Hozack v The Church of Jesus Christ of Latter-Day

[1997] FCA 1300

FEDERAL COURT OF AUSTRALIA

INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - employee a member of a church which was also her employer - condition of employment that employee remain “Temple-worthy” - employee “disfellowshipped” from Church - whether breach of condition of employment - whether termination was “in good faith in order to avoid injury to the religious susceptibilities of adherents of [the Church]” - whether Church had a VALID REASON to terminate the employment - effect of s 170DF(3) on the operation of s 170DE(1) - meaning of “OPERATIONAL REQUIREMENT” - meaning of “CAPACITY”

Commonwealth Constitution, s 116
Workplace Relations Act 1996 (Cth), s 170DC, s 170DE(1), s 170DF(1), s 170DF(3)

Church of the New Faith v Commissioner for Pay-Roll Tax (Vic) (1983) 154 CLR 120, followed

KERRY ANNE HOZACK v CHURCH OF JESUS CHRIST OF LATTER-DAY SAINTS

NI 1303 of 1996

MADGWICK J
SYDNEY
27 NOVEMBER 1997

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NI 1303 of 1996

BETWEEN:	KERRY ANNE HOZACK APPLICANT
AND:	CHURCH OF JESUS CHRIST OF LATTER-DAY SAINTS RESPONDENT

JUDGE(S):	MADGWICK J
DATE:	27 NOVEMBER 1997
PLACE:	SYDNEY

REASONS FOR JUDGMENT

HIS HONOUR: This is an application pursuant to s 170EA of the Workplace Relations Act 1996 (Cth) (“the Act”) in which the applicant, Ms Hozack, claims that the respondent (“the Church”) unlawfully terminated her employment in contravention of ss 170DC, 170DE(1) and 170DF(1) of the Act.

The applicant, who is also a member of the Church, was employed on 14 October 1993 as a part-time receptionist, apparently at the main desk in the Church’s “Pacific Area” office, from which (among other things) the affairs of the Church in Australia are administered.  There is no dispute that Ms Hozack was a competent employee, and had been commended by the Church for her standard of work.  However, it was expressly stated to be a term of her employment that she “demonstrate [her] personal worthiness by fulfilling those conditions required to obtain a Temple recommend while so employed”. A “Temple recommend” is a commendation issued annually to each eligible member of the Church to certify that he or she has lived by the Church’s doctrines and is considered by the Church to be worthy to worship at the “sacred Temple”.  One is then considered to be “Temple-worthy”.

In early January 1996 it came to her bishop’s attention that Ms Hozack was engaged in an intimate (including sexual) relationship with a man while she was separated from her husband but not divorced.  The bishop visited Ms Hozack’s home and told her that, if she did not cease the adulterous relationship, she would be excommunicated from the Church and would probably lose her job.  He gave her three weeks to consider her options.

On 21 January Ms Hozack was called to appear before the Church’s Disciplinary Council, conducted by the bishop and two advisors.  She explained that the relationship had ceased but, had she and her male friend still been together, she would not have terminated the relationship, regardless of the bishop’s instructions. Her approach, in general, was that she was emotionally vulnerable and worried over her children’s and her own welfare, and should have been allowed ample time to make an unpressured decision.

As a result of that meeting Ms Hozack was “disfellowshipped” for a year.  The consequence, under the Church’s rules, was that during that period she no longer had the status of being “Temple-worthy”.

The applicant returned to work on 24 January and was called into the office of Mr Rundle, the Human Resources Manager.  Mr Rundle told Ms Hozack that she was now required to commence work at 7:30am instead of 9:00am.  This was a pretence.  Mr Rundle intended giving Ms Hozack an opportunity to resign on the basis that she was unable to start work early because of her children.  However, Mr Rundle very soon had a change of heart and told Ms Hozack squarely that, because she had been disfellowshipped, she had breached the condition of her employment that she be Temple-worthy.  He gave her the option of resigning or being dismissed.  When she refused to resign, Mr Rundle terminated her employment with immediate effect and handed her a cheque that had already been drawn for pay in lieu of two weeks’ notice.  A letter dated the same day was later forwarded to her, confirming that the reason why her services had been terminated was “breach of the conditions of employment . . . being that you have failed to comply with the Church Temple recommend standard of worthiness required by all employees”.  The letter went on to state that, as she had been a valued employee, the Church would be “most happy” to reconsider her for employment if the opportunity arose when she was again Temple-worthy.

