Lei v Chance Trading Pty Ltd

[2015] FCCA 441

FEDERAL CIRCUIT COURT OF AUSTRALIA

LEI v CHANCE TRADING PTY LTD [2015] FCCA 441

Catchwords:
INDUSTRIAL LAW – Adverse action – dismissal due to pregnancy – coercion – respondent not attending hearing – compensation for economic loss and non-economic loss – penalties.

Legislation: 

Fair Work Act 2009 ss.341, 342, 343, 351, 365, 545, 546
Federal Circuit Court Rules 2001 rr.13.03A, 13.03B

Sagona v R & C Piccoli Investments Pty Ltd & Ors [2014] FCCA 875
Mason v Harrington Corporation Pty Ltd [2007] FMCA 7

Applicant: JIA LEI

Respondent:

CHANCE TRADING PTY LTD

(ACN 126 466 500)

File Number: MLG 1369 of 2014

Judgment of: Judge Riley

Hearing date: 9 February 2015

Date of Last Submission: 9 February 2015

Delivered at: Melbourne

Delivered on: 9 February 2015

REPRESENTATION

Counsel for the Applicant: Ms Dowsett

Solicitors for the Applicant: Victoria Legal Aid

Counsel for the Respondent: The respondent did not appear

Solicitors for the Respondent: The respondent was not represented

DECLARATION

The respondent contravened:

(a)s.351 of the Fair Work Act 2009; and

(b)s.343 of the Fair Work Act 2009.

ORDERS

1. The respondent pay the applicant a pecuniary penalty under s.546(1) of the Fair Work Act 2009 in the sum of $25,000.

2. The respondent pay the applicant $21,139.91 gross under s.545(1) of the Fair Work Act 2009 for economic loss being the wages that the applicant would have earned if she had not been dismissed.

3. The respondent pay the applicant $10,000 under s.545(1) of the Fair Work Act 2009 for non-economic loss consisting of hurt and humiliation.

4. The respondent pay the amounts specified in orders 1, 2 and 3 within 28 days.

5. There be no order as to costs.

NOTATION
Pursuant to rule 16.05(2)(a) of the Federal Circuit Court Rules 2001, the court may vary or set aside a judgment or order made in the absence of a party.

FEDERAL CIRCUIT COURT OF AUSTRALIA

AT MELBOURNE

MLG 1369 of 2014

JIA LEI

Applicant

And

CHANCE TRADING PTY LTD

(ACN 126 466 500)

Respondent

REASONS FOR JUDGMENT

(revised from transcript)

1. This is an application for default judgment brought in the context of a fair work application.  The applicant was an employee of the respondent, which is a corporation. 

2. Under r.13.03B(2)(d) of the Federal Circuit Court Rules 2001 the court may give judgment against a respondent who is in default. 

   
   

   The definition of a party in default is found in r.13.03A. Subrule13.03A(1) provides that a respondent is in default if the respondent fails to comply with an order of the court.

3. There is a company search before the court which shows the address of the respondent’s registered office. There is an affidavit before the court which shows that the initiating application, the claim under the Fair Work Act 2009 (“the Act”) and the orders made by a registrar on

   
   

   15 August 2014 were posted to that address on 22 August 2014.  I take it from the affidavit of service that those documents were received by the respondent. 

4. The order made by the registrar on 15 August 2014 required the respondent to file and serve a notice of address for service and a response on or before 29 August 2014.  The respondent did not comply with the order of the registrar on or before 29 August 2014 or at all.  Consequently, it is appropriate to proceed to deal with the matter as a default application.

5. The matter was listed before the court today at 10am by Judge Whelan on 17 December 2014.  In addition, an application in a case was filed by the applicant.  The application in a case indicates on its face that it was listed for hearing today, 9 February 2015, at 10am.  When the matter was called today a little after 10am, there was no appearance from the respondent.  There is an affidavit of service indicating that the application in a case was served on the respondent by post at its registered office on 17 December 2014.  All in all, I am satisfied that the respondent was aware of the listing today and was aware of the orders that would be sought against it.  Those orders were set out in the application in a case filed on 17 December 2014.

