Singh v Vellios t/as Prototype Clothing Agencies

GENERAL DISTRIBUTION

CATCHWORDS

INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - UNLAWFUL TERMINATION - OPPORTUNITY TO RESPOND - CONDUCT AND PERFORMANCE - SEXUAL HARASSMENT - SEXUAL ASSAULT - REINSTATEMENT IMPRACTICABLE - COMPENSATION - DISTRESS CAUSED BY TERMINATION - BREACH OF DUTY OF CARE BY EMPLOYER TO PROTECT EMPLOYEE FROM INJURY - DAMAGES FOR FAILURE OF EMPLOYER TO TAKE REASONABLE STEPS TO PROTECT EMPLOYEE FROM INJURY CAUSED BY SEXUAL ASSAULT - UNWELCOME SEXUAL ADVANCE AND UNWELCOME REQUEST FOR SEXUAL FAVOURS BY MANAGER OF RESPONDENT - ASSESSMENT OF DAMAGES AS A RESULT OF INJURY CAUSED BY SUCH CONDUCT - EXPERT REPORT OF AFFECT OF SEXUAL HARASSMENT DESIRABLE BUT NOT ESSENTIAL IN CALCULATION OF NON-ECONOMIC LOSS - VIOLENCE IN WORKPLACE: NEED FOR GUIDELINES OR CODE OF PRACTICE - FAILURE TO MEET OBLIGATIONS UNDER NSW OCCUPATIONAL HEALTH AND SAFETY LEGISLATION.

Workplace Relations Act 1996 (formerly known as Industrial Relations Act 1988)
Sections 170DB, 170DC, 170DE, 170EE
Sex Discrimination Act 1984 (Cth) Sections 28A, 28S, 106
Crimes Act 1900 (NSW) Section 61L

Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371
Perrin v Des Taylor Pty Ltd (1994) 58 IR 254
Liddell v Lembke (1994-95) 1 IRCC 466
McLean v Tedman (1984) 56 ALR 359
Paz v Mack Trucks (McIlwaine JR, 13 September 1996, unreported, decision no. 668/96)
Bryant v Fairfield (McIlwaine JR, 16 December 1997, unreported, decision no. 302/97)
Maria Burazin v Blacktown City Guardian Pty Limited (IRCA, Full Court, 13 December 1996, unreported decision no. 606/96)
Knight v Government Insurance Office of NSW (NSWCA, 13 April, unreported, CA40755/92)
Bennett & Ors v Everitt & Ors (1988) EOC 92-244
Tammy Jackson v Riste Ilievskil (Innes, Com., Human Rights and Equal Opportunity Commission, 10 February, 1996, unreported)
Lorelle Dippert v Cliff Luxford and Vrachnas Betabake Pty Ltd (1996) EOC 92-828
Hall, Oliver and Reid v A&A Sheiban Pty Ltd (1989) 85 ALR 503
Thomas v Westpac Banking Corporation (1995) 62 IR 28

Singh v Vellios
NI 1800 of 1996

Before:  MCILWAINE JR
Place:  COFFS HARBOUR
Dates of hearing:    12 & 13 JUNE 1997, 14 & 15 JULY 1997
Date of judgment:   4 June 1998

GENERAL DISTRIBUTION

IN THE INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY

NI 1800 of 1996

BETWEEN:

Tatjana Singh
Applicant

AND

Fotini (known as "Effie") Vellios trading as "Prototype Clothing Agencies"
Respondent

ORDER

Judicial Registrar:
McIlwaine

Date of Order:
4 June 1998

Where Made:
Sydney

THE COURT DECLARES THAT:

The Applicant was an employee of Fotini (known as "Effie") Vellios trading as “Prototype Clothing Agencies” between 4 March 1996 and 31 May 1996.

The Respondent has contravened s 170DC of the Act.

The Respondent has contravened s 170DE(1) of the Act on the grounds that there was no valid reason for the termination of the employment of the Applicant on 31 May 1996.

It is impractical to reinstate the Applicant in any position with the Respondent.

It is appropriate to award compensation to the Applicant in the sum of ten thousand, eight hundred and eighty six dollars ($10, 886).

THE COURT ORDERS THAT:

The Respondent pay to the Applicant within twenty one days the amount of ten thousand, eight hundred and eighty six dollars ($10, 886).

Any sum paid within twenty one days to the Australian Taxation Office, which the Respondent is obliged to pay on behalf of the Applicant or which can lawfully be made on her account, in respect of the sum ordered in paragraph 6 shall be pro tanto satisfaction of the obligations of the Respondent under that order.

THE COURT DIRECTS THAT:

Subject to the receipt, within twenty one days of the written consent of the Applicant which may be provided through her Counsel or other legal adviser, the District Registrar of the Federal Court of Australia, NSW District Registry, is to forward to the Commonwealth Attorney-General a copy of these reasons for judgment and the evidence of the witnesses and to make available, as may be required, the full transcript of the proceeding and the exhibits for inspection by any officer authorised to inspect by the Commonwealth Attorney- General to enable an investigation to be made by the Commonwealth or State Police Services with a view to the prosecution of charges of sexual assault against Mr Louis Vellios.

Naomi Englebrecht
Acting Associate to
Judicial Registrar McIlwaine

GENERAL DISTRIBUTION

IN THE INDUSTRIAL RELATIONS COURT
OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY

NI 1800 of 1996

BETWEEN:

Tatjana Singh
Applicant

AND

Fotini (known as "Effie") Vellios trading as "Prototype Clothing Agencies"
Respondent

BEFORE:     MCILWAINE JR
PLACE:        SYDNEY
DATE:           4   FEBRUARY 1997

REASONS FOR DECISION

Delivered ex tempore - revised from the transcript

APPLICATION

This is an application by Tatjana Danielle Singh (“the applicant”) claiming unlawful termination of her employment under Division 3 Part VIA of the Industrial Relations Act 1988 (Cth) now known as the Workplace Relations Act 1996 (“the Act”) against her former employer, Effie Vellios trading as “Prototype Clothing Agencies”.

In her claim, the applicant records the work performed for her employer as “Manager in Ladies Retail”. The business was conducted at a shop in a retail complex at Coffs Harbour which is a major New South Wales coastal country centre. The applicant maintains that she started work with the respondent on 5 February 1996. This date is not agreed although there is no dispute between the parties that the last day the applicant worked in the shop was 31 May 1996. The remedy sought by the applicant in her claim is compensation. She amplified this claim by requesting:

“declaration that unfairly dismissed; and damages”.

There was no claim made for reinstatement. “Alleged Shortage of Work” is recorded in her application providing for a brief summary of reasons for the termination of employment to be stated.

The application dated 7 June 1996, was received by the Australian Industrial Relations Commission on 14 June 1996. Apart from an employment separation certificate dated 7 June 1996 there was no written notice of termination and therefore no question arises as to the claim being out of time. Commissioner Wilks of the Australian Industrial Relations Commission issued a certificate, dated 9 July 1996, in the following form:

In accordance with subsection 170ED(1) of the Industrial Relations Act 1988, the commission hereby certifies:
i. that it has been unable to settle this matter by conciliation within a reasonable period, and
ii. that the parties in this matter, having been invited to elect to have the matter dealt with by consent arbitration have not so elected.”

There was no objection to the certificate made by either party, I therefore find the matter is properly before the Court.

The respondent, Mrs. Fotini (known as "Effie") Vellios (hereafter referred to as Mrs. Vellios) was said to be the owner of two retail stores, one at Shop 319 The Gateway Mall, Wollongong and the other at Shop 82 City Centre Mall, Coffs Harbour. The business apparently trades under the name of “Prototype Clothing Agencies”. Mrs Vellios was not present during the first two days of evidence but subsequently gave evidence which was intended to corroborate that of her husband. Apart from the evidence of the mother of the applicant and a short piece of cross-examination of the applicant by leave of the Court, Mrs Vellios did not have the benefit of hearing the evidence of the other witnesses for the applicant and the evidence in chief and extensive cross-examination of the applicant.

Mrs Vellios signed the notice of employer’s appearance which was submitted to the Australian Industrial Relations Commission in that document she described the business as a sole trader and declared that she was the true employer of the applicant. Although alongside her name but under the section marked “position” is printed the word “manager”. In that document her brief summary of reasons for the termination were given as (i) shortage of work (ii) non performance in her duties”. This should be contrasted with the endorsement in the Employment Separation Certificate signed by Mr Vellios:

"Business was not making money - was going to reduce hours of Tatjana and work myself"

A subsequent Notice of Appearance was dated and filed in the Registry of the Court by Messrs. Lailotis and Co., Solicitors of Earlwood on 7 August 1996. This firm ceased to act for the respondent on 6 June 1997, when Messrs. Koop Martin Solicitors, of Coffs Harbour, filed a Notice of appearance.

