Milica Stojanovic v The Commonwealth Club Limited
[1995] IRCA 652
•08 December 1995
CATCHWORDS
INDUSTRIAL LAW - termination of employment - review of decision of Judicial Registrar - whether employee dismissed because of pregnancy - whether employer established that pregnancy was not a reason.
Industrial Relations Act 1988 - s170DF(1)(f), and s170EDA(2)
Bowling v General Motors Holden Pty Ltd (1975) 8 ALR 194
General Motors Holden Pty Ltd v Bowling (1976) 12 ALR 605
No. AI267R of 1994
MILICA STOJANOVIC v THE COMMONWEALTH CLUB LIMITED
MOORE J
CANBERRA
8 DECEMBER 1995
IN THE INDUSTRIAL RELATIONS )
)
COURT OF AUSTRALIA ) No. AI367R of 1994
)
NEW SOUTH WALES DISTRICT REGISTRY )
BETWEEN: MILICA STOJANOVIC
Applicant
AND: THE COMMONWEALTH CLUB LIMITED
Respondent
JUDGE: Moore J
PLACE: Canberra
DATE: 8 December 1995
ORDER OF THE COURT
THE COURT ORDERS THAT:
The order of the Judicial Registrar dismissing the application under s170EA be set aside.
The respondent pay the applicant the sum of $8,500.
NOTE: Settlement and entry of orders is dealt with in Order 36 of the Industrial Relations Court Rules.
IN THE INDUSTRIAL RELATIONS )
)
COURT OF AUSTRALIA ) No. AI367R of 1994
)
NEW SOUTH WALES DISTRICT REGISTRY )
BETWEEN: MILICA STOJANOVIC
Applicant
AND: THE COMMONWEALTH CLUB LIMITED
Respondent
JUDGE: Moore J
PLACE: Canberra
DATE: 8 December 1995
REASONS FOR JUDGMENT
Introduction
On 6 June 1995 a Judicial Registrar dismissed an application brought under s170EA of the Industrial Relations Act 1988 ("the Act") by Mrs Milica Stojanovic ("the applicant") who claimed the termination of her employment by The Commonwealth Club Limited ("the Club") contravened a number of provisions of Division 3 of Part VIA of the Act. Mrs Stojanovic has sought a review under s377 of the Act of the determination of the Judicial Registrar.
The nature of the present review
A review is a hearing de novo: Association of Professional Engineers, Scientists and Managers Australia v Deniliquin Council (1995) 129 ALR 418 and Gibson v Bosmac Pty Ltd (1995) 130 ALR 245. In appropriate circumstances, the review may be conducted on the basis that all evidence is called afresh and findings of fact made by the Judge without regard to the evidence led before the Judicial Registrar or findings made by the Judicial Registrar. In the present case the review was not conducted on that basis. In the hearing before the Judicial Registrar extensive affidavit evidence was adduced and oral testimony given. The Judicial Registrar made various findings of fact based on her assessment of the credibility of the witnesses and she did not accept some of the evidence of the applicant and her husband. In this review it was accepted by both parties that the review should be determined by reference to the affidavits and transcript before the Judicial Registrar. It was conceded by the applicant that I should accept the Judicial Registrar's adverse findings on her credit and that of her husband.
In substance, I was invited by the applicant to deal with her application by reference to the Club's evidence at its highest at least in so far as it constituted proof of primary facts. That is, I am to accept the evidence of the Club's witnesses both in their affidavits and oral testimony and then proceed to determine whether on the primary facts they establish, the termination of the applicant's employment was in contravention of the Act. However I am not precluded from determining what inferences might reasonably be drawn from those facts: see e.g. Rennie v The Commonwealth Full Court of the Federal Court, 17 November 1995, unreported.
The circumstances leading to the termination
The following emerges from the evidence approached in the way I have just discussed. I have not endeavoured to record all the evidence but rather those parts of it I view as material. The Club is a private social club. The applicant was an assistant manager at the Club. Her duties included supervising the dining room and various functions held at the Club, rostering staff for the functions in the dining room, organising and overseeing functions at the Club and preparing accounts for both the functions and the members accounts for the dining room.
On 16 September 1994 the applicant signed an employment contract with the Club which set out the terms and conditions of her employment. It read:
"16 September 1994
Ms M Stojanovic
27 Hallen Close
Swinger Hill ACT 2606
Dear Milica,
Thank you for accepting our offer of Assistant Manager for The Commonwealth Club. It is with much pleasure I confirm the following terms and conditions of your employment.
POSITION:Assistant Manager
DEPARTMENT: Operations
SALARY:$26,500 gross per annum, paid weekly into a bank account of your choice. Salary review is annual.
HOURS OF WORK: Five day roster as determined by the Operations Manager.
SUPERANNUATION: Contribution of 4% calculated on your gross weekly salary will be deposited into the Club Plus Scheme by the Club. You can make additional contributions if you wish.
UNIFORMS: Prior to commencement we will outfit you with two new suits and accessories at the expense of the Club. These will be laundered at the Club's expense.
MEALS:A complimentary staff meal is provided while you are on duty. Complimentary soft drinks are also provided. Meals may only be taken in the designated staff room.
TERMINATION: In the event that either party should seek to terminate this employment arrangement, either party will give the other party four working weeks notice of their intentions.
COMMENCE DATE: To be confirmed, subject to notice with current employer. Please advise us at your earliest convenience.
It would be appreciated if you could sign the enclosed copy of this letter and return it to me as acknowledgment that you accept these terms. Please also find attached a copy of the current job description for your position to assist in understanding the responsibilities of your role.
We are looking forward to you joining our team and making a contribution towards the continued improvements to the standards of service at The Commonwealth Club. Please do not hesitate to contact me personally should you have any inquiries about your appointment.
Yours sincerely,
(signature)(signature)
Hugh Stowell Milica Stojanovic
Secretary(Date 6/9/1994)
It is to be noted that the letter provides for termination at the instance of either party on four weeks notice.
