McGregor v The Bratter Company Pty Ltd

[1997] IRCA 289

INDUSTRIAL RELATIONS COURT OF AUSTRALIA

INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - review of decision of judicial registrar - whether employment terminated at the initiative of the employer - whether valid reason for termination

Workplace Relations Act 1996 (Cth), s 170DE

GALE McGREGOR v THE BRATTER COMPANY PTY LTD
NI 1316 of 1996

MADGWICK J
SYDNEY
4 NOVEMBER 1997

IN THE INDUSTRIAL RELATIONS COURT

OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

NI 1316  of   1996

BETWEEN:	GALE McGREGOR APPLICANT
AND:	THE BRATTER COMPANY PTY LTD RESPONDENT
JUDGE(S):		MADGWICK J
DATE OF ORDER:		4 NOVEMBER 1997
WHERE MADE:		SYDNEY

THE COURT ORDERS THAT:

1. The respondent pay to the applicant the sum of twelve thousand six hundred dollars ($12,600) plus interest thereon from 28 July 1995 up to judgment calculated at 8 per cent per annum.

1. Upon   (a)     payment within 14 days to the Commissioner of Taxation of any amount bona fide believed by the respondent to be so payable on account of tax, in respect of the said award of compensation and interest, and the filing and service of evidence thereof; and

   (b)payment within that period of the balance of the said award of compensation into Court (for payment out to the applicant),

   the respondent shall have credit against the amounts awarded for such taxation deduction.

1. Payment to the applicant is to be made within 14 days.

IN THE INDUSTRIAL RELATIONS COURT

OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

 NI 1316 of 1996

BETWEEN:	GALE McGREGOR APPLICANT
AND:	THE BRATTER COMPANY PTY LTD RESPONDENT
JUDGE(S):	MADGWICK J
DATE:	4 NOVEMBER 1997
PLACE:	SYDNEY

REASONS FOR JUDGMENT

HIS HONOUR: This is an application for review of a judicial registrar’s decision that Ms McGregor’s application for relief under s 170EA of the Workplace Relations Act 1996 (“the Act”) be dismissed on the ground that there was no termination of her employment at the employer’s initiative.

In March 1994 the applicant, Ms McGregor, was employed as the manager of a liquor store operated by the respondent company and attached to the premises of the Payless Supermarket in Mittagong.  In January 1995 Ms McGregor became aware that she was pregnant, and ceased work on 28 July 1995.  She sought to resume work in January 1996, but was told that she was no longer employed.  The essence of the dispute between the parties is whether the applicant had left work in the belief that there was understanding between the parties that she was taking maternity leave, or whether she had resigned.  The dispute arises out of the fact that Ms McGregor did not produce to her employer written notice of her intention to take maternity leave, despite several requests by the company’s administrator to do so.  The legal question is whether her employment was terminated at the initiative of the employer: s 170CB, Schedule 10.

Ms McGregor’s case was that although she knew she was required to provide written notice, she had been uncertain how the letter should be drafted, and had approached the company’s administrator, Ms Cartwright, on several occasions for guidance.  Ms Cartwright had been too busy to help her, so she approached the company’s managing director, Mr Bratter, for assistance.  Mr Bratter assured her that she was not required to provide the company with a formal letter because he knew that she was coming back to work after the baby was born.  She had also written a note on a calendar in Mr Bratter’s office to the effect that she would be on maternity leave from August 1995 and would return to work during the first week in August 1996.  In any event, the applicant claimed, she had made it clear to everyone in the store, the staff and regular customers, through general conversation, that she intended to take 12 months maternity leave, and then see how she and the baby felt before returning to work.  The inference that the respondent knew this to be the case was, she claimed, supported by the fact that on her last day of work she did not receive an employment separation certificate or a reference, as would have been expected if she had resigned from her employment.