Termination on the grounds of religion: s170 DF

The first issue to be determined is whether Ms Hozack’s employment was terminated for a reason prohibited by s 170DF(1)(f), and if so, whether the exemption in s 170DF(3) applies in this case. The relevant legislative provisions are as follows:

“s170DF(1) An employer must not terminate an employee’s employment for any one or more of the following reasons, or for reasons including any one or more of the following reasons:

. . .

(f)race, colour, sex, sexual preference, age, physical or mental disability, marital status, family responsibilities, pregnancy, religion, political opinion, national extraction or social origin.

. . .

170DF(3)Subsection (1) does not prevent a matter referred to in paragraph (1)(f) from being a reason for terminating a person’s employment as a member of the staff of an institution that is conducted in accordance with the doctrines, tenets, beliefs or teachings of a particular religion or creed, if the employer terminates the employment in good faith in order to avoid injury to the religious susceptibilities of adherents of that religion or creed.”

The respondent conceded, indeed asserted, that Ms Hozack’s employment was terminated for a reason of religion and thus it would have acted in contravention of s 170DF(1)(f), but for the effect of s 170DF(3), which provision, it was submitted, concluded this case in the Church’s favour.

Those subsections deal with conflicting values:  on the one hand, an individual’s right to employment secure from termination on grounds which offend notions of human rights; and on the other, effective freedom of religious belief and practice.  Section 170DF(3) expressed Parliament’s intention that, in such a conflict, respect should be given to the interests of the adherents of a religion by permitting their religious institution to give effect (to the extent indicated by the section) to religious and some other reasons for terminating employment, although generally there was to be a blanket denial to other employers of such reasons.  This follows from the terms of the Termination of Employment Convention 1982 (Schedule 10 of the Act), to which the relevant Division of the Act gives effect. It may be that, perhaps among other considerations, Parliament had an eye to s 116 of the Australian Constitution:

“The Commonwealth shall not make any law . . . for prohibiting the free exercise of any religion . . .”

To obtain such protection as s 170DF(3) grants, the termination of employment must, however, be made in good faith and in aid of genuinely held beliefs.  Ms Hozack sought to dispute that the termination of her employment was effectuated “in good faith in order to avoid injury to the religious susceptibilities of adherents of [the Church’s] religion”.  It was said that there was no evidence of actual injury to the religious susceptibilities of the adherents to the Church, and that those susceptibilities could not be adequately identified or proven, so that the Court could not be satisfied that the conditions of s 170DF(3) had been met.  This submission is, in my opinion, misconceived.  To satisfy the conditions of the exemption contained in s 170DF(3), the Church need only demonstrate that the decision to terminate Ms Hozack’s employment was made in good faith for the purpose of avoiding injury to the religious susceptibilities of its adherents, not that any of its members were actually injured in such susceptibilities.

It is however necessary that avoidance of injury to religious susceptibilities be the Church’s object.  Action aimed at the avoidance of mere offence to the presumed social mores of church members, or of alarm to a faction not clearly amounting to “injury” to religious susceptibilities, would not suffice.  It is not, of course, the Court’s role, nor should it be, to pass upon the basis or the nature of the faith practised by or within a church, or to comment on the cogency of a church’s doctrines.  In Church of the New Faith v Commissioner for Pay-Roll Tax (Vic) (1983) 154 CLR 120 at 174, Wilson and Deane JJ said that the question of whether a belief can be characterised as “religious” should be “...approached and determined as one of arid characterisation not involving any element of assessment of the utility, the intellectual quality, or the essential ‘truth’ or ‘worth’ of tenets of the claimed religion”.  As Mason ACJ and Brennan J put it at 134, “the State has no prophetic role in relation to religious belief”.  Such an approach, in my opinion, stems not only from a court’s obligation to give full effect to the plain language employed by Parliament, it also embodies the full meaning of respect for religious observance:  if a court (part of the State) can choose which religions, or which beliefs of a religion, are entitled to respect under a statute such as the present, the road to Salem or, at least, to serious communal disharmony, may be a short one.  It is to be observed also that, if there be an institution conducted in accordance with the tenets of what, as a matter of “arid characterisation”, could be called a “creed” and which opposed established religions, its adherents too would be entitled to the same broad protection.

