Kavassilas v Migration Training Australia Pty Ltd
[2012] FMCA 22
•27 January 2012
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| KAVASSILAS v MIGRATION TRAINING AUSTRALIA PTY LTD | [2012] FMCA 22 |
| INDUSTRIAL LAW – Unlawful termination – dismissal because of temporary absence because of illness – whether absence ‘of a kind prescribed’ in relation to sick leave – effect of reverse onus of proof – assessment of evidence of employer – unsubstantiated reasons given for dismissal – uncertainty as to true reasons – finding of liability – entitlement to compensation for period out of work – further hearing on penalty and costs. |
| Evidence Act 1995 (Cth), s.140 Fair Work Act 2009 (Cth), ss.96, 97, 107, 352, 360, 361, 545(2)(b), 546, 547, 551 Fair Work Regulations 2009 (Cth), reg.3.01 Federal Magistrates Act 1999 (Cth), s.76 Workplace Relations Act 1996 (Cth), ss.644, 659(2)(a), 809 |
| Australian Licenced Aircraft Engineers Association v International Aviations Service Assistance Pty Ltd [2011] FCA 333 Badman v Grasshoppers Early Learning Centres Pty Ltd [2009] FMCA 32 Bahonko v Sterjov (2007) IR 43, [2007] FCA 1244 Barclay v The Board of Bendigo Regional Institute of Technical and Further Education (2011) 274 ALR 570; [2011] FCAFC 14 Qantas Airways Ltd v Gama (2008) 167 FCR 537 Sperandio v Lynch (2006) 160 IR 360 |
| Applicant: | DAPHNE KAVASSILAS |
| Respondent: | MIGRATION TRAINING AUSTRALIA PTY LTD |
| File Number: | SYG 2419 of 2010 |
| Judgment of: | Smith FM |
| Hearing dates: | 1 & 2 June 2011 15 & 16 November 2011 |
| Delivered at: | Sydney |
| Delivered on: | 27 January 2012 |
REPRESENTATION
| Counsel for the Applicant: | Mr T Saunders |
| Solicitors for the Applicant: | Eakin McCaffery Cox Solicitors |
| Counsel for the Respondent: | Mr A Britt |
| Solicitors for the Respondent: | Christopher Levingston & Associates |
ORDERS
The matter is adjourned for further hearing in accordance with the reasons for judgment published today.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG 2419 of 2010
| DAPHNE KAVASSILAS |
Applicant
And
| MIGRATION TRAINING AUSTRALIA PTY LTD |
Respondent
REASONS FOR JUDGMENT
Mr Levingston and Mrs Ross (also known as Ms Allan) are directors of Migration Training Australia Pty Ltd (“MTA”), Christopher Levingston and Associates Pty Ltd (“CLA”), and Visacorp Pty Ltd (“Visacorp”). These companies conduct separate businesses which provide, respectively, migration agent education services, legal services, and migration visa services. From 17 May 2010 the directors of MTA employed Ms Kavassilas in a newly created position of Group General Manager on an initial base salary of $150,000.
The position presented various managerial challenges. On Monday 9 August 2010, after a particularly stressful previous week, Ms Kavassilis’ sister telephoned her workplace to inform her employers that Ms Kavassilas was taking personal leave covered by a medical certificate for the whole week, but hoped to return on the Wednesday. Mr Levingston and Mrs Ross received this message, but proceeded to terminate her employment summarily. They served a letter of termination on Ms Kavassilas at about 4pm on Wednesday 11 August 2010. Among other reasons, the letter said: “you have failed to keep the Directors aware of your absences.” Ms Kavassilas had no other record of unexplained absences, and two medical certificates covering Ms Kavassilas’ absence between the 9th and 11th were forwarded to MTA by her solicitor on 17 August 2010.
Ms Kavassilas alleges in the present proceedings against MTA that her dismissal without ‘one month’s written notice’, as provided in cl.17 of her contract, was not justified by any serious misconduct or wilful neglect or other reason permitting termination without notice under cl.16. Although much evidence was presented by both parties concerning numerous allegations about Ms Kavassilas’s discharge of her duties, MTA conceded at the end of the hearing that Ms Kavassilas had been summarily dismissed in breach of contract. It now concedes that she is entitled to one month’s lost wages in lieu of notice, being the sum of $12,500.
Ms Kavassilas also alleges that her dismissal was in contravention of s.352 of the Fair Work Act 2009 (Cth), which prohibits dismissal due to temporary absence because of illness of a kind prescribed. She seeks the imposition of a penalty on the company under s.546, and compensation under s.545(2)(b) by way of lost wages and superannuation contributions from 12 August 2010 until she obtained alternative employment on 15 November 2010. The maximum penalty which can be imposed on MTA is $33,000. Ms Kavassilas has not sought any remedies against Mr Levingston or Mrs Ross personally.
MTA denies that the objectively determined circumstances of Ms Kavassilas’ absence bring her case within s.352. It also denies that her absence on personal leave provided a reason for her termination, as distinct from a ‘failure to keep the Directors aware’ of her absence. It submits that the best evidence of the directors’ reasons for terminating the employment is found in the termination letter. It also submits that it is irrelevant whether the reasons stated in the termination letter had any merit, and whether they were genuinely operative in the minds of the directors, since none of them revealed an unlawful reason.
I have concluded that the objectively determined circumstances of Ms Kavassilas’ absence are sufficient to raise a presumption of a reason made unlawful by s.352. Endeavouring to find the true reasons for the termination of her employment on 11 August 2010, I have found most of the two directors’ evidence to be unsatisfactory and unpersuasive. I find that at relevant times they were aware that Ms Kavassilas had taken reasonable steps to inform the directors of MTA of her absence on sick leave. I am unable to arrive at a confident conclusion on the balance of probabilities that Ms Kavassilas’ absence because of illness provided a true reason for her dismissal, although it is clear to me that, at least, it influenced the timing and manner of the directors’ decision to terminate her employment. A finding of MTA’s liability for contravention of s.352 is therefore to be established by application of the presumption raised by s.361. It is agreed that, having made that finding, I should appoint a further hearing in relation to quantum of penalty and costs issues.
An assessment of Ms Kavassilas’ loss suffered because of the contravention is not easy, due to the difficulty of predicting how long her employment might have continued if the directors had not taken their unlawful action on 11 August 2010. As I shall explain, I am not persuaded that her employment was doomed to an early termination, but I cannot ignore substantial contingencies that it might not have continued for another three months. I have concluded that a fair and appropriate amount of compensation is arrived at by awarding compensation covering the full period of her unemployment but with a discount of 20% for these contingencies. I shall award interest on that amount up to judgment calculated under s.547 of the Fair Work Act. I shall invite the parties to agree upon the calculation of an exact amount of compensation and interest, which I shall include in my orders when addressing penalty and costs.
Ms Kavassilas’ employment and termination
Counsel for Ms Kavassilas has provided in his written submissions an admirably concise and balanced narration of the evidence concerning Ms Kavassilas’ employment and the events leading to her termination. Counsel for MTA expressly indicated that he took no issue with the accuracy of this narration and its citations of evidence. I am grateful to both counsel for their assistance in this respect. I shall therefore extract these parts of the submissions in full, omitting their citations to the location of the evidence. I am satisfied that all of the narrated facts are established on the evidence, and that I should accept all of counsel’s submissions as to the inferences and conclusions to be drawn from the evidence to which he refers.
Findings of fact
3Ms Kavassilas commenced employment with MTA on 17 May 2010 in the position of Group General Manager.
4The evidence of Mrs Ross and Mr Levingston in cross examination established that Ms Kavassilas came into a business which:
(a)had not been managed as well as it could have been managed;
(b)required organisational change; and
(c)was a difficult environment in light of the fact that Mrs Ross and Anthony Ross were recently separated, but continued working together and from time to time allowed their personal issues to come into the workplace, and Mrs Ross had taken up a new personal relationship with Mr Levingston, who was also a director of MTA.
5Mr Levingston gave evidence that he expected some of MTA’s long serving employees to find it difficult to cope with the organisational change to be implemented by Mr Kavassilas. That is in fact what happened.
6On 1 June 2010, Mrs Ross sent Ms Kavassilas an email in which she described a number of Ms Kavassilas’ suggestions or recommendations as “this is a brilliant idea”, “great plan”, “good plan”, and “thanks so much”. Mrs Ross gave evidence that she thought Ms Kavassilas was performing well at this time.
7On 7 July 2010, Mrs Ross received an email from Jesslyn Lee, an employee of MTA, in relation to “workplace harassment” by Ms Kavassilas.
8Mrs Ross forwarded the email on to Ms Kavassilas on 8 July 2010 and asked her to “resolve” the issue.
9Ms Kavassilas responded by an email to Mrs Ross in which she stated, inter alia, that she had “treated her [Ms Lee] with respect and patience since I’ve joined the organizations”. Although Mrs Ross asserted in cross examination that she did not know how Ms Kavassilas had treated Ms Lee, Mrs Ross made no response to Ms Kavassilas’ email to her. Instead, Mrs Ross simply left it with Ms Kavassilas to “deal with” the issue directly with Ms Lee.
10Prior to speaking to Ms Lee about her concerns, Ms Kavassilas and Mrs Ross decided to offer Ms Lee a new position as Mrs Ross’ Personal Assistant. So much is clear from the email dated 8 July 2010 from Ms Kavassilas to Mrs Ross after Ms Kavassilas had met with Ms Lee to discuss her concerns.
11Ms Kavassilas stated in her email to Ms Lee (cc to Mrs Ross) dated 8 July 2010 that she was “very happy we have resolved the issues” and “1 am also very happy that you are pleased with the new role we are offering you as Visacorp”. Ms Lee did not respond to this email, from which it can be inferred that she accepted its contents were accurate.
12Mrs Ross’ response to Ms Kavassilas’ email of 8 July 2010 was “This seems like a very (very) good result. Great!”. The Court should accept this contemporaneous document as an accurate record of Mrs Ross’ state of mind at the time.
13Later on the same day Ms Kavassilas and Mrs Ross had another discussion in which Ms Kavassilas expressed concern about the conflicting messages she was receiving from Mrs Ross and Mr Levingston in her role as General Manager. In that discussion Ms Kavassilas told Mrs Ross that they could “choose to let you [her] go”. That discussion is evidenced in the email from Mrs Ross to Ms Kavassilas sent at 3:26pm on 8 July 2010. That email also records Mrs Ross’ response to Ms Kavassilas in these terms:
“We have no intention of doing anything like that. I want to reassure you of that.”
14Ms Kavassilas responded at 3:32pm by stating “Not a problem Liana. Whatever you decide is fine. No need to talk about it.”
15Mrs Ross responded to that email at 3:34pm by stating “OK, as long as all is ok. We fully support you and I want you to be confident in that knowledge”.