The applicant commenced work at the Club on 20 September 1994. Her regular working hours were 3.00pm to 11.00pm. The applicant, it seems, fell pregnant prior to her commencing employment with the Club. However, she was not aware that she was pregnant until the beginning of November 1994 when her pregnancy was confirmed by her doctor.
There is no evidence of any complaints or observations prior to 7 December 1995 of the applicant performing her duties incompetently or manifesting a hostile or aggressive manner at work. On 7 December 1994, at approximately 11.30pm the applicant visited her immediate supervisor Mr Dickie, the Operations Manager, to discuss the purchase of a second uniform for her. This was consistent with a term of her employment contract. During this discussion the applicant revealed she was pregnant. This was the occasion on which the Club was first given notice of her pregnancy. Her pregnancy emerged when Mr Dickie told the applicant the suit she had chosen was too expensive, and she said words to the effect:
"I am going to need a new uniform - I am pregnant. I will start showing soon."
Mr Dickie described the applicant's demeanour as "off-hand" at the time of this revelation.
At 10.00am on Thursday, 8 December 1995 Mr Dickie informed Mr Stowell, the Club's Secretary, that the applicant was pregnant. Mr Stowell then immediately sought advice from the Confederation of ACT Industry "as to the legal and award obligations of the Club in order the explore the employee's options in light of the forthcoming confinement." Mr Stowell was advised by the Confederation that as there was a compulsory period of confinement, the applicant would have to take six weeks off work. This advice, in my view, is of some significance. It played a major role in causing Mr Stowell to make certain assumptions that moulded much of what he and others representing the Club did from that point on.
In the review, counsel for the applicant asserted that the advice that the applicant would have to take six weeks off was wrong and this assertion was not put in issue by counsel for the Club. That assertion is, on the material before me, correct. Parental leave is a common feature of federal awards and a component of the standard maternity leave clause is that if maternity leave is taken then six weeks leave must be taken at the time of confinement: see Parental Leave Case (1991) 36 IR 1 at pp 10, 11 and 18 (clause A(3)). There is no evidence to suggest that the applicant's employment was regulated by a federal award. However the matter is dealt with by legislation of general application. Both s170KA together with Schedule 14 of the Act and the Parental Leave (Private Sector Employees) Act 1992 (ACT) ("the ACT Act") contain provisions of general application in the Australian Capital Territory concerning maternity leave. However neither would have applied to the applicant as each require, as a condition precedent to the entitlement to maternity leave, twelve months service. The ACT Act renders applicable to employment in the Territory the standard federal maternity leave award provision. As just discussed, if an employee is entitled to maternity leave, and takes it, the employee would be obliged to take six weeks leave at the time of confinement.
Mr Stowell also sought advice from the Club's Treasurer, Mr Ledger. Mr Stowell, through Mr Dickie, then arranged a meeting with the applicant at the commencement of her shift that day. Mr Stowell intended the meeting to be an informal discussion of "the options" up until the period of confinement. He had three concerns prior to the meeting. First, that in being pregnant, the applicant would not be able to keep up with the physical demands of her job. Second, that the applicant was not entitled to maternity leave as she had not been in the Club's employ for at least twelve months and by leaving to have her baby she would be breaching the terms of her contract of employment. Lastly, he was concerned that the Club could not afford to have the applicant off for six weeks.
At the commencement of the meeting with the applicant, Mr Stowell acknowledged that he had recently been made aware of the applicant's pregnancy. The applicant then stated words to the effect:
"Yes, I am pregnant and I intend to keep working until the time of having the baby."
In his affidavit Mr Stowell recounts their conversation in these terms:
"I replied:"That's alright. I need to discuss the options available to you. When you leave to have your baby we will be unable to hold the position open for you." Mrs Stojanovic replied: "Why?"
I said words to the effect: "When you go off to have the baby you will be breaking the terms of your employment. Milica, you are not entitled to maternity leave because you've only been here for three months and you have to be employed for a year before you are entitled to any maternity leave".
I also expressed concern that the job requirements entailed her to spend a good deal of time on her feet, and there is always some physical demands such as moving tables and furniture.
Ms Stojanovic said words to the effect that: "I will only have two weeks off to have the baby and I don't see what the problem is - there are no worker's compensation issues here." I reminded her that there is an obligatory post confinement period of six weeks. She then said in a raised voice, words to the effect that: "Your just trying to get rid of me - this is discrimination!" I asked Ms Stojanovic if she had been discriminated against. She said: "No, but I think I should have been able to wear tailored business pants to work."
I said:"Milica, I'm just trying to make you aware of your rights as an employee." I then said words to the effect that: "I am concerned that I found out about this following a casual discussion with James (Dickie) over uniforms at 11.30pm last night?" Ms Stojanovic who was becoming increasingly aggressive replied, (screaming): "So, you found out - what's your problem! I could have left it." I asked Ms Stojanovic not to scream at me.
I then said words to the effect: "Your job has a lot of physical demands. Maybe you could work up to say February/March and the Club could offer you a payment equal to the time you would have worked?".
At this point Ms Stojanovic began crying and said: "I'm not saying anything unless my solicitor is here." I said: "That's not necessary."
It was common ground that the applicant was visibly distressed and upset. Mr Stowell briefly left his office at her request to enable her to compose herself. When Mr Stowell came back the applicant asked to make a phone call and proceeded to rise from her chair to leave the room however, she twisted her foot and fell onto the floor. Mr Stowell went to his office door and asked Mrs Sullivan, his secretary, to assist her. In his evidence Mr Stowell said, and I must accept that:
"... I must admit my initial reaction was to go and assist - I mean, as you would when anyone falls over - but in the split second it took me to sort of manoeuvre myself around my desk, two thoughts went through my mind in that split second: firstly, that Mrs Stojanovic had displayed a lot of aggression and tension in her body language when she was sitting in front of my desk and I was extremely concerned that if I went to approach her, or touch her that she may have perhaps put her arm out in some way and strike, and I was very concerned about what complications that might then cause. I was also very conscious that being a woman lying in the very peculiar position, sort of half seated, half lying on my floor that it would be more appropriate for another lady to touch her."
