Heraud v Roy Morgan Research Ltd (No 2)
[2016] FCCA 1797
•15 July 2016
FEDERAL CIRCUIT COURT OF AUSTRALIA
| HERAUD v ROY MORGAN RESEARCH LTD (No 2) | [2016] FCCA 1797 |
| Catchwords: INDUSTRIAL LAW – Determination of compensation for loss suffered by the Applicant because of contraventions by the Respondent of s.340 of the Fair Work Act 2009 – consideration of the principles governing the calculation of economic loss from loss of opportunity for employment – determination of appropriate penalty is to apply pursuant to s.546 of the Fair Work Act 2009. |
| Legislation: Australian Human Rights Commission Act 1986, s.46PO Crimes Act 1914, s.4AA Fair Work Act 2009, ss.45, 65, 340, 536, 539, 545, 546, 557, pt.3.1 |
| Cases cited: Aitken v Construction, Mining, Energy, Timberyards, Sawmills and Woodworkers Union of Australia (WA Branch) (1995) 63 IR 1 Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8; (2008) 165 FCR 560 |
| Applicant: | JAYE HERAUD |
| Respondent: | ROY MORGAN RESEARCH LTD |
| File Number: | MLG 1775 of 2014 |
| Judgment of: | Judge Jones |
| Hearing date: | 21 April 2016 |
| Date of Last Submission: | 21 April 2016 |
| Delivered at: | Melbourne |
| Delivered on: | 15 July 2016 |
REPRESENTATION
| Counsel for the Applicant: | Mr Irving and Ms Knowles |
| Solicitors for the Applicant: | Kelly Workplace Lawyers |
| Counsel for the Respondent: | Mr Catlin |
| Solicitors for the Respondent: | James Yeatman, solicitor |
ORDERS
The parties prepare a minute of consent orders which reflect this decision in relation to compensation.
Pursuant to s.546 of the Fair Work Act 2009, the Respondent pay the Applicant an amount of $52,000 within 28 days of these Orders.
For the purpose of Order (1) the matter will be listed for Directions on 19 September 2016 at 2.15pm.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLG 1775 of 2014
| JAYE HERAUD |
Applicant
And
| ROY MORGAN RESEARCH LTD |
Respondent
REASONS FOR JUDGMENT
Introduction
This is an application for compensation pursuant to s.545(2)(b) of the Fair Work Act 2009 (Cth) (“the Act”) and for pecuniary penalties pursuant to s.546 of the Act in relation to contraventions declared by this Court of the general protection provisions (Pt 3-1 of the Act) in Heraud v Roy Morgan Research Pty Ltd [2016] FFCA 185 (“the Liability Judgment”).
Compensation
Section s.545(2)(b) of the Act provides that the court may make “an order awarding compensation for loss that a person has suffered because of the contravention.” There must, therefore, be “an appropriate causal connection between the contravention and the loss claimed”: see Australian Licenced Aircraft Engineers Association v International Aviation Service Assistance Pty Ltd (2011) 193 FCR 526 at [423].
In Aitken v Construction, Mining, Energy, Timberyards, Sawmills and Woodworkers Union of Australia (WA Branch) (1995) 63 IR 1, Lee J considered a predecessor of s.545(2)(b) of the Act (s.170EE of the Industrial Relations Act 1988 (Cth)). His Honour said (at [9]) that:
“In assessing the compensation that is appropriate the Court will have regard to what is reasonable in the circumstances and will look at what would have been likely to occur had the Act not been contravened… The Court will consider the detriment occasioned to the employee by the employer’s contravention of the Act, and the extent to which to is reasonable to compensate the employee for such consequences.”
Although the award of compensation under s.545(2)(b) of the Act is a statutory entitlement, the usual approach to the calculation of economic compensation under s.545(2)(b) of the Act is, so far as a monetary amount can achieve, to place the employee in the position he or she would have been in, if the employer had not contravened the Act. This reflects the settled principles identified in Haines v Bendall (1991) 172 CLR 60 regarding damages for actions in tort or contract. In simple terms, in circumstances where an employee has been terminated, this involves, having regard to the totality of the evidence, an assessment of how long the employee would have remained in that employment and the determination of the value of the likely income stream, followed by the application of the discount for contingencies and vicissitudes. The discounted income stream is then reduced by the employee’s mitigated loss (his or her actual earnings since the dismissal). The Court may consider whether the employee has taken appropriate steps to mitigate his or her loss. However, it is for the employer to establish the facts going to the employee’s alleged failure to mitigate his or her loss: Harding v Harding (1928) 29 SR (NSW) 96 at 106; Tasman Capital v Sinclair Pty Ltd 75 NSWLR 1 at [55]-[72] and Bagnall v National Tobacco Corporation of Australia Ltd (1934) 34 SR (NSW) 421 at 430.
The assessment of economic compensation for the loss suffered by an employee, because of a contravention or contraventions of the Act, is not to be limited to circumstances where an employee has lost his or her particular job. It may extend to circumstances where the employee has suffered a loss of opportunity for employment because of the particular contravention: Maritime Union of Australia v Fair Work Ombudsman [2015] FCAFC 120 (“the MUA decision”).
Because there must be a causal connection between the contravention and the loss suffered, it is appropriate to set out the contraventions found by the court in the Liability Judgment. These are contained in the declarations made as follows:
“(1) In deciding not to return the Applicant to her pre-parental leave position after her personal carer’s leave ended, the Respondent contravened s.340 of the Fair Work Act 2009 (Cth) (the Act) by injuring the Applicant in her employment, for the reason that, or for reasons which included as a substantial and operative reason that, the Applicant had exercised her workplace right to take maternity leave.
(2) In deciding not to make any positions in the Research Centre available to the Applicant, the Respondent contravened s.340 of the Act, by altering her position to her prejudice, for the reason that, or for reasons which included as a substantial and operative reason that, the Applicant had exercised her workplace right to request flexible working arrangements.
(3) In deciding to terminate the Applicant’s employment, the Respondent contravened s.340 of the Act when it, dismissed the Applicant, for the reason that, or for reasons which included as a substantial and operative reason that, the Applicant had exercised her workplace right to request flexible working arrangements.”
These contraventions will be referred, in this decision, to as the “first contravention”, “second contravention” and “third contravention” respectively.
The Applicant’s claim for compensation is set out in the table below which was produced at the hearing by senior counsel for the Applicant:
Loss arising from the contraventions
Earning - based on FWA* request Pre maternity leave earnings = $125,000 p/a = $2,403.85 p/w
FWA based on 20 hours p/w for 3 months**
FWA period earning would have totaled (20/38 x $2,403.85) = $1,265.18 x 13 weeks = $16,447.34
Applicant’s role after 3 months FWA The Applicant works fulltime to 2 July 2016 Calculations of earnings after FWA period Fulltime from 2 October 2014 to 10 July 2016 = approximately 91 weeks
$2,403.85 x 91 = $218,750.35
Subtotal $235, 197.69 Loss of chance*** 85% x $235,197.69 Subtotal $199,918.03 Less mitigated loss $19,562 Total of economic loss $180,356.03 Penalty interest $19,821.86 Non-economic loss $30,000 Total of loss $230,177.89 Offset redundancy payment $14,418 Total $215,759.89
* FWA - flexible work arrangements: s.65 of the Act.
** Applicant claims she would have worked for three months on a part-time basis at 20 hours each week.
*** Loss of chance estimated at 85%, representing an estimated 90% chance of obtaining a Project Manager’s position in the Respondent’s Research Centre and 5% for contingencies and vicissitudes.
The Respondent submits that the economic loss suffered by the Applicant, as a consequence of the three contraventions, is to be calculated by assessing an income stream for the Applicant from the date of her dismissal, based on her pre-paternity leave salary for a period of three months, adjusted to take into account her desire to initially work part-time employment, offset by her failure to mitigate the loss, in addition to her actual earnings after dismissal. In its written submissions the Respondent expresses this amount as:
a)loss of FWA entitlement $16,447.34;
b)a further nine weeks to 2 December 2014 $21,634.65;
total damages (lost earnings loss) $38,081.99
less any sum by reason of resumed employment.
The Respondent submits that the Applicant’s non-economic loss is $15,000.
The Respondent’s counsel accepted that penalty interest should apply to the economic loss.
Economic loss
First and Third contraventions
I shall first consider the first and third contraventions, as they are easily dealt with. Those contraventions resulted from the failure of the Respondent to return the Applicant to her pre-parental leave position.
The Applicant’s employment was terminated on 27 June 2014 whilst another employee, Mr Euan Wilson continued to act in the Applicant’s pre-parental leave position, until 31 August 2014. The evidence is that Mr Wilson was then transferred to work in an Operations role on various projects, which were part of the Applicant’s remit in her pre-paternal leave position, until December 2014. Mr Wilson was then appointed to become manager of the Respondent’s Call Centre Operations. The position was not advertised either internally or externally. Mr Wilson’s undisputed evidence was that he was approached to take this position.
The Applicant submits, in respect of the first and third contraventions found, that her economic loss can be assessed as follows:
a)she would have returned to work at the end of her maternity leave on 2 July 2014 and remained working in an Operations role until December 2014;
b)she would then have had an opportunity to apply for the Head of Call Centre Operations role and that the loss of opportunity assessed as the probability or possibility that she would have succeeded in obtaining a position can be assessed at 75%, given the evidence that she had previously set up and managed a Call Centre for four years and that Mr Wilson had never managed a Call Centre before;
c)alternatively, she would have had the opportunity to apply for other vacancies in the Respondent’s Research Centre, including the Research Director role which was advertised externally on 29 October 2014. This loss of opportunity, the Applicant submits, can be assessed at 30%.
The income stream accruing from this approach would then be discounted for contingencies and offset by the Applicant mitigated loss, calculated at $19,562.00.