16In light of the content of the contemporaneous email communication between Mrs Ross, Ms Kavassilas and Ms Lee on 7 and 8 July 2010, the Court should find that any issue Ms Lee had with Ms Kavassilas was resolved, and that Mrs Ross knew that it had been resolved, on 8 July 2010.
17On 3 August 2010, Ms Kavassilas took part in a staff meeting to discuss issues in the workplace. On 3 August 2010, Mr Levingston was hoping that any problems he had with Ms Kavassilas “would resolve”.
18On either 4 or 5 August 2010, Mr Levingston told Ms Kavassilas that he was not going to sack her, and that “there has been no discussion between Liana and I about that. If there had been, I would tell you”
19Mr Levingston agreed in cross examination that he had no intention of sacking Ms Kavassilas on 4 or 5 August 2010.
20Any concerns which Mr Levingston had in his mind on 4 or 5 August 2010 about Ms Kavassilas were not, he agreed, very significant.
21On 6 August 2010, Ms Kavassilas met with Mrs Ross and Mr Levingston from about 10:15am until about 12:15pm. During that meeting they discussed a whole range of tasks that they intended Ms Kavassilas would undertake over the coming months.
22Mr Levingston gave evidence that he would not have been asking Ms Kavassilas on 6 August 2010 to undertake such work over the coming months if he was going to sack her.
23At the end of the meeting on 6 August 2010 Mr Levingston had no intention of sacking Ms Kavassilas.
24In contrast, Mrs Ross asserted in cross examination that she had made her mind up during the meeting on 6 August 2010 that Ms Kavassilas was going to be dismissed.
25During the meeting on 6 August 2010 Mrs Ross saw that Ms Kavassilas was rubbing her chest. They had a discussion about Ms Kavassilas’ chest pains and Mrs Ross ended the discussion by saying “I suffered anxiety when I had my first child and the symptoms you describe are panic attacks”. Mrs Ross gave evidence in cross examination that she thought Ms Kavassilas appeared anxious during the meeting on 6 August 2010, and that she was moving towards a panic attack or she may have had a heart problem.
26The meeting on 6 August 2010 was the last time that Mrs Ross or Mr Levingston would see Ms Kavassilas at work.
27At 3:43pm on 6 August 2010, Ms Kavassilas emailed a copy of her typed up notes from the meeting earlier that day to Mr Levingston and Mrs Ross.
28Following receipt of those notes Mrs Ross had the following conversation with Ms Kavassilas:
Mrs Ross:“Daphne I do not agree with some of the things that you have put in the memo or the version of events that you have included. I have my own version and it is different to yours.”
Ms Kavassilas: “I look forward to receiving yours, Liana.”
29Mrs Ross does not recall if she responded to this final statement by Ms Kavassilas during their conversation. However, it is clear from Mrs Ross’ evidence during cross examination that:
(a)she did not provide a copy of her notes to Ms Kavassilas;
(b)at no time did she give Ms Kavassilas an opportunity to respond to any particular assertion by Mrs Ross as to the ways in which she alleged Ms Kavassilas’ notes were incorrect or misleading;
(c)she still has a copy of her notes from the meeting of 6 August 2010;
(d)she did not annex a copy of her notes from the meeting of 6 August 2010 to her affidavit, notwithstanding that she still has those notes. In those circumstances, an inference should be drawn that those notes would not have assisted MTA’s case.
30Ms Kavassilas left work on the afternoon of 6 August 2010 and went to see her doctor. She was provided with a medical certificate from her doctor stating that she would be “unfit for her normal work from 6/8/2010 to 13/8/2010”.
31There is a controversy in the evidence as to when Mr Levingston and Ms Ross decided to terminate Ms Kavassilas’ employment with MTA; Mr Levingston gave evidence that the decision was made on Monday. 9 August 2010, whereas Mrs Ross gave evidence that the decision was made on the weekend of 7 and 8 August 2010. Mr Levingston’s evidence should be accepted, and Mrs Ross’ evidence should be rejected, on this question for three reasons:
(a)First, Mrs Ross’ assertion is inconsistent with her emails to Mr Levingston on Monday, 9 August 2010 at 9:48am and 12:24pm where she makes statements concerning Ms Kavassilas’ notes from the meeting on 6 August 2010. If a decision had been made on the weekend to dismiss Ms Kavassilas, Mrs Ross would have told Mr Levingston in her emails on Monday, 9 August 2010 either that (i) the notes were irrelevant because they had already made their decision to dismiss Ms Kavassilas or (ii) the notes confirmed the decision they had made to dismiss Ms Kavassilas;
(b)Secondly, Mrs Ross had no plausible explanation for the delay in allegedly making the decision to dismiss Ms Kavassilas on the weekend and the sending of the letter of termination on Wednesday, 11 August 2010; and
(c)Thirdly, the letter of termination itself refers to Ms Kavassilas’ “failure to keep the Directors aware of your absences”, which absences Mrs Ross said were those by Ms Kavassilas on 9, 10 and 11 August 2010. If her absences from work on those days were part of the reason for her dismissal, the decision to dismiss could not have been made before Ms Kavassilas was absent from work on 9 August 2010.
32Before 9:30am on 9 August 2010, Ms Daisy McHugh, Ms Kavassilas’ sister, telephoned the MTA’s work telephone number [number omitted] and told Sarah Seville, an employee of Christopher Levingston and Associates who (along with a number of other employees including Ms Kavassilas) had duties to MTA which included answering its telephone and providing messages to MTA, that Ms Kavassilas would “not be into work today or tomorrow as she has been to see the doctor and she is unwell for work She has a doctor’s certificate for the whole of the week but I will ring you Wednesday morning if she won’t be able to return by then”.
33Ms Seville then sent an email to Mr Levingston at 9:39am on Monday, 9 August 2010, informing him that “Daphne also called in sick. She will be returning to work on Wednesday”.
34Mr Levingston read that email and then forwarded it on “FYI” at 12:44pm on 9 August 2010 to Mrs Ross.
35In addition to sending him the email at 9:39am concerning Ms Kavassilas’ absence, Ms Seville also told Mr Levingston in a face to face discussion on 9 August 2010 that Daphne “was ill” and “Daisy had called and that Daphne would not be in until Wednesday”. Mr Levingston replied with words to the effect that “he understood”. That discussion took place between 9:39am and midday on 9 August 2010 in the reception area of MTA’s offices at a time when Mr Levingston was within two metres of Ms Seville. Mr Levingston did not deny that he had such a discussion with Ms Seville; he could not recall one way or the other whether he did. In light of Ms Seville’s clear recollection of the matter and her position as an independent witness, her evidence ought be accepted.
36On Monday, 9 August 2010 Ms Kavassilas received a voicemail message from Ms Seville wishing her “a speedy recovery and asked if I needed anything to call and that she had let Chris know I was ill”.
37On Monday, 9 August 2010 Ms Kavassilas received a voicemail message from Mr Levingston in which he said “Sorry to hear you are sick. Please call me when you are feeling better.” Mr Levingston did not deny leaving such a voicemail message for Ms Kavassilas; he simply could not recall one way or the other.
38On Tuesday, 10 August 2010 Ms Kavassilas was absent from work due to her illness.
39On Wednesday, 11 August 2010 Ms Kavassilas was again absent from work due to illness.
40At 8:58am on Wednesday, 11 August 2010 Daisy McHugh called MTA’s offices and spoke to Ms Seville. Ms McHugh told Ms Seville that Ms Kavassilas was “not too good I’m afraid so she won’t be in for the rest of the week. Can you please let the powers that be know.” Prior to calling Ms Seville, Ms McHugh had called Ms Kavassilas to find out how she was feeling.
41During the morning of Wednesday, 11 August 2010 Ms Seville told Mr Levingston that “Daisy had called again”, “a doctor’s certificate will be sent through” and that Ms Kavassilas would be away for “the remainder of the week”. Mr Levingston replied with words to the effect of “okay”. That conversation took place in the reception area of MTA’s offices.
42On Wednesday, 11 August 2010 Ms Seville sent Ms Kavassilas a text message saying “Hi Daphne that was me, sarah, just seeing how u were going? Hope ur okay”. Ms Kavassilas responded with a text message saying “Hi Sarah not well won’t be in this week. Will send Drs certificate. Hope you’re okay Dx.”
43At 12:39pm on Wednesday, 11 August 2010 Ms Kavassilas sent an email to Mr Levingston in the following terms:
“Dear Christopher
I am ill and unable to come to work.
I have a doctor’s certificate for the rest of the week.
I shall ensure you are sent a copy.
Many thanks
Daphne”
44The letter of termination was delivered to Ms Kavassilas’ house at about 4pm on 11 August 20l0. That is when Ms Kavassilas employment came to an end.
45Mrs Ross gave evidence during cross examination that she was aware when she signed the letter of termination on Wednesday, 11 August 2010 that (a) Ms Kavassilas had been absent from work because of illness from 9-11 August 2010, (b) a medical certificate would be provided by Ms Kavassilas, and (c) the likely person who told her that information was Mr Levingston.
46On 12 August 2010 Ms Kavassilas went to see her doctor again. He provided her with a medical certificate in the following terms:
“In my opinion, Daphne has severe anxiety due to work related stress. She has been emotionally labile, anxious and suffers from insomnia as a result of her current work situation which culminated in receiving a notice of termination of her employment when on sick leave yesterday.
She is taking medications to aid in her sleep and also may require antidepressant medications at a later date.”
47On 17 August 2010 Ms Kavassilas’ solicitor faxed a copy of her two medical certificates to MTA.
(citations omitted)
It is also useful to extract relevant parts of Ms Kavassilas’ contract of employment, and the full terms of the termination letter. I can then more closely examine the evidence of the directors’ concerning their reasons for delivering that letter.
Ms Kavassilas’ contract of employment is dated 24 March 2010, and was executed by Mrs Ross and Mr Levingston as directors of MTA. It attached a letter of offer dated 22 March 2010, and job description. It provided for the commencement of employment on 17 May 2010, with no fixed term. The contract’s provisions for sick leave and termination were:
12SICK LEAVE
12.1The Employee is entitled to 10 days sick or personal carers leave in each year of service. This is not cumulative.
12.2Should the Employee take in excess of 2 consecutive days’ sick leave, the Employee is to provide The Directors of the Employer with a medical certificate from a qualified Medical Practitioner stating that the Employee was unfit for work on those days.
12.3The Employee is not entitled to payment for untaken sick leave on termination of the Employee’s employment.