At approximately 3.40pm Mr Stowell was informed that Mr Stojanovic had arrived at his office to speak with him. Mr Stowell then telephoned Mr Graeme Finlayson, and Mr R Nattey, a Vice-President of the Club, to obtain advice as to whether he should speak to Mr Stojanovic. Both said Mr Stowell should speak with him with a view "to establish whether the issue could be resolved". Mr Stowell requested Mr Dickie to be present.
A further meeting was held at Mr Stowell's office at which Mr Dickie, Mr Stowell and the applicant and her husband were present. Mr Stojanovic commenced the discussion with words to the effect:
"I have worked in the hospitality industry for many years and I can't believe the way you have treated my wife. I demand that you advise me of the Club's intention to terminate my wife in writing. By the time I am finished with the media, publicity and Parliament, and Dennis Martin who is a member of this Club whom I know, the Board will regret they ever employed you, you have made the biggest mistake of your lives."
During cross-examination Mr Stowell said, and I must accept, that both the applicant and her husband were angry, aggressive and made threatening remarks to him during the meeting.
Mr Stowell reiterated in this second meeting to the applicant and her husband that he was seeking to explore all the options available to the applicant and that he was not terminating her employment. Rather, he was informing them that by the applicant leaving the Club to have her baby she would be in fact breaching her contract of employment.
The applicant then shouted words to the effect:
"This Club is full of discrimination!"
Mr Stowell asked her to clarify what she meant by that accusation and she replied that she had been discriminated against because she could not wear pants.
Mr Stojanovic requested Mr Stowell to put in writing that he was terminating the applicant's employment on the grounds of pregnancy. Mr Stowell denied he was terminating her employment and indicated he was merely pointing out once again that by the applicant leaving to have the baby, she would be breaching the terms of her employment. Mr Stowell then considered there was no point in continuing discussions as the Stojanovics were very upset and nothing was resolved. Mr Stowell informed the Stojanovics that he would refer the matter to the committee.
After the meeting the applicant went to the doctor who informed her that she should rest her ankle for a few days and not return to work. Probably on late Thursday or Friday, 9 December 1994 Mr Stojanovic telephoned Mr Dickie and informed him that the applicant would not be able to return to work on Friday because of her ankle. On that Friday the applicant prepared rosters from home and faxed them to work. On Sunday 11 December 1994 she attended the office Christmas party.
On Monday 12 December 1994, the applicant completed her normal shift. When the applicant had been at work for an hour and had not come to visit Mr Stowell, he decided to go and see her with Mr Dickie. He came across the applicant in discussion with some staff. Afterwards, Mr Stowell said, "good evening" and the applicant replied, "good evening" back. Mr Stowell did not pursue any further conversation with her as she gave him a "rude look" and then walked away from him. Mr Stowell then telephoned Mr Campbell, the Club President indicating that he believed the applicant was hostile towards him and that the committee should look after the matter. During cross-examination he said that the hostility he was referring to was that evident on the Thursday afternoon and that he did not mention during this conversation with Mr Campbell that anything had occurred on Monday 12 December 1994.
On 13 December 1994 a meeting of the Club's committee was held. In this judgment, I refer to the committee and a meeting of the committee. Other expressions such as board or executive are also used in some of the evidence. What is the correct title of the governing body and whether this meeting was a formal meeeeeting of it is a matter I need to concern myself with. It was not an issue in the proceedings. Mr Campbell described the reason for the committee's involvement in the matter:
"At about 4.00pm on 12 December 1994 I received another phone call from Mr Stowell. Mr Stowell said words to the effect that; "Ms Stojanovic was very aggressive towards me and had personally attacked me and is accusing me of discrimination." Mr Stowell said words to the effect that; "The meeting was to try to resolve the issue to the satisfaction of all concerned - Milica is very angry and will not speak to me and has refused to speak with James. (Dickie)" I told Mr Stowell that in view of this breakdown in communication I would speak with my two Vice Presidents and organise a meeting with Ms Stojanovic at the earliest opportunity. It was my belief that at this time, the Club executives would handle this matter on behalf of the Club. It was clear to me that the relationship between Mr Stowell and Ms Stojanovic had broken down and the Club executive had to get involved to form our own view and to resolve the matter if possible, one way or another."
At 10.00am Tuesday 13 December 1994 the applicant was telephoned by Mrs Sullivan and advised that the committee wanted her to attend a meeting with them. Mr Stojanovic telephoned to inform the Club he would be attending with his wife. The meeting commenced at 3.00pm, and was attended by Mr Campbell, Mr Finlayson and Mr Nattey, who are both Vice-Presidents, and Mr Stowell. The applicant and Mr Stojanovic also attended.
Mr Campbell commenced the meeting with words to the effect of needing to "resolve the issues and get on working together", and his wish to find a solution. Mr Campbell then indicated to the Stojanovics his concern about the applicant's physical welfare given the physical demands of her job. The applicant said very little during the meeting though she manifest an aggresive and negative attitude towards those representing the Club. Mr Campbell accepted, during cross-examination, that the applicant said words to the effect that she did not have a problem working for the Club. Rather, she was upset with the manager, Mr Stowell and stated:
"... he treated me like a dog last week. You wouldn't treat a dog the way he treated me."
She also uttered words to the effect that the Club was "full of discrimination". The applicant's reference to Mr Stowell treating her like a dog concerned how he had treated her during the Thursday 8 December 1994 meeting.
Mr Finlayson then stated:
"That is not what we are here to discuss. We are here to try and resolve the matter. Matters of that sort are better left out of the discussion. This meeting is purely an attempt to settle our differences, and resolve the whole issue surrounding the absence of an amicable working relationship between you and management."