It was adequately shown here that “religious” susceptibilities and the prevention of “injury” to them were at issue:  Ms Hozack’s relations had been adulterous; in her Church’s view adultery itself could be a ground for loss of Temple-worthiness, as could her unrepentant attitude towards such adultery; and Temple-worthiness was required, apparently as a matter of religious doctrine, of Church members employed by the Church.  Evidence was given on behalf of the respondent by Mr Cave and Mr Thompson, who have both held religious positions in the Church, relating to the Church’s doctrines and principles.  It is not necessary that I attempt to summarise their understanding of those doctrines here; it is sufficient to say that, in my opinion, the conditions of s 170DF(3) have been met.

Ms Hozack complained that the Church ought not to have exemption under s 170DF(3) because she was treated differently from other member-employees.  She sought to rely on the evidence of her immediate supervisor, Ms Stent.  The latter had remained employed though her superior had been aware that she had been involved for a period in a de facto marriage relationship.  However, Ms Stent revealed in cross-examination that she had been placed “on probation” by the bishop (the last step before being disfellowshipped), so it is apparent that some disciplinary action had been taken against her to indicate the Church’s disapproval.  In any event, whether those administering the Church qua employer saw fit to draw a distinction between Ms Hozack’s circumstances and those of her supervisor, the evidence does not demonstrate that the Church had a general disregard for, or was haphazard in, the enforcement of its own doctrines.  In any case, no church is entirely consistent in its practices.  No institution, dependant on human beings, is. Mistakes, slips, compromises, failures of comprehension, even occasional infractions or the toleration of them, in relation to values and doctrines, hardly indicate that the values and doctrines are not truly held.  It is enough for s 170DF(3) if the Church can show good faith; it need not show perfection.

The applicant also sought to rely on the fact that the respondent employed non-members of the Church, who obviously were not bound by the same condition of employment as to Temple-worthiness, as showing that it was not offensive to Church members for an employee not to be considered Temple-worthy.  However, the fact that the respondent employs some non-members, from whom the Church could hardly exact its religious stipulations, does not demonstrate that (for the purposes of s 170DF(3)) the Church failed to act in good faith to avoid injury to religious susceptibilities: Ms Hozack was a member of the Church; she was bound by the same religious doctrines relating to fitness for employment as all other Church members employed by it; and she understood the implications of the condition of being Temple-worthy.

Thus the Church was not in breach of s 170DF(1)(f). As will be seen, however, the employment of non-members by the Church and of Ms Stent’s erstwhile position has other significance for the case.

Valid reason for termination of employment: does s 170DF(3) foreclose considerations of s 170DE(1)?

The second issue raised in this review concerns the effect, if any, of s 170DF(3) on the operation of s 170DE(1). Section 170DE(1) provides:

“s170DE(1) An employer must not terminate an employee’s employment unless there is a valid reason, or valid reasons, connected with the employee’s capacity or conduct or based on the operational requirements of the undertaking, establishment or service.”

Ms Hozack submitted that, even if s 170DF(3) applies in this case, that does not exclude the operation of s 170DE(1), nor does it mean that the Church necessarily had a valid reason for the termination of her employment. The Church, on the other hand, submitted that any reason that is permitted by s 170DF(3) must, as a matter of proper construction, constitute a valid reason within the meaning of s 170DE(1).

The scheme of the Act, mirroring the Convention, is that there be a valid reason within particular categories for terminating an employee’s service. Section 170DF(1) prohibits an employer’s reliance on reasons of the kinds enumerated therein, whether or not they would otherwise be valid within the meaning of s 170DE(1). For example, it was once widely thought inappropriate for men to be employed as stenographers. It might possibly, at that time, have been thought valid to dismiss a man so employed, upon a new supervisor’s exhibiting antipathy to working with him. Now, quite apart from changed social standards, s 170DF(1)(f) prohibits an employer from so acting for the reason of the employee’s sex. There is no equivalent of s 170DF(3) in the Convention. Section 170DF(3) operates in certain circumstances to remove the s 170DF(1)(f) prohibition in the case of a religious institution. It does not expressly provide that it also ousts the s 170DE(1) requirement of validity or that it automatically confers validity upon a reason of the kinds listed in s 170DF(1)(f).