…
16TERMINATION WITHOUT NOTICE
The Employee’s employment may be terminated without prior notice or payment in lieu of notice if the Employee:
(a)commits any serious or persistent breach of any of the provisions of this agreement
(b)is guilty of any serious misconduct or wilful neglect of the Employee’s duties;
(c)becomes bankrupt or makes any arrangement or composition with the Employee’s creditors;
(d)is convicted of a criminal offence other than an offence which in the reasonable opinion of The Directors of the Employer does not affect the Employee’s position as an Employee of Migration Training Australia;
(e)becomes permanently incapacitated, by reason of accident or illness, from performing the Employee’s duties under this agreement, and for the purposes of this clause incapacity in excess of 90 consecutive days or for an aggregate period of 90 days in any period of 12 months is deemed to be permanent incapacity; or
(f)consistently fails to carry out the Employee’s duties in a manner satisfactory to the Company.
17TERMINATION – WITH NOTICE
Either party may terminate this agreement by giving one month’s written notice of termination to the other for any reason.
The letter of termination dated 11 August 2010 is signed by each of Mrs Ross and Mr Levingston, as “The Directors, Migration Training Australia”. It stated:
Dear Daphne
Re Your Employment
The purpose of this letter is to formally advise you of the resolution of the Directors to terminate your employment.
This is a “notice’ as defined in your contract of employment (Clause 21.7) and is being posted to your residential address.
The Directors are of the view that you have consistently failed to carry out your duties in a manner satisfactory to the Company, Migration Training Australia.
Specifically, this disruption to the Companies as defined in paragraph 1.1 has led to a loss of income in all trading entities with key staff members being disaffected by your management style. You are aware of the complaints of bullying and harassment made by an employee of Visacorp and an employee of MTA. Other key staff have come forward with similar complaints.
You have failed to keep the Directors aware of your absences, and you have failed to diligently and consistently to apply yourself to the discharge of your duties.
Further, you have declined, without good reason, to cooperate with the Directors in respect of your role in the marketing of the “portal”. Under the circumstances The Directors herewith notify you of their intention to terminate your employment with immediate effect. The Directors reserve their rights to your intellectual property including your marketing list which you have failed to disclose to the Directors. We require you to produce that list in an acceptable format within the next 7 days but no later than 4pm on 18 August 2010.
I am sorry we do not have better news for you and take this opportunity of wishing you all the best for the future.
Yours faithfully
Liana Allan and Christopher Levingston
The Directors
In fact, it is common ground that the letter was delivered by courier to Ms Kavassilas at her home at about 4pm on 11 August 2010.
The reasons indicated in the letter were maintained in MTA’s defence and cross-claim in the proceedings, which contended:
6.As to in paragraph 11 of the applicant’s statement of claim, the respondent denies the facts and assertions [except as stated below] on the following grounds:
(a)The termination of the applicants employment was not because the applicant was temporarily absent from work because of illness or injury.
(b)The termination of the applicant’s employment was for various reasons including the following:
(i)The applicant had consistently failed to carry out her duties in a manner satisfactory to the respondent and in particular the duties specified in Attachment 2 of the Agreement.
(ii)The applicant disrupted the activities of the group of companies defined in clause 1.1 of the Agreement. The disruptions resulted in the loss of income by all companies in the group.
(iii)The applicant’s management style resulted in the disaffection of key staff.
(iv)The applicant harassed and bullied an employee of Visacorp and an employee of MTA.
(v)Other employees of the group of companies made similar complaints in relation to the way in which the applicant carried out her role.
(vi)The applicant failed to keep the directors of the group of companies aware of her absences from work.
(vii)The applicant failed to diligently and consistently apply herself to the discharge of her duties.
(viii)The applicant refused without any satisfactory reason to co-operate with the directors with respect to the marketing for the group of companies of the “Online portal” described under the heading in attachment 2 to the Agreement.
(ix)The applicant failed to provide the lists to which the applicant refers in subparagraph 11(c) of the applicant’s statement of claim.
The directors’ evidence as to their reasons
It is convenient first to examine the respondent’s contention that one of the true reasons for terminating Ms Kavassilas’s employment was that she “failed to keep the Directors aware of your absences”, as distinct from the fact of her absence on 8, 9 and 10 August 2010.
In his affidavit sworn on 14 April 2011, Mr Levingston referred to the staff meeting called by Mrs Ross on 3 August 2010. He continued:
26Overall the relationship between Ms Kavassilas, Ms Allan and I soured when we were informed that she had been bullying Mr Brian Kelleher and deprecating the performance of Ms Jesslyn Lee. Both of these substantial issues arose within about a week of each other. I was very concerned that the occupational health and safety obligations of MTA with respect to bullying of staff were being traversed. I was concerned that both Mr Kelleher and Ms Lee commence legal proceedings against MTA.
27It was on these bases that the Directors took the decision to have a staff meeting so that these issues could be ventilated was resolved. The immediate reaction of Ms Kavassilas was “Brian and Jesslyn are lying” and “I have been defamed” and “I will sue them”. This extraordinary reaction accompanied by tears and threats of legal action were dismissed by Ms Allan and I.
28However, it was recognised that there was a significant risk that the relationship between the staff of the various companies and the group general manager was in real danger of becoming unworkable. The conduct of Ms Kavassilas prior to the staff meeting, during the meeting and thereafter was in my view inconsistent with her statutory duties with respect to the staff under her control.
29After the meeting of 3 August 2010, Ms Kavassilas was distant and withdrawn, She appeared very tense and upset. At a meeting with the Directors on Friday 6 August 2010 she was tense and although ostensibly cooperative she was still dismissive of the concerns of staff and said “let’s move on”.
30When I first received the document, a copy of which is Annexure DK18 to the affidavit sworn by Ms Kavassilas on 2 March 2010 (Agenda Notes dated 6 August 2010), I met with Ms Allan at the offices of CLA. We discussed the contents of DK18. I knew that the representations in paragraphs 1 and 2 of DK18 were either not true or a distortion of the actual statements and events.
31I believed that object of Ms Kavassilas in writing paragraphs 1 and 2 of DKI8 was to exculpate herself from the staff allegations of bullying.
32I also believed that object of Ms Kavassilas in writing her version of the minutes in DK18 was to attempt to minimise and distort her responsibility for the crises exhibited at the 4 August 2010 meeting.
33Ms Allan and I had a conversation which included the following:
Me: “This is not right, she is setting us up.”
LA:“Yes, don’t worry I have kept notes of what went down.”
Me:“OK. Just be sure to hang onto them you never know what might happen now.”
34It became obvious to me that Ms Kavassilas had no understanding or insight into the legal ramifications of her behaviour and management style. That afternoon she left without saying goodbye.
35From 6 August 2011 there was no communication with between me and Ms Kavassilas. I made at least 3 attempts by me to ring her on her mobile telephone.
36I tried to ring and text Ms Kavassilas on Monday 9 August 2010 and Tuesday 10 August 2010 to find out where she was. I even rang the concierge in her building to ask if they had seen her and if they did see her to get her to call. I did not know of her whereabouts. I did not receive any replies and I was not informed by Ms Seville that Ms Kavassilas had told Ms Seville she was sick.
37On Tuesday, 10 August 2010, I noticed there was nothing of a personal nature left in her office. I remember thinking “she is gone”.
38I would not have resolved to terminate the employment of Ms Kavassilas if I had been informed that she was sick. I would have waited until she was well enough to return to work.
In her first affidavit, Ms Kavassilas referred to being unwell on Friday 6 August 2010 and the following week, and to communications to the MTA offices by her sister and herself:
210.I felt unwell and decided to consult my medical practitioner on the evening of 6 August 2010. I had pains in my chest during my 10.l5am meeting with the directors at CLA offices. LA saw me rubbing my chest and said:
“Are you having pains in your chest?”
I said:
“Yes, it feels tight”
LA said”
“I get those pains and I call them ‘my friends’ it is because we have so much on at the moment.”
211.The medical practitioner certified me to be unfit for work. I decided to follow my doctor’s recommendation and took sick leave on the week commencing Monday 9 August 2010. My sister Daisy McHugh had called me over the weekend.
212.I asked my sister to advise the Company that I was off sick and would be off work due to my illness. I asked her to speak with Sarah Seville at around 8.45am as I knew that CL wouldn’t be in the office. He normally didn’t arrive until around 10am or 11am and usually left by 3pm most days.
213.My sister later informed me that she had telephoned my work on Monday 9 August 2010 and informed them that I was unwell and would not be in work for a few days however would call and advise my progress on Wednesday. I understand that she spoke with SS who told her to wish me well and a speedy recovery.
214.On Monday 9 August 2011 I received a voicemail from Sarah Seville, the Receptionist and Sales Support at CLA/MTA. The message wished me a speedy recovery and asked if I needed anything to call and that she had let Chris know I was ill.
215.On the morning of Wednesday 11 August 2011 my sister Daisy McHugh called Sarah Seville again to let her know that I would not be in for the rest of the week.
216.SS called again and left me another voice mail. She then sent me a text message as follows at 1.38pm:
“Hi daphne that was me, sarah, just seeing how u were going? J hope ur okay”
217.I responded with:
“Hi Sarah not well won’t be in this week. Will send Drs certificate. Hope you’re okay Dx.”
218.She responded at 2.l8pm with:
“I mite give u a call later if that’s ok? Everything is fine with josie n i. So long as ur ok, been worried about u J talk soon- Sarah x”
219.At 12:39 pm on 11 August 2010 I sent an email to Christopher Levingston, advising that I was ill and unable to attend work, that I had a doctor’s certificate for the rest of the week and that I would ensure that he was sent a copy of the certificate. Annexed and marked with the letters “DK22” is a copy of that email.
220.On 11 August, 2010 while on sick leave I received written notice that my employment had been terminated with immediate effect. The letter had been delivered to my home at approximately 4 pm on 11 August, 2010. Annexed and marked with the letters “DK23” is a copy of the Letter of Termination.
In reply to these paragraphs, Mr Levingston repeated his denial of being aware that Ms Kavassilas was absent on sick leave. He said:
Paragraph 210
I do dispute the representations made in the paragraph. At the meeting on 6 August 2010, Ms Kavassilas appeared composed but tense. At no stage did she indicate that she was unwell. There was no conversation to the effect that she was having chest pains.
Paragraph 211
A medical certificate concerning the absence of Ms Kavassilas was given but on a date after 11 August 2011 (sic: 2010). I dispute or do not know whether the representations made in the remainder of the paragraph are true or false.
Paragraph 212
I was not told that Ms Kavassilas was ill and not able to work. l did not receive any text messages or emails to that effect. I did note the absence of Ms Kavassilas but was not concerned until 10 August 2011 (sic: 2010). I had a conversation with Ms Allan concerning the absence of Ms Kavassilas. I dispute or do not know whether the representations made in the remainder of the paragraph are true or false.
Paragraph 214
I was not told by Ms Seville on 9 August 2011 (sic: 2010) that Ms Kavassilas was ill. I do not know whether the representations made in the remainder of the statement are true or false.