The Respondent makes general submissions with respect to the economic loss because of the three contraventions of the Act, as found by the Court in the Liability Judgement. In its written submissions the Respondent says:
“The Respondent submits the standard principles applicable to earnings loss calculation in unfair dismissal apply, namely:
(a) The Court will impose a cut off on the compensable period (post dismissal) of lost earnings by way of the duty of an employee to limit loss, by seeking to resume earning through acquiring alternative employment;
(b) Failure to mitigate loss will not be rewarded;
(c) If the employment agreement has no term, the compensable period will be the period of notice: Macken Law of Employment at [10.95]. This is because the High Court has ruled an employer is entitled to perform the employment agreement in the manner least disadvantageous to it: Cth v Amann Aviation (1991) 174 CLR 64 at 92 per Mason CJ and Dawson J.
(d) The more senior or specialized the area of employment, the more time the Court will allow for acquiring new employment – in effect a greater notice period.
The principles (a) to (c) above, can be seen in adverse action cases involving dismissal for reasons including maternity”
(footnotes omitted)
The Respondent further sets out what it describes as “factual variables on which loss of earning should be decided” as follows:
“7. Some matters are agreed:
(a) the Applicant’s gross salary was $125,000;
(b) She was entitled to return to work on a flexible work arrangement at 20 hours per week for 13 weeks valued at $16,447.34;
(c) Her date of return to work under the flexible working arrangement was some time in the first week of July, 2014;
(d) Her pre-maternity leave position, had (post FWA period) 9 weeks left by reason of the position disappearing;
(e) Her recommencement of full time work if any was from the first week of October;
(f) The Respondent has previously calculated her redundancy entitlement at $9,615.38 representing 152 hours;
(g) The Respondent has indicated the Applicant would be welcomed back if she applied for a position.
8. Her binding employment agreement stipulates at clause 25.2 for only 6 weeks’ pay for redundancy. Her notice period was 3 weeks pursuant to clause 24.1. It further stipulates that the Respondent was entitled to terminate her employment on the mere provision of notice. Thus the Applicant could have returned to work and had her employment terminated as long as maternity related rights formed no part of the decision. The notice period provided by s.117 of the FWA is 3 weeks.
9. A position the Applicant would have returned to and which was taken by Mr Wilson completed in December, 2014 in any event: Judgment at [193]. Her actual “pre-parental leave position was available for her to return to until at least 31 August 2014. The Respondent decided to make the Applicant redundant effective 27 June 2014”. Judgment at [197]. The fifth adverse action was failing to return her to that role [judgment at 198].”
(footnotes omitted)
The Respondent submits that the position the Applicant was to return to was “legitimately becoming redundant three months later”. In oral submissions, counsel for the Respondent submitted that the date at which the position became redundant had the effect of terminating the causal relationship between the contraventions found and the Applicant’s loss.
Counsel for the Respondent described the Applicant’s submissions regarding lost opportunity as speculative and not supported by the evidence. The Respondent submits that, at most, the findings of the Court with respect to positions in the Respondent’s Research Centre amount to an unfulfilled expectation, and there was no legal obligation on the Respondent to provide such a position. The Respondent submits that “of the three positions notionally on offer there, she was unqualified for 2 and did not want the third.”[1] Reference is made to paragraph [93](d) of the Liability Judgement. As to the loss of opportunity in relation to the Head of the Respondent’s Call Centre Operations role, the Respondent argues that the Applicant is in effect arguing that she had a right to further employment in that position after being made redundant, an argument which is not supported at law.
[1] Respondent’s Written Submissions at [10].
The Respondent maintains that it was entitled to terminate the Applicant’s employment with three weeks notice pursuant to clause 24.1 of her employment agreement, provided this did not contravene her maternity leave rights.[2] The Respondent relies on the cases in Wheeler v Philip Morris Ltd (1989) 32 IR 323 at 351 and Gregory v Philip Morris Ltd (1988) 24 IR 397 at [426]-[427] (“Philip Morris”).
[2] Ibid at [8].
In Bostik (Australia) Pty Ltd v Gorgevski (1992) 36 FCR 20 (“Gorgevski”) the Full Court said at [32]:
“Where an employee is wrongfully dismissed, he is entitled, subject to mitigation, to damages equivalent to the wages he would have earned under the contract from the date of the dismissal to the end of the contract. The date when the contract would have come to an end, however, must be ascertained on the assumption that the employer would have exercised any power he may have had to bring the contract to an end in the way most beneficial to himself; that is to say, that he would have determined the contract at the earliest date at which he properly could do so …”
The Full Court in Gorgevski held that this common law position did not apply in circumstances where the award term (which prohibited unfair dismissal) was incorporated in the contract of employment. This view derived from the line of authority in Wheeler v Philip Morris Ltd (1989) 32 IR 323 and Philip Morris. This line of authority was overturned by the High Court in Byrne v Australian Airlines Ltd (1995) 185 CLR 410, which held that an award term would not be implied into an employment contract in fact or by law. Arguably, therefore, the common law position set out in Gorgevski has application to the assessment of economic loss under sub-s. 545(2)(b) of the Act.
It is unnecessary for me, in respect of the first and third contraventions, to deal with the approach to be adopted with respect to loss of opportunity or loss of chance. This is because I accept that firstly, upon the Applicant’s pre-paternity leave position becoming redundant, the causal connection between the loss suffered because of the first and third contraventions, was severed. Secondly, having regard to the evidence, I cannot accept that the Applicant suffered any loss of opportunity or loss of chance to be employed as the Head of the Respondent’s Call Centre Operations or in the position of Research Director of the Respondent’s Research Centre.
The evidence is that Mr Wilson was selected to be the Head of the Respondent’s Call Centre Operations without any internal or external advertisements. A logical consequence of this, is that the position would not have been one which the Respondent would have offered the Applicant as part of the redeployment process after her redundancy. I agree with the Respondent that the clear evidence was that the Respondent regarded Applicant’s skill set (even with training) as falling well below the requirements of the position of Research Director of the Respondent’s Research Centre.
Second contravention
The assessment of loss of opportunity of employment
Senior counsel for the Applicant submitted, that the proper approach to the assessment of the economic loss in relation to the second contravention, was that set out in the MUA decision. The appeal brought by the MUA was against a judgement at first instance, awarding two persons (“the Loves”) compensation flowing from contraventions of the general protection provisions of the Act and its predecessor, the Workplace Relations Act 1996, by engaging in unlawful conduct in relation to the proposed employment of those persons. The Full Court described the essence of the contraventions as follows (at [2]):
“2. The relevant contraventions involved not only the MUA, but also Offshore Marine Services Pty Ltd, now called Skilled Offshore (Australia) Pty Ltd (OMS), which carried on a business of supplying crew to vessels engaged in the off-shore oil and gas industry. The essence of the contraventions was that the MUA persuaded (to use an neutral term) OMS to use a system under which only persons who were MUA members would be placed into positions on such vessels and persons who were not MUA members would not be offered work on such vessels. The Loves were not MUA members. One of the OMS officers, who was responsible for placing crew on vessels, wanted to place the Loves as stewards on off-shore vessels, but could not because they were not members of the MUA. The Loves attempted to join the MUA, but were refused; the union took the view that it had sufficient membership numbers. The Loves were thereby denied the opportunity of working as stewards or cleaners on off-shore vessels from 2009.”
The Full Court rejected the MUA’s submission that the relevant loss or damage that had to be proved on the balance of probability was a loss of individual work contracts, and that the Loves could only show loss if they showed that they had lost particular jobs; that their loss crystallised only upon being denied a particular casual contract.
The Full Court stated at [28]-[30]:
“28. The task of the primary judge, having found the relevant contraventions, was to assess the compensation, if any, that was causally related to those contraventions. That involved not an examination of what did happen, but an assessment of what would or might have occurred, but which could no longer occur (because of the contraventions). Subject to any statutory requirement to the contrary, questions of the future or hypothetical effects of a wrong in determining compensation or damages are not to be decided on the balance of probability that they would or would not have happened. Rather, the assessment is by way of the degree of probability of the effects – the probabilities and the possibilities: Malec v JC Hutton Pty Ltd [1990] HCA 20; 169 CLR 625 at 642-643; Sellars v Adelaide Petroleum NL [1994] HCA 4; 179 CLR 332 at 352-356. The above proposition must be qualified by the recognition that, where the fact of injury or loss is part of the cause of action or wrong, it must be proved on the balance of probability. Compensation is generally awarded for loss or damage actually caused or incurred, not potential or likely damage: Tabet v Gett [2010] HCA 12; 240 CLR 537; Sellars at 348; Wardley Australia Ltd v Western Australia [1992] HCA 55; 175 CLR 514 at 526; that is equally so here under ss 807(1)(b) and 545(2)(b).
29. Difficulties sometimes arise in relation to the distinction between these two principles: see Sydney South West Area Health Service v Stamoulis [2009] NSWCA 153, discussed in Evans v Queanbeyan City Council [2011] NSWCA 230 at [54] per Allsop P, [59]-[61] per Hodgson JA, and [100]-[103] per Basten JA. Here, the statutes provide for an order requiring the defendant to pay an amount “as compensation for damage suffered by the other person as a result of the contravention”: s 807(1)(b) of the WR Act; and an order “awarding compensation for loss that a person has suffered because of the contravention”: s 545(2)(b) of the FW Act (emphasis added). Thus, there must be proved, on the balance of probability, to have been some “damage suffered...as a result of the contravention” and some “loss...suffered because of the contravention.” The wording is not dissimilar to the wording and structure of s 82(1) of the Trade Practices Act 1974 (Cth), which was dealt with by the High Court in Sellars: “A person who suffers loss or damage by conduct of another person that was done in contravention of a provision...may recover the amount of the loss or damage.”
30. What such damage or loss is (in the present context) that must be proved on the balance of probability will be governed by an understanding of the statute. Given the evident protective purpose of provisions such as s 792 of the WR Act and s 346 of the FW Act, there would be no sensible statutory purpose in denying a proposition that the damage or loss in relation to prospective employment can be constituted by the loss of an opportunity or chance to be considered for employment as a result of, or because of, the contravention (which then has to be given a value to inform the order for compensation); and there would be no sensible statutory purpose in limiting the compensation to damage or loss proved by reference to the proof of events that would, on the balance of probability, have or have not occurred. Thus, if the relevant contravention by a party has prejudiced a person in prospective employment, it would conform entirely with the statutory purpose to identify the damage or loss by reference to, indeed as, that prejudice. Depending on the circumstances, such prejudice may best be seen as the loss of the chance or opportunity of particular employment….”