Nor is there, in my opinion, any compelling reason for reading the statute as implicitly so intending. As noted, what s 170DF(1) does (in the case of most employers) is to preclude an assertion that any of the reasons enumerated therein, which are diverse, constitutes a valid reason: an employer simply may not give effect to any such reason the employer might possess for wishing to terminate an employee’s employment. That is the express approach of the Convention in Article 5: of most of the reasons set out in s 170DF(1), the Convention says that they “shall not constitute valid reasons for termination”. In Australia, in the case of religious institutions, it is only the preclusion of such assertion, in relation to some of such reasons (those in para (f) of s 170DF(1)), that is reversed.  That does not carry with it the preclusion of an assertion by the employee that one or more of the latter class of reasons does not constitute a valid reason, otherwise required by s 170DE(1), for termination of his or her employment.

It is difficult to believe that the change of terminology in s 170DF(3) from that in the Convention did not have some deliberate purpose. The limitation I have pointed to is apt to be that purpose. Section 170DF(3) has been carefully framed so as to limit only the operation of s 170DF(1). It does not otherwise affect the whole Division in which ss 170DE and 170DF occur. The various provisions in Div 3 of Part VIA of the Act should be understood as imposing quite separate obligations. The fact that, even if the conditions in s 170DF(3) were made out, an employee would still be entitled to a remedy for a breach of, for example, s 170DB(1) in relation to the required periods of notice, suggests that this is so. Similarly, if the respondent’s argument is right, it is not easy to see why s 170DF(3) would not also override an employee’s right to an opportunity for self-defence to a charge of misconduct, etc under s 170DC. It is very unlikely that that was intended.

The fact that there is an element of invidiousness in a court being called upon to pass upon the “validity” of a reason, asserted to be one of religion, for a religious institution terminating an employee’s employment is, perhaps, a consideration in favour of the Church’s argument.  But courts are frequently put in the invidious position of being obliged to make highly contentious judgments which touch deeply-held beliefs.  The great guarantee of the Convention is that employees will not have their employment terminated except for certain cogent kinds of valid reason.  Given that the legislation is based on a remedial, international treaty, it is appropriate to construe the operation of the legislation beneficially to those it is intended to assist:  Andersen v Umbakumba Community Council (1994) 1 IRCR 457, see also Applicant A v Minister for Immigrationand Ethnic Affairs (1997) 142 ALR 331. While it is also true that s 170DF(3) intended an exemption in favour of religious freedom, and such an exemption should also be generously construed, there is, in my opinion, nothing in the Act’s terms, or otherwise, which sufficiently indicates that that guarantee was necessarily to be set aside for an employee employed by a religious institution, when such employer’s reason for termination was a religious one.

The Act of course is to be construed so as to keep it intra vires:  s 15A Acts Interpretation Act 1901 (Cth). The fundamental importance to human dignity of the free exercise of any religion and the constitutional guarantee against the prohibition of such free exercise must be kept in mind. But, in my view, those considerations do not greatly assist. For example, a church’s doctrines may religiously prohibit its members from participation in union activities, regarding them, say, as the work of Mammon. Section 170DF(1)(b) would preclude the assertion of such participation as a reason for dismissing an employee and s 170DF(1)(f) would not reverse that preclusion for any church. In my view, that approach reflects the legal doctrine that -

“. . . the area of legal immunity marked out [constitutionally] by the concept of religion cannot extend to all conduct in which a person may engage in giving effect to his [sic] faith . . . [Religious conduct] is excluded from the area of immunity marked out by the concept of religion if it offends against the ordinary laws, i.e. if it offends against laws which do not discriminate against religion generally or against particular religions or against conduct of a kind which is characteristic only of a religion”: Church of the New Faith v Commissioner of Pay-Roll Tax (Victoria) (1982-1983) 154 CLR 120 at 135-6 per Mason ACJ and Brennan J.

In that case, their Honours cited, with evident approval, Reynolds v United States (1879) 98 U.S. 145, in which the United States equivalent of s 116 of the Constitution was held not to exempt Mormons (the same faith of course, as that of the Church in this case) from the law forbidding polygamy. The United States Supreme Court said that so to do would “in effect . . . permit every citizen to become a law unto himself.  Government could exist only in name under such circumstances”.

Section 170DE(1), and the entire Division in which it occurs, is an “ordinary law” in the sense meant by Mason ACJ and Brennan J. There is no reason why the doctrine they enunciated would not also apply constitutionally to justify an inquiry into the “validity” of a religious institution’s reason for termination, pursuant to s 170DE(1), even though that reason might be one of those set out in s 170DF(1)(f) and exempted by s 170DF(3). If there is no constitutional invalidity in so reading the Act, there is, in my view, no other impediment to such an approach. Indeed, the reasoning in the constitutional cases supports no especially wide construction of the religious protection in the Act. Such was hardly likely to have been intended to permit “every [religious institution qua employer] to become a law unto [it]self”. 