Paragraph 215
I do not know whether the representations made in the paragraph are true or false. However, I was told by a member of staff sometime after 11 August 2011 (sic: 2010) that Ms Kavassilas was on sick leave and that a medical certificate would be given in respect of her absence.
Paragraph 220
The “Letter of Termination” was drafted on 10 August 2010 settled on the morning of 11 August 2011 (sic: 2010) and sent by courier to the residential address of Ms Kavassilas. At this time I was not aware of any illness Ms Kavassilas may have had.
However, at the hearing Ms Kavassilas called her sister and Ms Seville as witnesses, and they gave unshaken evidence which corroborated Ms Kavassilas’ account of events. I accept their evidence. In particular, I accept that on the morning of Monday 9 August 2010, Ms Seville “told Christopher Levingston to his face that Daisy had called and that Daphne would not be in until Wednesday … that she was ill” and “that Daisy would let me know how Daphne was faring on the Wednesday”, and that he said words “to the effect that he understood”.
The likelihood of this conversation, and that its import was also communicated to MTA’s other director, Mrs Ross, was confirmed by an email sent by Ms Seville to Mr Levingston on Monday 9 August 2010 at 9.39am. It said:
Hi CHL
Just letting you know that Brian called in sick today – he is going to the doctors at 10 and will have the rest of the day off. Brian will return to work tomorrow.
Also, Daphne also called in sick. She will be returning to work on Wednesday.
Thanks,
Sarah
Another email shows that he forwarded this message to Mrs Ross on the same day at 12.44pm with the heading ‘sick people’.
I also accept Ms Seville’s evidence that she told Mr Levingston during the morning of Wednesday 11 August 2010 “that Daisy had called again and that a doctor’s certificate will be sent through”, and that Ms Kavassilas would be off work “until the remainder of the week”. I accept that Mr Levingston indicated that he understood this message.
Faced with this evidence, Mr Levingston withdrew his denial that he was not informed that Ms Kavassilas was taking sick leave. He conceded that he had received the email from the MTA receptionist, Ms Seville, and – not without some prevarication – said “I don’t specifically recall having read it”. He said he had no recollection of the two conversations with Ms Seville concerning Ms Kavassilas’s absence, but did not deny that they occurred. He did not suggest that he had any reason not to accept the truth of what was communicated to him by Ms Seville. In effect, in my opinion, his oral evidence demonstrated the complete unreliability of his sworn affidavit on this very important issue, and casts general doubt on the reliability of the whole of his evidence.
Mrs Ross did not provide any evidence in her affidavit concerning her knowledge of Ms Kavassilas’ absence between 9 and 11 August 2010, nor as to the discussions between the directors of MTA leading to their preparing and serving the letter of termination.
She attached some emails of her exchanges with Ms Kavassilas in the preceding weeks. These confirm that there were tensions in some relationships within the offices in which Ms Kavassilas worked, and other issues which the directors of MTA attempted to address at the general staff meeting on 3 August 2010 and at a meeting with Ms Kavassilas on 6 August 2010. However, they give no corroborative evidence that the directors, or either of them, was contemplating her summary dismissal or had discovered a cause for doing so before Monday 9 August 2010. Certainly, they give no evidence that Ms Kavassilas was put on notice of any matter of concern which might result in her dismissal, with or without notice.
In her oral evidence, which was given at the resumed hearing on 15 November 2011, Mrs Ross gave evidence as to her state of mind which was contradicted by contemporaneous documents. In explanation, she seemed to suggest that she is a person who makes untrue statements to disguise her true feelings, thoughts, and actions, in the course of her business and personal dealings. I shall refer to this evidence below, when endeavouring to find the true reasons for Ms Kavassilas’s summary dismissal by the directors of MTA. I found her evidence unpersuasive, and was left with an opinion that Mrs Ross’ evidence is generally unreliable except where it is independently corroborated.
In relation to Ms Kavassilas’ absence from work between 9th and 11th August 2010, Mrs Ross said that she signed the termination letter containing the asserted reason that Ms Kavassilas had ‘failed to keep the directors aware of your absences’ without any belief in the truth of this assertion, and “because Christopher had drafted this letter and because he’s a solicitor I decided to sign it …”. She readily conceded that “the only absence I was aware of was the fact she was off sick that Monday. She then said: “the fact that she was absent from work had no bearing on whether or not, in my view, I wanted her to be dismissed”, and maintained that she and Mr Levingston had already reached this decision before the Monday. She agreed that she was aware on Wednesday 11 August 2010 that someone, probably Mr Levingston, told her that Ms Kavassilas or someone on her behalf, had informed MTA that Ms Kavassilas was unlikely to be at work for the rest of the week and that she had a medical certificate for her absence. Mrs Ross said she thought it could have been a genuine illness of panic attack, anxiety or heart problem, “but my gut feeling was that she was using it as a way not to turn up”.
On all the evidence before me, I find that at all relevant times on 9, 10 and 11 August 2010, Mr Levingston and Mrs Ross were probably aware that the reason for Ms Kavassilas’ absence from her workplace was that she was taking sick leave, for which she would present a medical certificate if it lasted longer than the two days allowed by cl.12.2 of her contract. Mr Levingston has given no acceptable evidence that he had any reason to hold, nor that in fact he held at the relevant times when he was preparing and sending the letter of termination, a genuine belief that Ms Kavassilas, via her sister, had not reasonably informed her employer and its directors of her absence on claimed sick leave in the week of her termination. As I have noted, Mrs Ross admits that she had no such belief. I find that the termination letter’s assertion that “you have failed to keep the Directors aware of your absences” was untrue, and was probably known by Mr Levingston and Mrs Ross to be untrue when it was included in the letter. I note that it was not contended in the respondent’s case that this criticism had any foundation in any absence by Ms Kavassilas earlier than in the week commencing 9 August 2010.
No issue was taken as to the probity of the medical certificates which were forwarded to MTA by Ms Kavassilas’ solicitor on 17 August 2010, covering the period of her absence. The first certificate dated 6 August 2010 gives an opinion that “Daphne has a medical condition. Daphne will be unfit for her normal work from 6/8/2010 to 13/8/2010 inclusive”. The second certificate, dated 12 August 2010, states:
12/08/2010
This is to certify that I have today examined:
Ms Daphne Kavassilas
[address omitted]
In my opinion, Daphne has severe anxiety due to work related stress. She has been emotionally labile, anxious and suffers from insomnia as a result of her current work situation which culminated in receiving notice of termination of her employment when on sick leave yesterday.
She is taking medications to aid in her sleep and also may require anti-depressant medications at a later date.
Dr Graham Chin
I therefore find that the asserted reason of “failed to keep the Directors aware of your absences” was not, in fact, a reason for her dismissal. I find that, in fact, the Directors were aware at all relevant times that Ms Kavassilas was absent under a claim for personal sick leave for which she was entitled under the terms of her contract of employment. I am satisfied that she had that entitlement, and that she suffered from an illness which justified her claim for sick leave.
It remains for me to consider whether her absence was itself a reason for her termination, so as to give rise to contravention of s.352 of the Fair Work Act. This requires me first to investigate the other reasons which were asserted in the termination letter and in the oral evidence of the directors of MTA.
I can deal with the other reasons asserted in the termination letter briefly. In short, the evidence of Mr Levingston and Mrs Ross gave no substance to the other criticisms of Ms Kavassilas’s conduct which were made in the termination letter. They, and a host of other criticisms of her work which Ms Kavassilas perceived to have been raised by the respondent’s poorly particularised pleading and affidavits, were thoroughly explored in evidence. Some matters were abandoned in the course of the trial, and in his final submissions the respondent’s counsel did not invite me to make findings as to the truth or substance of any of them. It is therefore necessary for me to do no more than point to how they were abandoned or demolished in the course of the cross-examination of Mr Levingston or Mrs Ross.
The assertion in the termination letter that Ms Kavassilas caused ‘disruption to the companies’ was obscure when it was made, and remained so on the pleadings and evidence presented by the respondent. Nor was any substance given to the assertion that she was responsible for a loss of income or some other financial deficiency. It emerged in evidence that she had no access to the MTA bank accounts, nor any independent responsibility in the financial and accounting affairs of any of the companies. A suggestion that she was responsible for a significant loss upon termination of a website contract was shown to be lacking any foundation.
The assertions of staff disaffection and harassment also did not emerge as having particular substance or pertinence to a rushed decision to terminate Ms Kavassilas’ employment on 11 August 2010. The affidavits of the two staff members who were alleged to have felt grievances were withdrawn, and no other evidence was led which caused me to doubt Ms Kavassilas’ evidence – which appeared to be consistent with the contemporaneous email evidence – that she had acted reasonably and with apparent satisfaction to the two directors, when attempting to initiate staffing changes and deal with staff complaints. The most serious staff complaint, by Jesslyn Lee, was made to the directors in July 2010, and was dealt with by Ms Kavassilas – at Mrs Ross’s request and with her approval – by moving Ms Lee to another position. Mrs Ross’ emails to Ms Kavassilas at the time concluded with the messages “this seems like a very (very) good result. Great!” and “we fully support you and I want you to be confident in that knowledge”. The evidence of the staff meeting called by Mrs Ross on 3 August 2010, at which the junior staff were invited by Mrs Ross to make general criticisms of other staff members including the group general manager, suggests that some staff grievances remained. However, looked at objectively, Ms Kavassilas’ responses to this unwise procedure appear reasonable and understandable, and did not give rise to any reasonable ground for contemplating her summary dismissal.
In relation to the marketing of the ‘portal’, Mr Levingston agreed that it had not been built, and that the discussions on this topic on 6 August 2010 showed the converse of a refusal by Ms Kavassilas to assist the marketing of the portal or a failure of cooperation with directors. I find that this accusation in the letter of termination was also untrue, and was probably known to the directors to be lacking in substance when they made it.
The accusation in the penultimate paragraph of the termination letter had even less substance. Everyone seems to have been aware prior to Ms Kavassilas’ employment by MTA that she had developed a ‘marketing list’ in the course of her own consultancy work and arising from her previous employment, which might be of interest to her new employer. However, she was under no contractual obligation to make it available to Mr Levingston and Mrs Ross on any terms whatsoever, and ultimately this was conceded by Mr Levingston. He agreed with the proposition that “it’s just nonsense to suggest that you had a right” to her intellectual property in this list. I find that the assertion in the termination letter that MTA had rights to the list was untrue, and was probably known to the directors to be untrue.
It is therefore necessary to search for evidence on other matters which might reveal the true explanation for the rushed decision by the MTA directors to terminate Ms Kavassilas’s employment on 11 August 2010, at a time when she was known to be temporarily absent on sick leave.
