January and February but no casual work was forthcoming. 

Mr Arera, the factory manager, gave evidence that he had heard that the applicant was unhappy about leaving on 21 December.  She had not raised the matter directly with him.  He had been involved in interviewing a replacement for the applicant.  The replacement had commenced 3 days before the applicant ceased work on 21 December and the applicant had trained him.  The replacement had been paid $400.00 per week, which was at a higher rate than the applicant.  He was, however, to do a wider range of duties. 

Employer initiated termination or agreement?
The central issue that must be resolved here is whether what happened was a termination at the initiative of the respondent or an agreement between the parties that the applicant cease full time work on 21 December 1995.  The applicant presented as an honest witness.  She was unable to recall the detail of some conversations.  She was firm in her evidence, however, that she resisted Mr Davis’s proposition that she cease work on 21 December.  She wanted to continue for as long as she was physically able to.  She denied an agreement to leave on 21 December. 

Mr Davis, in contrast, appeared to reconstruct a number of elements of his conversations with the applicant.  Many of his answers were prefaced with “I would have”.  He was uncertain as to the dates of many events.  At the same time parts of his evidence were not put to the applicant in cross-examination.  Further, other parts of the applicant’s evidence were corroborated by his later evidence or other evidence.  An example of this includes the reference to “waddle” and how he said the applicant could spend the time when she was not working in January.

The inherent probability of events supports the applicant’s version.  She was a young woman about to become a single parent.  She was working considerable overtime before November.  While it is possible, it is not probable, that she would have chosen to voluntarily cease work some four months before her confinement.  It is more likely that, as she asserted, she wanted to continue working for financial reasons.  The fact that she refused to complete a maternity leave application form, and that Mr Arera was aware that she was unhappy about leaving, confirms her version of events.  Having compared the demeanour of the witnesses and weighed the likelihood of the conflicting evidence I am satisfied that the applicant’s evidence is to be preferred.

It follows that I find that it was the respondent that initiated the termination of the applicant’s employment.  This occurred in a conversation in late October or early November between the applicant and Mr Davis.  I am satisfied that the alteration of the status of the applicant from a full-time employee before the Christmas close down to that of an “as requested” casual employee after that date was a “termination” of the applicant’s employment.  There was no evidence led from the respondent that the applicant had in fact performed any work for it since 21 December, nor that she had been offered any work.  The applicant did not voluntarily leave the employment of the respondent.  The real action that terminated the employment here was that of Mr Davis, who, I am satisfied, insisted that the applicant cease full time employment on 21 December.  The respondent has terminated the employment here.

What was the reason for the termination of employment?
Because the “reason” for a termination of employment is known to an employer, the structure of the Act is that the onus is on the employer to prove the reason. When the reason is alleged to be one prohibited by s170DF(1), s170EDA(2) requires the respondent to prove a negative, ie. that the alleged reason was not one of its reasons : Johns v Gunns Ltd (1995) 60 IR 258 at 268; Stojanovic v The Commonwealth Club Limited (Industrial Relations Court of Australia, Moore J, 8 December 1995, unreported).  Here the solicitor for the applicant argued that the reason for the applicant’s termination included “temporary absence from work because of illness or injury” (s170DF(1)(a)) and “pregnancy” (s170DF(1)(f)).

It was common ground that the applicant’s pregnancy exacerbated a back condition resulting in her absence from work for about 4 days at the end of October.  At that time the respondent gave the applicant a warning (Exhibit A2) that referred to her “frequent absences” and to the importance of “punctuality and reliability”.  The same warning also stated that “no sick pay will be paid unless a doctor’s certificate is presented at the office at the time of resumption of work”.  The conversation in which Mr Davis alleged that the applicant agreed to leave work on 21 December also occurred about this time.  Further, the advertisement for the applicant’s replacement first appeared on 3 November.  Mr Davis’ evidence was that in the conversation with the applicant around the end of October he was “concerned” about her pregnancy.