In a nutshell, what s 170DF(3) does, in relation to s 170DE(1), is to preserve the capacity of a religious institution (which otherwise it would have lost under s 170DF(1)) to show, if it can, that a religious etc. reason for terminating an employee’s services may be a valid reason based on the operational requirements of the undertaking. Thus understood, there is no conflict between s 170DF(3) and s 170DE(1). Contrary to the Church’s submission, therefore, no question of a general statutory provision giving way to a particular one, nor of avoidance of an absurd or embarrassing result, arises.

I conclude that the Church must prove that it had a valid reason in accordance with s 170DE(1) to terminate Ms Hozack’s employment.

It was asserted by the Church that the only reason why Ms Hozack’s employment was terminated was because she had lost her Temple recommend, and that there was no complaint about the quality of her work.  Thus Ms Hozack’s termination is said to have related to the fact that she no longer had the “capacity” to work in that position, nor was she able to fulfil the “operational requirements of the undertaking”, in that she was no longer considered Temple-worthy.  However, that “capacity” was determined by the appropriate arbiter within the Church ultimately on the basis of her conduct or attitude.

In many ordinary circumstances, an employee’s non-criminal behaviour away from the workplace, let alone his or her attitude to a religious doctrine, would have scant justifiable relevance to an employer’s decision to terminate the employment.  Nevertheless, there are considerations in favour of the Church’s position.  In cases such as this, religious authorities are entitled to have regard to their own “doctrines, tenets, beliefs or teachings”, as s 170DF(3) aptly describes them.  Very commonly, such doctrines, etc. extend to moral standards expected of church members in relation to sexual and other behaviour, and in relation to attitudes towards the church’s doctrines and its authority, as vested in its responsible organs.  In that context, it may be argued that a requirement by the Church that its members be in good religious standing if they are to be, or are to remain, employed by the Church is not unreasonable or unfair.  The point was taken that it is that standing which was the criterion for the Church both of the employee’s “capacity” and of the relevant “operational requirement”, rather than the employee’s “conduct”. 

However, if the matter should more properly be dealt with as one of the employee’s conduct, then, again, there are some circumstances which might be thought to favour the Church’s position.  Ms Hozack professes her allegiance to the Church.  The Church’s requirement of conduct consistent with being deemed Temple-worthy is only made of her because she is and desires to be a member of the Church.  The kind of conduct (refusal to repent behaviour which is religiously proscribed) which has apparently led to her not being so deemed, is of a nature usually treated as serious by religious institutions - not only Christian, and not only theist.  It was also proved to be important, apparently, to the faith promulgated by the Church that a disfellowshipped member not continue in its employment.  Having in mind the full respect which, as I have indicated, should be given to freedom of religious observance, and that the purpose of Ms Hozack’s employment was to assist the Church to maintain and propagate its faith (rather than, say, simply to perform religiously-mandated good works), those factors support a conclusion that the Church (as Ms Hozack’s employer) had a reason to terminate her employment, which, by the lights of the religion professed by the Church and Ms Hozack, was sound and justified.  The Church, of course, denied that Ms Hozack’s conduct furnished any reason for the termination of her employment.

“Operational requirements”

However, the test is not merely whether, by the lights of the Church’s religion, the reason, whether it be one of conduct or otherwise, is valid. Not all valid reasons will suffice: they must either be “connected with the employee’s capacity or conduct” on the one hand or “based on the operational requirements of the undertaking, establishment or service” on the other: s 170DE(1).

It may be granted that the phrase “operational requirements” is a broad term (see e.g. Art 13.1 of the Convention) but the use of the word “operational” at least serves to exclude requirements which are not materially directed at the efficient or effective operations of the enterprise.  In the secular environment, requirements by the employer going only to matters of sentiment or good taste, for example, and not touching the effective operation of the undertaking, would be excluded.  Secondly, the word “requirements” has been used.  In the context, this implies the notion of an actual need or necessity of the operations of the undertaking etc., as distinct from some lesser connection with such operations.  The gravamen of the concept “operational requirements” is better conveyed in the equally authoritative French version of the Convention (Art. 22):

“Un travailleur ne devra pas être licencié sans qu’il existe un motif valable  de licenciement lié à l’aptitude ou à la conduite du travailleur ou fondé sur les nécessités du fonctionnement de l’entreprise, de l’établissement ou du service.”(emphasis added)

The relevant dictionary definitions (the entries in the Oxford English and Macquarie dictionaries for “operate”, “operation”, “operational”, “require” and “requirement”; and for the French, the Larousse Modern Dictionary) include meanings perfectly consistent with the notion of “necessary matters for the functioning of the enterprise”, etc. which the literal translation of the French signifies.