My findings as to the complete lack of substance in the stated grounds for summarily terminating Ms Kavassilas’ employment, and the general unreliability of the respondent’s two key witnesses, leaves it very difficult to discover the true motivations of Mr Levingston and Mrs Ross when preparing and serving the termination letter. It is particularly difficult for me to reconcile the oral evidence of both of them, and to reconstruct their probable discussions and states of mind.
While disclaiming recollection of Ms Kavassilas’ communicated reasons for her absence, Mr Levingston was adamant in his oral evidence given on 2 June 2011 that the fact of her absence on Monday 9 August 2010 was a matter of importance to him, and was discussed between him and Mrs Ross when they were deciding to terminate her employment summarily before she returned to work. He accepted that he had forwarded Ms Seville’s email to Ms Ross in the late morning of Monday 9 August 2010, and he said that he also discussed her absence “with her on the Tuesday and on the Wednesday”. He said that they thought “she was trying to avoid being sacked”, although he also said he was “a bit worried about her” because he thought she might be sick. I have noted above that Mrs Ross gave evidence of holding a similar belief.
Mr Levingston said that he had no intention of sacking Ms Kavassilas on 4, 5 or 6 August 2010, as a result of events concerning the staff meeting on 3 August 2010 or other issues. He agreed that Ms Kavassilas’ meeting with the directors in the late morning of 6 August 2010 appeared to be constructive. He said “it was very tense when it started, and then progressively got very upbeat”. He said that he “certainly (did) not” have any intention of sacking her at that time. He claimed that the turning point in his mind occurred when he read the draft minutes for the meeting which she emailed to Mr Levingston and Mrs Ross. An email exchange on Monday 9 August 2010 between Mr Levingston and Mrs Ross concerning the draft minutes is in evidence. This tends to show a mounting concern expressed by Mrs Ross on that day to Mr Levingston, and not earlier, that the minutes contained some inaccuracies in relation to a staffing issue. Thus, at 9.48am, Mrs Ross wrote to Mr Levingston:
Chris
I don’t have time to read this stuff. A lot of this has been twisted. Where is the bit where Daphne stated that Brian was telling lies in the meeting? A lot of this is about Daphne’s versions of events. I never asked her to take notes and I wonder if she is working up to something. Eg paper trail.
Best Wishes
Liana J Allan
At 12.24pm, she wrote:
Chris
I have read this and she has omitted stuff, added stuff in and is now framing me. The only part I 100% admit is that Sarah is not to be trusted, that I think she is a liar etc. I stand by that. As for the rest, some of that stuff is twisted and manipulated to display a different perspective than the one actually stated.
Best Wishes
Liana J Allan
However, looked at objectively the relatively minor disputed parts of Ms Kavassilas’ draft minutes do not appear to raise any potential justification for summary termination of the most senior manager, particularly while she was absent on claimed short term sick leave, and without first raising any concern with her about the minutes. Moreover, a concern about the draft minutes was not even raised in the termination letter.
When pressed for the immediate reasons for preparing the termination letter on the Monday and Tuesday, Mr Levingston pointed to the fact that “she produced a set of minutes which didn’t reflect what happened at the meeting”, and also said that “the fact of her being absent was an important consideration … that she was avoiding coming to work … certainly her being absent from work was critical”. This evidence appears to give substance to a conclusion that Ms Kavassilas’ absence provides one explanation for the director’s decision to terminate her employment on 11 August 2010, before she returned to work.
However, at the resumed hearing on 18 November 2011, Mr Levingston appeared to contradict his earlier evidence, by asserting that if Ms Kavassilas had not been absent on Monday 9 August 2010, “she would have been terminated on that day … I had resolved to that during the weekend”. This assertion was consistent with the evidence of Mrs Ross, which was given on the same date. It had not been raised in any manner in the pleadings or evidence presented by MTA before the lengthy adjournment in the trial.
In her oral evidence, Mrs Ross claimed that she had hidden her true state of mind from Ms Kavassilas at all times, and in particular when sending congratulatory and affirmative emails to her in July 2010. She said that, in fact, she thought that they were potentially on the road towards a dismissal. This was notwithstanding that she agreed that she had raised no concerns with Ms Kavassilas, and that Ms Kavassilas “had come up with a number of good ideas” in the short time she was employed, and “had been working hard”, and had showed good performance, and had tried hard to act as intermediary in Mrs Ross’ matrimonial difficulties with her husband who also worked at Visacorp. She explained her state of mind:
Mr Saunders: Well, do you agree that telling Daphne what you told her in that sentence, in that email, was misleading having regard to the private thoughts you had in your own mind at the time?
Mrs Ross:I guess it is misleading to a point, but I was saying it in a way that I had — we had appointed Daphne to the position of Group General Manager, and I wanted to give her every opportunity to actually perform that role despite the way that I felt. Because I thought, well, every new role has teething problems, and there’s always going to be issues in the workplace, or dramas that come along and then disappear. And I thought, well, maybe we’re just having a bad trot, and maybe, hope above hope, we will support Daphne and I will have to be confident in the knowledge that she can actually deal with it, despite how I feel.
Mr Saunders: I’m not sure if, in that very long answer, you answered my question?
Mrs Ross:Okay.
Mr Saunders: Do you agree that it was misleading for you to make that statement in your email to Daphne of 8 July at 3.34 pm? That is, the statement, “We fully support you, and I want you to be confident in that knowledge”?
Mrs Ross:Yes, we did fully support her, yes.
Mr Saunders: And you wanted her to be confident in that knowledge?
Mrs Ross:Yes.
Mr Saunders: At no stage prior to Daphne’s dismissal did you ever tell her that if her performance or conduct did not improve, her employment would or might be terminated?
Mrs Ross:Never.
Mr Saunders: See, I want to suggest to you that on 8 July 2010, you had no intention of dismissing Daphne, did you?
Mrs Ross:Not at that point in time, no.
Mr Saunders: And you had – you weren’t even on the train towards dismissal, to use your phrase, were you?
Mrs Ross:Yes, yes, on the train, but at that point in time, no.
Mrs Ross then said that the critical change in her mind occurred in the course of the meeting between Mr Levingston, Ms Kavassilas, and herself in the late morning of Friday 6th August 2010. She said:
Mr Saunders: Now, you and Christopher made a decision the following week commencing 9 August 2010 to dismiss Daphne, didn’t you?
Mrs Ross:We made a decision earlier than that.
Mr Saunders: Earlier than that?
Mrs Ross:Yes.
Mr Saunders: Well, when do you say you made the decision?
Mrs Ross:Well, I made a decision straight after the meeting. Like, I was making the decision as the meeting was unfolding that no matter what happened Daphne had to go.
Mr Saunders: You were making the decision as the meeting was unfolding?
Mrs Ross:Yes. Every - every - the result of the initial meeting on the Tuesday, and then the further meeting on the Friday, 1 knew that it was time. It had reached that - the train had reached the crucial point where it was about to smash and it was time.
Mr Saunders: And when did you reach that point in time? During the meeting? Before the meeting on 6 August 2010?
Mrs Ross:During, and then the definite was as soon as I read the minutes. So during the meeting I was going, nuh, this isn’t going to happen.
Mr Saunders: During the meeting you resolved in your own mind she had to go?
Mrs Ross:Yeah, and then when I saw the minutes, it was the final nail in the coffin.
Mr Saunders: After you read the minutes she prepared, you say that was the final nail in the coffin?
Mrs Ross:Yes.
Mrs Ross then contradicted Mr Levingston’s evidence at the first hearing as to when the decision had been made to terminate Ms Kavassilas’s employment. She said:
Mr Saunders: Did you and Christopher Levingston first discuss the possibility of terminating Daphne’s employment on Monday, 9 August 2010?
Mrs Ross:No, we discussed it on the weekend.
Mr Saunders: You and Christopher both agreed on the decision to dismiss Daphne, didn’t you?
Mrs Ross:Yes.
Mr Saunders: And the agreement to dismiss Daphne was made on Monday, 9 August 2010, wasn’t it?
Mrs Ross:No, it was made on the weekend.
Mr Saunders: So it was made on the weekend?
Mrs Ross:Yes.
Mr Saunders: Which day of the weekend, do you say?
Mrs Ross:I’m not sure because we talked about it most of the weekend – it was the main topic of conversation. Probably all weekend.
This version of the decision-making of the directors of MTA had not been presented in the affidavits of either of them. As I have noted, it was first raised at the tail of Mr Levingston’s evidence in cross-examination at the resumed hearing. It is inconsistent with his earlier sworn evidence. It is, in my opinion, also inconsistent with Mrs Ross’ emails of Monday 9 August 2010, which I have extracted above, which suggest that she first became seriously concerned when, on that day, she and Mr Levingston examined Ms Kavassilas’ draft minutes for the 6th August meeting. In my opinion, if in truth the two directors of MTA held discussions and reached a firm decision to dismiss Ms Kavassilas at some time over the weekend, and prior to their becoming aware of her absence from the office on the Monday, then evidence to this effect would have been led earlier, clearly, and consistently, by the two directors in their affidavits.
I have above noted my concern about the general reliability of Mr Levingston’s evidence. Considering the evidence of both of these witnesses given on 15 November 2011, I am left with an impression that both witnesses were tailoring their evidence to present an untrue rationalisation of Ms Kavassilas’ dismissal, which attempted to avoid the, by then apparent, lack of substance in the previously presented justifications.
Mrs Ross’s evidence not only suffered from inconsistency with Mr Levingston’s evidence presented at the first hearing, but also generally was given in a manner and content which left me with a firm impression of embellishment and tailoring, in an effort to exclude the fact of Ms Kavassilas’s absence as a reason for her dismissal on 11 August 2010, and to accommodate the evidence which emerged at the first hearing showing that both directors were aware that Ms Kavassilas had explained her absence to them. The central premise of Mrs Ross’ oral evidence as to the timing of the directors’ decision is unsupported and appears inconsistent with contemporaneous documentation. Mrs Ross’ affidavit showed generally a highly partisan response to Ms Kavassilas’ case, and in at least one respect was shown in cross-examination to have been sworn without careful attention to the truth of allegations it made against Ms Kavassilas. Assessing her evidence generally, I consider that she was an unreliable witness in relation to all matters which are otherwise unverifiable or uncertain.
On my above findings, there is no reliable and clear evidence as to the discussions and considerations which motivated the two directors of MTA to execute and deliver the letter which summarily terminated Ms Kavassilas’ employment on 11 August 2010. In view of the lack of substance in all of the expressed reasons, I have concluded that the directors have been concerned only to give a veneer of rational justification to their decision. The termination letter was a cloak for unexpressed true reasons which have never been adequately articulated by them. Their evidence to the court presented a succession of reasons which appeared increasingly threadbare when exposed to cross-examination.