6. The applicant says that the respondent took adverse action against her contrary to s.351 of the Act in that she was dismissed because she was pregnant. Section 351 provides that an employer must not take adverse action against a person who is an employee of the employer because of the person’s pregnancy, among other things. Adverse action is defined in s.342 of the Act to include dismissal.

7. The applicant also alleges that her employer contravened s.343 of the Act by coercing or seeking to coerce her to refrain from taking her dispute to the Fair Work Commission. Section 343 of the Act provides that a person must not take any action against another person with intent to coerce the other person to exercise or not exercise a workplace right. Section 341(1)(b) of the Act defines “workplace right” to include the ability to initiate or participate in a process or proceeding under a workplace law. Under s.365 of the Act, the applicant, as a person who was dismissed, was entitled to apply to the Fair Work Commission to deal with the dispute.

8. The applicant affirmed an affidavit on 16 December 2014. It is unchallenged. I accept the evidence contained in it.

9. The evidence is that the applicant was employed by the respondent commencing on 8 October 2013 as a receptionist.  She was on a three month probationary period.  At the end of that three months, on 2 January 2014, the respondent sent an email to the applicant confirming that her period of probation had ended and confirming her as an ongoing full time employee commencing with effect from 6 January 2014.

10. The applicant was pregnant at that time.  The principal of the respondent learned of the pregnancy on approximately 12 February 2014. 

11. The respondent was owned and operated by a Mr Chan. 

    
    

    The respondent employed a manager, Mr Xu, a sales manager, Ms Su, and the applicant, who was a receptionist.  The manager, Mr Xu, called the applicant for a meeting on 18 February 2014 and raised various performance issues with her.  The timing of this, in conjunction with the very recent confirmation of ongoing employment, creates some doubt about the truth of the issues concerning the applicant’s performance.

12. In any event, on 21 February 2014, the sales manager, Ms Su, spoke with the applicant over a coffee and told her that the job was too stressful for a pregnant woman.  On 20 February 2014, Ms Su, Mr Xu and Mr Chan held a meeting with the applicant.  Ms Su told the applicant that the company’s opinion was that it was not good to have a pregnant woman working on reception and the work was too stressful. 

13. Later on 20 February 2014, Mr Chan asked the applicant to resign from her position and said that if she did not resign he would fire her. 

    
    

    He said that he would pay her two weeks’ salary and provide her with a reference.  The applicant said that she would not accept that offer and would take him to the Fair Work Commission.  Mr Chan told the applicant that, if she went to the Fair Work Commission, she would only receive two weeks’ pay, but if she did not go to the Commission, she would get two weeks’ pay and a good reference.  Mr Chan told the applicant to leave the office immediately and said that if she agreed to resign she should send an email.  The applicant left the office but did not send Mr Chan an email. 

14. In the circumstances, I accept that the applicant was dismissed because she was pregnant. Clearly, under s.361 of the Act, the respondent has not proved otherwise. She was not paid for the two weeks’ notice period. I take Mr Chan’s statement to the effect that if the applicant went to the Fair Work Commission she would not get a reference as being an attempt to coerce her.

15. It seems to me that on the evidence that has been filed, the court can be satisfied that the respondent has breached both s.351 and s.343 of the Act. It is appropriate in all the circumstances of this case that judgment should be given against the respondent. In particular, it is proper to make a declaration that the respondent contravened ss.343 and 351 of the Act.

16. The applicant seeks compensation under s.545(1) of the Act for the pay that she would have received from the date of termination up to the date when she would have left work to have her baby. The applicant has calculated the amount that she would have earned as $21,139.91. That is based on her hourly rate, the amount of superannuation that she would have earned and the amount of annual leave that she would have accrued. I have checked those figures and I am satisfied that the amount of $21,139.91 is accurate.