Finally, it is not every notion capable of being, and bona fide conceived as being, an operational requirement that is a “valid” one:  an element of objective validity is required: (see e.g. Kerr v Jaroma Pty Ltd, Industrial Relations Court of Australia, Marshall J, 7 October 1996).  Probably the Court should tend, in cases of operational requirements, to a minimalist view of such objective validity.  A judge cannot sit “in the employer’s managerial chair” (Kenefick v Australian Submarine Corporation (1995) 62 IR 107 at 116, per Wilcox CJ), let alone on the cardinal’s throne.

The test therefore is whether, for a secular court, the reason based on the “operational requirements” of the Church was “valid”.  Whether it is valid means whether it is sound and defensible (see Selvachandran v Peteron Plastics Pty Ltd (1996) 62 IR 371) or (they are much the same) fair and just (Westen v Union Des Assurances Des Paris, Industrial Relations Court of Australia, Madgwick J, 17 December 1996).  Validity must be measured by contemporary community standards:  Cosco Holdings Pty Ltd v Van Do & Ors (Industrial Relations Court of Australia, Madgwick J, 30 June 1997).  That point is an important one for present purposes.  A court constituted by one or more individuals is plainly not to apply his, her or their purely subjective (which may include religious or areligious) notions of what is sound or justified.  No other test than that of the hypothetical, reasonable and fair-minded citizen suggests itself.  Further, harshness to the employee, or any other effect of the decision to terminate his or her employment, is not a decisive factor:  Victoria v Commonwealth (1996) 138 ALR 129, although it seems to me not to be wholly irrelevant to a judgment as to whether an employer’s reason is valid (see, for example, my discussion of the matter in Cosco).

It will be observed that my conclusion is that, even though the Church based its reason for the termination on the ground of “religion” within s 170DF(1), the task of the Court is to determine whether such a reason is a valid one based on the operational requirements of the undertaking, etc in accordance with s 170DE(1). There is no inconsistency here with my recognition, based upon constitutional doctrine, that it is inappropriate for the Court to enter upon a prophetic or critical role in relation to any religious doctrine of the Church or its adherents. The point may be illustrated in this way. Section 170DF(1)(f) refers to a number of matters other than religion. If a church argued, for example, that its reason for terminating an employee’s employment had been that the employee was one-legged (c.f. “physical disability” in s 170DF(1)(f)), the Court would nevertheless investigate whether that was a valid reason, based on the operational requirements of the undertaking, establishment or service (s170DE(1)). The Court need not question the worth or wisdom of the religious doctrine (as distinct from its actuality) which might impel the church in question to raise such a claim. Likewise, here, it is not for the Court to question the worth or wisdom of any religious doctrine of the Church, and no such questioning is involved in determining whether the Church’s religious reason was a valid one, based on the operational requirements of the Church as employer.

As to the Church’s “requirements”, in my view, a reasonable citizen would pay great respect to others’ religious beliefs and tenets.  He or she would not lightly conclude that a church was acting unjustly or indefensibly in declining to continue to employ a church member unrepentant about conduct reasonably seen by the church to be seriously in breach of a standard promulgated by it.  But he or she would need also to decide whether such a just or valid reason was truly based on the operational requirements of the church as employer.

Ms Hozack submitted that since there was no system for notifying other members of the Church that a member may have lost his or her Temple Recommend, and the reasons for her disfellowshipment were not known to anyone outside the Church’s Disciplinary Council, it could not be said that her remaining employed would jeopardise the good standing of the Church or conflict with the Church’s operational requirements.  However, in defence of the Church, it may be said there was no requirement that Ms Hozack’s disfellowshipment be kept confidential and, human nature being what it is, other Church members would doubtless become aware of her loss of status.  Ms Hozack herself was not minded to make a secret of any of the facts.  It follows that, even if other members might not necessarily become aware of the reasons for it, the fact that Ms Hozack had been disfellowshipped could embarrass the Church if she remained in its employment.  It is a reasonable aim of a church that the church’s good standing with its members generally, and in the broader community, be preserved by the church’s not being seen as hypocritical in relation to the employment of its own members.  The question remains, however, whether such is an “operational requirement” within the meaning of s 170DE(1).