In this situation, and considering all the evidence in the broad context of Ms Kavassilas’ employment, I am inclined to conclude that the true reasons for deciding to terminate her employment were impulsive and irrational, and that the decision itself was prompted by her absence. The most likely hypothesis in my mind, is that both directors had doubts whether they wanted to continue to engage her services and whether Ms Kavassilas herself wished to continue in their employment. They were then swayed by irrational and unsubstantiated concerns, triggered by her absence from work, that she might resign and make claims on MTA for breach of contract, and by an impulsive and ill-considered desire to pre-empt her resignation by summarily dismissing her without any delay. It is possible, but highly speculative, that the fact that she had foreshadowed, but not yet produced, a medical certificate, may have played a conscious or unconscious role in prompting the decision, including an incorrect view of the Fair Work Act (as explained below) that Ms Kavassilas could lawfully be terminated while absent on sick leave at any time until a medical certificate was actually submitted. For whatever reason, her absence appears likely to have contributed to the perceived urgency with which they formed and gave effect to their desire to terminate her services.
Clearly, their decision was poorly thought through, and the procedures which were followed were devoid of objective reasonableness and fairness to Ms Kavassilas. The purported justifications for summary dismissal presented to Ms Kavassilas in the termination letter, and pleaded in defence in the present proceedings, were always without proper substance. Exactly what caused Mrs Ross and Mr Levingston separately and in discussion to agree that they would dispense with Ms Kavassilas’ services immediately, remains obscure to me. However, the above elements in the circumstances of the termination suggest that the fact of Ms Kavassilas’ temporary absence from the office was itself the sole immediate reason for the decision which was taken, even where there were other operative reasons for dismissing her. I am therefore inclined to accept Mr Levingston’s initial evidence that the absence itself was an ‘important consideration’ in the minds and discussions of both directors, which explains the adverse action taken by MTA on 11 August 2010. I am certainly not persuaded, on the balance of probabilities, that it was not.
I must now explain how these findings as to the circumstances of the dismissal of Ms Kavassilas support a conclusion that there was contravention of s.352 of the Fair Work Act.
The legislative context
Section 352 provides:
352Temporary absence—illness or injury
An employer must not dismiss an employee because the employee is temporarily absent from work because of illness or injury of a kind prescribed by the regulations.
Note: This section is a civil remedy provision (see Part 4‑1).
A prescribed ‘illness or injury’ must satisfy one of the categories found in reg.3.01 of the Fair Work Regulations 2009 (Cth). It provides:
3.01 Temporary absence — illness or injury
(1)For section 352 of the Act, this regulation prescribes kinds of illness or injury.
Note: Under section 352 of the Act, an employer must not dismiss an employee because the employee is temporarily absent from work because of illness or injury of a kind prescribed by the regulations.
(2)A prescribed kind of illness or injury exists if the employee provides a medical certificate for the illness or injury, or a statutory declaration about the illness or injury, within:
(a) 24 hours after the commencement of the absence; or
(b) such longer period as is reasonable in the circumstances.
Note: The Act defines medical certificate in section 12.
(3)A prescribed kind of illness or injury exists if the employee:
(a) is required by the terms of a workplace instrument:
(i)to notify the employer of an absence from work; and
(ii)to substantiate the reason for the absence; and
(b) complies with those terms.
(4)A prescribed kind of illness or injury exists if the employee has provided the employer with evidence, in accordance with paragraph 107 (3) (a) of the Act, for taking paid personal/carer’s leave for a personal illness or personal injury, as mentioned in paragraph 97 (a) of the Act.
Note: Paragraph 97 (a) of the Act provides that an employee may take paid personal/carer’s leave if the leave is taken because the employee is not fit for work because of a personal illness, or personal injury, affecting the employee.
(5)An illness or injury is not a prescribed kind of illness or injury if:
(a) either:
(i)the employee’s absence extends for more than 3 months; or
(ii)the total absences of the employee, within a 12 month period, have been more than 3 months (whether based on a single illness or injury or separate illnesses or injuries); and
(b) the employee is not on paid personal/carer’s leave (however described) for a purpose mentioned in paragraph 97 (a) of the Act for the duration of the absence.
(6)In this regulation, a period of paid personal/carer’s leave (however described) for a purpose mentioned in paragraph 97 (a) of the Act does not include a period when the employee is absent from work while receiving compensation under a law of the Commonwealth, a State or a Territory that is about workers’ compensation.
The provisions of s.97 and 107 of the Act, which are referred to in this regulation, form part of Division 7 of Part 2-2 in the ‘National Employment Standards’, which confer ‘minimum standard’ entitlements in relation to paid personal and carer’s leave. The presently relevant provisions are:
96. Entitlement to paid personal/carer’s leave
Amount of leave
(1)For each year of service with his or her employer, an employee is entitled to 10 days of paid personal/carer’s leave.
Accrual of leave
(2)An employee’s entitlement to paid personal/carer’s leave accrues progressively during a year of service according to the employee’s ordinary hours of work, and accumulates from year to year.
97. Taking paid personal/carer’s leave
An employee may take paid personal/carer’s leave if the leave is taken:
(a) because the employee is not fit for work because of a personal illness, or personal injury, affecting the employee; or
(b) to provide care or support to a member of the employee’s immediate family, or a member of the employee’s household, who requires care or support because of:
(i)a personal illness, or personal injury, affecting the member; or
(ii)an unexpected emergency affecting the member.
Note:The notice and evidence requirements of section 107 must be complied with.
107. Notice and evidence requirements
Notice
(1)An employee must give his or her employer notice of the taking of leave under this Division by the employee.
(2)The notice:
(a) must be given to the employer as soon as practicable (which may be a time after the leave has started); and
(b) must advise the employer of the period, or expected period, of the leave.
Evidence
(3)An employee who has given his or her employer notice of the taking of leave under this Division must, if required by the employer, give the employer evidence that would satisfy a reasonable person that:
(a) if it is paid personal/carer’s leave—the leave is taken for a reason specified in section 97; or
(b) if it is unpaid carer’s leave—the leave is taken for a permissible occasion in circumstances specified in subsection 103(1); or
(c) if it is compassionate leave—the leave is taken for a permissible occasion in circumstances specified in subsection 105(1).
Compliance
(4)An employee is not entitled to take leave under this Division unless the employee complies with this section.
Modern awards and enterprise agreements may include evidence requirements
(5)A modern award or enterprise agreement may include terms relating to the kind of evidence that an employee must provide in order to be entitled to paid personal/carer’s leave, unpaid carer’s leave or compassionate leave.
Note:Personal information given to an employer under this section may be regulated under the Privacy Act 1988.
The legislation imposes a shifting onus of proof on the parties in relation to satisfaction of the elements constituting a contravention of s.352. Under s.551:
551.Civil evidence and procedure rules for proceedings relating to civil remedy provisions
A court must apply the rules of evidence and procedure for civil matters when hearing proceedings relating to a contravention, or proposed contravention, of a civil remedy provision.
It was common ground that the word ‘because’ in s.352 carries with it the application of general provisions governing contraventions turning upon an employer’s reasons for taking adverse action (see also Barclay v The Board of Bendigo Regional Institute of Technical and Further Education (2011) 274 ALR 570; [2011] FCAFC 14 at [24]). These include ss.360 and 361. Section 360, addresses the not uncommon situation where an employer might act for concurrent or mixed reasons:
360.Multiple reasons for action
For the purposes of this Part, a person takes action for a particular reason if the reasons for the action include that reason.
Absent a specific provision showing an intention otherwise, the applicant would have the burden of proving all the necessary facts to establish the essential elements of a contravention, and of doing so according to the standard provided under s.140 of the Evidence Act 1995 (Cth), i.e. “on the balance of probabilities” taking into account the matters set out in s.140(2).
However, s.361 provides:
361.Reason for action to be presumed unless proved otherwise
(1)If:
(a) in an application in relation to a contravention of this Part, it is alleged that a person took, or is taking, action for a particular reason or with a particular intent; and
(b) taking that action for that reason or with that intent would constitute a contravention of this Part;
it is presumed, in proceedings arising from the application, that the action was, or is being, taken for that reason or with that intent, unless the person proves otherwise.
(2)Subsection (1) does not apply in relation to orders for an interim injunction.
The point at which s.361 operates to shift the burden of proof onto the respondent where the applicant alleges contravention of s.352 was touched upon in submissions before me. Both counsel referred me to the helpful discussion of Wilson FM in Badman v Grasshoppers Early Learning Centres Pty Ltd [2009] FMCA 32, where his Honour considered the previous contravention provision in s.659(2)(a) of the Workplace Relations Act 1996 (Cth) as in force from 27 March 2006 which is equivalent to s.352 of the Fair Work Act, and applied the relevant ‘reverse’ onus of proof provision then found in s.664 of that Act. Wilson FM noted that s.644 was in the same terms as previous s.170CQ of the Workplace Relations Act, which Jessup J in Bahonko v Sterjov (2007) IR 43, [2007] FCA 1244 at [95]-[100] explained as carrying an established jurisprudence “which made it part of the prosecutor’s (or applicant’s) case to prove as an objective fact the circumstances alleged to constitute the basis of the “reason” to which the reverse onus section applied.”
Neither counsel addressed me on the implications of a further ‘transposition’ in the two different reverse-onus provisions which were discussed by Jessup J, occurring upon the repeal of the Workplace Relations Act by the Fair Work Act. This had the consequence that the language of present s.361 is not the language of previous s.664, but has more similarities with the previous s.809 of the Workplace Relations Act immediately before its repeal – which was a renumbering of s.270 and had ‘pre-reform’ antecedents in s.298V of that Act. On one view, the different language of the current provision allows an applicant more easily to shift a burden of disproof onto a respondent than under the old s.664, since in its terms an applicant is only required to ‘allege’ that the adverse action was taken ‘for a particular reason or with a particular intent’ which would constitute a contravention, before shifting an onus onto the respondent to dispel the presumption raised by s.361. Uninstructed by judicial gloss, the language of s.361 might suggest that an applicant need do no more than raise a threshold allegation of contravention of a type coming within s.361, before passing the onus onto the respondent to disprove at least one ‘objective’ or subjective element of the contravention, including that the adverse action was not attributable to an unlawful reason.
However, there are suggestions in recent Federal Court judgments which are binding upon me that s.361 should also be understood as requiring “the applicant to prove the existence of objective facts” which are essential elements of the alleged contravention (see Barclay v The Board of Bendigo Regional Institute of Technical and Further Education (2011) 274 ALR 570; [2011] FCAFC 14 at [35]. Since the change in language of the reverse onus provision was not explored in submissions, and since I consider that the present applicant has positively established all the ‘objective facts’ forming elements of a contravention of s.352, I do not propose further to investigate the legislative history of s.361 and its jurisprudence further, and this exercise can be left for another day.