HEARING

The applicant was represented at the hearing by Mr Parrington of Counsel and the respondent by Mr Jamieson, Solicitor of Messrs. Koops Martin, Solicitors of Coffs Harbour.

The case first came before the Court in Sydney on 8 August 1996 in a directions hearing conducted by telephone and it was requested that it be heard by the Judicial Registrar in Coffs Harbour. This was an oral application and it was granted by the Judicial Registrar. Subsequently, 7 and 8 November 1996 at Bellingen Local Court was set as the date and place of hearing as a Court in Coffs Harbour was not available on the agreed dates (Bellingen Court House being in the vicinity of Coffs Harbour and often used by the Court for this purpose). For a number of reasons which do not effect these proceedings the case was not heard on those days.

Eventually, the matter came on for hearing before me on 12 and 13 June 1997. A witness for the respondent was in hospital and therefore unable to give evidence on either day. The hearing then continued on 14 July 1997 and was completed on 15 July 1997 when the decision was reserved.

BACKGROUND

There are some issues of fact in this matter which both parties do not dispute. The applicant is a young woman, who was, at the time of dismissal, twenty one years of age. She received a wage of $410.70 per thirty eight hour week gross, giving her a net figure of $338.00 per week. In addition the respondent was supported by a government subsidy of $200 per week from the Jobstart program. This subsidy was payable between 4 March 1996 and 4 August 1996 - a period of twenty two weeks.

The applicant apparently started work as a casual with the Blue Moon Boutique (hereinafter referred to as “Blue Moon”) when it was under the proprietorship of Mr and Mrs Knight. Her job in the store was to retail womens’ clothing. The applicant worked full time in the business from 5 February 1996. The applicant was interviewed by Mr Vellios and his son in a Coffee Shop alongside the Blue Moon where it was decided that when the sale of the business was complete the applicant would continue to run the shop as the shop manager. Her employment as shop manager by the respondent commenced during March 1996, although the exact date was not agreed between the parties. However, there is sufficient documentation to support 4 March 1996 as the commencement date for the employment of the applicant.

EVIDENCE OF THE APPLICANT

The applicant testified that one morning, after the sale of the business was finalised, she had received a telephone call in the shop. She stated:

“I answered the phone and said “Good Morning Blue Moon, how may I help you?”

He said:

“Tatjana, it’s Louis, come down to the motel room, you can get Leanne to take over and catch a cab.”

It is most probable that this occurred at about 11.30 am on 18 March 1996.

The applicant testified that she was "stunned, surprised and very shocked" and did not know what to say. Once the applicant had collected herself, she told Mr Vellios she would telephone him again then terminated the call. Next, the applicant telephoned her then fiancé, requesting him to have lunch with her. The applicant said that, over lunch, they discussed the request of Mr Vellios. She remained very upset by the approach. After lunch the applicant went back to the shop and decided not to ring Mr Vellios but to continue with her work.

The applicant reported that, at approximately 2.30 pm, Mr Vellios telephoned again. After she answered the call, he said:

“What’s the matter, have you changed your mind?”

The applicant answered:

“No I am not like that, you know that, I have my friends, my boyfriend and I keep them all separate that’s how I like to keep it.”

Mr Vellios replied:

“Fine, I know you will let me know when you change your mind.”

The applicant further testified that when she said: “I’m not like that,” Mr Vellios had said:

"I didn't necessarily want to have intercourse with you, I just wanted to lay down beside you."

The applicant then reported that during the last 30 seconds of the conversation, her friend, Ms Selina Pilchowski (“Ms Pilchowski”) entered the Blue Moon. The applicant terminated the call and broke down in tears. She said that she sat with Ms Pilchowski and explained what had happened, telling her about the earlier phone call and how Ms Pilchowski had actually walked in at the end of the second conversation.

Later in the day at about 4.40 pm, Mr Vellios came into the shop and placed some papers on the counter. He walked to the front and then to the back of the shop. He told her that he was going back to Sydney and asked for a kiss. The applicant testified that she refused. Mr Vellios then picked up his papers and books and left the shop. The applicant testified that she went home at 5.00 pm and told her mother.

Her mother arranged for her to speak with Mr Parrington who was both a family friend and legal adviser. He apparently counselled the applicant to keep a diary of events. Also, as a consequence of the advice given to her by her legal representative, the applicant let Mr Vellios know his advances were not welcome. The applicant testified she kept a note of everything that had occurred. In addition, she stated that on

"every occasion something had happened..[h]e was put firmly in his place"

The applicant confirmed that, following the 18th March 1996, Mr Vellios came to Coffs Harbour and continued to make advances towards her. Initially the applicant gave evidence that:

“there was numerous, I can’t name and date everyone but - of asking me out to dinner, to when I was going to play the poker machines with him or go to dinner with just him.”

The applicant also described one Thursday night during late night shopping when they were both in the shop. While the applicant was marking off stock and recording it in the stock book when Mr Vellios said to her:

“You’re never happy, you’re not getting enough sex at home”

She turned to him and replied:

“I’m getting plenty of sex thank you Louis”

and walked away.

ALLEGATIONS OF SEXUAL ASSAULT AND SEXUAL HARASSMENT

Before allowing evidence to be led from the applicant in relation to these matters, I thought it appropriate to give the solicitor for the respondent, an opportunity of a brief consultation with his client. It is now well settled that when these types of allegations are made in Court they are emotive and place enormous strain on all the parties. In the conduct of such a case, it may be appropriate or even wise for an advocate, to make certain admissions on behalf of his client, so that the risk of further trauma being given to the complainant can be reduced. It is also, of course, open to the person to deny the allegations in total. See the discussion of these issues by Kim Lane Scheppele in the article “Just the facts Ma’am: sexualised violence, evidentiary habits and the revision of truth”, Volume 37, New York Law School Law Review, 123.
.
After the short adjournment, the applicant continued her testimony. In her evidence she did not amplify her allegations of the “different touchings behind the counter”, she gave a graphic, poignant demonstration of a groping by Mr Vellios. I asked her to as far as possible without having to face Mr Vellios who was sitting in the Court room to give a demonstration but ensuring that Mr Vellios could see as well as his solicitor and Counsel for the Applicant. The Applicant demonstrated the touching by sliding her hand with the palm against her body from a line level with her hip downwards towards her genital area. The movement stopped extremely close to her groin. I am satisfied that the demonstration which she showed me by putting her hand quite close to her groin was such as to constitute an act of gross indecency. Indeed, it would be sufficient to count as a sexual assault.

None of the witnesses who supported the case of the Applicant gave any evidence which went as far in their description as what was shown in the Court. I am satisfied that the applicant did not exaggerate the evidence. It is understandable that she would not share this indecency on the part of Mr Vellios with other persons. My assessment is that the giving of this evidence made a further substantial emotional impact on her. It may also have had an effect on her current relationship. In my view, these are all matters which can be taken into account in assessing the damage caused by the termination.

After these events, the applicant said she noticed a change in his attitude as he became abrupt with her, finding fault with anything little and accusing her of doing things wrong. On 30 May 1996, the applicant went to the Enterprise and Training Company ("ETC") and had an interview with Claire Mason, her case manager who was leaving on maternity leave that day. The ETC is a non-profit organisation which is independent from the Commonwealth Employment Service (“CES”), although it performed some of the same functions as the CES. Also present was Sue Irving who was taking over her position. The applicant testified that she had told these women about the phone calls and other incidents:

“I told them everything and that I wasn’t happy, I was getting very upset, very distressed at work but I didn’t want to lose my job because I enjoyed it.

During the testimony of the applicant a male person was present in the public gallery of the court room.

EVIDENCE OF FEMALE FRIEND OF APPLICANT

Ms. Selena Jan Pilchowski gave evidence as a friend of the applicant. She was interposed during the evidence in chief of the applicant so she could return to her employment. Ms Pilchowski testified that she knew "Louis" as being the employer of the applicant. She said she visited the applicant at the Blue Moon on 18th March 1996. On that visit, the applicant appeared to be upset at the time when she arrived which was just after lunch and the applicant burst into tears when she saw her. The applicant told her that she had been talking to Mr Vellios who had asked her to phone Leanne, request her to work, and then catch a taxi to his motel. Under cross-examination Ms Pilchowski admitted that she didn’t overhear the conversation on the telephone.