At about this point Mr Campbell said words to the effect: "We don't wish to hear such unpleasantness and there is no need for such talk." Mr Finlayson agreed with Mr Campbell. Mr Stojanovic informed them that his wife could work up until the time she had the baby. While there is some slight divergence in the Club's witnesses account of what then happened, a conversation to the following general effect occurred:
Mr Campbell said to Mr Stojanovic:
"I didn't think you would wish to see Milica working in the later stage of her pregnancy."
Mr Stojanovic replied:
"She is independent financially. She has her own financial commitments."
Mr Campbell replied:
"If it were secretarial duties it wouldn't be so difficult."
Mr Campbell, at about this point in the meeting, said words to the effect: "We want to settle this matter" and offered Mrs Stojanovic three months salary which is the equivalent of about $6,000. Mr Stojanovic informed the Club that that amount was not sufficient as the applicant would be unemployed for at least 6 months. He was informed the the offer should also include a month's notice which would have increased the amount to approximately $8,000. Mr Campbell explained the Club was not prepared to offer more than $6,000. Mr Stojanovic agreed that he and the applicant would discuss the offer further that evening. The applicant asked about her shift that evening. Mr Campbell said she was visibly angry and said "I have a function tonight." However Mr Stowell told her not to worry about it. Later on in the evening Mr Stojanovic telephoned Mr Campbell the offer and told him that $11,000 would be acceptable. Mr Campbell did not decline that offer and he agreed to consult the committee.
On 14 December 1994 the applicant went to the Club to resume work. However, she was informed that she could take paid rostered days off until the matter was resolved. Mr Stowell told the applicant that she was not required to report to work until the matter was resolved. The applicant replied, "Are you terminating me?" Mr Stowell informed her that he was merely asking her to take rostered days off until a settlement could be reached. The applicant agreed to go. According to Mr Campbell on the morning of 14 December 1994 after having consulted the two Vice Presidents he decided "in light of all the circumstances, $11,000 was excessive and a formal letter of settlement be sent to the Stojanovics."
On 15 December 1994 Mr Stowell asked Mrs Sullivan to contact the Stojanovics to inform them that a letter was being couriered to them that afternoon. The letter provided for the termination of Mrs Stojanovic's employment:
"15 December 1994
Ms M Stojanovic
27 Hallen Close
Swinger Hill ACT 2606
Dear Milica,
At our meeting at the Club on Tuesday, 13 December 1994 with you and your husband it became very clear indeed that there is no likelihood of there being an amicable and compatible working relationship between you and the Club management. For that reason, and that reason alone, the Club has decided to invoke the terms of your signed employment agreement and to terminate your employment on four weeks notice. Termination will be effective from today and you will be paid four weeks wages in lieu of notice.
In response to your husband's letter dated 12 December 1994 and received by the Club Secretary yesterday, I reiterate that at no time has the Club indicated to you that your employment was in jeopardy or would be terminated because of your pregnancy. What you were told is that as you would not have been employed by the Club for 12 months at the time the baby is born, you would not be entitled to maternity leave and when you left the Club's employ, by breaking your employment agreement, to have the baby, the position would not be held open.
The Club has decided that it is not prepared to increase its offer made at our meeting at the club on Tuesday afternoon beyond a total sum of $8,000.00. The offer however remains open on a without prejudice basis until accepted by you or withdrawn by the Club. The payment of four weeks wages and all entitlements as above is included in the offered sum of $8,000.00.
Yours sincerely,
(signature)
Robert R Campbell
President
I discuss in detail later in this judgment the evidence concerning the making of the decision to send this letter.
On Friday 16 December 1994 Mr Stowell was contacted by the Canberra Times in relation to the applicant. In the result the offer of the payment of a sum of $8,000 made on 15 December 1994 was withdrawn.
Section 170DF(1)(f): Whether the Club terminated Mrs Stojanovic's employment on the ground of pregnancy
Section 170DF provides:
"(1)An employer must not terminate an employee's employment for any one or more of the following reasons, or for reasons including any one or more of the following reasons:
(a)...
(b)...
(c)...
(d)...
(e)...
(f)race, colour, sex, sexual preference, age, physical or mental disability, marital status, family responsibilities, pregnancy, religion, political opinion, national extraction or social origin;
(g)..."
Section 170EDA(2) provides:
"If an application under section 170EA alleges that a termination of employment of an employee contravened subsection 170DF(1) on the ground that the termination:
(a)was for a particular reason or reasons referred to in that subsection that were stated in the application; or
(b)was for reasons stated in the application that included a particular reason or reasons referred to in that subsection;
the termination is taken to have contravened subsection 170DF(1) unless the employer proves that:
(c)the employment was not terminated for the particular reason or reasons or for reasons that included the particular reason or reasons; or
(d)the particular reason was a reason, or the particular reasons were reasons, to which subsection 170DF(2) or (3) applied."
It can be seen that if it is alleged that a termination was for the reason of pregnancy, then s170EDA operates so as to require the Court to treat the employment as having been terminated for that reason unless the employer proves, affirmatively, the employment was not terminated for that reason. As I earlier discussed this is a hearing de novo and in most respects the reasons for judgment of the Judicial Registrar are not material to the task I must undertake. However the conclusion I have reached differs from that of the Judicial Registrar in circumstances where the findings of fact the Judicial Registrar made are not, in substance, impugned. Accordingly it may be helpful if I were to indicate what I consider to be the reason, or part of the reason, why different conclusions have been reached.