On the assumption that s.361 has the same effect as previous s.664, counsel for Ms Kavassilas accepted that she must satisfy me not only that she had been “temporarily absent from work” but also that this was “because of illness or injury of a kind prescribed by the regulations”. He accepted that Ms Kavassilas must establish all the ‘objective facts’ by which one of the alternatives in reg.3.01 is satisfied.
In this respect, he presented his case by reference to both reg.3.01(2) and reg.3.01(4). In relation to subparagraph (2), he submitted that it was “reasonable in the circumstances” for Ms Kavassilas not to have submitted her medical certificates within 24 hours after the commencement of her absence on 9 August 2010, and not until they were forwarded by her solicitor on 17 August 2010. In relation to subparagraph (4) he submitted that in the communications to MTA by her sister, herself, and solicitor between 9 and 17 August, she had “give(n) her employer notice of the taking of leave … that would satisfy a reasonable person” that the leave was being taken because she was “not fit for work because of a personal illness” within s.97(a).
For his part, counsel for MTA accepted that it was necessary for Ms Kavassilas to show that her absence fell within the description in one of these sub-regulations according to the satisfaction of the court upon all of the evidence now before it, that is, including by the use of hindsight. He did not submit that it was necessary to establish that the employer was subjectively aware, at all times during an absence, that it was of a kind prescribed. In effect, he accepted that s.352 operated as a strict liability provision, in which an employer who dismissed an employee because of an absence, for which the employee subsequently presented medical evidence to the employer establishing that it was duly taken sick leave, would be liable for contravention, if the Court was later satisfied that a time specification for presenting the evidence was satisfied in terms of either reg.3.01(2) or (4). Moreover, he also accepted that if the Court was so satisfied, the employer had the burden to disprove that the temporary absence was a reason for the dismissal.
In my opinion, these concessions reflected the proper interpretation of the legislation on the authorities cited above. Section 352 is clearly intended to give protection against dismissal in relation to the employee’s exercise of rights to take sick leave, whether under the minimum standard set by ss.96 and 97 or under more generous rights and procedures conferred by contract or other source of sick-leave entitlements. The statutory entitlement is expressly shown by s.107(2) not to be conditioned upon the prior presentation of notice and evidence of illness, and allows a retrospective giving of notice ‘as soon as practicable’ and evidence ‘if required by the employer’. Regulation 3.01 is drafted in accordance with that policy.
It is not difficult to understand why it will be common that an employee may need to commence the taking of sick leave before being able to notify his or her employee and provide a medical certificate. In this context, it is unlikely that the legislature intended that an employer could avoid contravention of s.352 by dismissing employees for short term absences, before the elapse of a specified or reasonable time for giving notice and evidence of the taking of sick leave. It is not unreasonable to construe the legislation, including s.352, as intending to encourage employers not to take any dismissal action for a temporary absence of an employee, without first inquiring whether the absence might be attributable to injury or illness covered by sick leave, or at least waiting until the elapse of a specified or reasonable time to receive notice and evidence of this in accordance with s.107 and other notification requirements of the terms of employment.
However, in the application of reg.3.01(2) to the present circumstances, counsel for MTA submitted that I could not be satisfied that Ms Kavassilas’ medical certificates were provided to MTA within ‘such longer period as is reasonable in the circumstances’ within reg.3.01(2)(b). He submitted that, as a matter of law, Ms Kavassilas lost the opportunity to satisfy this provision upon the termination of her employment on 11 August 2010, so that the subsequent tender of medical certificates was irrelevant. In effect, he submitted that the regulation implied the words ‘prior to a dismissal’ as conditioning the test of a ‘reasonable longer period’ than 24 hours. He submitted that such an opinion of the previous provision was indicated by Wilson FM in Badman (supra) at [44]-[45], where his Honour said:
44. In my view the discretion to extend the period of 24 hours in Regulation 12.8(1)(a)(i) to a period that is ‘reasonable’ in the circumstances requires the court to take all factors into account, both from the point of view of the employee and the employer.
45. An employee may be so disabled that he or she simply cannot get the certificate to the employer by any means. The employer may waive the requirement for a certificate. Neither of those scenarios applies in this case. In my view, it is not necessary to look at any reason for delay beyond the termination of employment. That is because s.659(2)(a) of the Act obviously looks to matters that have happened up until the date of termination.
However, I do not consider that Wilson FM took such a construction of the previous regulation, nor that it would accord with the legislative policy which I have explained above. As with all judgments, the dicta of the judge must be considered in the light of the facts in the case. In Badman, Wilson FM closely examined the circumstances of the employee’s absence, and found that it was not reasonable for the employee to have withheld presentation of a medical certificate dated 30 June 2006 and certifying fitness to return to work on 7 July 2006 before she was dismissed on 19 July 2006. In this context, his Honour’s focus upon the date of dismissal might suggest that, if the delay in presenting a medical certificate before the date of dismissal was reasonable, then any subsequent delay is irrelevant. I am inclined to agree with such an opinion.
The facts in the present case are clearly distinguishable. I consider that it was clearly reasonable for Ms Kavassilas not to have presented her medical certificates within 24 hours after the commencement of her absence and not before she was dismissed. Her contract of employment expressly indicated that she did not need to obtain and present a certificate covering an absence not exceeding two days. She was a trusted and most senior employee of the company. Her employer was informed that she was taking sick leave at the commencement of her absence, and the content and manner of her notification conveyed by her sister was understood and accepted by Mr Levingston. In fact, it was covered by a longer medical certificate covering the whole week ending on 13 August 2010. However, it was reasonable for Ms Kavassilas to wait until the 11 August 2010 before providing the certificate, in the hope that she might be able to return to work earlier. When, on the morning of the 11th, this appeared not possible, she again notified her employer via her sister and in an email, in a manner appearing sufficient and reasonable in the circumstances of her employment.
If it is relevant to consider the further delay in presenting medical certificates after the date of dismissal, then I consider that this also has been reasonably explained in the present case. The employer was again informed as to the existence of the medical certificate on the morning of 11th. This certificate and another certificate dated 13th, explaining the nature of the medical condition suffered by Ms Kavassilas, were presented to MTA in the following week. Meanwhile, she had been summarily dismissed on the afternoon of the 11th. The second medical certificate indicated that service of the notice of summary dismissal had aggravated Ms Kavassilas’ anxiety condition, and it easy to understand why this might have been so. In circumstances where no attack is made on the underlying medical justification for Ms Kavassilas’s absence between 9th and 11th, and where the two directors clearly were aware and accepted that she was exercising an entitlement to sick leave, I do not consider that her medical certificates were unreasonably withheld until after she was dismissed. It was then reasonable for Ms Kavassilas to take legal advice about her dismissal, and for the certificates to be forwarded by the solicitor on 17 August 2010.
Taking into account all the circumstances of Ms Kavassilas’ absence from work and her dismissal from her employment, I am positively satisfied that she provided a medical certificate for her illness within ‘such longer period as is reasonable in the circumstances’ within reg.3.01(2)(b). I am therefore satisfied that her absence from work was ‘of a kind prescribed by the regulations’, and that a presumption of contravention of s.352 is raised by s.361.
This finding makes it unnecessary for me to examine whether her absence was also of a kind prescribed under reg.3.01(4). However, I accept the submissions of counsel for Ms Kavassilas that the evidence of her notification of the reasons for her illness and presentation of the medical certificates which I have discussed above, also shows that she “provided the employer with evidence, in accordance with paragraph 107(3) of the Act, for taking paid personal leave for a personal illness”, on any construction of that sub-regulation.
There is ambiguity arising from the words “in accordance with” in reg.3.01(4), whether there is a narrow adoption of only some of the words found in s.107(3)(a), or an adoption of the whole scheme of notification and providing evidence under s.107. On a narrow construction of reg.3.01(4), it is irrelevant whether or not notice of the taking of leave was given in terms of s.107(2) and whether evidence was or was not “required by the employer” and then provided. Narrowly focusing upon the wording of the reference to s.107(3), it only provides a description of evidence which has, in fact, been provided, being “evidence that would satisfy a reasonable person” that an entitlement to sick leave was being exercised.
On the alternative broad construction of reg.3.01(4), the employee must show that he or she gave notice complying with s.107(1) and (2), and then – but only if he or she was so required – that evidence was provided “that would satisfy a reasonable person” that the sick leave was justified.
These nuances of construction were touched upon in the submissions of counsel, but I consider that they do not need to be resolved, and should be left to another case, since both constructions are satisfied in the present case.
In short, I conclude that there was sufficient informal notification of the taking of sick leave given by Ms Kavassilas on 9th August 2010, by means of the messages delivered by her sister to the MTA receptionist and by her to the directors. Contrary to a submission of counsel for MTA, I see no reason to read s.107(1) and (2) and the statutory definition of ‘employee’ as requiring a formal notification made by the employee in person. In my opinion, the context of injury and illness must provide many reasons for allowing the normal presumption that a statute intends to allow the employee to give notice of the taking of sick leave to the employer, either in person or by an agent or intermediary through any manner of communication which would be reasonable in the circumstances.
Although there is no evidence that Ms Kavassilas was ever specifically requested to present medical evidence, I am prepared to find that there was a ‘requirement’ by MTA for Ms Kavassilas to present certificates of her medical unfitness for work under the terms of her contract, once she intended to extend the period of her sick leave beyond 10th August 2010. However, in the circumstances I have discussed above, and for the reasons which caused me to be satisfied in terms of reg.3.01(2)(b), I find that the submission of the medical certificates in the circumstances in which they were provided to MTA would ‘satisfy a reasonable person’ that her leave was taken for personal illness rendering her unfit for work on the days that she was absent.
I am therefore also satisfied that Ms Kavassilas’s absence was ‘of a kind’ prescribed in reg.3.01(4).
I must therefore consider whether MTA has overcome the presumption raised by s.361 that the action of MTA when dismissing Ms Kavassilas was taken for the reason that she was temporarily absent from work between 9th and 11th August 2010. If I am not so satisfied, then MTA is liable for contravention of s.352.
The task of a court required to reach conclusions under the Fair Work Act which address whether the reasons for adverse action included an unlawful reason such as is proscribed by s.352, was explained by a Full Court in Barclay v The Board of Bendigo Regional Institute of Technical and Further Education (supra). Although this judgment is under appeal in the High Court, it remains currently binding on judges of this court. In their majority judgment, Gray and Bromberg JJ agreed that the word “because” was intended to have the same meaning as “by reason of the circumstance that”, and that it was relevant to apply authorities in relation to other legislation which proscribes actions if they occurred for a specified reason. They found assistance from a recent High Court case concerning disability discrimination:
26. As Gummow, Hayne and Heydon JJ said in Purvis v State of New South Wales (Department of Education and Training) [2003] HCA 62; (2003) 217 CLR 92 at [236] of the use of “because” in a similar way to its use in s 346:
For present purposes, it is enough to say that we doubt that distinctions between motive, purpose or effect will greatly assist the resolution of any problem about whether treatment occurred or was proposed "because of" disability. Rather, the central question will always be - why was the aggrieved person treated as he or she was? If the aggrieved person was treated less favourably was it "because of", "by reason of", that person's disability? Motive, purpose, effect may all bear on that question. But it would be a mistake to treat those words as substitutes for the statutory expression "because of".