According to her observation, Ms Singh was extremely emotional, bursting into tears and seemed to be scared and distressed by the event. Ms Pilchowski confirmed that Ms Singh had suffered from Ross River Fever which at times made her emotional and upset. Ms Singh was often shaking, crying, very upset in her presence and needed to talk. Ms Pilchowski denied this was a result of the fever. The description given by this witness of the emotional distress exhibited by the applicant was well in excess of that testified to by the applicant. I accept her evidence of the distress caused to the Applicant as being quite severe and of some longevity.

Ms Pilchowski conceded that she was a friend of the applicant but strongly maintained that she would not lie to the Court. Ms Pilchowski agreed that she had bought some goods at a discount from Ms Singh when she was in charge. Ms Pilchowski said she had applied for a job at the company but had been told by the applicant that there was no job available. This rejection also did not influence her evidence.

EVIDENCE OF ACTING CASE MANAGER

Susan Gay Irving of Coffs Harbour was a case manager at ETC, located in Grafton Street Coffs Harbour. Ms. Irving met the applicant several months before 30 May 1996, whilst she was working as an administration assistant to the case managers at ETC. Mrs. Mason, the then current case manager of the applicant, was going on maternity leave and Ms. Irving, was to replace her for the duration of that time. The applicant had an interview with Mrs. Mason, about which Ms. Irving testified:

“I just sat in on the interview, but it was to do with Tatjana’s concerns over sexual harassment at her workplace. Mrs Mason was giving her some advice regards to what action she may or may not take; what may be necessary to resolve her problems at work.”

On the nature of the sexual harassment reported by the applicant, she reported:

“there were various body touchings, as in brushings against her body, patting on the bottom, things of this nature; some intimidation, as regards to how long her position at work would last for. Things of this nature.”

Ms. Irving further noted that the applicant was: “extremely distressed and ...upset, nervous”. At the meeting, the possibility of a different job was considered, given the state of mind of the applicant, as a constructive change was needed. Ms. Irving noticed that the applicant’s choice of clothes changed around the time she raised her concerns about the sexual harassment: “ordinary clothing” became “neck to toe”. Asked to explain further, she amplified her evidence:

“Collared shirts, full-length sleeves, long trousers. She had - Tatjana also made the comment that...I can’t remember the exact words, but she had mentioned that she was now wearing clothing that was covering her body, because she felt intimidated and harassed and did not want to encourage her employer.”

On 31 May 1996, Ms. Irving was working as a case manager. She received a telephone call from the applicant who sought her advice. Ms. Irving stated:

“[S]he was extremely upset on the phone. She had been threatened with dismissal for - dismissal from her position at the time, for seeking advice as to her rights and responsibilities and her employer’s rights and responsibilities, in regards to her job ... [The applicant] was - ringing to let us know that she had not - not received her pay for the week, or the last pay that was due, and that her employer had advised her that she would not receive that pay. There was a query over $10 missing from the till at the time. She had also mentioned something along the lines of there was some lay-bys in the store and that until the lay-bys were paid off by the customer, she would not receive any pay at all.”

Ms. Irving was unable to answer the applicant’s question as to whether she was able to take her wages out of the till and told the applicant that she would check with a senior case manager and call her back. In response, Ms. Irving was warned by the applicant that her employer threatened to dismiss her immediately should she receive such a phone call. However, Ms. Irving did call again and testified that she told the applicant that:

“[T]he employer has no grounds to dismiss her because she is checking on her rights and responsibilities for her position. And that we could not advise her whether or not to take any money from the till equalling her pay, but to alert her to the fact that if she wished to take this complaint further, it would probably go against her if she were to take that action.”

When the applicant called around to the office later that day Ms. Irving was with another client and the senior case manager spoke with the applicant privately.

Under cross examination, Ms. Irving confirmed that she neither observed any activities nor overheard any conversation between Mr. Vellios and the applicant which might be considered an act of sexual harassment. Ms. Irving could not give an exact date when she first had contact with the applicant, as Mrs. Mason had been her case manager. Ms. Irving confirmed that the applicant expressed her concerns that her position at work may not last for long, although Ms. Irving denied that the reason given was due to discussions Mr Vellios had with the applicant concerning her performance. Ms. Irving confirmed that the applicant related to her more that one incident of body touching. Expanding on this she said: “there was several complaints of many touches”, suggesting that the complaints extended beyond a month. Ms. Irving did not speak to the applicant again that day when she was in the office of ETC,

“apart from ‘Hi,’ or something along those lines. She was extremely stressed at the time, and things were being taken care of by the other case manager.”

EVIDENCE OF MOTHER OF THE APPLICANT

Mrs Singh, the mother of the applicant had been unavailable on the first two days of the hearing. She gave evidence on the applicant's behalf after some of the witnesses for the respondent had completed their evidence, but before the cross examination of Mr. Vellios commenced.

Mrs Singh formerly lived in Coffs Harbour but had now moved to Queensland. She recalled that her daughter was living at home during February 1996 when she was working at the Blue Moon. Under cross-examination, Mrs Singh confirmed her daughter had stopped residing at their home two to three weeks before the harassment commenced. Mrs Singh also testified that she and her daughter were very close.

After the shop was sold to Mr Vellios, Mrs Singh and her husband had either gone to the Coffee Shop or had some discussions with him one Saturday morning before 18 March 1996. Mrs Singh thought it was rather an impromptu meeting. They had talked about health tonics. Mrs Singh recalled telling Mr Vellios that both her husband and herself were pleased with their daughter working at the Blue Moon. Mrs Singh did not recall asking Mr Vellios home for dinner, a claim which he made in his evidence. Sometime around 18th March 1996, Mrs Singh recalls an incident (but not the particular day) when the applicant came home from work after lunch. Her daughter was upset about a telephone call which she said Mr Vellios had made to her, asking her to go to his motel.

Mrs Singh then gave evidence that she had phoned Mr Parrington of Counsel and arranged for her daughter to speak to him. Her daughter later spoke with Mr Parrington and arrangements were made for her to keep a diary of events. Mrs Singh confirmed that the applicant had the practice of writing the events in her diary which had held other personal details such as addresses for her twenty first birthday party. However the diary had been stolen out of the applicant’s car in late October/November 1996.

Mrs Singh conceded that they were initially quite impressed with Mr Vellios and surprised by the applicant's reports of his conduct. She was certain that such reports were of separate incidents on more than one occasion and included descriptions of events where the applicant had been touched and/or brushed against by Mr Vellios while working at the Blue Moon. Mrs Singh was very definite that there were reports on more than one occasion. Mrs Singh reported that her daughter told her Mr Vellios had said:

“she would soon get sick of her boyfriend and that she knew where to find him”
(Mr Vellios).

Mrs Singh Maintained that her daughter was very upset by the situation at her workplace. She confirmed that her daughter had suffered a lot of emotional upset which made her tired and withdrawn. Before these events her daughter had been an outgoing, happy girl. She had become less communicative with men and especially older men. When she went for job interviews she virtually froze up.

EVIDENCE OF SUBSEQUENT MANAGER OF THE BLUE MOON

Ms Adele Woodward gave evidence that she was the current Manageress of the Blue Moon and that Mr Vellios was one of the best bosses that she had ever worked with. Ms Woodward maintained that he had never sexually harassed her or touched her and she never felt threatened by him as her employer.

Although a performance issue was made of the applicant not doing the banking for the shop each day, Ms. Woodward in her evidence admitted that she did not do the banking everyday. This evidence tended to offset one of the suggested elements of poor performance of the applicant.

Following her cross examination, it became clear that the number of hours worked by the casual employees at the Blue Moon had increased since the time the applicant was in charge. Ms. Woodward also confirmed that all financial transactions, including wages, were made by cash payments.

EVIDENCE OF MANAGER OF RESPONDENT

Mr Louis Vellios testified that he was the Manager of the Proto-type Clothing Agencies and managed the businesses conducted by his wife and son. He and his wife formerly lived in Sydney but have since moved to Wollongong. His business address was Shop 319 Gateway Mall, Wollongong where he was the manager of that store. He did the buying for both the Wollongong and Coffs Harbour shops, the address of the latter being 82 City Centre Mall. He stated that his wife, Mrs. Vellios, was the owner of the Prototype Clothing Agency in Coffs Harbour. He had been introduced to the applicant by the owner of the Blue Moon, Mr Phil Knight, at a meeting between the two men held during the third week of February 1996. Negotiations to purchase the business from Mr. Knight had been taking place over three months.