The Church no doubt had a legitimate concern not to appear to people generally to be lacking in respect for its own tenets and processes.  However, in contemporary Australia, it is difficult to believe that any reasonable outsider would think less of the Church simply because, during a 12-month loss of a particular religious status, the Church might continue to employ a Church member as a receptionist.  But that is not the end of the matter.  The Church also had its position with its own adherents to consider.  It was argued here that it is a reasonable and defensible requirement of the effective operation of the Church that it appear neither hypocritical nor indifferent as to the maintenance of its own religious standards, including as to conduct such as failure to acknowledge the moral authority of the Church on an important issue of appropriate behaviour and/or as to the giving of significance to a solemn determination of religious status within the Church.  There is no doubt that those directing the Church bona fide require that matters so appear and, stated in the abstract, that is, to my mind, quite a defensible position.  But, like many other abstract propositions, it is best tested in its concrete and objective results.

No moral requirement of repentance or acceptance of the religious authority of the Church was or could reasonably be required of an employee who was not a member of the Church. It was the Church’s preference to employ members, wherever available and qualified, and its practice only to employ non-members where no such member-applicant could be found. Nevertheless, it could not, in my view, reasonably be concluded that it was a “requirement” of the Church, in the sense used in s 170DE(1), that only members be employed. In contemporary Australia it seems clear that a religious institution as employer, which did not or could not reasonably “require” (in the s 170DE(1) sense) of a particular employee adherence to the employer’s religion, could not validly terminate the services of such an employee whose personal position as to a matter of faith became, during the course of the employment, inconsistent with that religion. Accordingly, Ms Hozack might, in law, have saved her employment by promptly, voluntarily relinquishing her membership of the Church.

It would not, as I understand it, be regarded by the Church as in its interests, nor would it be regarded by the Church as in Ms Hozack’s interests, that she should renounce her Church membership.  It appears indefensible to me that Ms Hozack would have been entitled at law to keep her job had she left the Church, but could lose it as a result of the disciplinary penalty of disfellowshipment.  Such is, of course, a lesser penalty than excommunication.  The case of excommunication need not be considered here, but excommunication itself is no more, in essence, than an assertion by a church that it and its (ex-)adherent no longer share the same faith.

Although Ms Hozack worked in a role quite visible to some Church members, it was equally plain that her work was modest in its nature:  she was not in a position from which anyone would normally expect any particular leadership or example.

In these circumstances, it seems to me that, paying due (which is to say, very great) respect to the religious susceptibilities of Church members, it has not been proved that it was an “operational requirement” within the meaning of s 170DE(1) that a person in Ms Hozack’s position must be propelled from her employment with the Church. The matter is really concluded by the Church’s not having proved it to be a requirement that all the Church’s employees exhibit, on a continuing basis, religious standards and values such that, if they were Church members, they would qualify to be Temple-worthy.  Further, in my view, such, if it were a requirement, could not truly be said to be an operational requirement of the Church, considered as an employer of persons whose individual work is not intrinsically religious in nature.

In consequence, I cannot and do not conclude that the Church had a valid reason based on an operational requirement to terminate Ms Hozack’s employment.  It will be plain, I add, that the position might be otherwise had it been intrinsically (and not, for example, merely colourably) Ms Hozack’s task primarily to propagate or defend the Church’s faith.