The operation of ss170DF(1)(f) and 170EDA(2) was discussed by the Judicial Registrar in the following passage from her reasons:
"The Applicant argues that her employer breached Section 170DF(1)(f) of the Act, in that the reasons for the termination of her employment included pregnancy. The onus is placed on the employer to prove to the satisfaction of the Court that the pregnancy was not such a reason. The civil standard applies. Counsel for the Respondent referred me to Bowling v General Motors Holden Pty Limited 8 ALR 197 and I follow the opinion of Smithers and Evatt JJ, at page 200, that for a factor to operate as a reason which motivated the employer, the factor must be a substantial and operative factor actuating the action of the employer. I am not satisfied on the balance of probability that the Applicant's pregnancy was a substantial and operative factor in the termination of this employment contract." (emphasis added)
It can be seen that the conclusion is expressed in terms of the Judicial Registrar not being satisfied on the balance of probabilities that the applicant's pregnancy was a substantial and operative factor in the termination. In my view this provides an answer to the wrong question. For the Judicial Registrar to have dismissed the application it would have been necessary for her to have been satisfied that the applicant's pregnancy was not a substantial and operative factor in the termination, accepting, for present purposes, that the approach in Bowling v General Motors Holden (1975) 8 ALR 197 is to be applied in a case such as the present. The proper placement of the word "not" in the last sentence in the above quotation is not pedantry at work. The conclusion as expressed by the Judicial Registrar implies that for the applicant to have succeeded it was necessary that it be demonstrated, presumably by the applicant, that the pregnancy was a substantial and operative factor. However the Act requires the employer to establish that it was not. Indeed the Judicial Registrar adverts to this in her earlier reference to an "onus ... placed on the employer". In my view and for reasons I shortly explain, the Club has not discharged that onus, even taking the Club's evidence at its highest. The Judicial Registrar would have been acting in conformity with s170EDA (2) if she had said, if it be the view she held:
"I am satisfied on the balance of probabilities that the applicant's pregnancy was not a substantial and operative factor in the termination of this employment contract."
The submission of the respondent on this issue was contained in written submissions that had been provided to the Judicial Registrar. They were relied on in the review. Reference was made to the following observations of Smithers and Evatt JJ in Bowling (supra) at 200:
"Reading s.5(4) as part of s.5 taken as a whole, we are of the opinion that a particular action taken by an employer may be said to have been actuated by a particular reason or circumstance. If that reason or circumstance was a substantial and operative factor influencing him to take that action. Further, an employer may be said to have been actuated by a particular reason if it was a substantial and operative factor influencing him to take that action, although that reason was but one of a number of reasons which so influenced him. ... It is in this sense ... the burden is cast upon the defendant to prove to the satisfaction of the court as on the balance of probabilities that in dismissing the informant (employee) it was not actuated by the circumstances that the informant was a shop steward."
The submissions then advanced a proposition formulated in the following terms:
"In summary then the onus is on the respondent Commonwealth Club to prove on the balance of probabilities that the applicant's pregnancy was not either:
(a)if a reason (factor) for termination; or
(b)of the pregnancy was a reason (factor) that it was not a substantial and operative reason (factor)."
In my opinion, some caution has to be exercised in applying in a case such as the present, dicta from cases concerning, as Bowling (supra) did, s5(4) of the Conciliation and Arbitration Act 1904. Section 5 created a number of offences that required, as an element, that an employer disadvantaged an employee "by reason of the circumstances that the employee" had engaged in conduct of the type specified in paragraphs (a) to (f) of s5(1). Section 5(4) then provided:
"(4)In any proceeding for an offence against this section, if all the facts constituting the offences, other than the reason for the defendant's action, are proved it shall lie upon the defendant to prove that he was not actuated by the reason alleged in the charge."
It can be seen that s5(1) speaks of "by reason of" and s5(4) of "the reason for" and "the reason alleged". In s5(4) the word "reason" is in the singular. However s170DF(1) is expressed differently. The prefatory words of s170DF(1) say that "an employer must not terminate an employee's employment for any one or more of the following reasons, or for reasons including one or more of the following reasons:... (emphasis added). It is plain from the highlighted words that the proscribed reasons can be one of a number of reasons. Thus the proscribed reason need not be the only reason. Section 170EDA requires the employer to establish either that if a proscribed reason is alleged, that was not the reason, or if a number of reasons are alleged including a proscribed reason, the proscribed reason was not one of the reasons. While the concept of "substantial and operative factor" referred to in Bowling (supra) provides a useful guide in applying s170DF and s170EDA, it should not distract attention from the width of the language in s170DF.
I should add that the notion of substantial and operative factor was referred to with approval in the High Court by Mason J in General Motors Holden Pty Ltd v Bowling (1976) 12 ALR 605 at 616 with whose reasons Stephen and Jacobs JJ agreed. Mason J went on to say at 617:
"Section 5(4) imposed the onus on the appellant of establishing affirmatively that it was not actuated by the reason alleged in the charge. The consequence was that the respondent, in order to succeed, was not bound to adduce evidence that the appellant was actuated by that reason, a matter peculiarly within the knowledge of the appellant. The respondent was entitled to succeed if the evidence was consistent with the hypothesis that the appellant was so actuated and that hypothesis was not displaced by the appellant. To hold that, despite the subsection, there is some requirement that the prosecutor brings evidence of this fact is to make an implication which, in my view, is unwarranted and which is at variance with the plain purpose of the provision in throwing on to the defendant the onus of proving that which lies peculiarly within his own knowledge."
I should note that notwithstanding the terms of s170EDA(2)(a) and (b), no reasons were stated by the applicant in the application. Indeed the standard form of application in the Court's Rules, Form 132, makes no provision for the identification of reasons and thus effectively precludes the operation of s170EDA(2)(a) and (b) if "application" in s170EDA(2) is a reference to the originating process. However no point was taken by the Club concerning the form of the application even though I adverted to it at the hearing.
I now deal with the application of s170EDA(2) to the facts as I have set them out. It is to be remembered that the meeting between the applicant and Mr Stowell on Thursday 8 December 1994 commenced with him saying words that indicated, in his view, the employment of the applicant would have to be terminated in due course because it would be necessary her to be absent from work for six weeks during her confinement. That inference can plainly be drawn from the use of the words "we will be unable to hold the job open for you". This was based on a mistaken belief of the legal obligations of the Club and/or the applicant. For my part I find it difficult to understand why an employer would uncritically accept advice that an employee was obliged to take six weeks off at the time of confinement in circumstances where the employee was not entitled to maternity leave. As I have already said the obligation to take six weeks leave arises if an employee exercises a right to take maternity leave. However I must accept, for reasons earlier given, that Mr Stowell genuinely held this belief. Nonetheless it is reasonably clear that Mr Stowell's attitude from the outset was that the pregnancy of the applicant would lead to her employment being terminated. I infer that what then, in substance, was being raised with the applicant by Mr Stowell was when that termination should take place and on what conditions. It was against that background that the decision to terminate the applicant's employment was ultimately taken.