17. The applicant also seeks an order pursuant to s.545 of the Act that she receive compensation for non-economic loss consisting of hurt and humiliation. In this context, the applicant has referred to the decision of this court in Sagona v R & C Piccoli Investments Pty Ltd & Ors [2014] FCCA 875, where Judge Whelan said the following:

    348.The Applicant also seeks damages with respect to the stress that she suffered as a result of the actions of the Respondents. The unchallenged sworn evidence of the Applicant was that she completed a mental health plan with her general practitioner because of the stress she was experiencing as a consequence of the Respondents’ treatment of her after she announced her pregnancy. It was also the Applicant’s sworn evidence that the Respondents’ conduct caused her to feel very stressed and anxious on numerous occasions after she announced her pregnancy.

    349.The Applicant states that the Respondents caused her to break into tears and that she was so upset that the Third Respondent informed her she should not get upset because it was not good for her baby. The Applicant personally informed the Respondents of the upset and stress that she was experiencing on a number of occasions. In her evidence, she stated that she consulted with a psychologist on 19 September 2012, on reference from her general practitioner, because of the stress and anxiety she was experiencing.

    …

    351.The calculation of compensation under s.545 of the Act is approached in accordance with ordinary principles.

    
    

    The fundamental purpose of damages or compensation under s.545 of the Act is to provide a monetary sum to put the employee in the position he or she would have been in if the employer had performed the contract or not contravened the Act. As a majority of the High Court stated in Haines v Bendall (1991) 172 CLR 60:

    The settled principle governing the assessment of compensatory damages, whether in actions of tort or contract, is that the injured party should receive compensation in a sum which, so far as money can do, will put that party in the same position as he or she would have been in if the contract had been performed or the tort had not been committed.[1]

    …

    359.Section 545(2) of the Act allows the Court to award compensation in respect of non-economic loss for distress, hurt or humiliation. I accept that the Applicant suffered stress as a result of the Respondent’s treatment of her and that she required medical treatment for this. In particular, the abusive nature of that treatment, in my view, warrants compensation for distress, hurt and humiliation. In the circumstances of the case I consider an amount of $10,000.00 to be neither excessive nor derisory.

    [1] (1991) 172 CLR 60 at 63.

18. In the circumstances of this case, I also consider that a sum of $10,000 is an appropriate amount for the stress that the applicant has suffered.  She said in her affidavit that she suffered a good deal of stress as a result of her dismissal.  She said that she suffered embarrassment as she was obliged to seek assistance from her parents with the purchase of a house to which she and her husband were already committed. 

    
    

    She also felt guilt and embarrassment about having lost her job. 

    
    

    She said that she felt stress and anxiety, had difficulty sleeping, did not wish to socialise and felt angry and helpless. 

19. A letter dated 24 October 2014 from a psychologist is attached to the affidavit of the applicant’s solicitor which was affirmed on
    11 December 2014.  The letter from the psychologist said that the applicant suffered severe anxiety.  It also said that the applicant did not report any significant mental health issues prior to her dismissal.  As I have said, in these circumstances, I consider that a sum of $10,000 for non-economic loss is appropriate.

20. The applicant also seeks pecuniary penalties in respect of the contraventions. The pecuniary penalties are payable under s.546 of the Act. That section provides that the court may order a person to pay a pecuniary penalty that the court considers is appropriate if the court is satisfied that the person has contravened a civil remedy provision. Subsection 546(2) of the Act provides that:

    The pecuniary penalty must not be more than:

    (a)if the person is an individual—the maximum number of penalty units referred to in the relevant item in column 4 of the table in subsection 539(2); or

    (b)if the person is a body corporate—5 times the maximum number of penalty units referred to in the relevant item in column 4 of the table in subsection 539(2).

21. Subsection 546(3) of the Act provides that:

    The court may order that the pecuniary penalty, or a part of the penalty, be paid to:

    (a)     the Commonwealth; or

    (b)     a particular organisation; or

    (c) a particular person.

22. The table in s.539(2) of the Act provides that the maximum penalty in the event of a dismissal is 60 penalty units. A penalty unit is currently $170. Therefore, the maximum penalty is $51,000 for each of the contraventions in this case.