Mr Vellios often did not answer a question properly. An example of which is:

“And where was that meeting? ---That was - that week - by then - February 1996 because we - we have a meeting because we want someone to run our business.”

He confirmed the evidence of the applicant that his son, Jim, was present at this initial meeting with the applicant:

“We have a coffee next door to our shop and myself, my son, and Ms Singh. We explain to Ms Singh we can’t take over the business properly the first week of March or by the end of March. And we want her to run our business as managing the business. We knew at the time Ms Singh was employed through the CES Job Start. Mr Knight, before I approach the interview - Ms Singh - he told me he was paying the young lady $250 a week net and he say costing him only $50 a week. He insist is a good idea if he keep employ her and get $800 a month. When we interview Ms Singh, we offer her, if she willing to stay and looking after business, we raise her pay to $410 a week. She agree and she was very happy with that. At that meeting - it was a short meeting actually. There wasn’t a long meeting but we did indicate to Ms Singh and explain to her, particular myself: this is very intelligent business; you have to be very careful with the public; you have to be polite to people; you have to be - dress up properly; you have to be - look after the shop by cleaning and mopping every day, windows and mirrors every day; and banking the money - I have an idea what was going on at Coffs Harbour - banking and not leave any money in the cash till - cash register. She was very happy and I told her I be back in Coffs Harbour the first week of March and by then I will know exactly when I will be going to take over the business. I have indicated to Ms Singh she has to be - at her age, she has to be very, very polite to people because the public is very important to us. We have to look after our customers. We have to not (?) on the public. We have to do our best to improve our name in this town.”

In answer to a further question from Mr Jamieson, he gave his opinion of the applicant as being the right person for the business at the time. He stated that the duties discussed with the applicant were:

“Priority to the customers; looking after the public; keep smiling to the public; be kind and look after..[the] customers”

Further, he stated:

“We want to improve our name in this town. The next thing was - I didn’t mention the banking but I did mention that the next meeting we had before the 12th or 14 March. Most of the time, I did remember at the time, Mr. Knight, who was doing the banking and I wasn’t aware if Ms Singh was familiar to the banking system.”

He agreed with his solicitor that the applicant appeared to be someone who fitted the special type of person that Mr. Vellios wanted.

Mr Vellios had his next meeting with the applicant, during the second week of March. He repeated that one of the duties to be performed was the banking (at least every second day). The other duties discussed with the Applicant were:

“Make the shop look nice, don’t waste your - don’t waste any time, but occupying yourself, nothing - by straighten - straighten up the garments, make sure the garments are looking in a proper way, the hangers are hanging up properly, the floor, the mirrors, the - the walls has to be clean, dusting around the racks, because usually if you don’t dust around the racks where the hangers - the garments hanging a lot of dust sits on them, and the most important - it was looking after the public. The was the - our first priority, looking after the customers.”

He conceded that the method of accounting or providing discount to the customers or clients of the Blue Moon was never discussed at that meeting. He conceded that it could have been discussed at a meeting held on the 15 or 19 April 1996.

He said that he felt that the applicant was an intelligent young lady and that he had formed the opinion that hopefully the applicant was the best person to run the shop. As time went on he met the mother and father of the applicant over coffee one Saturday morning. Mr. Vellios gained the impression they were pleased with the way he was talking about the applicant and encouraging their daughter. Moreover he believed, they were very happy to meet him. The applicant’s parents had invited him over to their home for tea. Mr Singh, discussed the fact that Mr Vellios was feeling down and brought a bottle of herbs for him to try. Mr Vellios had even paid $45 to buy the herbs from Mr Singh.

Mr Vellios gave evidence that as a result of his visits to Coffs Harbour he formed the view that the applicant was not properly performing her duties, the shop did not, in his view, look clean and the applicant was not helping customers enough. After the applicant left her employment he had to spend 10 days cleaning the shop. He alleged that the applicant was not doing exactly what was expected of her. He had determined to speak to her about her performance but he then decided that he would have to give her another go. He maintained he was trying to assist and encourage her to become a better shop manager. He testified that he went back to Sydney at this stage and discussed her performance with his wife. In particular, her attitude to shop sales. He had advised the applicant to be happy when working and to smoke only outside the shop. Mr Vellios said he had treated her as a family member. He denied assaulting or touching the applicant

The cross examination of Mr Louis Vellios was commenced by Mr Parrington after all other witnesses had completed their evidence on the third day of the hearing. Mr Vellios testified that even though he appeared to understand English very well, his understanding of some matters was poor. I am not inclined to accept his claim. On a number of occasions he chose, instead of answering a question, to deliberately argue or engage in a verbal dispute with Counsel. Alternatively he would repeat some parts of his earlier testimony for example, that he had always dreamed of having a house at Coffs Harbour. He maintained that he employed the applicant, because Mr and Mrs Knight had highly recommended her. Under cross-examination he confirmed the extent of his experience in hiring female employees. He maintained that it was towards the end of March, when Ms Singh was appointed. He disputed the claim of the applicant that 5 February 1996 was the starting date.

During cross examination, Mr Vellios denied that the goods sold in the Blue Moon were in the lower price range of the market. He was then questioned whether sales made on certain dates (25 and 29 April , 24 May) were under $50. He disagreed, despite the written evidence to the contrary.

When cross-examined about the turn-over of the business he confirmed that he had told the Court in his evidence in chief, that the turnover after the first two weeks had fallen. He was then forced to agree with some figures which were produced by Counsel for the applicant to the effect that the average daily takings were $290.85 for March, whilst in April they were $402.28. Whilst it was not put to him, it was clear that in May there was a reduction down to about $300 but this figure was still slightly above the March figure. Nevertheless, in my view, those concessions which had to be forced out of Mr Vellios in cross-examination are evidence that there could not be any justified claim that her performance in terms of selling was not improving. It may be that the overall economics of the shop was not viable. But such issues had not been made her responsibility. There was no attempt made to produce, for example, any sales forecasts made at the time of purchase so a comparison could be made with the results obtained by the applicant.

There was a further allegation made that the applicant was leaving the cleaning to Leanne which she was doing during the busy lunch hour. Mr Vellios suggested that the concentration should have been on serving the customers, rather than cleaning the shop during this busy period. Moreover, he saw the cleaning duty as being part of the job of the applicant.

Mr Vellios had stated that he had done a stocktake towards the end of March, but when he had done a similar stocktake in early May he calculated that some $6,731 worth of clothes were missing. He admitted that could amount to at least 570 garments. He was asked about a stock book which was not produced nor was a private diary. The excuse given for not producing the private diary was that in the recent move of Mr and Mrs Vellios from Sydney to Wollongong this book had been lost. However there was no explanation given for the failure to support his claim by producing the stock book. I am of the view that it was not produced as it may not have assisted the case of the respondent.

Mr Vellios reluctantly agreed that Ms Singh had on one occasion requested that a particular size of dresses be made available for sale in the Coffs Harbour store. Mr Vellios said that he made it clear to Ms Singh that no person was to be given a discount apart from her mother and herself. It was put to him that he never warned or cautioned Ms Singh. Mr Vellios responded that she was warned from day one but gave no specific details.

He was cross-examined about series of events recorded in red pen in a “management diary 1996” book (exhibit A). Originally, in his answer to Mr Jamieson during evidence in chief he left the Court with the clear impression that these entries had been made contemporaneously with the events. Obviously these were the instructions that were given to Mr Jamieson, because questions of that nature in relation to this book were put to the applicant. However, on carefully examining the original document, it appeared, quite likely that the notations made in red ink in the book had not been entered on the days in question. The entries were bogus as they had been entered in a subsequent period. I raised my concern with Mr Jamieson and gave him the opportunity to obtain further instructions by granting a short adjournment for the purpose. It then emerged in the evidence that these entries had been made in the private diary of Mr Vellios and that at the instructions of a former solicitor had been transferred to this diary (exhibit A). The original diary had been lost and could not be produced to support this explanation.

He was further cross-examined extensively by Mr Parrington, who made the valid point that on the case for the respondent the major events took place on the 31st May 1996. However, there were no details of that event or of the termination of the employment recorded in the diary, which was currently exhibited before the Court. All the other notations were of the nature of recording a warning. It is astounding how many witnesses destroy their case by clearly fabricating documents to ensure there is written evidence of warnings being given to the applicant. This is particularly the case when a truthful oral recollection of such events can be accepted by the court.