Despite the denial of Mr Davis that the applicant’s pregnancy was a reason for the termination of her employment, I am not satisfied, when all the matters that I have referred to are considered, that the respondent has discharged its onus of proof that the applicant’s temporary absence from work because of her back injury or her pregnancy, have been excluded as reasons for the termination of the applicant’s employment.  The warning letter, the conversation, and the advertising for a replacement, all took place at a time proximate to the applicant being temporarily off work for a physical condition that arose out of her pregnancy; cf Brown v Power and Anor. (Industrial Relations Court of Australia, Moore J, 19 April 1996, unreported). Given my preference for the applicant’s version of the disputed conversation the respondent has not excluded these reasons. I therefore find that the applicant has made out breaches of s170DF(1)(a) and s170DF(1)(f) of the Act.

Valid reason
If I am wrong in this conclusion I am satisfied, in any event, that the respondent did not have a valid reason to terminate the applicant’s employment (s170DE(1)). There was no evidence that the applicant was unable to do her work. The respondent was entitled to notice from the applicant that she would go on maternity leave so that it could make appropriate arrangements. The convenience of the respondent that the applicant leave on 21 December was not, however, a sufficient reason, in late October or early November for Mr Davis to terminate her employment at that time. The applicant had been performing well in her duties prior to that, and continued up until 21 December. It is also significant that the applicant was replaced with an employee who had much less experience than her. The respondent, given my finding that it was Mr Davis that imposed the 21 December completion date on the applicant, has not satisfied me that it had a valid reason to do so. The respondent has breached s170DE(1) of the Act.

Remedy

Reinstatement was not sought by the applicant. The solicitor for the applicant sought the maximum of six months compensation under s170EE(2) of the Act. I am satisfied that an order for compensation is appropriate here. The applicant has satisfied me that the respondent has breached the Act and she has suffered significant financial losses since December 1995. Under s170EE(3)(a) the Court, in determining any amount of compensation is not to exceed :

“the amount of the remuneration that would have been received by the employee in respect of the period of 6 months that immediately followed the day on which the termination took effect if the employer had not terminated the employment, and the employee had continued to receive remuneration in respect of the employment at the rate at which he or she received remuneration immediately before the termination took effect.”

Under the Graphic Arts Award the applicant was entitled to maternity leave if at the date she proceeded upon such leave she had been employed for not less than twelve months. The applicant said in evidence in chief that she told Mr Davis she would work until the end of March 1996. She said in cross-examination that she believed that she would have been able to work until 19 April 1996, which would have made her eligible for unpaid maternity leave under the Award. Regardless of the provisions of the Award, under Schedule 14 of the Act, which is incorporated into the Act by reason of s170KB, the applicant is entitled to maternity leave provided that at the expected confinement date she had 12 months service. The applicant meets that criteria. The applicant’s evidence was that she would have taken one or two months leave after the birth and then resumed work. The applicant has lost the monies she would have earned both before and after her maternity leave.

In considering the amount of remuneration that the applicant would have received in the six months following 21 December 1995 there are a number of uncertainties as just discussed.  Not least of these are whether the applicant would have continued to work right up until the confinement, and then when, if she had a position to return to, she would have resumed her employment after the birth.  Doing the best I can with the competing contingencies and probabilities, I am satisfied that the applicant would have been likely to have received remuneration for four of the six months following her termination of employment, if the termination of employment had not occurred.  I propose to make an order for compensation for that amount.  I will return to the actual amount of remuneration on which the compensation order is to be based below.

Claim for underpayment of wages.
By way of a statement of claim filed, 25 July 1996, pursuant to s179 of the Act the applicant sought amounts for underpayment of overtime, and underpayment of wages. The respondent admitted that there had been a miscalculation in overtime payments and the parties agreed to discuss and agree upon the amounts due.