(emphasis added)
The decision of the High Court in Malec v JC Hutton Pty Ltd [1990] HCA 20; 169 CLR 638 is the seminal decision in relation to the assessment of damages by way of degree of probability of the future or hypothetical effects of a wrong. This decision concerned the calculation of future damages to be awarded to a plaintiff arising from the defendant’s negligence. The majority, Deane, Gaudron and McHugh JJ stated at p.642-643:
“7. When liability has been established and a common law court has to assess damages, its approach to events that allegedly would have occurred, but cannot now occur, or that allegedly might occur, is different from its approach to events which allegedly have occurred. A common law court determines on the balance of probabilities whether an event has occurred. If the probability of the event having occurred is greater than it not having occurred, the occurrence of the event is treated as certain; if the probability of it having occurred is less than it not having occurred, it is treated as not having occurred. Hence, in respect of events which have or have not occurred, damages are assessed on an all or nothing approach. But in the case of an event which it is alleged would or would not have occurred, or might or might not yet occur, the approach of the court is different. The future may be predicted and the hypothetical may be conjectured. But questions as to the future or hypothetical effect of physical injury or degeneration are not commonly susceptible of scientific demonstration or proof. If the law is to take account of future or hypothetical events in assessing damages, it can only do so in terms of the degree of probability of those events occurring. The probability may be very high - 99.9 per cent - or very low - 0.1 per cent. But unless the chance is so low as to be regarded as speculative - say less than 1 per cent - or so high as to be practically certain - say over 99 per cent - the court will take that chance into account in assessing the damages. Where proof is necessarily unattainable, it would be unfair to treat as certain a prediction which has a 51 per cent probability of occurring, but to ignore altogether a prediction which has a 49 per cent probability of occurring. Thus, the court assesses the degree of probability that an event would have occurred, or might occur, and adjusts its award of damages to reflect the degree of probability. The adjustment may increase or decrease the amount of damages otherwise to be awarded. See Mallett v. McMonagle [1970] AC 166, at p. 174; Davies v. Taylor [1974] A.C. 207, at pp. 212, 219; McIntosh v. Williams [1979] 2 N.S.W.L.R 543, at pp. 550-551. …”
(Emphasis added)
In Sellars v Adelaide Petroleum NL and Ors[1994] HCA 4; (1994) 179 CLR 332. Therein, Mason CJ, Dawson, Toohey and Gaudron JJ said as follows at 355:
“Notwithstanding the observations of this Court in Norwest, we consider that acceptance of the principle enunciated in Malec requires that damages for deprivation of a commercial opportunity, whether the deprivation occurred by reason of breach of contract, tort or contravention of s. 52(1), should be ascertained by reference to the court's assessment of the prospects of success of that opportunity had it been pursued. The principle recognized in Malec was based on a consideration of the peculiar difficulties associated with the proof and evaluation of future possibilities and past hypothetical fact situations, as contrasted with proof of historical facts. Once that is accepted, there is no secure foundation for confining the principle to cases of any particular kind.”
Counsel for the Respondent described the MUA decision as extraordinary. It is not clear to the Court whether counsel was suggesting that the Court should eschew the approach to the assessment of the loss chance or opportunity of particular employment, or whether counsel was referring to the compensation awarded to the Loves. Counsel described the approach of assessing the loss of chance or opportunity of employment in their Research Centre as speculative. However, the fact that the assessment may involve a degree of speculation should not dissuade the Court from determining the value of the economic loss by assessing the probability or possibility the Applicant would have obtained and maintained employment as a Project Manager in the Respondent’s Research Centre. In the MUA decision, the Full Court said at [34]-[35]:
“34. The assessment of the value of the loss of an opportunity may involve an evaluative judgment that calls for restraint in appellate review: McCartney v Orica Investments Pty Ltd [2011] NSWCA 337 at [126]-[127]; Horne v Cranney [2011] QCA 149 at [9]; Hammond Worthington v Da Silva [2006] WASCA 180 at [128]; Nigam v Harm (No 2) [2011] WASCA 221 at [259]; Falkingham v Hoffmans (a firm) [2014] WASCA 140 at [47]-[49]; Wainwright v Barrick Gold of Australia Ltd [2014] WASCA 15 at [88]-[90]. It may also involve factual analysis and findings of a non-evaluative character, and it will almost necessarily involve a degree of speculation. Thus, how (that is, by what methodology), and with what ultimate result, an evaluation is made may involve questions of choice, and judgments about which reasonable minds may differ.
35. It is also relevant to recall that all evidence is weighed according to the proof which it is in the power of one side to have produced and in the power of the other side to have contradicted: Blatch v Archer [1774] EngR 2; (1774) 1 Cowp 63 at 65; [1774] EngR 2; 98 ER 969 at 970; Hampton Court Ltd v Crooks [1957] HCA 28; 97 CLR 367 at 371-372; Cullen v Welsbach Light Company of Australasia [1907] HCA 3; 4 CLR 990 at 1013-1014; see also JD Heydon Cross on Evidence (10th Australian Edition) at 312-313 [7160] and the cases at footnote 132.”
It is instructive to briefly set out the approach of the Full Court in the MUA decision to the assessment of the Loves’ economic loss. The Full Court considered in detail the evidence in relation to the likelihood that the Loves would have been employed, but for the contravention, the likelihood that the Loves would have remained in employment from the perspective of the potential employer, and the Loves themselves. The Full Court stated at [127]:
“127. …The proper way to approach the calculation of the loss of opportunity was by: first, calculating the value of potential earnings of Mr Love; secondly, applying the discount for contingencies to that figure; and then thirdly, subtracting Mr Love’s actual annual income. Such an approach is in line with that formulated by Finkelstein J in La Trobe Capital & Mortgage Corporation Ltd v Hay Property Consultants Pty Ltd [2011] FCAFC 4 at [97]-[105] (Jacobson and Besanko JJ agreed with that methodology at [116]); see also the comments in Valcorp Australia Pty Ltd v Angas Securities Limited [2012] FCAFC 22 at [177]-[180]. …”
The Full Court found that it was likely that the Loves would have gained employment as stewards or cleaners on and off all vessels from 2009 or early 2010. They agreed with the trial judge that the length of service of 5 to 6 years was a reasonable assumption for the valuation of the income stream of the lost opportunities. The Full Court then calculated the income stream which each of the Loves would have obtained had they acquired casual work on a continuous basis for 5 to 6 years. The Full Court stated at [142] that the discount for contingencies and vicissitude must “take into account the real possibility that the Loves would not have obtained continuous full-time work, in recognition of the nature of the industry, the amount of work available, and competition from other stewards, both permanent and casual. It must then take account of the particular vicissitudes of life at sea and incorporate a significant discount for the possibility that the Loves would find the lengthy periods of separation as unsustainable.” The Full Court determined that the appropriate discount was 50%. This discount was applied to the assessed income stream for each individual. The gross actual income earned by each individual over the six years was then subtracted from the discounted amount, to arrive at the award of compensation.
The relevant findings in the Liability Judgment in relation to the second contravention are as follows:
“211. On the evidence, I am satisfied as to the following:
a) On 5 May 2014, Mr Gibson informed the Applicant that he considered that an appropriate redeployment for the Applicant would be within the newly created Research Centre;
b) That, at the very least, the Managers of the Research Centre (Ms Schwensen and Ms Katiforis) considered the Applicant was suitable for the position of Project Manager in the Research Centre;
…
213. I accept that the Respondent had conveyed to the Applicant, in early May 2014, that she would be appropriately redeployed in the Research Centre. Further, I am satisfied that the Applicant had a genuine basis for believing that she would be offered redeployment within the Research Centre. Indeed the Respondent’s own documents (Exhibit R3) had the Applicant located in the Research Centre at the time the Applicant was made redundant.
214. The evidence does not establish that the Respondent had made a formal offer to the Applicant for redeployment in any position in the Research Centre.
215. I am, however, satisfied the Respondent had created an expectation that the Applicant would be redeployed in the Research Centre, at least in the position of Project Manager.
…
219. I find that the Respondent had created an expectation on the part of the Applicant in early May 2014, that she would be redeployed in the Research Centre, at least in the position of Project Manager. There is no doubt that this expectation was disappointed when the Applicant was informed by Mr Schwarz later in May 2014, that arising out of decisions Ms Levine had taken, positions in the Research Centre would not be available to her.
220. It is consistent with the authority cited above to find, and I do so find, that the circumstances set out above amounted to an alteration of the Applicant’s position to her prejudice, within the meaning of s.342(1), Item 1(c) of the Act. The prejudice arose from an expectation created by the Respondent as to the Applicant’s future employment security, which was then not fulfilled by the Respondent.”