Mr Vellios denied that he had been looking for female company or that he had said words to that effect to the applicant. There were some words that Mr Vellios admitted that he might have said but not at the time which was suggested by Mr Parrington. This, he said was with reference to a discussion with the applicant about her coming to work looking very pale. Mr Vellios stated that she explained her condition by saying that she was working late at night in her own modelling agency business. He confirmed under cross-examination that he expected his wife to be in Coffs Harbour for the Queen’s Birthday weekend in early June.

According to Mr Vellios, the shop in Coffs Harbour, known as “Blue Moon”, had closed on 28th June 1997.

Mr. Vellios gave his evidence in chief during the second day of the hearing. His cross examination was not commenced, by consent, on that day. His cross examination took place at the end of the third day of hearing after the evidence of all other witnesses had been completed. In these circumstances, I am satisfied he had every possible opportunity to understand and prepare for the questions which were asked of him by Counsel for the applicant.

EVIDENCE OF OWNER OF THE RESPONDENT

Mrs Vellios gave evidence in support of husband testifying that she owned the “Proto-type Clothing Company”. Mrs Vellios confirmed that her husband had full authority and control over the day to day running of the shop at Coffs Harbour. Mrs Vellios did not inspect the shop before it was purchased and had not been to the Coffs Harbour store until after the dismissal of the applicant.

I have accepted the evidence of Mrs Vellios that she was the owner of the store which is supported by the testimony of her husband. Although there is some material which tends to contradict this testimony. See for example her description of herself as “Manager” contained in the Notice of Employers’ appearance. Moreover the Department of Social Security file contains the following letter:

“18 March 1996

Commonwealth Employment Service  Mr Philip Knight
   Rigby House  Bluemoon Boutique
   Coffs Harbour NSW 2450  Shop 82, City Centre Mall
  Coffs Harbour NSW 2450
ATTN: Mr Kevin Dickson
Dear Mr Dickson
This letter is to inform the C.E.S. that Bluemoon Imports has been sold by the         owners Mr & Mrs Philip and Marilou Knight to a Mr Louis Vellios, which took effect on the 4th of March 1996. Mr Vellios will continue to employ Miss      Tajana Singh (sic) who is presently employed through the C.E.S. on Job Start.

Yours Thankfully

(signed) (signed)
Mr Louis Vellios Mr Philip Knight”

The intended affect of this letter was to notify the Department of Social Security of the sale of the shop to Mr Vellios. No doubt it was written to enable the payment of the subsidy to the new owner of the shop. Based on the testimony of Mrs Vellios and her husband this letter is not factually correct as it suggests that Mr Louis Vellios was the purchaser of the business and the new employer of the applicant. The Job Start Wage Subsidy Agreement was also signed by Mr Vellios apparently as the authorised representative of Prototype Clothing Agencies.

Mrs Vellios maintained her husband had told her about the performance of the applicant which he said was very poor. Mrs Vellios did not give a first person account of what was said to her by her husband, simply saying “Tatjana did not do what Louis asked her to do”. Basically Mrs Vellios summarised the position as: the applicant was not good on paperwork and never gave the owners a telephone call. Mrs Vellios maintained that the applicant was always talking on the phone, the shop was not in a clean condition and was very disgusting when she arrived, after the applicant left her employ. Mrs Vellios says that when she came to Coffs Harbour after the applicant left she had to spend three days cleaning the store. This contradicts the assertion that it took Mr Vellios ten days to clean the store after the applicant left.

The applicant was giving her friends discounts of 20 to 30% off the correct price of the clothing without authorisation from her husband. It could have been expected that some of these examples would be given by Mrs Vellios when filling out the Employer’s Notice of Appearance. None of the examples which Mrs Vellios gave in her evidence were recorded on this document. The main reason given being “shortage of work”.

It emerged in evidence that Mrs Vellios and her husband had been in business since 1971. They had employed some 1,500 people, most of whom were female, and they claimed never before to have had a problem of this nature. Mrs Vellios said the people who had worked with her husband, were all female, including sewing ladies, and they had never made any complaints about him. Mr and Mrs Vellios treated their business as a family affair.

Mrs Vellios was strongly convinced that there had been no sexual harassment by her husband. In support of this denial Mrs Vellios said that she had been married to him since she was 18 and she was now 51 years of age. They had been married for 33 years and had 2 grandchildren. They came from Greece and they were very proud and had a very strong relationship.

Under cross-examination by Mr Parrington, Mrs Vellios confirmed that she had never been present in the store during the time of employment of the applicant. Mrs Vellios had not spoken to Mr and Mrs Knight, the former proprietors of the store. There were certain matters which she couldn’t remember except that she knew the takings of the store were very poor. It was the only shop conducted by the business outside Wollongong. In that shop, which Mrs Vellios went to just about every day, they had one full time employee and a number of casuals, probably up to 4 part-time people. Mrs Vellios strongly denied that her husband would need to find friends as he already had plenty of friends, particularly in Coffs Harbour. Mrs Vellios was reluctant to concede any issues to the cross-examiner, even where there were facts that could be supported by documentation presented to her. I have no reason not to accept the evidence of Mrs Vellios when she says she does not believe the allegations about the sexual activities of her husband, although I am firmly of the view that her conviction is misplaced. It is clear that Mrs Vellios could have no factual knowledge of the activities of her husband in Coffs Harbour which would support his denials. Her loyalty to her husband is to be respected, but she also had a duty to her employee. Mrs Vellios confirmed that it was well known she was to come to Coffs Harbours during the June Long Weekend in 1996. But denied that this was the reason why her husband needed to terminate the employment of the applicant.

Mrs Vellios was also from a non-English speaking background and although her English was not totally fluent I had no difficulty in understanding her testimony. Mrs Vellios staunchly defended her husband. An example of this occurred in some remarks made by her which were no doubt intended to influence the decision of the court:

“Even if my husband was a person like that - if - so many people outside that with a phone call I am pretty sure that everyone will get anybody. I am sorry to say that but that’s my feelings.”

It may be that he did tell his wife about his concern about the performance of the applicant. This would be consistent with his discussions with Mr Dickson. It would also set the scene for the termination of employment of the applicant. Mrs Vellios can not remember some of the crucial details about the case. Mrs Vellios gave no credible evidence which supports her claim to have known about the alleged poor performance of the applicant. In this regard, the evidence of Mrs Vellios was no worse than that given by her husband.

EVIDENCE OF INDEPENDENT WITNESS FOR THE RESPONDENT

Mr Kevin John Dickson, clerk with the Commonwealth Employment Service gave evidence on behalf of the Respondent. He also produced a file of the Department which became part of the evidence. He had handled the changeover of the Jobstart subsidy for Mr Vellios. The amount of the subsidy was $200 per week paid upon an application submitted every four weeks. The duration for Mr. Vellios was twenty two weeks. He recalled that some three or four weeks later there were some discussions to the effect that things were not working out with the applicant. He was questioned as to whether the Jobstart subsidy could be paid to another person and he had answered “no” to that request. Two or three weeks later Mr Vellios sought a further appointment and said things were not getting any better:

“Can I replace her? Alternatively, could I have someone on a Jobstart to supervise?”

Mr Dickson recalls he made some enquiries within the Department and was advised that these proposals were not permissible.

Mr Dickson could not recall whether he had spoken to the applicant about her performance. Mr Dickson said at no time did Mr Vellios specify exactly what was going wrong. All he can recall is statements that the applicant was just not working out. Mr Dickson said he explained to Mr Vellios that the Jobstart Programme and subsidy did not prevent the owner of the business from terminating the employee, if they had a proper reason for such action. Mr Dickson did not make any notes of his conversations with Mr Vellios.

RE-EXAMINATION OF THE APPLICANT

At the request of Mr Jamieson and in order to enable him to put certain matters to Ms Singh. I allowed him to cross-examine her again by leave. The applicant was cross-examined about a document that she had given the CES in which there was no mention made of the sexual assault. The explanation of the applicant for this omission was that there had been no decision made as to whether it would be raised in her case regarding the termination of employment or in some other proceedings.

In a further re-examination by Mr Parrington, the applicant produced a document giving a number for a report of an incident to the NSW Police Service. Her evidence was that this was her report of the stolen diary. The applicant testified that the papers and the report could only be supplied by the police in response to a subpoena. No action had been taken to require such a subpoena to be issued by either party. However, I accept the testimony that her diary was stolen as it was supported by the evidence of her mother.