27. The central question under s 346 is why was the aggrieved person treated as he or she was? If the aggrieved person was subjected to adverse action, was it “because” the aggrieved person did or did not have the attributes, or had or had not engaged or proposed to engage in the industrial activities, specified by s 346 in conjunction with s 347?
28. The determination of those questions involves characterisation of the reason or reasons of the person who took the adverse action. The state of mind or subjective intention of that person will be centrally relevant, but it is not decisive. What is required is a determination of what Mason J in Bowling (at 617) called the “real reason” for the conduct. The real reason for a person’s conduct is not necessarily the reason that the person asserts, even where the person genuinely believes he or she was motivated by that reason. The search is for what actuated the conduct of the person, not for what the person thinks he or she was actuated by. In that regard, the real reason may be conscious or unconscious, and where unconscious or not appreciated or understood, adverse action will not be excused simply because its perpetrator held a benevolent intent. It is not open to the decision-maker to choose to ignore the objective connection between the decision he or she is making and the attribute or activity in question.
Gray and Bromberg JJ also explained the effects of ss.360 and 361 of the Fair Work Act:
30. Section 360 continues the long-standing position that, where adverse action is taken against a protected person, culpability will be established if the reasons for that conduct include a reason for conduct that is within the ambit of s 346. The reason must be an operative or immediate reason and need not be the sole or dominant reason (see the Explanatory Memorandum at para 1458). But the drawing of distinctions between proximate or immediate reasons for conduct (Greater Dandenong City Council v Australian Municipal, Administrative, Clerical and Services Union [2001] FCA 349 (2001) 112 FCR 232 at [216]), or between the cause of conduct and the reason for conduct (Greater Dandenong at [164]), is not helpful. Those distinctions fail to give sufficient attention to whether or not the reason was operative, and they also draw distinctions between a reason and a factor in a reason. As Gray J (with whom Woodward and Jenkinson JJ agreed) said in Lewis Construction Co Pty Ltd v Martin (1986) 17 IR 122 at 125:
The Act and the authorities do not distinguish between a “reason” and a “factor”; indeed, in Bowling, these terms are used interchangeably.
31. Further, that no distinction is to be drawn between the cause of conduct and the reason for conduct is supported by our earlier conclusion at [24] as to the meaning of “because” and the interchangeable use by the relevant provisions (ss 340, 346 and 360, 361) of cause and reason.
32. The onus cast by s 361 on the person taking the adverse action means that, to succeed, that person has to establish that he or she was not actuated by the attributes or industrial activity which s 346 seeks to protect. As Mason J said in Bowling at 617, that objective will not be achieved unless the evidence establishes that the real reason for the adverse action lies outside the ambit of the provision – in this case s 346. The real reason or reasons for the taking of the adverse action must be shown to be “dissociated from the circumstances” that the aggrieved person has or had the s 346 attribute or has or had engaged in or proposes to engage in the s 346 industrial activity.
Guided by these principles, and applying my factual findings explained above, I am not satisfied that MTA has overcome, on the balance of probabilities, the presumption raised by s.361 that Ms Kavassilas’ dismissal was taken, inter alia, by reason of her temporary absence. The evidence presented on its behalf failed to satisfy me that the directors of MTA had no knowledge of her absence and of its reasons when they took this action, nor that her temporary absence did not ‘actuate’ nor was ‘disassociated’ from their decision to summarily dismiss her while she was absent from work on 11 August 2010 (c.f. Jessup J in Sperandio v Lynch (2006) 160 IR 360 at [91]).
Indeed, on my above findings, the directors were at all relevant times aware of her temporary absence, and that it was explained by the taking of sick leave, and that Ms Kavassilas would present a relevant medical certificate if it lasted beyond two days. The letter of termination itself suggests that her absence provided a reason for the termination – albeit that the letter also falsely suggested that the directors had not been informed of its justification. The evidence of one of the directors expressly supported the inference that her absence itself provided one of the important reasons for the action being taken. That this may have been the case tends to be supported, rather than otherwise, by the surrounding circumstances of unfairness and unsubstantiated explanations for the summary dismissal. As I have explained, I do not accept the contention, first raised in the evidence of the directors at the end of the trial, that they had already made a decision to dismiss Ms Kavassilas before the period of her absence had commenced.
Taking into account the above matters, and my lack of satisfaction as to the truth and substance of all the grounds for the dismissal which were propounded in the letter of termination, in the respondent’s pleading in this court, and in its directors’ evidence to the court, I am satisfied that MTA should be found liable for contravention of s.352 of the Fair Work Act.
The compensation claims
As I have noted, Ms Kavassilas’ application included a cause of action for breach of a contractual entitlement to a payment of $12,500 in lieu of receiving one month’s notice of termination. This claim was conceded by MTA at the end of the trial.
Ms Kavassilas also claims additional compensation to cover her full period of unemployment between 11 August 2010 and 15 November 2010, consequent upon the court’s finding of contravention. She also seeks orders which would require MTA to make employer superannuation contributions in relation to her period of unemployment. She also seeks relocation expenses of $4,887.10 incurred when she moved from Sydney to Brisbane to take up her present employment.
It is accepted by MTA that the court has power to award these types of monetary compensation under s.545(2)(b). Both counsel cited passages in the recent judgment of Barker J in Australian Licenced Aircraft Engineers Association v International Aviations Service Assistance Pty Ltd [2011] FCA 333 at [407] and following, which drew attention to the broad nature of the court’s power to award compensation to an employee for losses causally related to the employer’s contravention. In this respect, principles of the assessment of damages in tort and contract are not necessarily applicable, and the discretionary nature of the remedy does not necessarily require the applicant to be fully compensated for all losses (c.f. Qantas Airways Ltd v Gama (2008) 167 FCR 537 at [94], [115]).
MTA did not challenge that an award of compensation for economic loss would provide an appropriate remedy in the present case. Although it was in contention at the trial, it is now accepted by MTA that Ms Kavassilas was unemployed and had no alternative net income until she obtained her present employment in Brisbane. Although there is evidence that she pursued some avenues for advancing her career as a marketing consultant during her period of unemployment, MTA did not submit that there was a failure by Ms Kavassilas to take reasonable steps to mitigate her loss of income arising from her summary dismissal. However, its counsel pointed to aspects of Ms Kavassilas’ own evidence which pointed towards the possibility that her employment would have come to an end before November 2010. He submitted:
42.The Applicant by August 2010:
(i)was having her health affected by the conduct of the Respondent’s directors and had concerns about why she had been employed;
(ii)was upset and horrified by Ms Lee’s complaint;
(iii)had raised the possibility of the termination of her contract with Ms Ross;
(iv)was aware the Respondent had declining revenue which was significant;
(v)was aware by late July the Respondent was not profitable;
(vi)did not think she was being supported in her role;
(vii)thought she was receiving mixed messages from the directors of the Respondent;
(viii)thought she was not respected by Ms Ross;
(ix)thought she was not respected by Ms Lee and Mr Kelleher;
(x)disappointed with the meeting of 3 August 2010;
(xi)was aware of staff disharmony;
(xii)did not have directors full support on 3 August 2010; and
(xiii)felt on the 6 August 2010 staff were trying to undermine her.
(transcript citations omitted)
There is substance in this submission, and it is also given some substance by my objective assessment of the position at MTA to which she had been appointed by its directors and the personalities of the directors. Even if I, as I would, heavily discount Mrs Ross’ evidence of a ‘gut feeling’ before August 2010 that Ms Kavassilas was ‘on a train for dismissal’, it is clear that the directors’ expectations as to what the new position of group general manager could achieve in relation to their three businesses were highly uncertain. It is clear that Ms Kavassilas herself might have found some aspects of her employment stressful or distasteful. There are aspects of the three businesses and of the personal lives of their principals, which suggest that Ms Kavassilas’ position was inherently dysfunctional and that this might have become apparent to all parties at some stage before the end of 2010. The evidence concerning events in August 2010 points, at least, to a propensity for emotional and ill-considered decision-making by the directors in relation to employment matters.
However, I am not positively satisfied that Ms Kavassilas would have been dismissed, nor that either she or MTA would have given notice of termination, if this unlawful action had not been taken on 11 August 2010 during her absence from work. If the directors had waited until she returned to work, and then discussed with Ms Kavassilas their difficulties arising from her draft minutes of the meeting of 6 August 2010, and brought into the open any other unstated concerns about the continuance of her employment, then it appears to me just as likely that her employment would have lasted into November 2010 as otherwise.
My difficulty, essentially, is that predicting the future of Ms Kavassilas’ employment with MTA beyond 11 August 2010 requires me to use a crystal ball, which the law does not provide.
Doing the best I can in the particular circumstances of this case, particularly considering the highly personalised nature of the employment relationships, I have concluded on the balance of probabilities that her employment would have continued, but that an irretrievable breakdown in confidence on one or both sides of the relationship would have occurred at an uncertain time in the future.
Adopting a broad brush approach to my discretion to assess compensation, I consider that an appropriate and just award of compensation would be reached by calculating the full amount of Ms Kavassilas’ lost wages and superannuation entitlements until she commenced her new employment (including the lost one-month’s notice entitlements), and then discounting those amounts by 20% for uncertain but real contingencies that her employment would not have lasted that long.
I do not consider that it is appropriate to include any amount for relocation expenses in an award of compensation. The evidence does not satisfy me that Ms Kavassilas was unemployable in Sydney, and I am left with an impression that she was highly qualified in fields where she would have been able to pursue a satisfactory career without moving to Brisbane.
Under s.547 of the Fair Work Act, the court is obliged to “include an amount of interest in the sum ordered, unless good course is shown to the contrary”, and to calculate interest by reference to the “period between the day the relevant cause of action arose and the day the order is made.” The Court also has a general discretion under s.76 of the Federal Magistrates Act 1999 (Cth) to order the payment of interest up to judgment. The usually appropriate rate of interest is found under Federal Court Practice Note CM 16. MTA did not contend that interest should not be ordered under these provisions, and I consider that is should.
For all the above reasons, I shall appoint a further hearing into penalty and costs. At the resumed hearing, I shall also address the form of a declaration of liability to penalty, and receive the parties’ calculations of the monetary amounts to be ordered to be paid by MTA in accordance with my judgment, including as to the amount of interest to be included.
I certify that the preceding ninety-six (96) paragraphs are a true copy of the reasons for judgment of Smith FM
Date: 27 January 2012
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