In his evidence on behalf of the respondent company, Mr Bratter denied that any notation of the applicant’s intended maternity leave had been made on his calendar, and that he had not had any conversations with the applicant regarding her maternity leave, as he was not involved in the day to day management of the store.  He also denied that he had told Ms McGregor that she did not need to provide written notice, as it was company policy that all employees had to provide written notice of intended leave, and he made no exceptions.  He had, however, asked Ms Cartwright and Mr Maguire, the manager of the adjoining supermarket, to organise any arrangements to be made in regard to Ms McGregor’s leave.

Ms Cartwright’s evidence was that, some time after such a request from Mr Bratter, she informed Ms McGregor that, if she wished to take maternity leave, she would have to put her intentions in a letter to the company.  Ms Cartwright stated that the question of maternity leave was not raised with the applicant again until 30 June 1995 when, on Mr Maguire’s advice, she contacted the Retail Traders’ Association to find out what period of notice was required.  After receiving a facsimile from the Association which contained the relevant provisions of the then Industrial Relations Act 1991 (NSW), Ms Cartwright told Ms McGregor that if she was going to take maternity leave, then the company needed to know the relevant dates immediately, because the required period for notice had passed.  Ms Cartwright said that she spoke to Ms McGregor at least once a week after that about the necessity for her to give notice.  Since she had not received any letter as of the applicant’s last day at work on 28 July 1995, Ms Cartwright then believed that Ms McGregor did not intend to return and had, in effect, resigned.  This, she says, was made clear on the statement accompanying Ms McGregor’s last pay, where the words “termination pay” appeared and a payment was made for the applicant’s outstanding holiday pay. 

Was there a termination of employment at the initiative of the employer?

It is clear from the evidence given by both the applicant and the witnesses for the respondent company that Ms Cartwright had told Ms McGregor that she was required to put her application for maternity leave in writing.  The applicant’s evidence is that Mr Bratter had subsequently relieved her of that obligation, a claim which Mr Bratter strongly denies.  Both Ms McGregor and Mr Bratter seemed generally to be doing their best to give an accurate and truthful account of what had occurred when giving evidence before me, and I am unable to draw any inference about the credibility of either from their demeanour.  It is therefore necessary to look to the objective indicators to determine what might be the true version of events.

In favour of the respondent company, it seems strange that, if Mr Bratter had told Ms McGregor that she did not need to provide written notice, he did not pass that information on to Ms Cartwright or Mr Maguire.  They obviously did not know of any such conversation, otherwise they would not have gone to the trouble of contacting the Retail Traders Association for information concerning the required period of notice, nor would Ms Cartwright have continued to ask the applicant to supply that letter.  On the other hand, if Ms McGregor was aware that applications for maternity leave were required to be made in writing, then, being the person to lose by failing to give the requisite notice, the only reasonable explanation for her never doing so was that Mr Bratter had in fact told her that written notice was not necessary.

The respondent also submitted that, considering that the parties had shared an excellent relationship before the dispute arose, there was no reasonable explanation as to why Ms McGregor would not have been granted maternity leave or would not have been employed when she returned in January, other than that she had not made it clear to either Mr Bratter or Ms Cartwright that she wished to take maternity leave.  The respondent suggested that, through her training as a manager, Ms McGregor was well aware of the proper procedure regarding written notice, and had no reason not to provide such notice other than that she wished to keep her options open, without committing herself to returning to work after the maternity leave period. 