SUBMISSIONS ON BEHALF OF THE RESPONDENT

In response to the specific allegations of sexual assault and sexual harassment made by the applicant, Mr Vellios maintained that it never happened. Mr Jamieson made very strong and coherent submissions in his attempts on behalf of Mr Vellios to have me accept that these incidents of sexual assault and sexual harassment did not occur.

Mr Jamieson submitted that these complaints were made as a result of the termination of the employment of the applicant and that they rose out of anger from that event. However, in order for me to accept this proposition I would have to put aside the evidence given by Ms Irving, Ms Pilchowski and the mother of the applicant and I am not able to do so.

I find that Mr Vellios spoke in a halting manner. I found his evidence confusing. He appeared to say he was fed up with the performance of the applicant. He was evasive, not answering questions put to him by his own solicitor, he was rambling and confused. In my view a lot of this conduct was a deliberate action on his part to avoid the consequences of his extreme misconduct.

Mr Jamieson made a very valiant effort to put a best case proposition forward on his client’s behalf but despite the suggested interpretations which were urged upon me by Mr Jamieson, I find that I cannot accept the denial of Mr Vellios regarding these serious allegations. Moreover, where the evidence of Mr Vellios and the applicant differs, I prefer the evidence of the applicant based on my observations of them both.

DATE OF THE COMMENCEMENT OF EMPLOYMENT

The date set out by the applicant in her application to the Court for the commencement of her employment was 5 February 1996. The respondent suggests that the date is much later in March. However, I find that her employment commenced on 4 March 1996. My main reason for adopting that date is a letter, dated 18 March 1996, addressed to the Commonwealth Employment Service which records a sale date of 4 March 1996. Also, a Wage Subsidy agreement signed by Mr Vellios shows an employment commencement date of 4 March 1996. It appears to me that it would have been in the interests of Mr. Vellios to obtain the earliest possible date for the transfer of employment as the subsidy would be payable to him rather than to Mr and Mrs Knight. As there is no evidence that Mr Vellios ever met with Mr and Mrs Knight other than in Coffs Harbour the date on this letter tends to confirm that he was in town on 18 March 1996. It should not be forgotten that this is the date, alleged in evidence to be the day when the telephone call inviting the applicant to the motel was first made.

I am therefore satisfied that the date of effective employment by the respondent was 4 March 1996. It may well have been that the applicant was in employment before that time and did receive some orders from Mr Vellios, but technically she probably remained an employee of Mr and Mrs Knight.

TERMINATION OF EMPLOYMENT

On 31 May 1996, the applicant arrived at work to find Mr. Vellios in attendance. There are some differences between the parties as to how the termination occurred, however, when all the factors are taken into account, it seems that the disputed facts between the two persons is of little consequence. The applicant says that she went to the till on arrival to check the float and to take out her pay. The float was out by $10. The applicant says that Mr. Vellios had been doing the till up every night as he had been there for a week. The applicant then asked for her wage. Mr. Vellios told her she was not entitled to do that until later in the day. The applicant explained that she had to pay her rent before 12:00 pm that day and he replied that she should wait until later in the day when there was more money in the till. An argument then erupted between the two of them over discounting of sales.

Mr. Vellios was a little vague in his description of events and his reasons for acting as he did. However, as most of the payments in this business were in cash and the applicant was entitled to be paid on the Friday, I see little justification for his attitude on that day. The applicant then says that she made a telephone call to her acting case manager and this is confirmed by the unchallenged evidence of Ms. Irving. I have already set out the substance of the conversation in this judgment and it is not necessary to set out the version given by the applicant as I accept Ms. Irving as giving truthful evidence. The respondent was given the opportunity of challenging her credit and no challenge was made. The applicant says that Mr. Vellios warned her that if there was a returned telephone call, she would be dismissed. On the other hand, Mr Vellios testified that he had raised certain issues about accounts and discounting being given to friends of the applicant and that this was his justification for his response. The applicant finally said to Mr Vellios:

"so you are sacking me on the spot?”,

to which he replied
“Yes”.

As the applicant began to walk out the door she said:

“Don’t think this is the last that you will be hearing of me with all of the sexual harassment and all the other things as well.”

His response was:
“what sexual harassment?”

I am satisfied that the applicant was terminated in this fashion.

After a further exchange between them the applicant left the shop. She then attended the local Legal Aid Office where a letter to Mr Vellios was written and delivered by hand to him that day. The amount of $1 432.10 demanded in that letter for non-payment of wages, underpayment of wages and notice was subsequently paid in cash. Consequently there is no allegation made of a breach of s 170DB of the Act

In the circumstances of a shop where all the payments are made in cash (there is clear evidence of this), the attitude of the respondent to the person who, in the absence of his attendance, would normally take the cash at any time, does not seem to me to have any appearance of being rational and indeed, it seems to be quite a capricious action on the part of the respondent, through its manager, Mr. Vellios.

Under the provisions of the Act, the respondent carries the burden of showing that at termination it had a valid reason or reasons for bringing the employment to an end summarily. In his decision in Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371, Northrop J describes the meaning of this phrase in the following way:

“Section 170DE(1) refers to “a valid reason, or valid reasons”, but the Act does not give a meaning to those phrases or the adjective “valid”. A reference to dictionaries shows that the word “valid” has a number of different meanings depending on the context in which it is used. In the Shorter Oxford Dictionary, the relevant meaning given is: “2. Of an argument, assertion, objection, etc.; well founded and applicable, sound, defensible: Effective, having some force, pertinency, or value.” In the Macquarie Dictionary the relevant meaning is “sound, just, or well founded; a valid reason.”
In its context in s170DE(1), the adjective “valid” should be given the meaning of sound, defensible or well founded. A reason which is capricious, fanciful, spiteful or prejudiced could never be a valid reason for the purposes of s170DE(1). At the same time the reason must be valid in the context of the employee’s capacity or conduct or based upon the operational requirements of the employer’s business. Further, in considering whether a reason is valid, it must be remembered that the requirement applies in the practical sphere of the relationship between an employer and an employee where each has rights and privileges and duties and obligations conferred and imposed on them. The provisions must “be applied in a practical, commonsense way to ensure that” the employer and employee are each treated fairly, see what was said by Wilcox CJ in Gibson v Bosmac Pty Ltd (1995) 60 IR 1, when considering the construction and application of s170DC.”

The evidence in this case leads me to the conclusion that there was not well founded or just grounds for the decision to terminate the employment of the applicant. There was not a valid reason to terminate the employment of the applicant.

SECTION 170DC: EMPLOYEE OPPORTUNITY TO RESPOND

Section 170DC is in the following terms:

“An employer must not terminate an employee’s employment for reasons related to the employer’s conduct or performance unless the employee
(a) has been given the opportunity to defend himself or herself against the allegations made or
(b) the employer could not reasonably be expected to give the employee that opportunity.”

In this matter Section 170DC(b) certainly does not need to be considered as there is no evidence that the applicant would not act reasonably in accepting her dismissal.

The applicant was not given the opportunity to defend herself against the allegations of poor performance. In the matter of Perrin v Des Taylor Pty Limited (1994) 58 IR 254 at 256-7, Moore J said the following about the purpose of section 170DC:

“Its purpose is at least twofold. It is to give the employee the opportunity to demonstrate that the allegations have no foundation in fact or they should not be viewed as reflecting on the employee’s capacity. In the present case, the applicant may have been able to show that the complaints about slow delivery parts had no factual foundation or that there was an explanation for their slow delivery that did not relate to any want of effort on his behalf.

A second purpose of s170DC is that an employee with whom an allegation has been raised may be able to persuade the employer that, while the allegation is of substance, there are factors that should persuade the employer not to terminate the employment. They may be extenuating personal circumstances or they may involve undertakings about future conduct.”

In my view, the respondent breached section 170DC of the Act, in that none of the allegations of poor performance placed before the court were ever properly raised with the Applicant. There was no cogent evidence of any proper attempt to give the applicant an opportunity to defend herself against the allegations of poor performance. Any contemporaneous documentation of prior warnings, if it ever existed, was alleged to have been being recorded n a diary which had been lost. The claims for payment of the Jobstart subsidy signed by Mr Vellios did not answer the question on the form:

“Is/was employees performance satisfactory?”