(footnotes omitted)
The evidence considered in the Liability Judgment leading to these findings and relevant to the assessment of the economic loss suffered by the Applicant because of the second contravention, included:[3]
[3] The numbers in brackets refer to the particular paragraph/s from the Liability Judgment.
a)the Applicant’s pre-paternal leave position was that of National Customised Operation Director. This position involved the overall management of large projects being undertaken by the Respondent, including the management and development of project managers working in the field: [65];
b)in 2013, the Respondent lost major clients, which had a significant effect on the company’s profitability. The Respondent decided that its’ future survival necessitated a reduction in its wages bill (which comprised over 70% of its total expenses) to around $20 million from $32 million: [67];
c)The Respondent embarked on a major restructuring of its organisation, with the consequence that there were a large number of redundancies. As part of the Respondent’s new organisational structure, a Research Centre was created: [2], [15];
d)In respect of a meeting the Applicant had with Mr Gibson (Chief Operations Officer) and Mr Trifkovic, held on 5 May 2014;
i)The Applicant said that she was told by Mr Gibson that the company had always intended for her to eventually move into a newly created department, the Research Centre: [85], and that Ms Katiforis and Ms Schwensen would head the Research Centre: [87];
ii)Mr Gibson confirmed that, given the type of role the Applicant held, he was of the view that the Applicant rch Centre and that this was something he wanted to speak to the Applicant about, and for her to speak to Ms Katiforis and Ms Schwensen about: [89];
iii)There were three positions available in the Research Centre, a Senior Project Manager, reporting to the Research Director, a Project Manager and a Project Director, reporting to the Research Director: [26]; and
iv)Mr Trifkovic said that Mr Gibson informed the Applicant that it was his vision that her role should be placed within the newly created Research Centre, and this was something she should speak to Ms Katiforis and Ms Schwensen about: [91];
e)Following the meeting with Mr Trifkovic and Mr Gibson, the Applicant went, accompanied by Mr Trifkovic, to meet with Ms Katiforis and Ms Schwensen;
i)The Applicant said that Ms Katiforis stated that there were three positions currently available within the Research Centre, and that all roles would be suitable, depending on the level of commitment the Applicant was willing to make upon her return: [92(b)]. The Applicant said that Ms Katiforis also suggested that the Applicant might be best to return in the position of Project Manager: [92(d)];
ii)Ms Katiforis said that she was aware that the Applicant was one of the staff members potentially being considered for redeployment to the Research Centre and she thought that the Project Manager position would be suitable for her. She did not believe the Applicant had the skills or experience for the two other senior positions available in the Research Centre: [93](a), (c) and (d);
iii)Ms Schwensen said that both she and Ms Katiforis told the Applicant that they thought the Project Manager position would be in line with the level of the Applicant’s skills. The Applicant appeared reluctant to consider the Project Manager position. She presumed the Applicant would remain on her current salary if employed in any of the positions: [95](c), (e) and (f)]; and
iv)Mr Trifkovic stated that the Applicant’s evidence about her meeting with Ms Katiforis and Ms Schwensen was generally correct. He said that the Applicant may have formed the view that she could accept any of the positions offered, and it seemed to him that the issue of her redeployment had started, but nothing was agreed in relation to her hours of work, and remuneration, or start date were not discussed: [97];
f)The position of Research Director of the Research Centre was advertised externally in October 2014: [120]. Ms Schwensen’s opinion was that the Applicant did not have the appropriate standard of research skills for this position: [121]; and
g)Ms Jepson, Head of Corporate Services, said that the Applicant was recorded in a table of the Respondent, which set out departures by staff from the Respondent from 1 July 2013/2014 (Exhibit R3), as being located in the Research Centre because she had had discussions with Ms Schwensen and Ms Katiforis to see whether there was any interest in retraining. Ms Jepson conceded that there was a possibility the Applicant might return to the Research Centre at the end of her maternity leave, but that her position had been made redundant. She said that the retraining or extra training would be contemplated for positions anywhere in the spectrum of Project Manager to Project Director: [101]-[102]. Ms Jepson stated that the Applicant was a valued member of the Respondent and would be welcomed back if she wished to apply for, and was offered, a new position: [112].
In the proceedings leading to the Liability Judgment, the Respondent argued that the evidence disclosed that the Applicant would not have been interested in any position in the Research Centre which was less senior than a Director level. I rejected this submission as follows, at [189] of the Liability Judgement:
“I reject the Respondent’s submission that the evidence shows that the Applicant was neither interested in pursuing redeployment options, nor would accept any position less than Director level. The undisputed evidence is that on 20 May 2014, Mr Schwarz informed the Applicant that the roles in the Research Centre would no longer be offered to her, but that she would be offered other current vacancies in the company. I accept this is a reasonable explanation for the fact that after the meeting in early May 2014 with Ms Schwensen and Ms Katiforis, there was no further communications between the Applicant and these managers of the Research Centre.”
I am satisfied that the second contravention engaged in by the Respondent in this matter prejudiced the Applicant in prospective employment; that being, prospective employment as a Project Manager in the Respondent’s Research Centre. It is manifestly clear on the evidence, that the transfer of the Applicant to the Research Centre was one which the Respondent considered appropriate in the context of the restructure of the organisation, and this was made plainly clear to the Applicant. The evidence is that the position the Respondent believed the Applicant was most suitable for (with or without training) was the Project Manager position. The evidence is that there was a process under way by which the Respondent and Applicant were considering the transfer or redeployment of the Applicant to the Research Centre. This process ended when the Respondent terminated the Applicant’s employment on 27 June 2014.
In these circumstances, I am satisfied that I should to adopt the approach set out by the Full Court in the MUA decision and engage in an assessment of the economic loss suffered by the Applicant; being a lost opportunity of employment because of the second contravention, by a method under which the Court determines the degree of probability and the possibilities of the loss of opportunity.
I now turn to determine the economic loss suffered by the Applicant because of the second contravention.
There is no dispute between the parties that the Applicant’s economic loss would, at the very least, be her pre-maternity leave earnings at a pro rata rate (20 hours per week) for a period of three months, during which she would engage in flexible work arrangements. I am satisfied that the value of the Applicant’s earnings would have been, for that period, $16,447.34.
The Respondent did not dispute the Applicant’s assertion that, if she were employed as a Project Manager in the Research Centre, the Respondent would have maintained her pre-paternal leave earnings. I accept this as a basis, therefore, in calculating the value of the Applicant’s future earnings in the Project Manager position.
The Applicant argues that she would have been employed full-time from October 2014 to 10 July 2016, after the completion of her part-time work. In other words, she argues that the value of her potential income stream should be assessed on the basis she would have been employed for a period of two years. The Applicant submits that she would likely have been employed for a period of two years, having regard to the fact she was a valued employee of the Respondent, that she had a previous history of stable employment, the fact that alternative suitable employment was not readily available and the fact that she was now the mother of a baby and would, in those circumstances, want to maintain ongoing stable employment with the Respondent.
The Respondent submits that it would have been entitled to take, and would have taken, any action available to it to bring the Applicant’s employment to an end. The Respondent relies on the decision of Mortimer J in Dafalla v Fair Work Commission [2014] FCA 328 (“Dafalla”) where her Honour said at [161]:
“In considering causation, in the circumstances of a clearly fraught employment relationship as was the case between MsDafallah and Melbourne Health, it is appropriate in my opinion to consider that the employer would have in any event been entitled to exercise any power it had to bring the employment contract lawfully to an end in a way most beneficial to itself. The likelihood of an employer taking such a step will be fact dependent but, in contractual terms, it has been held to be relevant to the assessment of damages: see Bostik (Australia) Pty Ltd v Gorgevski[1992] FCA 209; (1992) 36 FCR 20 at 32. In my opinion, it is a factor which can also be taken into account for the purposes of determining what compensation is appropriate under s 545(1), where compensation is limited to the loss caused by the contravention.”
The Respondent acknowledges that the Applicant was regarded as a valued employee (this being the evidence of Ms Jepson) but argues that, in the context where the Respondent sought to reduce its wages bill to $20 million down from $32 million, and was doing so by the implementation of a restructure and redundancies, the Respondent would have exercised its right to bring the Applicant’s employment to an end in accordance with the contract of employment or the Act.
I am of the view that the Respondent’s reliance on Dafalla and the authority cited in that decision is, in the circumstances of this case, misplaced. In Bostik v Gorgevski, the employees had been dismissed summarily for conduct which undisputedly constituted serious misconduct. In Dafalla, the evidence was that the appellant had been dismissed for poor performance and had prosecuted unsuccessfully an unfair dismissal claim under the Act in the Fair Work Commission. There is no question of misconduct or poor performance in this case. It is to be recalled that the Applicant was regarded by the Respondent as a valued member of its staff.
The Respondent’s submission overlooks the evidence that the Research Centre was created by the Respondent, in its newly restructured organisation, in response to the financial circumstances it confronted. The Respondent was seeking personnel to fill the newly created positions in the Research Centre. It placed an external advertisement for a Research Director in October 2014, some four months after the Applicant’s employment was terminated. The evidence simply does not support the Respondent’s submission that it would have, had the Applicant been employed as a Project Manager, brought the employment contract lawfully to an end because of ongoing redundancies.
It seems to me, that the question of any ongoing redundancies is one that is relevant to the consideration of any discount for contingencies or vicissitudes.
Having considered the evidence, I find that the Applicant would have likely been employed in the position of Project Manager in the Research Centre for a period of 12 months after she returned to full-time work. In making this finding, I have had regard to the fact that, although there is no evidence that the Applicant would not have taken the Project Manager position, I am satisfied that it would not have been her preferred position. She made it plain in her evidence and in the written submissions made on her behalf, that she believed she had the skills and experience for a more senior position to that of a Project Manager. I am satisfied, that upon returning from maternity leave and settling into full-time employment, the Applicant would have wanted to enjoy a period of stable employment. However, the Applicant did not strike me as a person who would remain in a position simply because she was the mother of a young child. I accept that her evidence was that she had experienced difficulty in obtaining alternate equivalent employment to her pre-paternal leave position at the Respondent. I am not convinced, however, that this difficulty would have persisted into the future. In the position of Project Manager at the Respondent’s Research Centre, the Applicant would have been in a superior position to search for, and obtain, alternative employment, than she was as a person who was unemployed and struggling with the demands of a newborn baby at the time she gave evidence. I am satisfied that the Applicant would have performed the role of Project Manager at the Respondent’s Research Centre very competently and to the satisfaction of the Respondent.
Accordingly, I find that the Applicant would have been employed full-time as a Project Manager from 2 October 2014 until 1 October 2015 (52 weeks). Her potential earnings stream during this period would have been $125,000.00. Taking her earnings stream as a part-time employee working flexible working arrangements for a period of three months into account, the value of her earnings stream would have been $141,447.34.