The following is a more detailed examination of such evidence as there is, of the discussions by the committee on 13, 14 and 15 December 1994, and the consideration given by the individuals involved, of why the applicant's employment should be terminated for the reasons given namely, irreconcilable differences between the applicant and management. Central to the decision appear to have been Mr Campbell and Mr Finlayson.
At paragraphs 4 and 5 of Mr Finlayson's affidavit he stated with respect to the 13 December 1994 meeting:
"Milica displayed an aggressive manner from the outset. She said: "How can I work here, the place is full of discrimination. The secretary treated me like a dog." I then said: "That is not what we are here to discuss. We are here to try and resolve the matter. Matters of that sort are better left out of the discussion. This meeting is purely an attempt to settle our differences, and resolve the whole issue surrounding the absence of an amicable working relationship between you and management."
he also said:
"Ms Stojanovic's attitude was aggressive and at this point I formed the view that the working relationship between Ms Stojanovic and the Club had broken down. She displayed such negative attitude towards management and the Club."
During cross-examination Mr Finlayson gave the following evidence:
"And there's this sentence: "It became clear to me, however, that the relationship between Mr Stowell and Ms Stojanovic had irretrievably broken down"?---Yes.
What was it that caused you to form that view at that point of time?---Prior to the meeting I'd had some discussions with Stowell, the secretary, who'd indicated to me that he felt that he could not continue to work with Milica, and I said to him, "Well, that may not be an option. You may not have that option at all. You may well be continuing to work with her." And so I didn't actually take - - -
Meaning what?---Meaning that she may be continuing to work with the Club.
Depending upon whose decision - - -?---Depending on whatever the outcome of the meeting was. And I said to Hugh, you know, "I haven't observed what went on so I can't say yes, I agree with you or not, I don't agree with you." But when we were at the meeting and I saw what Milica said and did, and it was her body language, I suppose, as much as anything as to what she said. It was her - the way she said it and the sort of vitriol that was apparent. It became very clear to me that the problem did exist between management and Milica and at that point it was my view that there would no longer be any amicable relationship between her and management."
The Judicial Registrar asked Mr Finlayson what led to the ultimate decision to terminate the applicant's employment on 15 December 1994:
"THE J. REGISTRAR: Well, what happened after the 14th, what was the catalyst for the dismissal on the 15th given that a decision had not been made as at the 14th?---We tried - the President - so, the 14th yes, the 14th was the day that I rang him. The catalyst I think must have been that we decided amongst ourselves, it wasn't in a meeting, but I think it was by telephone, that the resolution of the matter was that there had been a total breakdown in relationship between Milica and management and that, therefore, her employment should be terminated because it was no longer a tenable option for the club to have her employed. Because we - I particularly and I guess the others as well, but I particularly could not see that relationship mending from what I observed on the 13th.
In your discussions, did anyone anticipate that it might be said that you were discriminating on the basis of the pregnancy?---Well, as a solicitor I was conscious of discrimination as to pregnancy and everything that I looked at and spoke to in relation my discussions with fellow board members I was at pains to tell them that it wasn't, you know, it wasn't a tenable thing to be doing to consider termination on the grounds of pregnancy and indeed as I have said before, in my discussions with Stowell, I said, you know, there isn't - that's not an option and he accepted that and as I say one of the options that I considered quite on the cards was that she might well be continuing to work in the Club despite Mr Stowell's problems with her and I - as I say, it wasn't until the 13th at that meeting that it became clear to me and that's when I made my mind up that the relationship had broken down to the extent where it just wasn't workable.
Pregnancy or no pregnancy is that - - -?---Exactly."
It thus appears that there was at least telephone discussion on Wednesday 14 December 1994 between Mr Finlayson and Mr Campbell about what should be done as a result of the events leading to the meeting the previous day and as a result of the meeting itself.
Mr Nattey dealt in his affidavit with a conversation he had with Mr Campbell on Wednesday, 14 December 1994. He said:
"On 14 December 1994 I received a telephone call from Mr Campbell. Mr Campbell said that Mr Stojanovic had telephoned him to say that $11,000 would be acceptable. Mr Campbell said that he thought that this figure was excessive. He suggested that the Club's offer be formalised in writing. I agreed with this course of action."
What was discussed was not elaborated upon in his oral testimony. Mr Natty did say, however, that there had been a discussion amongst the board members prior to the meeting of 13 December 1994 but he rejected the suggestion that it was then thought it would be fair to offer the applicant compensation and ask her to leave her employ.
The letter of termination was signed by Mr Campbell. I have already briefly referred to some of what occurred concerning the dispatch of the letter. It was not a matter dealt with in Mr Campbell's oral testimony and I should repeat in full what is said in his affidavit:
"Later that evening at 10.00pm on 13 December 1994, I received a telephone call at home from Mr Stojanovic who said words to the effect that; "$11,000 would be acceptable" I did not decline Mr Stojanovic's counter - offer and agreed to consult with other the [sic] Vice Presidents.
During the morning of 14 December 1994 I telephoned Mr Stowell to tell him that the matter was still under consideration. I then consulted by telephone with Mr Finlayson and Mr Nattey. Having consulted the Vice Presidents I decided that in light of all circumstances, $11,000 was excessive and a formal letter of settlement be sent to the Stojanovic's.
During the afternoon of 14 December 1994 I received a telephone call from Mr Finlayson who said that Ms Stojanovic had "turned up for work" Mr Finlayson said words to the effect; "that the offer is still on the table" I said "we should prepare a letter setting out the Club's position". Mr Finlayson agreed and prepared this letter.