Capacity

Insofar as it was said that Ms Hozack’s “capacity” was the reason for her termination, some consideration of that term, as used in s 170DE(1), is necessary. Again, the French text of the Convention, with its reference to “l’aptitude”, confirms one’s impression, as a matter of the ordinary use of English, of the meaning in the context. It means capacity for the work the employee was engaged to do. If nuance be needed, it is provided by the remainder of s 170DE(1) itself and by the entirety of the Convention and the subject Division of the Act. It would be very strange if an employer, religious or otherwise, could self-define “capacity” so as to undo the cogency for an employment relationship, demanded by s 170DE(1) in its reference to “operational”, of an employer’s requirements. It would be equally incongruous if the entire scheme of the Division, which is to protect aspects of an employee’s economic position from the effects of arbitrary, unjustified or unreasonably unmitigated termination of employment (c.f. ss 170DB, 170DD, 170FA, 170GA), could be undermined by an employer’s merely idiosyncratic notions of capacity. The reference to “performance” in s 170DC, since it is there referred to as an alternative to “conduct”, also , in my view, confirms the approach I take to the matter. That the attempt to define “capacity” itself was made by the Church in the express statement of employment which it prepared for its member-employees does not improve or alter matters: the parties cannot contract out of s 170DE(1). Ms Hozack was not a minister of her religion. No one doubted her ability to do her work as a receptionist. Her “capacity” within the meaning of s 170DE(1) was not wanting.

Opportunity to respond:  s 170DC

I deal with this matter for completeness’ sake.

Section 170DC provides:

“s170DC An employer must not terminate an employee’s employment for reasons related to the employee’s conduct or performance unless:

(a)the employee has been given the opportunity to defend himself or herself against the allegations made; or

(b)the employer could not reasonably be expected to give the employee that opportunity.”

It is clear from the evidence that the decision to terminate Ms Hozack’s employment was made before she was given an opportunity to respond:  such a failure was conceded by Mr Rundle under cross-examination.

The Church submitted, however, that s 170DC has no application in this case because the termination was not concerned with her conduct or performance. Alternatively, the Church submitted that the conditions of s 170DC had been met, as Ms Hozack had been given an opportunity to defend herself before the Disciplinary Council. The Church’s position is that since only the bishop had the power to determine whether a member is Temple-worthy, the relevant time for Ms Hozack to have been given an opportunity to defend herself was before the Disciplinary Council, and not before Mr Rundle, who had no power to question or override the bishop’s decision.

The following discussion proceeds upon the assumption, contrary to my own primary conclusion, that Ms Hozack was dismissed because of her conduct.

The decision to terminate Ms Hozack’s employment was not made at the meeting before the Disciplinary Council, and s 170DC deals specifically with employment matters, not internal Church disciplinary measures that are unrelated to employment. The decision-maker as to the termination was not the Disciplinary Council, but Mr Rundle, and a Church officer known as the Director of Temporal Affairs. Their decision was, according to Mr Rundle, ratified by “headquarters” in Salt Lake City.

The real question is whether those decision-makers, on behalf of the respondent, could reasonably be expected to have given Ms Hozack that opportunity.  As a practical matter, there was nothing that Ms Hozack could have said that would have changed the circumstances.  It was incontrovertible that she had been disfellowshipped, and that the employing authorities of the Church had no power to change that decision, the organs for the exercise of the Church’s authority being what they are.

But, even assuming in Ms Hozack’s favour that she was not given an opportunity to respond in breach of s 170DC, the end result would have been the same: She made it clear in Court that she had had no change of heart and would have persisted with the unrepentant attitude that had apparently offended the Church’s doctrines, as judged by the Disciplinary Council, even though she knew that the result must be her being disfellowshipped. Ms Hozack understood that, according to her Church’s tenets, she was required to repent before being re-admitted into the fellowship of the Church, but despite her continuing adherence to the Church, she had no such intention. She would have undoubtedly made that position clear had she been invited to defend herself. Therefore, the Church would have had no reason to change its mind or to postpone the termination. For that reason no remedy in compensation or otherwise should arise if there was an infraction of s 170DC.

Remedy

It is common ground that reinstatement would be impracticable.

Ms Hozack seems to have been earning about $250 for the 22 hours she usually worked each week.  She lost at least 6 months’ earnings at such a rate, but received some social security.

I intend to order that she have compensation in the sum of $7,280 ($280 x 26), the maximum that is available (s 170EE(3)), together with interest thereon, but will ask the parties to bring in short minutes within 7 days to accommodate provisions as to tax, and to enable them, after making enquiries of the Department of Social Security, to assess how best to deal with any claims which that Department might have on Ms Hozack’s compensation.

I certify that this and the preceding pages are a true copy of the Reasons for Judgment of the Honourable Justice Madgwick.

Associate:        
Date:               27 November 1997

Appearances

Counsel for the Applicant:            P. Newall
Solicitor for the Applicant:            Pigott Stinson Stuart Thom
Counsel for the Respondent:        I. Neil
Solicitors for the Respondent:       Barker Gosling
Date of hearing:  12 November and 16 December 1996