The Applicant’s claim that her loss of chance of obtaining employment as a Project Manager at the Respondent’s Research Centre is 90%, is based on the following evidence:[4]
a)Three positions were available at the Research Centre in early May 2014: [93](b);
b)the Applicant had the skills for the position, her skills included being responsible for outcomes on projects nationally and managing and developing project managers: [65]. Ms Schwenson and Ms Katiforis told the Applicant that they thought the Project Manager position was in line with her skills: [211], [93](d) and [95](c);
c)Ms Schwenson said that the Applicant would have remained on her current salary whichever position she ended up with: [95](f);
d)Ms Jepson said the Applicant would be provided with the necessary retraining for Project Manager or Project Director position, if it was necessary: [102];
e)The Applicant was keen to continue working for the Respondent, the Applicant was intending to return to work on 2 July 2014 [197];
f)Mr Gibson, the Manager of Operations said the company always intended for her to move to the research centre: [211] and [89], and Mr Trivovic said that Gibson’s vision was that her role would be in the research centre [91];
g)The Respondent’s policy was to redeploy redundant staff wherever possible: [187];
h)The Applicant was a valued member of the employer and would be welcomed back if she applied for a new position: [112].
[4] The numbers in brackets refer to the particular paragraph/s from the Liability Judgment.
The Respondent argues that the probability of the Applicant obtaining the position of Project Manager at the Research Centre was considerably diminished by the fact that, in circumstances where there were widespread redundancies, there would have been greater pool of applicants for available positions, including those in the Research Centre. There was no evidence before the Court about how the Respondent intended to implement the redeployment process of staff made redundant. For example, whether positions would be advertised internally for any staff to apply, or whether particular positions would be offered to particular individuals, in accordance with the Respondent’s managers’ assessments as to where those individuals should be transferred. On the evidence, it is apparent, at least in relation to the Applicant, that the latter approach had been adopted. There is no doubt that the position of Research Director had been advertised externally, however, this is not a position the Court has found the Applicant would have had any chance of obtaining.
Having regard to the evidence, I am satisfied that the Applicant’s loss of chance in obtaining employment as a Project Manager in the Research Centre was 85%. In coming to this conclusion, I have had regard to the evidence that those in management positions were of the view that the Applicant should be transferred or redeployed to the Research Centre, that the individuals who were to manage the Research Centre believed that the Applicant, having regard to her experience and skill set, was suitable for the position of Project Manager, and that there was in place a process by which the Applicant was considering the available positions within the Research Centre.
This process of redeployment did not proceed, not because the Applicant refused any position, but because of the termination of her employment in contravention of the Act. I am, however, satisfied that the Applicant’s preferred positions were the more senior ones in the Research Centre. However, it is more likely than not, if she were confronted with two alternatives; that being redundancy or employment as a Project Manager and maintaining her salary, she would have decided to accept redeployment in the position of Project Manager. There were indeed numerous redundancies occurring at the time and there may well have been a number of other persons interested in the position. However, the Respondent did not produce any evidence to this effect.
I consider that a discount of 10% for contingencies and vicissitudes is appropriate, having regard to all the evidence in this case. The assessment of an appropriate discount is very much a question of impression and degree. It may be, for example, that notwithstanding the maintenance of her salary, the Applicant may well have decided she was not happy working in a position that was not at the level of seniority as her former position. Whereas in her previous position she was a Director responsible for the management and development of project managers, in the position of Project Manager at the Research Centre she would be reporting to more senior staff. It may be that she would have looked for alternative employment, which enhanced her reputation and future career prospects, even though initially she may have been less well remunerated. There are also the vicissitudes associated with sickness and changes in personal preference or lifestyle about the nature of or basis of her work. As the Respondent points out, it may be that the Applicant could have decided to engage in work on a more flexible basis. As I have noted, the Respondent argues that the Applicant’s position would have been vulnerable because of ongoing redundancies. The Applicant correctly points out that if this had been the case then the Respondent ought to have produced such evidence during the proceedings (conducted in early 2016) leading up to the Liability Judgment. The Respondent did not. A relevant factor in assessing the appropriate discount is that the period of employment for which the consideration of contingencies and vicissitudes is being assessed, is three months working a flexible work arrangement, and 12 months working as a Project Manager. This is not a particularly lengthy period of time.
The discounted value of the Applicant’s potential earnings stream is $127,302.61.
The Respondent argues that the Applicant has failed to mitigate her loss. In oral submissions, counsel for the Respondent was critical of what it describes as a “small bundle of applications” in Exhibit A3. It was argued that the Court could not be satisfied that “all the best efforts” had been made by the Applicant to apply for other employment. The Respondent argued that the evidence disclosed that there are other employers out in the field, including major market research companies that the Applicant had already worked for, and a new competitor that had caused substantial diminution of the Respondent’s clientele. The Respondent did not produce any evidence in relation to vacancies at these organisations during the hearing leading to the Liability Judgment.
In Sperandio v Lynch(No 2) [2006] FCA 1838, Jessup J considered a similar proposition put by the Respondent:
“3. The respondents, however, take the position that the applicant has not sufficiently mitigated her loss and damage because the alternative employment which she sought and obtained was, by her own choice, of a part-time nature, involving, as it did, only 20 hours work per week. They say that the applicant has provided no evidence as to why she did not seek, nor as to why she might not readily have obtained, full-time alternative employment at the same level of weekly remuneration as she received while employed by them at the clinic in High Street. …”
In respect of the submission, his Honour stated:
“6 The principle upon which the respondents rely is that, where an applicant succeeds in an action for damages for breach of contract, the measure of his or her compensation will not include any damages which might have been avoided by the reasonable efforts of the applicant. Although the applicant carries the onus of proving that loss or damage has been suffered, the onus of establishing facts relevant to the question of mitigation lies upon the respondents: see Goldburg v Shell Oil Co of Australia Ltd(1990) 95 ALR 711, at 714-717, and the authorities there referred to. Clearly, the onus will be more easily discharged in a case in which the applicant is shown to have done nothing in the way of mitigation: see Harding v Harding[1928] NSWStRp 103; (1928) 29 SR (NSW) 96, 106 per Campbell J. However, even in such a case, it remains a matter of evidence on which the respondent at least starts out with the evidentiary onus.”
The Applicant has produced evidence of the steps she has taken to mitigate her loss. As at the date of the hearing leading to the Liability Judgment, her evidence was that she had derived $19,562.00 from these efforts. The Respondent’s assertion the Applicant had not made reasonable efforts to avoid her economic loss is made without taking any steps to discharge its evidentiary onus.
I have found that the value of the Applicant’s earnings from her employment as a Project Manager is to be calculated based on likely employment in that position until 1 October 2015. The value of her potential discounted loss should be offset by her earnings up until that date.
The amount of $19,562.00 reflects the Applicant’s gross earnings, after her employment was terminated in June 2014, for the financial year ending 30 June 2015 (Exhibit A4). The Applicant did not give evidence at the hearing that her then casual employment had ceased. Any calculation of an award of compensation for economic loss will need to be adjusted for the Applicant’s actual earnings from 30 June 2015 to 1 October 2015. The Applicant will need to produce relevant evidence of her actual gross earnings over this period before a final Order can be made.
There is no dispute that penalty interest should be calculated on the total of the economic loss.
This amount should be offset by the Applicant’s redundancy payment.
Non-economic loss
The Applicant claims $30,000.00 in compensation for the non-economic loss suffered by her because of the Respondent’s contraventions of the Act. She claims that she has suffered loss of enjoyment of employment, loss of self-esteem, embarrassment and hurt and humiliation. The Applicant’s evidence is set out in her affidavit filed on 14 August 2015:
“21. The changes at Roy Morgan left me feeling very distressed and anxious, to the degree that it consumed my thoughts in the final months of my maternity leave. When I went on maternity leave I knew exactly what I would be coming back to. It was a very helpless feeling to be outside of the organization and have to start all of the conversations with Roy Morgan to attempt to keep my place in the organization.
22. After the meeting on the 5th May I was worried about what the others would think with the sudden demotion of my role from National Customised Operations Director to Project Manager in the Research Centre. I cried the entire train ride home while I called my husband to tell him what had happened and how I didn’t know what to do. I felt hurt that a team that I worked so hard to build was now going to be managed by someone else whilst I was relocated to another part of the business. I would now be in the same level as many of the team that I previously managed.
23. After I had been made redundant I applied for many jobs. I secured several interviews, only to miss out on the positions at a later date. I applied for part-time at first, most of which were at a lower level than where I was previously. I lost confidence in my ability to work. I began to apply for a mix of part time and full time roles just to try and gain some income. I began to lose confidence in my ability to secure work again since becoming a parent.”
The Respondent submits that there was no particular evidence of non-economic loss. In oral submissions counsel submitted that the non-economic loss in monetary terms was $15,000.
The Applicant relies on a decision of the Full Court in Richardson v Oracle Corporation Australia Pty Ltd [2014] FCAFC 82 and in particular, the judgment of Kenny J. The decision concerned “damages by way of compensation for any loss or damage suffered because of the conduct of the Respondent”: s.46PO(4)(d) of the Australian Human Rights Commission Act 1986. The trial judge found that an employee (the Second Respondent) of the First Respondent engaged in conduct (sexual harassment of the Applicant) contrary to the Sex Discrimination Act 1984, and that the First Respondent was precariously liable for the employee’s unlawful conduct. The trial judge accepted that the Applicant was entitled to damages by way of compensation for the stress she suffered because of the Second Respondent’s unlawful conduct, and awarded her $18,000.00 in general damages. It is to be noted that at trial, the judge found that the Applicant suffered chronic adjustment disorder with mixed features of anxiety and depression: [74]. There was also medical evidence by way of diagnosis of adjustment disorder, corroborative evidence of the Applicant’s distress contained in a counselling journal and of the impact on her from the Applicant’s partner and her neighbour.
The question to be determined on appeal was whether the award of $18,000.00 in damages was manifestly inadequate. The First Respondent argued that the award of damages fell within the permissible range of general damages arising from sexual harassment cases: [78], and that the circumstances of this case were to be distinguished from those cases where the amount awarded was significantly outside this range: [79].