The way these claims were made and paid contradicts his evidence about the poor performance of the applicant. The Jobstart subsidy was last paid on 30 May, 1996. As the applicant was not informed of the ownership of the shop by Mrs Vellios, she was not in a position seek her intervention or to give any undertakings to her as to future conduct. In those circumstances I propose to make a finding against the respondent that there was a contravention of section 170DC.

IMPRACTICABLE

I am required by the provisions of the legislation to determine the impracticability of reinstatement. Some early views were expressed on this issue in Liddell v Lembke (1994-95) 1 IRCR 466. Based on the discussion on this issue in that case, I am satisfied that I have only a limited discretion not to reinstate the applicant. Nevertheless I am obliged by Section 170EE(1) to take into account all the circumstances of the case. It should not be overlooked that Section 170EE(1) allows the Court to take into account the legitimate circumstances of the applicant as well as that of the employer.

In view of the finding which I have made on the allegations of sexual harassment and sexual assault, reinstatement is not only impracticable, it is also out of the question. Moreover, I am satisfied that at the date the hearing was concluded, the Coffs Harbour shop is no longer being operated by the respondent. It is not practicable to order the reinstatement of the applicant in the Wollongong store primarily because of its location and the cost of the applicant moving there. I therefore find that it is impracticable to reinstate the applicant.

SUMMARY OF FINDINGS ON SEXUAL HARASSMENT AND SEXUAL ASSAULT

I find that the manager of the respondent made an unwelcome sexual advance towards the applicant by placing his hand near the groin of the applicant and that such action constituted a sexual assault. Further, his other statements and actions constituted “unwelcome conduct of a sexual nature."

There is sufficient evidence for me to make a finding by a considerable margin that it was more probable that not that:
(a)       Mr Vellios committed at least one act of indecent assault on the applicant within the        meaning of the Crimes Act 1900 (NSW);
(b)       Mr Vellios committed other acts of assault on the applicant by touching and brushing      against her in an unwelcome manner; and
(c) The general conduct of Mr Vellios towards the applicant fell well within the scope of the definition of "sexual harassment" contained in s 28A Sex Discrimination Act 1984          (Cth).

VIOLENCE IN THE WORKPLACE

In this matter the responsible employer abrogated her management role to her husband. This is not a responsibility which can be avoided in such a fashion. Mrs Vellios remains liable for any sexual harassment and/or sexual assault by her husband in the workplace. There was also a failure by her to take any action to prevent sexual harassment or sexual assault of her employee as she would be required to do under the Occupational Health and Safety legislation in NSW. Moreover, there is a general duty at common law to protect an employee from injury. In McLean v Tedman (1984) 56 ALR 359 at 364, Mason, Wilson, Brennan, and Dawson JJ in a joint judgment state:

"'The employers obligation is not merely to provide a safe system of work, it is an obligation to establish, maintain and enforce such a system. Accident prevention is unquestionably one of the modern responsibilities of the employer'
(Fleming, Law of Torts, 6th ed., 1983 (pages 480-1)). In deciding whether an employer has discharged his common law obligations to his employees the court must take account of the power of the employer to prescribe, warn, command and enforce obedience to his commands."

In this case Mrs Vellios had the power to prescribe, warn, command and enforce obedience to her commands by her manager. However, her failure to attend the business and by leaving the operation totally in the hands of her husband, this left the applicant as her employee subjected to an unsafe system of work. There was a clear breach of that duty of care. The applicant suffered injury and damage as a direct consequence.

I am satisfied that the breach of duty of the respondent to prevent injury to the applicant from sexual assault or harassment by the manager of the shop was a significant factor in the emotional trauma suffered by the applicant.

I am satisfied that her failure to assume her responsibilities as the owner of the shop permitted the Manager to do an act that is unlawful pursuant to the Sex Discrimination Act 1984 (Cth). Moreover, there was no evidence adduced that the Respondent took all reasonable steps to prevent her manager from doing these unlawful acts. Consequently, the respondent may be subject to the liability imposed by s 106 of the Sex Discrimination Act 1984 (Cth).

In NSW, since 1977, and insofar as the Commonwealth is concerned, since 1984, there have been widely publicised legislation preventing sexual harassment of employees. Whilst it is true to say that the Human Rights and Equal Opportunity Commission did not publish a guide which would be suitable for use by small business until August 1996, nevertheless, I am of the view that by the time the applicant was employed, any employer ought to have been aware of the necessity for taking precautions against sexual misconduct by either managers or fellow employees.

In two recent judgments, Paz v Mack Trucks (McIlwaine JR, 13 September 1996, unreported, decision no. 668/96) and Bryant v Fairfield (McIlwaine, JR, 16 December, 1997, unreported, decision no. 302/97), I had cause to examine the question of violence in the workplace arising out of incidents of "unwelcome conduct of a sexual nature" between males and the contribution which could be made by the Occupational Health and Safety Legislation in the respective states toward preventing such violence. In those cases, I observed that there was a need to develop plans or a code of practice to prevent or reduce violence in the workplace. I need not repeat those observations in this judgment except to say that they are also relevant for a small business such as is the case with this respondent, particularly as there is now a published guide for use by small business.

DISTRESS

This termination had a harsh effect on the applicant. She had left her home on the basis that she had secure employment. Suddenly, she was confronted with a situation where her manager stopped her pay even though he knew her rent was due that day. Given her prior good conduct, this was a despicable action which was open to all types of adverse interpretations in the country community in which she lived. The allegation of money missing from the float could have extreme consequences for future employment in a retail environment.

I am satisfied that the applicant suffered distress of the nature outlined in Burazin v The Blacktown City Guardian Pty Ltd (IRCA Full Court, 13 December 1996, unreported, decision no. 606/96). In that case the full court suggested that in making an assessment of damages caused by stress suffered in a termination of employment restraint must be exercised in the level of damages.

The fact that the applicant, in order for her to try and keep her job in a country town, had to tolerate the unwelcome conduct of Mr Vellios was a contributing stressful factor. Given the position with unemployment generally in country areas her situation is even more exasperated. I am satisfied that her termination did and will have a continuing adverse impact on her. Those circumstances justify taking that damage into account.

In this matter, I assess damages suffered through distress caused by the method of termination at $3 000. That assessment is based upon my observations of the applicant in giving her evidence, her description of how she felt at the time of her termination and the reaction which she illustrated in the witness box. This was a young woman with good prospects of a future career in womens’ fashion. The applicant lived in a relatively small country town where the circumstances of her dismissal would quickly become common knowledge.

NON ECONOMIC LOSS CAUSED BY SEXUAL HARASSMENT OR SEXUAL ASSAULT

In order for there to be a connection between a breach of duty and for damages to follow, it is necessary to show that the breach relied upon was a cause of the loss suffered. The test as to whether the act or admission was a cause of damage is one of common sense. In this case, Mrs Vellios had a duty of care to her employee (the applicant) to protect her from the activities of her Manager, Mr Vellios (who happened to be the husband of Mrs Vellios). Mrs Vellios admitted that she did not take an active role in the control of the premises or in the operation of the shop. Any knowledge of the applicant as her employee came from Mr Vellios as her Manager. This is a clear case of a breach of the duty of care to protect an employee from injury.

Kirby P in Knight v Government Insurance Office of New South Wales (NSWCA, 13 April 1995, unreported, CA 40755/92) discusses the problem of proof and assessment of compensation for loss of sexual function. His judgment involved an examination of the loss by the plaintiff of sexual function, enjoyment and capacity which was not adequately given in evidence. Similarly in this case any difficulties that the applicant suffered in her existing or future relationships as a consequence of these invasions of her privacy were passed over lightly in her evidence.

It could be, that the applicant has sought medical advice and the results may not have been made available to her Counsel. This is understandable particularly as he is regarded as a family friend and the applicant may have difficulty explaining such issues to him. (The discussion on this issue by Kim Lane Scheppele in the New York Law School Review (1992) Volume 3, page 123 at page 138-139 is also helpful). No doubt, it would be less embarrassing if such information could have been conveyed to the Court by way of expert report, either by a medical expert or a psychologist.

The cost of obtaining such a report would have been substantial. In the light of the provisions restricting the recovery of costs in these proceedings, there would be no guarantee that such fees would be recoverable. However, such a report would be desirable as an aid to determining such matters as the extent of pain and suffering and future humiliation in her personal relationships. It may be that an expert assessment of the long-term future prospects of her recovery from this traumatic series of events for the applicant would enable a longer period of rehabilitation. In the absence of an expert prognosis, it is impossible for me to make any allowance on that basis for future damages. However, whilst I have made that acknowledgment, it seems to me that it is not necessary for there to be a report to enable a calculation of the loss to be completed.