This letter is attached hereto and marked "A"."
There was no annexure "A" to the affidavit but I infer it was the termination letter that was sent and which I set out earlier in this judgment. It is to be noted that Mr Finlayson did not give evidence directly concerning the preparation of the letter.
In my opinion, what is not clear from this evidence is who made the decision to terminate the applicant's employment, when it was made and the details, if any, of what occurred when it was made. The evidence is limited as to the rationale, as discussed or contemplated at the time, for the decision to terminate the applicant's employment. There is a vague reference in the evidence of Mr Finlayson that her employment "was no longer a tenable option". While I do not say this critically of Mr Finlayson, he guesses at the views of the other members of the committee involved in the decision making process.
There is, of course, the letter of termination itself. It is a contemporaneous record of the reason for the termination and it must be accepted that the reason given by the Club for the termination in the written notice was not the applicant's pregnancy. However the letter itself, in my view, somewhat laboured the point that the reason was as expressed. It would not be a fanciful conclusion to view the explanation given as being in such unequivocal terms partly because there was an apprehension that the applicant's pregnancy might reasonably be viewed as at least one reason for the decision to terminate her employment. I accept, however, that the letter constitutes a written rejoinder to an accusation made by Mr Stojanovic on several occassions that his wife was to be dismissed because of her pregnancy. Nonetheless I do not accept the letter at face value having regard to its terms.
Prior to the meeting of the committee on 13 December 1994 with the applicant there was an informal discussion amongst the members of the committee about offering the applicant a sum to settle the matter. This was before any opportunity to observe directly the attitude of the applicant to management. I find it difficult to accept that the applicant's pregnancy was not one reason why the monetary offer was discussed and made. If the members of the committee had formed the view that the applicant's employment should be terminated only because of her conduct and they believed they were justified in doing so, they may have been able to summarily dismiss her. In any event, they could certainly dismiss her by giving the contractual notice. However what was discussed prior to the meeting, at the meeting and referred to in the letter of termination was an offer to pay an amount considerably in excess of any contractual obligation the Club had. The offer of payment, however well intended it may have been, has the appearance of a proposal intended to relieve the Club of the burden of continuing to employ someone who was pregnant or facilitating the termination of the employment of a pregnant employee in a way that might ensure there was no resulting controversy. On either approach the payment was to be an integral part of the termination and the payment was directly linked to the applicant's pregnancy.
That the applicant's pregnancy may have been a reason for the Club's decision to terminate the applicant's employment is also suggested by the remarks made at the meeting on Tuesday, 13 December 1994 by Mr Campbell about the capacity of the applicant to perform her duties in due course. I earlier adverted to what had been said. In his affidavit Mr Campbell records:
"I said words to the effect that I didn't think you would wish to see Milica (sic) her working up to that stage and I'm concerned that she couldn't work up until that time because of the position she holds" Mr Stojanovic said "words to the effect that she is an independent person" I said that if she had Secretarial work it wouldn't be such a problem."
He was cross examined about this:
"And you told her, I think, about your wife needing naps in the afternoon when she was pregnant?---Yes, well actually my wife had two miscarriages. We lived out in the country and it was a very dramatic affair, I can assure you, and my daughter, before she was born, she spent many weeks in Canberra hospital, sorry, in Queanbeyan hospital and at home in bed. We lived a long way out in the country.
So, you had this idea that pregnant ladies need a lot of rest?---That's right.
You suggested to her that she might be better off taking a secretarial job, as an easier option?---That's correct, yes. I'd seen her CV and I knew that she'd done that sort of thing, you see.
You were also a bit worried that her appearance might look a bit unsightly around the club, as she got very pregnant?---No, not her appearance, no, not her appearance, I wasn't worried about that. It was just the fact (sic) her physical fitness and not being able to do things.
Well, you would not want to see members, you would not want your members to observe a pregnant woman picking up knives and forks from the floor?---Well, my daughter is very pregnant and I think she looks terrific."
Similar beliefs appear to have been held by Mr Finlayson though it is not suggested they were articulated at the meeting. His cross-examination included the following:
"MS KYPRIANOU: Mr Finlayson, Mr Campbell showed some concern about Milica being able to do her job at the advanced stages of her pregnancy, didn't he, at that meeting?---At the beginning of the meeting he said words to the effect, yes.
And he said his daughter got a secretarial job when she got pregnant and that might be a good idea for Milica as well?---I'm not sure. I think he said something like that. He certainly said something about his daughter. I thought he said something about miscarriages but I'm not quite sure whether he was referring to his daughter or somebody else, but he certainly was concerned about workload and that sort of thing."
and later:
"It's fair to say that you were all concerned about her ability to carry out certain tasks as her pregnancy advanced?---Yes, I suppose it's fair to say that. It would be inhumane not think along those lines, sure.
And the sight of a heavily pregnant woman picking up forks, I think, Mr Campbell said, you thought might not look terribly good for the members?---No, I didn't think about that at all, I must say, that was Mr Campbell. I think Mr Campbell made that remark, I hadn't thought about picking up forks.
Were you concerned about the sight of a very pregnant woman walking around the - - -?---I hadn't thought about it."
I do not suggest that these concerns did not flow from views genuinely held and I have no doubt they reflect views shared by others in the Australian community. However the legal obligations of the Club derive from the Act.
Parliament has made plain in s170DF(1)(f) that pregnancy is not a reason justifying the termination of an employee's employment subject to the qualifying effect of s170DF(2) which provides:
"Subsection (1) does not prevent a matter referred to in paragraph (1)(f) from being a reason for terminating employment if the reason is based on the inherent requirements of the particular position."
and s170DF(3) concerning staff at religious institutions.