In my opinion, whether or not the alleged conversation between Ms McGregor and Mr Bratter took place, it is reasonable to infer from the evidence that the applicant had made it known that she was intending to apply for maternity leave, or was at least contemplating it, otherwise Ms Cartwright and Mr Maguire would not have continued to pursue her for a letter confirming her intentions.  Further, the respondent’s submission that the applicant wished to leave her options open is a sound one, but it actually leads to conclusions which do not favour the respondent.  Almost any reasonable woman in the applicant’s position would have done what she could to leave her options about a return to work open, until she had decided whether returning to work was what she wanted to do after the birth of her child.  Mr Bratter agreed that such would be Ms McGregor’s most likely attitude; such, in fact, was the course that another employee had taken in January 1996.  As inconvenient as the maternity leave legislative provisions may be for a small employer, it would defy common sense and experience if Ms McGregor had not intended to utilise that opportunity to her advantage.  The effective way to keep the options open would be to claim the leave:  there is no penalty for changing your mind later.  It is not keeping one’s options open not to claim the leave:  a failure to claim the leave closes off the option of exercising a right to return to work.  However, Ms Cartwright conceded under cross examination that she had understood Ms McGregor to mean that whether she would ultimately return to work would depend on the health of her baby, after the period of leave had finished.  This was also the intention conveyed to Ms Worner, a casual employee, and customers who had asked Ms McGregor whether she would return to work after giving birth.

On that understanding, although it would have been prudent, perhaps indeed requisite, to avoid her statutory right to leave being defeated, for Ms McGregor to provide a letter stating that she intended to take maternity leave, the proper inference is that the company’s administrator knew that she had not in fact intended to resign from her position, but desired to have her employment left open, so that, if she wished, she could again perform duties after the birth of her child.  Failure to fulfil the formalities required by the maternity leave legislation, in order to obtain the benefit of such leave, was treated by Ms Cartwright, without warrant and against other indicators, as the tacit expression by Ms McGregor of a wish to resign.  But Ms McGregor had no such wish, as a simple enquiry would have confirmed.  The employer nevertheless, without notice to her, treated her as if she had resigned and then asserted that the employment had not continued beyond the applicant’s last day at work.  That is, the applicant’s employment was terminated at the employer’s initiative: the employer had a choice to act or not to act in compliance with Ms McGregor’s actual wishes, of which it knew.  But if the respondent desired that her non-compliance with a formality required by the leave provisions should have the consequence that it could treat her, despite her clear but informally expressed wishes, as having resigned from, or having abandoned, her employment, it had the obligation to make this intention clear to her.  I am not satisfied that this was done.

The only reason given by the respondent for the termination of Ms McGregor’s employment was that it acted on the basis that she had failed to provide written notice.  However, considering that Ms Cartwright acknowledged that it would be prudent for a woman in the applicant’s position to take 12 months leave and then decide whether to return to work, and that it was made reasonably clear by Ms McGregor that that was what she intended to do, although the means by which this was done were informal, it was mistaken, and unreasonable and unfair, for the respondent to treat Ms McGregor as having resigned, when the company (by Ms Cartwright) had in fact indicated at an earlier stage that it did not intend to stand on the letter of the maternity leave law (Ms Cartwright continued to ask the applicant for the relevant letter after having indicated that the required period for lodgement of such document had passed).  The respondent has therefore failed to prove that it had a valid reason to terminate the applicant’s employment.

Remedy

The applicant does not seek re-instatement, and it is common ground that such would be impracticable.

Little attention was paid in evidence to the issue of compensation.  Had Ms McGregor’s employment not been unlawfully terminated, she would likely have been given maternity leave:  she was well-regarded by the managing director, and would likely have received full-time work with his company.  The applicant had a limited work background, lives in a country area and has had part time work.  There is no evidence that she failed to mitigate her loss and accordingly no weight can be given to the submission to that effect.  It is an obvious inference that her loss on account of the unlawful termination of her employment exceeded the six months “cap”: s 170EE(3). I will therefore award her the maximum amount available plus interest at 8% per annum thereon: Order 35 Rule 2 Federal Court Rules.

This and the preceding five pages are a true copy of the Reasons for Judgment of the Honourable Justice Madgwick.

Associate:        
Date:               

Appearances

Counsel for the Applicant:            R Reitano
Solicitors for the Applicant:          R L Whyburn & Associates
Solicitors for the Respondent:       B Bilinski & Co
Date of hearing:  14 March 1997