There is extensive discussion of the assessment of non economic loss in sexual harassment cases such as:

Bennett & Anor v Everitt & Anor (1988) EOC 92-244
Tammy Jackson v Riste Ilievskil (Innes, Com., Human Rights and Equal Opportunity Commission, 10 February 1997, unreported, decision no. H96/85
Lorelle Dippert v Cliff Luxford and Vrachnas Betabake Pty Ltd (1996) EOC 92-828
Hall, Oliver and Reid v Sheiban (1989) 85 ALR 503.
Based on an examination of these cases it is reasonable to conclude that a range exists from $6 000 to $9 000 for such damages. Although in Hall the damages claim was referred back for an assessment by the decision maker. I am satisfied, having reviewed the above cases, that an assessment of $9 000 for the damage suffered through the failure of the respondent to protect the applicant from injury would be a most conservative assessment in her case.

The respondent received an amount of $2600 from government funds to assist in training the applicant, during her period of employment with the respondent. On any account, there was a minimum amount of training given to the applicant. Thus, there is a grave breach of trust involved. The situation is worsened given the protestations by Mr Vellios of his experience of working with female employees.

Other more personal issues include: the change in personality testified to by her mother; the evidence of extensive crying and emotional upset testified to by all three female witnesses for the applicant. As well there is the difficulty for the applicant of ever being employed locally should it become known that claims of sexual harassment by her former employer had been made by her or worse still, reported to the police. In my view, these issues justify a substantial assessment of damages. The assessment I make taking into account all of these factors is $19000.

COMPENSATION

Ordinarily, the calculation of the payment of remuneration lost by the employee commences from the date of termination, which was 31 May 1996. The weekly Gross Taxable Income being paid to the applicant was $410.70 and her net earnings were $338. In the letter of demand, dated 31 May 1996 (exhibit A2), the point is made that there was, effective from 30 April 1996, an award wage of $418.70 as this claim was paid by the respondent the figure of $418.70 should be used for the purpose of the calculation of compensation.

If the applicant had been supported in the management of her shop by proper training, her income might have eventually exceeded the figure that she was earning. Perhaps a commission system would have been introduced as an incentive for her. However, there was no evidence tendered which would enable me to make that prediction so, accordingly, I have not taken that prospect into account. In the circumstances, the economic loss should be assessed over the period during which she was without work. The applicant was unemployed from 31 May 1996 until 9 September 1996 - a period of fourteen weeks during which she would have earnt $5 861.80 gross. The applicant applied for a number of jobs but was not successful during that period. On 9 September 1996, she obtained employment with a local resort in the food and beverages area. However, the resort had some financial difficulties and her employment ceased on 25 November 1996 when she was retrenched along with other employees. In that time her earnings were:

Gross              $4746.25
  Tax                 $1031.70
  Nett                $3714.55

The applicant also attempted to continue with her modelling career by conducting a modelling agency between August and October 1996. I am satisfied that this enterprise ran at a loss. At the commencement of the hearing on 12 June 1997, the applicant was still unemployed and receiving social security benefits. The applicant admitted to receiving some moneys on an intermittent basis for part time modelling work. An allocation of $250 for this income is sufficient. Therefore I estimate her other earnings up to the date of hearing as $5 000.

In May v Lilyvale Hotel Pty Ltd (1995) 68 IR 112, Wilcox CJ, made an assessment of the future economic losses of the applicant based on the difference in terms of the salary which the applicant was likely to receive and that which she would have received in her previous position in her former employment. The calculation of that amount of damages was in excess of the maximum amount of compensation allowed under the legislation. Accordingly the maximum amount was allowed.

In the present case I do not have the necessary evidence as to future losses as it was not led from the applicant. Accordingly there is no evidence on which I can rely to make such a prediction. In the circumstances I am limited to assessment of the damages based on the evidence from the applicant for the period she was unemployed, together with the amount for distress and for non-economic loss arising from the sexual harassment, all of which I have assessed earlier.

The calculation of compensation is:

Economic loss  $ 5 861.80
Damages for distress              $ 3 000.00
Non-economic loss                 $19 000.00
  $27 861.80
  less
Earnings during period          $ 5 000.00
  $22 861.80

I assess damages in this matter at $22 861.80. This exceeds the maximum amount of compensation allowed of $10 886. It is therefore appropriate that there be an award of $10,886.

UNLAWFUL TERMINATION

There is probably scope for a declaration in this case that the respondent contravened s170DF(1)(f) of the Act on the grounds of sex. It is established that sexual harassment may constitute discrimination on the grounds of sex. I have not made a determination with respect to this section for a number of reasons.

Mrs Vellios was not present during a major part of the presentation of the case on behalf of the applicant. She did not see for herself the conviction with which all the witnesses spoke about the improper activities of her husband. There may be an element of unfairness in such a finding against her, particularly as it was only on 12 June 1997 that it was made clear that she was the employer. It is my assessment that it is possible that she is the owner in name only or for some other convenient legal device. It would have been preferable had this issue been raised before the commencement of the hearing. In the circumstances there will be no declaration that the respondent contravened s170DF (1)(f).

NEED FOR FURTHER ACTION

In Bryant (supra), I found that the actions of the applicant were such as to justify the applicant being charged with an offence under s 61L Crimes Act 1900 (NSW):

"Any person who assaults another person and, at the time of, or immediately before or after, the assault, commits an act of indecency on or in the presence of the other person, is liable to imprisonment for 5 years"

I did not initiate such action because there was a history of a previous assault by the two main participants. In addition I was satisfied that:

"The Board of the club will ensure that action is taken to adopt a proper Code of Practice dealing with workplace violence and sexual harassment in the workplace thus contributing to the continued good health and safety of its employees and the future well being of the club"

This case is different.

On one view of the matter it seems to me that I ought have an inquiry initiated into the activities of Mr Vellios particularly in the light of the fact that his employer is probably unable to take any action of an independent nature. See for example Thomas v Westpac Banking Corporation (1995) 62 IR 28, where the employer in that case had a sexual harassment policy and procedures in place which were designed to deal with incidents of this kind. So, for that reason alone I would normally arrange to initiate action through the Attorney-General with the appropriate authorities for a further investigation. In view of my finding of a sexual assault occurring, I regard the matter so seriously that it ought to be referred to the Police or prosecuting authorities for a prosecution under the Crimes Act 1900 (NSW). Alternatively, it may be that there ought to be an inquiry ordered by the Minister under s 58 of the Sexual Discrimination Act 1984 (Cth). However, each of these avenues of further action would require the co-operation of the applicant who in my opinion has already been subjected to sufficient trauma through her involvement in these proceedings. I am satisfied that, in giving her evidence, the applicant has been further traumatised by having to recall in detail the unwelcome conduct of Mr Vellios.

No action of this nature need be taken unless, the applicant provides either personally or through her counsel or legal representative to the Sydney District Registrar of the Court her consent that further police action be initiated. If the applicant resolves not to provide the Registrar with that advice then her choice will be understandable in the circumstances and no adverse view can or should be taken of her decision. These events should not become a continuing saga. It is more appropriate that this unfortunate situation be put behind the applicant and that all her efforts be placed into obtaining further satisfactory employment.

There will be allowed a period of twenty one days for the applicant to advise the Court through her Counsel or other adviser whether it is her wish that the transcript of evidence, exhibits and this judgment be referred by the Sydney District Registrar of the Commonwealth of Australia with a view to there being an investigation by the NSW Police Service (or Federal Police) of the allegations of sexual assault.

There will be judgment and orders accordingly.

I certify that this and the preceding page
are a true copy of the reasons for decision of
Judicial Registrar McIlwaine as recorded in the transcript
and revised by the Judicial Registrar.

Associate:
Dated:

APPEARANCES

Counsel appearing for the applicant: Mr J Parrington
(direct brief)

Solicitor appearing for the respondent: Mr P Jamieson

Solicitors for the respondent: Koops Martin

Dates of hearing: 12 & 13 June and 14 & 15 July 1997

Judicial Registrar:	McIlwaine
Date of Order:	4 June 1998
Where Made:	Sydney

Counsel appearing for the applicant:	Mr J Parrington (direct brief)
Solicitor appearing for the respondent:	Mr P Jamieson
Solicitors for the respondent:	Koops Martin
Dates of hearing:	12 & 13 June and 14 & 15 July 1997

[1998] IRCA 21

4 Jun 1998