In a lengthy judgment (with which the other members of the Court, Besank and Perram JJ agreed), Justice Kenny traversed the history of the award of damages in sexual harassment cases, observing the caution and uncertainty inherent in those decisions. She opined that it was relevant, in cases of damages for sexual harassment, to have regard to the award of damages in other jurisdictions, such as tort and contract of employment, for injuries suffered which were akin to those suffered by the Applicant. At [95], her Honour stated:
“95. An award of damages by way of compensation under s 46PO(4)(d) of the AHRC Act is to compensate for the injury suffered by the person harassed: see Hall v A & A Sheiban at 256 (Wilcox J), 281 (French J). In making an award, a court necessarily has regard to the general standards prevailing in the community. As indicated above, other awards of general damages for injury of the kind suffered by Ms Richardson may provide some measure of manifest inadequacy since they may provide some guidance as to what contemporary courts have discerned as proper compensation for such an injury according to generally prevailing community standards. Cases in the field of personal injury may be particularly useful because the object of an award of damages for non-pecuniary loss in such cases is much the same as an award of damages under s 46PO(4)(d) of the AHRC Act: see O’Brien v Dunsdon at 78 and Teubner v Humble (1963) 108 CLR 491 at 507 (Windeyer J); and Qantas Airways Ltd v Gama at [96].”
Her Honour noted, prior to considering damages awarded in tort, that, “in the context of damages for personal injury, there is reason to believe that community standards now accord a higher value to compensation for pain and suffering and loss of enjoyment of life than before”: [96].
By reference to two decisions of the Federal Court outside of anti- discrimination law: Nikolichv Goldman Sach J B Were Services Pty Ltd [2006] FCA 784 (“Nikolich”) and Walker v Citigroup Global Markets Australia Pty Ltd (2006) 233 ALR 687 (“Walker v Citigroup”), Justice Kenny observed that “awards have been at a higher level for loss of enjoyment of life and pain and suffering outside the anti-discrimination legislation field”: [105]. Her Honour stated at [109]:
“Even this cursory overview of the quantum of awards historically awarded in these other fields to successful claimants in situations not wholly unlike Ms Richardson’s reveals a substantial disparity between the level of those awards and the typical compensatory damages provided to victims of sexual discrimination and harassment. Such disparity bespeaks the fact that today an award for sexual harassment, though within the accepted range for such cases, may be manifestly inadequate as compensation for the damage suffered by the victim, judged by reference to prevailing community standards.”
At [117], Justice Kenny stated:
“Putting aside comparisons with general damages in negligence, including in connection with workplace bullying and harassment, and in other actions, it is clear that continued adherence in sex discrimination cases, including sexual harassment cases, to a ‘range’ of damages awards that has not absorbed the increases evident in awards in other fields of litigation has resulted in an award in Ms Richardson’s case that, judged by prevailing community standards, is disproportionately low having regard to the loss and damage she suffered. As noted earlier, the general range of general damages in respect of pain and suffering and loss of enjoyment of life caused by sex discrimination has scarcely altered since 2000 and does not reflect the shift in the community’s estimation of the value to be placed on these matters. The range has remained unchanged, notwithstanding that the community has generally gained a deeper appreciation of the experience of hurt and humiliation that victims of sexual harassment experience and the value of loss of enjoyment of life occasioned by mental illness or distress caused by such conduct. Indeed the range has remained fixed despite changing views of what might be “sums which are generally felt to be excessive”: Hall v A & A Sheiban at 256. In that case, in addition to cautioning against such excessive sums, Wilcox J (at 256) implored that while:
… damages for… injury to feelings, distress, humiliation and the effect on the claimant’s relationships with other people are not susceptible of mathematical calculation … [t]o ignore such items of damage simply because of the impossibility of demonstrating the correctness of any particular figure would be to visit injustice upon a complainant by failing to grant relief in respect of a proved item of damage.”
The Full Court substituted an award of $100,000.00 for the $18,000.00 general damages awarded by the trial judge.
The Respondent bases its estimate of the non-economic loss suffered by the Applicant having regard to a range of cases, some of which include anti-discrimination law. In its written submissions, the Respondent says at [35]:
“Prior decisions of this Court and its predecessor on adverse actions pertaining to maternity leave have very low non-economic loss: FWO v WKO $5,000, FWO v A Dalley Holdings $5,000. In Hickie v Hunt & Hunt an amount of $25,000 was awarded for non economic loss. In Song v Ainsworth Game Technology the sum of $10,000 was awarded. Both of these cases involved a continuing employment relationship in unsatisfactory circumstances and the distress of the Applicant was ongoing. The median is around $5,000.”
(footnotes omitted)
I am satisfied that at the time the Applicant was terminated from her employment, she was in a vulnerable position. She was on maternity leave, with a young baby, seeking to return to work with the Respondent in a senior position which she derived substantial enjoyment from. Prior to the termination she had occupied positions of responsibility and it is logical to assume her reputation and status was part of the enjoyment of employment.
I accept that the Applicant suffered acute distress, loss of enjoyment and humiliation by being terminated, and by being effectively frozen out of the redeployment process. Although she has not produced medical evidence regarding her distress, nor corroborative evidence regarding the impact of the Respondent’s conduct on her, I am of the view that the Court should not diminish her suffering, taking into account that the general protection provisions operate in the context of beneficial legislation, designed to protect those employees who take leave because of the birth or the adoption of a child. I am satisfied that prevailing community standards demand recognition of the fundamental entitlement of an employee to take paternal leave to care for their child or children, safe in the knowledge that their employment and future will not be prejudiced because they have exercised their right to take paternity leave, including to request flexible working arrangements. I am satisfied that community standards now recognise the distress and suffering an employee will experience when those statutory rights are contravened by an employer.
I am satisfied that, in the circumstances, an award of $20,000.00 for the loss of enjoyment, loss of reputation and distress experienced by the Applicant is appropriate, and I will so order.
Having added this amount to the to the economic loss suffered by the Applicant, it is then of course appropriate to deduct from this amount the amount the Applicant received by way of redundancy payments.
Penalties
Section 546 of the Act provides:
“Pecuniary penalty orders
(1) The Federal Court, the Federal Circuit Court or an eligible State or Territory court may, on application, order a person to pay a pecuniary penalty that the court considers is appropriate if the court is satisfied that the person has contravened a civil remedy provision.
Note: Pecuniary penalty orders cannot be made in relation to conduct that contravenes a term of a modern award, a national minimum wage order or an enterprise agreement only because of the retrospective effect of a determination (see subsections 167(3) and 298(2)).
Determining amount of pecuniary penalty
(2) The pecuniary penalty must not be more than:
(a) if the person is an individual – the maximum number of penalty units referred to in the relevant item in column 4 of the table in subsection 539(2); or
(b) if the person is a body corporate – 5 times the maximum number of penalty units referred to in the relevant item in column 4 of the table in subsection 539(2).
Payment of penalty
(3) The court may order that the pecuniary penalty, or a part of the penalty, be paid to:
(a) the Commonwealth; or
(b) a particular organisation; or
(c) a particular person.
Recovery of penalty
(4) The pecuniary penalty may be recovered as a debt due to the person to whom the penalty is payable.
No limitation on orders
(5) To avoid doubt, a court may make a pecuniary penalty order in addition to one or more orders under section 545.”
Sub-section 557(1) of the Act provides that:
“Course of conduct
(1) For the purposes of this Part, 2 or more contraventions of a civil remedy provision referred to in subsection (2) are, subject to subsection (3), taken to constitute a single contravention if:
(a) the contraventions are committed by the same person; and
(b) the contraventions arose out of a course of conduct by the person.”
These provisions do not, however, apply to contraventions of the general protection provisions of the Act: sub-s.557(2) of the Act.
Sub-section 539(2) of the Act prescribes the following maximum penalties that may be imposed on an individual for contraventions of that Act:
· 60 penalty units for a contravention of s.340 of the Act.
A penalty unit is $170.00 (s.4AA(1) of the Crimes Act 1914).
Sub-section 546(2)(b) of the Act provides that a pecuniary penalty, in the case of a body corporate, must not be more than five times the maximum number of penalty units referred to in sub-s.539(2) of the Act. As the Respondent is a body corporate, the maximum penalty for each contravention found by the Court is, therefore, $51,000.00.
The Applicant claims that the appropriate penalty, having regard to all the circumstances, is $107,100.00. The Respondent argues that, having regard to all the circumstances, the penalty should be no more than $15,000.00.
The discretion given to the Court to order penalties under the Act is a broad one. The Courts have, however, developed principles in relation to the approach which is appropriate to adopt in determining any penalty to apply for civil remedy contraventions and, in addition, what is described as a convenient checklist in determining the penalty to apply for each contravention.
The authorities establish that the following principles should be taken into account in determining the question of appropriate penalty: Fair Work Ombudsman v Jetstar Airways Ltd [2014] FCA 33, per Buchanan J at [28].
The first step for the Court is to identify the separate contraventions involved. Each contravention of each separate obligation in the Act, in relation to each employee, is a separate contravention: Gibbs v Mayor, Councillors and Citizens of City of Altona [1992] FCA 573, at pp. 260-261; McIver v Healey [2008] FCA 425 at [16].
Secondly, the Court should consider whether some or all of the contraventions arising out of the first step, constitute a single course of conduct pursuant to sub-s.557(1) of the Act. As noted earlier, this subsection does not apply with respect to contravention of the general protection provisions of the Act.
Thirdly, to the extent that two or more contraventions have common elements, this should be taken into account in considering what is an appropriate penalty in all the circumstances for each contravention. The Respondents should not be penalised more than once for the same conduct. The penalties imposed by the Court should be an appropriate response to what the Respondent did: Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8; (2008) 165 FCR 560 at [46]. The task is distinct from, and in addition, to the final application of the totality principle: Mornington Inn Pty Ltd v Jordan [2008] FCAFC 70 at [41]-[46].