It must be assumed that Parliament has taken the view that it is at least initially for the employee to determine whether she is able to perform her duties whilst pregnant unless s170DF(2) has application though it was not suggested in this case that it does. It is generally not for an employer to assume or anticipate a lack of capacity. If viewed objectively, the pregnancy precluded the effective discharge of the employee's duties, an employer ultimately may be able to terminate validly the employment for reasons relating to the employee's performance: see s170DE(1). However the relationship between s170DE and s170DF(1)(f) is a matter I need not consider further nor determine. That is because the views then held by at least two members of the committee about the likely effect of the applicant's pregnancy on her capacity to perform her duties were a matter of speculation and not based on any observed incapacity. Such views are symptomatic of the type of conduct to which s170(1)(f) was directed. More importantly they constitute evidence from which it might reasonably be inferred that at least one reason for the termination of the applicant's employment was her pregnancy and the belief that she would, while pregnant, not be able to perform her duties or, in doing so, would put at risk her health.
A reason for the termination of the applicant's employment may have been a belief, genuinely held, that the applicant's behaviour had led to a significant and material deterioration of the relationship between her and Mr Stowell in particular. However there is evidence that points to a further reason being the applicant's pregnancy. The Club has not demonstrated it was not. I am not satisfied that the pregnancy of the applicant was not a reason for the termination of her employment. Accordingly, having regard to the combined effect of s170DE(1)(f) and s170EDA(2) I find the termination was in contravention of a provision of Division 3 of the Act.
Contravention of s170DC and s170DE
Submissions were made in the alternative by the applicant that the termination of her employment involved a contravention of s170DC and s170DE of the Act. In view of the conclusion I have reached that the termination was in contravention of s170DF, it is probably unnecessary to consider the operation of ss170DC and 170DE. Moreover there is, in my opinion, a real question as to whether those provisions have any application in circumstances such as the present.
Section 170DC concerns circumstances where the termination is for reasons relating to the employee's conduct or performance. In the present case the reason given by the Club for the termination concerned, at least indirectly, the conduct of the applicant. She was perceived to be aggressive and confronting in a way that, in essence, destroyed the relationship beween her and the management of the Club. I have concluded that the operation of s170EDA has resulted in the termination having been deemed to have contravened s170DF(1)(f). That is to say, the Club has terminated the applicant's employment for the reason of her pregnancy or for reasons which include the reason of her pregnancy. If s170DF(1)(f) operates, in the present case, to treat the reason to be her pregnancy, and nothing more, then there may be no room, as a matter of construction, for the operation of s170DC. The operation of that provision, as I earlier noted, depends upon the reasons being reasons relating to conduct or performance. If, on the other hand, s170DF(1)(f) operates, in the present case, to treat the reasons for the applicant's termination as including the reason of her pregnancy, there is plainly scope for other reasons to have caused the
termination. Those other reasons could include reasons upon which s170DC might operate.
However these matters received no real attention in the submissions of the parties and, in particular, I was not addressed on whether, were I to conclude that there had been a contravention of s170DF(1), I could go on to consider whether there had been contravention of s170DC. Similar considerations arise concerning the relationship between ss170DE(2) and 170DF. I thus make no findings on these issues.
Remedy
Notwithstanding that s170EE gives primacy to reinstatement as the remedy if contravention of a provision of Division 3 of Part VIA is established and that at one point in the review counsel for the applicant said the applicant still wished to work for the Club, it was agreed between the parties only compensation should be considered as a remedy if contravention was established.
Section 170EE(3) deals with compensation. It invests the Court with power to award compensation though does not identify criteria by reference to which it should be calculated save that it requires the Court to have regard to the remuneration the employee might have received but for the termination. The expression "have regard to" requires that
remuneration lost is a fundamental matter to be considered: see R v Hunt; Ex Parte Sean Investments Pty Ltd (1979) 25 ALR 497.
Had the applicant's employment not been terminated on 15 December 1994, the tensions arising initially from the meeting between Mr Stowell and the applicant on Thursday 8 December 1994 may have dissipated in due course wthout further incident. Her employment may have continued till her confinement and possibly beyond if the applicant was able to give birth and resume her duties in a time frame acceptable to both the Club andher. However the tensions may not have dissipated and a situation may have arisen where her employment would have been terminated without any basis existing for the suggestion that the termination was for the reason of her pregnancy or that it was one reason. Thus allowance must be made for this possibility and that the applicant's employment might have been terminated in accordance with her contract of employment and not in contravention of Part 3 of Division VIA.
The applicant's salary was $26,500 per annum. The maximum compensation that might be ordered is six months salary, viz $13,250. Taking into account the matters I have just discussed and the payment of four weeks salary in lieu of notice, I determine that compensation in the sum of $8,500 be awarded. I so order.
I certify that this and the preceding thirty-three (33) pages are a true copy of the Reasons for Judgment herein of his Honour Justice Moore.
Associate: ........ ........ ......
Dated: ..../..../....
APPEARANCES
Counsel for the Applicant: Mr Selby
Solicitor for the Applicant: Pamela Coward & Associates
Counsel for the Respondent: Mr J Purnell, SC
Solicitor for the Respondent: Confederation of ACT Industry
Dates of Hearing: 5 September 1995
Written Submissions Complete:
IN THE INDUSTRIAL RELATIONS )
)
COURT OF AUSTRALIA ) No. AI 267R of 1994
)
NEW SOUTH WALES DISTRICT REGISTRY )
BETWEEN: MILICA STOJANOVIC
Applicant
AND: THE COMMONWEALTH CLUB LIMITED
Respondent
JUDGE: Moore J
PLACE: Canberra
DATE: 8 December 1995
CORRIGENDA
The following amendments are made to his Honour's judgment of 8 December 1995:
On the page entitled "Order of the Court" delete "No. AI 367R of 1994" which appears in the top right hand corner and insert "No. AI 267R of 1994."
On page 1 of the judgment delete "No. 367R of 1994" in the top right hand corner and replace with "No. 267R of 1994."
On page 5 of the judgment delete "1995" in line 8 and insert "1994."
On page 5 of the judgment delete "1995" in line 23 and insert "1994."
On page 11 of the judgment delete the word "meeeeeting" in line 26 and insert "meeting."
Associate:
Dated: 17 January 1996
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