The dispute in relation to wages revolves around the appropriate classification of the applicant under the Award.  The applicant’s solicitor alleged that by reason of her duties, and in particular her duties involving packing and despatching, she was entitled to be paid at the rate applicable for a Level 3 packer/despatcher, rather than Level 2 as the employer treated her.  Her solicitor relied on Clause 40, a “mixed functions” clause in the Award that provides for payment at the higher rate where the employee performs work at a higher classification each day.  Here, there is a classification for packer/despatcher.  In evidence was a folder that recorded the fact that on a daily basis, as part of her duties, the applicant packed and despatched printing work.  It was argued by the representative for the respondent that the mixed functions clause did not apply.  He referred to an Interim Classification that had been inserted into the Award but that remained the subject of negotiations before the AIRC between the employer and employee representative organisations.

On the evidence I am satisfied that the applicant has made out her claim for underpayment of wages based on the mixed functions clause.  It was not disputed by the representative for the respondent that she performed those duties on a daily basis.  Clause 40, I am satisfied, entitles her to be paid at the appropriate rate as a packer and/or despatcher, which is at the rate of $380.60 per week.  There was no suggestion that the Interim Classification clauses displaced or suspended the operation of Clause 40.  I note that the respondent, after the applicant was dismissed, employed a replacement employee who had substantially less experience than her at a higher wage rate than that for a packer/despatcher, with only slightly modified duties.  I am not satisfied that the board of reference provision of the Award (Clause 63(t)(2)) applies here.  The applicant is entitled to be paid at the higher rate because on the evidence her duties were within the duties of a packer/despatcher and Clause 40 obliges the respondent to pay her according.

The parties are in the best position to determine the exact amount due to the applicant as a result of these reasons.

Compensation
In relation to compensation, I will order that the respondent pay to the applicant four months remuneration based on her average weekly earnings during the period of her employment from 19 April 1995 to 21 December 1995, calculated at the Level 3 rate for a packer and/or despatcher.  Annual leave accruals and superannuation levy amounts are to be excluded.

Various amounts have been calculated by the solicitor for the applicant, but the representative for the respondent has not had an opportunity to consider the calculations.

Interest.
As the claim for underpayment of wages and overtime was not made until 25 July 1996, interest will not be payable prior to that date.  I will order that the respondent pay interest at the rate of 10% on amounts due for underpayment of wages and overtime, but not compensation, from that date to date.

NOTE:  Settlement and entry of orders is dealt with by Order 36 of the Industrial Relations Court Rules.

I certify that this and the preceding eleven (11) pages are a true copy of the reasons for judgment of Judicial Registrar Murphy.

Associate:                 
Dated:  23 August 1996.

Representative for the Applicants:  Australian Manufacturing
  Workers Union
Appearing for the Applicant:  Ms Penny Flint

Representative for the Respondent:         Printing Industries Association
  of Australia
Appearing for the Respondent:                 Mr J Hargrave

Date of hearing:  19 August 1996
Date of judgment:  23 August 1996

C A T C H W O R D S

INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - TEMPORARY ABSENCE due to INJURY exacerbated by pregnancy -VALID REASON - COMPENSATION - claim for underpayment of WAGES.

Industrial Relations Act 1988 ss.170DE, 170DF, 170EDA, 170EE, 170KB, 179

CASES:Johns v Gunns Ltd (1995) 60 IR 258.

Stojanovic v The Commonwealth Club Limited (Industrial Relations Court of Australia, Moore J, 8 December 1995, unreported).

Brown v Power and Anor. (Industrial Relations Court of Australia, Moore J, 19 April 1996, unreported).

VICKI ANNE FOWLER and
AUSTRALIAN MANUFACTURING WORKERS UNION
-v- PRINTING ACTIVITIES PTY LTD

No. VI 1256 of 1996

Before:  Judicial Registrar Murphy
Place:  Melbourne
Date:  23 August 1996