Fourthly, the Court should consider an appropriate penalty in respect of each contravention, whether a single contravention, a course of conduct or a group of contraventions, having regard to all of the circumstances of the case.
Finally, having fixed an appropriate penalty for each contravention, the Court should take a final look at the aggregate penalty, to determine whether it is an appropriate response to the contravening conduct. This is known as the “totality principle”.
The matters that the Court should take into account when considering the imposition of a penalty under the Act were summarised by Mowbray FM in Mason v Harrington Corporation Pty Ltd [2007] FMCA 7. This summary was adopted by Tracey J in Kelly v Fitzpatrick (2007) 166 IR 14 at [14] and has been consistently used ever since. The Court acknowledges that the summary is a convenient checklist, but does not prescribe or restrict the matters which may be taken into account in the exercise of its discretion: Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8; (2008) 165 FCR 560 per Gray, Graham and Buchanan JJ.
That list is as follows:
·The nature and extent of the conduct which led to the breaches.
·The circumstances in which that conduct took place.
·The nature and extent of any loss or damage sustained as a result of the breaches.
·Whether there had been similar previous conduct by the respondent.
·Whether the breaches were properly distinct or arose out of the one course of conduct.
·The size of the business enterprise involved.
·Whether or not the breaches were deliberate.
·Whether senior management was involved in the breaches.
·Whether the party committing the breach had exhibited contrition.
·Whether the party committing the breach had taken corrective action.
·Whether the party committing the breach had cooperated with the enforcement authorities;
·The need to ensure compliance with minimum standards by provision of an effective means for investigation and enforcement of employee entitlements and
·The need for specific and general deterrence.
There are three separate contraventions with which the Court is concerned in this case. The declarations in respect to those contraventions are set out at [6] above. I am satisfied that the second and third contraventions have common elements. These are that the Respondent took adverse action for a reason, or reasons, which included as a substantial and operative reason, the fact that the Applicant had made a request for flexible working arrangements. It is appropriate, therefore, that this should be taken into account in considering the appropriate penalty for each of the contraventions.
I now turn to a consideration of the appropriate penalty for the contraventions, taking into account the fact that the second and third contraventions have common elements.
The nature and extent of the conduct which led to the breaches and the circumstances in which the conduct took place
The nature of the conduct involved the termination of the Applicant’s employment and the cessation of a redeployment process, depriving the Applicant of her fundamental rights, established under the national employment standards of the Act, to return to work after maternity leave and to make a request for flexible working arrangements. I have already said that I am satisfied that the Applicant was in a vulnerable position, having taken parental leave to care for her baby.
The Respondent’s conduct occurred in the context of a structural re-organisation and redundancies, which occurred because of a significant deterioration in the Respondent’s financial position in 2013/2014. I accept that the redundancy process engaged in by the Respondent was genuine and further, that, given the re-organisation of the Respondent, the Applicant’s redundancy was genuine. However, I do not accept the characterisation by counsel for the Respondent of this conduct as an “administrative process error.” In its written submissions, the Respondent says at [26]:
“There was thus no evidence of mischief or ill intent toward the Applicant by reason of her maternity status. The trial judge found against the Respondent in substantial part because the real decision makes (sic) behind the adverse actions, such as Ms Levine, had failed to give evidence.”
This submission is misguided for two reasons. Firstly, the action of the Respondent was deliberate. The mischief in the Respondent’s conduct was engaging in unlawful conduct by reason of, or for reasons that, included, the rights the Applicant had exercised as a person on paternity leave. Secondly, the Liability Judgment sets out in considerable detail the evidence upon which the contraventions were found. These included documentary and oral evidence of witnesses brought by the Respondent. The reasoning of the Liability Judgement cannot be dismissed simply as one that is derived from the absence of evidence from decision-makers in the organisation.
The Respondent relies, in its submissions, on the fact that the circumstances of the conduct, such as its engagement in a legitimate redundancy program, as a factor for discounting any potential penalty for the contraventions. At [27], the Respondent states the circumstances of the conduct:
“…The legitimate redundancy and cost cutting activities of the Respondent had a considerable causal role in the adverse actions. The Court accepted this: judgement at [124].”
This submission is a misrepresentation of paragraph [124] of the Liability Judgement. At [124] I stated:
“The Court accepts that the Respondent was confronted with significant external factors, which impacted upon its profitability and viability, and that it engaged in a process of restructuring the organisation. The Court further accepts that it is the prerogative of an employer to rearrange its organisational structure, to reorganise positions and the skills, responsibilities and duties, which comprise that position, and redistribute these amongst other employees: Jones v Department of Energy and Minerals (1995) 60 IR 304.”
The Court did not find that the Respondent’s redundancy process had a considerable causal role in the adverse actions. It simply acknowledged what is an accepted principle, which is that that an employer is entitled to respond to external factors by rearranging its organisational structure. What it is not entitled to do is to engage, at the same time, in conduct that is unlawful.
Continuing its reliance on the redundancies as a reason for discounting the penalty, the Respondent states in its written submissions at [29(c)]:
“The proven legitimate redundancy environment in which the decision was made. The Court has found that the decision was made because the Applicant was seeking maternity rights, but it might credibly be argued that the decision was substantially motivated by legitimate economic concerns. The Act provides that a person takes action for a particular reason if the reasons for that action include that reason: s.360;”
This is an extraordinary submission. It appears that the Respondent is engaging in a process of rewriting the Liability Judgment. The fact is that the Court found that the Respondent’s adverse action was for a reason, or reasons, that included the exercise by the Applicant of her workplace rights in relation to parental leave. There was no finding made by the Court as to some proportion of the unlawful conduct that could be attributed to legitimate concerns of the Respondent.
The nature and extent of any loss or damage
I have already dealt with the nature and extent of any loss or damage sustained by the Applicant as a result of these breaches: see [92]-[99] above.
Previous contraventions of the industrial legislation
There is no evidence to suggest that the Respondent has previously contravened the Act.
The size and financial circumstances of the Respondent
The Respondent is a large market research company. At the relevant time it employed a director of human resources, and I am satisfied that it had access to human resource expertise. I have already dealt with the financial circumstances confronting the Respondent at the time of the contraventions.
Whether the breaches were deliberate and the role of senior management
Although there is no evidence to suggest that the Applicant’s redundancy was used as a pretext for getting rid of an undesired employee, I am satisfied that the breaches were deliberate. In relation to the second contravention, the evidence was that Mr Schwarz, the Human Resource Director, informed the Applicant that the Research Centre positions would no longer be offered to her (at [189] of the Liability Judgment). I accept the Applicant’s submission that this constitutes a deliberate decision.
The evidence is that the relevant decision-makers involved in the contraventions were Ms Levine, Chief Executive Officer and Mr Schwarz, (then) Human Resource Director, clearly senior management.
Contrition, corrective action and cooperation by the Respondent
Where wrong-doers have co-operated and have also made admissions early in the course of an investigation, or soon after the commencement of proceedings, it is appropriate to allow a discount of penalty (in the vicinity of up to 25-30%). However, consistent with the decision in Mornington Inn Pty Ltd v Jordan [2008] FCAFC 70 (at [76] per Stone and Buchanan JJ):
“… the benefit of such a discount should be reserved for cases where it can be fairly said that an admission of liability: (a) has indicated an acceptance of wrongdoing and a suitable credible expression of regret; and/or (b) has indicated a willingness to facilitate the course of justice.”
In Fair Work Ombudsman v Contracting Plus Pty Ltd & Anor [2011] FMCA 191, Burnett FM (as he then was) said at [125]-[127]:
“125. Although the applicant concedes that the respondents have admitted liability and could be said to have cooperated by partaking in the investigation, at least in a limited fashion; particularly by engaging in the record of interview process; by providing some necessary records and, by signing the agreed statement of facts, although that itself was only agreed on the day of the trial and, of course, only after some delay, the applicant says that the Court should not be too anxious to afford the respondent a significant discount for its admission and conduct.
126. In considering whether or not a discount should be applied, I have regard to the observations of Branston J in Mornington Inn Pty Ltd v Jordan, where her Honour said:
“The rationale for providing a discount for early plea of guilty in a criminal case does not apply neatly to a case such as the present, where a civil penalty is sought and the case proceeds on pleadings. Nevertheless, in our view, it should be accepted, for the same reasons as given in Cameron, that a discount should not be available simply because a respondent has spared the community the cost of a contested trial. Rather the benefit of such a discount should be reserved for cases where it can fairly be said an admission of liability (a) has indicated an acceptance of wrongdoing and suitable and credible expression of regret and/or (b) has indicated a willingness to facilitate the course of justice.”
127. In my view, this is a case where neither of those qualities can be demonstrated and, accordingly, I do not consider that any discount ought to be provided in this instance on this basis.”
(footnotes omitted)
The Respondent has displayed no contrition in respect of the found contraventions. The Respondent made no concessions in the substantive proceedings in relation to any contraventions. In the period between the Liability Judgment, no steps were made by the Respondent to express its remorse or contrition to the Applicant in relation to the found contraventions.
At the hearing in relation to release and penalties, counsel for the Respondent proffered:
“…I take the opportunity to express contrition at this stage on behalf of the Respondent. It regrets its actions towards the Applicant. The evidence of Ms Jepson was intended as something in the nature of practical contrition when she said that the Applicant should she seek to come back would come back – could come back.”
I am not satisfied that the submissions by counsel made at the end of the day indicated an acceptance of wrongdoing and constitute a suitable credible expression of regret.
Ensuring compliance with minimum standards
In Fair Work Ombudsman v A Dalley Holdings Pty Ltd [2013] FCA 509 (“A Dalley Holdings Pty Ltd”), Justice Bromberger stated at [19]:
“…In imposing a penalty, it is imperative for the Court to impose a penalty that reinforces the fundamental importance of compliance with the safety net of entitlements specified by the National Employment Standards and the general protection provisions of the FW Act. Further, it is important that employers comply with minimum standards in respect of consulting employees on parental leave about matters that will have a significant effect on the status, pay or location of an employee’s pre-parental leave position, or the return to work guarantee, so that employees absent from the workplace on a period of unpaid parental leave are not deprived of the benefits of those entitlements…”
I respectfully concur with this view.