23. The matters to consider in determining the amount of a pecuniary penalty are well known.  They were set out, for example, by Mowbray FM, in the matter of Mason v Harrington Corporation Pty Ltd [2007] FMCA 7. While those factors are not mandatory or exclusive, they have been relied upon on many occasions to provide guidance to the court.

24. The first of those factors is the nature and extent of the conduct which took place.  The conduct in this case is that the applicant was dismissed on the grounds of her pregnancy very shortly after she had been confirmed as an ongoing employee on the basis that she had fulfilled all the requirements of her probation and was clearly regarded as a suitable and able employee.  The conduct complained of has occurred on one occasion only and it occurred over a relatively short period. 

25. The next factor is the circumstances in which the conduct took place.  The circumstances have already been addressed. 

26. The next factor is whether there has been similar previous conduct by the respondent.  Nothing has been brought to the court’s attention to suggest that there was similar previous conduct. 

27. The next factor is whether the breaches were properly distinct or arose over the one course of conduct.  The applicant accepts that there was a single course of conduct.  There were two breaches:  one being the dismissal itself and the other being the coercion, but they were part and parcel of the one event. 

28. The next factor is the size of the business enterprise involved. 

    
    

    The applicant concedes that it was a very small enterprise.  There was the owner, Mr Chan, a manager, Mr Xu, the sales manager, Ms Su, and a receptionist, Ms Lei, the applicant. 

29. The next factor is whether or not the breaches were deliberate. 

    
    

    The breaches do, in this case, appear to have been entirely deliberate. 

30. The next factor is whether senior management was involved in the breaches.  In this case, senior management was involved.  Mr Chan himself effected the dismissal and the coercion. 

31. The next factor is whether the party committing the breach has exhibited contrition.  There is no evidence of any contrition before the court. 

32. The next factor is whether the party committing the breach has taken corrective action.  There is no evidence before the court of corrective action.  Indeed, there is an indication that the respondent did not even pay the applicant the two weeks pay that she should have been given by way of notice. 

33. The next factor is whether the party committing the breach has cooperated with enforcement authorities.  There are no enforcement authorities in this particular case.  The matter has been brought entirely by the applicant personally.  There is no evidence of any cooperation with the applicant.  The respondent has not participated in the proceeding in any way.  It seems that Mr Chan did correspond with the applicant’s solicitor on one occasion.  He sent an email which attached two unsigned witness statements from the other employees of the respondent.  The witness statements sought to allege that the reason for the dismissal was the applicant’s poor performance.  The covering email also talks about threats and so on made by the applicant.  That evidence was not put before the court on behalf of the respondent at the hearing, so I disregard it. It does not in any way suggest that there was any contrition or remorse on the part of the respondent or that the respondent has any inclination to take any corrective action.  Nor does it indicate any cooperation with the applicant to resolve the matter. 

34. The next factor is the need to ensure compliance with minimum standards.  There is a minimum standard that employees not be dismissed for reasons of pregnancy which clearly has not been complied with. 

35. The next factor is the need for specific and general deterrence. 

    
    

    It seems to me that there is a need for both specific and general deterrence in this case.  The respondent does not appear to be aware of the requirements in relation to pregnancy.  It is important that the respondent does not repeat this conduct in relation to any other employees it may have in the future.

36. Similarly, in terms of general deterrence, it seems to me to be important that employers generally do not engage in the sort of conduct that the respondent in this case engaged in. 

37. In considering a penalty, the court must look at the totality of the conduct.  It seems to me, in all the circumstances of this case, that the conduct should be regarded as a single breach, rather than two, meaning that there would be a maximum penalty of $51,000.  It also seems to me that the conduct in this case, although blatant and extreme, should be dealt with by way of a penalty at the medium level. 

    
    

    I consider that a penalty of $25,000 would be appropriate in all of the circumstances of this case.

38. There will be orders accordingly, and no order as to costs.

I certify that the preceding thirty-eight (38) paragraphs are a true copy of the reasons for judgment of Judge Riley

Associate: 

Date:  27 February 2015