The need for specific and general deterrence
In Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate and Ors [2015] HCA 46, the High Court affirmed the principle that the main, if not primary, purpose of the civil penalty provisions is the public interest in promoting deterrence:
“55. No less importantly, whereas criminal penalties import notions of retribution and rehabilitation, the purpose of a civil penalty, as French J explained in Trade Practices Commission v CSR Ltd, is primarily if not wholly protective in promoting the public interest in compliance:
“Punishment for breaches of the criminal law traditionally involves three elements: deterrence, both general and individual, retribution and rehabilitation. Neither retribution nor rehabilitation, within the sense of the Old and New Testament moralities that imbue much of our criminal law, have any part to play in economic regulation of the kind contemplated by Pt IV [of the Trade Practices Act]. ... The principal, and I think probably the only, object of the penalties imposed by s 76 is to attempt to put a price on contravention that is sufficiently high to deter repetition by the contravenor and by others who might be tempted to contravene the Act.””
In relation to specific deterrence, Gray J observed in Plancor Pty Ltd v Liquor, Hospitality and Miscellaneous Union (2008) 171 FCR 357; (2008) 177 IR 243, at [37] that:
“… Specific deterrence focuses on the party on whom the penalty is to be imposed and the likelihood of that party being involved in a similar breach in the future. Much will depend on the attitude expressed by that party as to things like remorse and steps taken to ensure that no future breach will occur…”
In Fair Work Ombudsman v Maclean Bay Pty Ltd (No 2) [2012] FCA 557, Marshall J observed at [29]:
“… It is important to ensure that the protections provided by the Act to employees are real and effective and properly enforced. The need for general deterrence cannot be understated. Rights are a mere shell unless they are respected…”
In relation to general deterrence, Lander J noted in Ponzio v B & P Caelli Constructions Pty Ltd (2007) 158 FCR 543; [2007] FCAFC 65 (“Ponzio”) at [93]:
“… In regard to general deterrence, it is assumed that an appropriate penalty will act as a deterrent to others who might be likely to offend: Yardley v Betts (1979) 22 SASR 108. The penalty therefore should be of a kind that it would be likely to act as a deterrent in preventing similar contraventions by like minded persons or organisations. If the penalty does not demonstrate an appropriate assessment of the seriousness of the offending, the penalty will not operate to deter others from contravening the section. However, the penalty should not be such as to crush the person upon whom the penalty is imposed or used to make that person a scapegoat. In some cases, general deterrence will be the paramount factor in fixing the penalty: R v Thompson (1975) 11 SASR 217…”
I am not satisfied that I should give much weight to the need for specific or general deterrence in the circumstances of this matter, for the following reasons:
a)the undisputed evidence was that the Respondent has a commendable history in facilitating the return to work of (female) employees to the workplace following a period of maternity leave and in facilitating the access of employees with family responsibilities to flexible work arrangements;
b)although the Respondent has not expressed its contrition in a suitable manner in this matter, nor given any evidence of steps it has taken to avoid repetition of these contraventions, I accept that it genuinely believes it has a reputation which it must maintain in relation to equal opportunity and the respect of the workplace rights of its employees. I have no doubt that the publication of the Liability Judgement and this decision will be seen by the Respondent as damaging to its reputation and consequently it will be motivated to avoid future repetition of like contraventions; and
c)The Respondent is a market research company. Unlike other industries, there is no evidence that it is necessary for the imposition of a penalty to act as a deterrent to prevent similar contraventions by like-minded organisations.
Conclusion on penalties
I am satisfied that, taking into account all relevant considerations, a penalty of 70% for the first contravention, and 70% for the second and third contraventions taken together, of the maximum penalty should be awarded; that is $71,400.00.
Having determined what the award of penalty should be, I now turn to consider the totality principle. In Ponzio, Jessup J, with whom Lander J agreed, said at [145]-[146]:
“145. For the above reasons, his Honour’s disposition of the appellant’s case under s 187AA cannot stand. That does not mean, however, that the appeal must necessarily succeed. As I have said, the trial Judge recognised that this was a case in which the totality principle should apply. His Honour said that the principle required “that in imposing penalties for numerous offences, the penalties in aggregate are just and appropriate ...” For that proposition, his Honour relied upon CPSU v Telstra Corporation Ltd (2001) 108 IR 228, 230 [7]. In CPSU, Finkelstein J said that, in a case of multiple breaches punishable by pecuniary penalty, it would be –
... necessary to resolve upon the appropriate total penalty, dividing that penalty by the number of individual contraventions and record that amount as the penalty for each contravention, whether or not the sum produced might be regarded as an inappropriate individual penalty.
With respect to his Honour, I do not believe this is the correct approach. The position was, in my view, correctly stated by Goldberg J in ACCC v Australian Safeway Stores Pty Ltd (1997) 145 ALR 36, 53:
The totality principle is designed to ensure that overall an appropriate sentence or penalty is appropriate and that the sum of the penalties imposed for several contraventions does not result in the total of the penalties exceeding what is proper having regard to the totality of the contravening conduct involved: McDonald v R (1994) 48 FCR 555; 120 ALR 629. But that does not mean that a court should commence by determining an overall penalty and then dividing it among the various contraventions. Rather the totality principle involves a final overall consideration of the sum of the penalties determined. In Mill v R (1988) 166 CLR 59; 83 ALR 1 the High Court accepted the following statement as correctly describing the totality principle:
The effect of the totality principle is to require a sentencer who has passed a series of sentences, each properly calculated in relation to the offence for which it is imposed and each properly made consecutive in accordance with the principles governing consecutive sentences, to review the aggregate sentence and consider whether the aggregate is “just and appropriate”. The principle has been stated many times in various forms: “when a number of offences are being dealt with and specific punishments in respect of them are being totted up to make a total, it is always necessary for the court to take a last look at the total just to see whether it looks wrong”; “when ... cases of multiplicity of offences come before the court, the court must not content itself by doing the arithmetic and passing the sentence which the arithmetic produces. It must look at the totality of the criminal behaviour and ask itself what is the appropriate sentence for all the offences”.
As Spender J pointed out in McDonald v R at FCR 556; ALR 631:
Implicit in that statement is that the sentence for each offence should be “properly calculated in relation to the offence for which it is imposed.”
It is explicit in this statement that a sentencer or penalty fixer must, as an initial step, impose a penalty appropriate for each contravention and then as a check, at the end of the process, consider whether the aggregate is appropriate for the total contravening conduct involved: McDonald v R at FCR 563, per Burchett and Higgins JJ.
The position as stated in Mill, on which Goldberg J relied, was described by Gummow, Callinan and Heydon JJ as the “orthodox, but not necessarily immutable, practice” in Johnson v The Queen [2004] HCA 15; [2004] 205 ALR 346, [26].
146. In a setting which did not involve an agreement on penalty, it would, therefore, be necessary to commence with an assessment of an appropriate penalty for each contravention, paying due regard to such mitigating factors as there were. In the judgments to which the trial Judge referred, it seems to have been accepted that, absent strong mitigating circumstances such as sheer inadvertence, a penalty of about $200 for each contravention of s 187AA on the facts existing on 5 and 6 August 2003 could not be regarded as excessive. On the facts of the present case, and having regard to what I have described as the conventional mitigating circumstances referred to by his Honour, I do not think that a penalty of $200 for a single contravention would have been excessive. It may not have been the penalty that I would have imposed, but on no view might it have been regarded as outside the permissible range. If that penalty had been imposed for each of the contraventions which came before his Honour, a total of $20,200 would be the aggregate result. Manifestly the application of the totality principle was then required.”
The contravening conduct was engaged in by the Respondent in a set of circumstances. These were that the Applicant was nearing the end of her maternity leave, she sought flexible work arrangements, her employment was terminated prior to the date her pre-paternity leave position became redundant and the employer withdrew from the redeployment process and decided not to make any alternative employment positions available in its newly created Research Centre. This is not to suggest that the contraventions were not serious, they were. However, in considering whether the aggregate is appropriate for the total contravening conduct involved, I find a penalty of $52,000.00 appropriate, and I will so order.
The Applicant has also sought that payment of any pecuniary penalty ordered, to be paid to the Applicant by the Respondent. Sub-section 546(3) of the Act allows the Court to order that a penalty, or part of a penalty, be paid to the Commonwealth, a particular organisation, or a particular person.
In considering this matter, I have had the opportunity of being guided by the decision of Tracey, Barker and Katzmann JJ in Sayed v Construction, Forestry, Mining and Energy Union [2016] FCAFC 4. In particular, I refer to and rely upon the paragraphs [120]-[121]:
“120. To the extent that the primary judge appears to have drawn a distinction, at [88]-[89], between a case prosecuted by a union or other representative organisation and one prosecuted by the person directly affected by the contravention(s), we fail to see how that distinction, of itself, should lead to any immediate assumption or conclusion that the individual, by contrast to an organisation, has not, or has not necessarily, incurred significant time, trouble and lost opportunity costs in maintaining the prosecution, so that in the absence of some disentitling feature, the usual order for payment of the penalty to the prosecutor is appropriate.
121. Furthermore, it is not apparent to us why the receipt of a penalty should not operate as an incentive to an affected person to bring a prosecution like this under the FW Act. After all, as Wilcox J noted in Finance Sector Union, it ensures the enforcement of the legislative scheme. Moreover, as Jessup J put it in Murrihy, this incentive to bring and maintain such a proceeding makes it more likely that the applicable provisions of the FW Act “will be more than mere words on the statute book”. As Gray J said in Plancor, the question of “profit” does not arise on a proper construction of the power.”
I am satisfied that the penalties should be paid to the Applicant.
I certify that the preceding one hundred and twenty-three (123) paragraphs are a true copy of the reasons for judgment of Judge Jones
Date: 15 July 2016
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