Woodhill v Australian Hotels Association (NSW) - [2010] FMCA 953

FEDERAL MAGISTRATES COURT OF AUSTRALIA

WOODHILL v AUSTRALIAN HOTELS ASSOCIATION (NSW)

[2010] FMCA 953

INDUSTRIAL LAW – Termination of employment for proscribed reason – sex and marital status discrimination – onus of proof – contract of employment – variation – consideration for variation – demotion – constructive dismissal.

Workplace Relations Act 1996, ss.642, 659, 664, 665
Fair Work (Transitional Provisions & Consequential Amendments) Act 2009, item 11 of sch.2

Applicant:

CHRISTINA WOODHILL

Respondent:

AUSTRALIAN HOTELS ASSOCIATION (NSW)

File Number:

SYG 2168 of 2009

Judgment of:

Cameron FM

Hearing dates:

25-26 May 2010

Date of Last Submission:

26 May 2010

Delivered at:

Sydney

Delivered on:

10 December 2010

REPRESENTATION

Counsel for the Applicant:

Mr A. Rogers

Counsel for the Respondent:

Mr B. Cross

ORDERS

The application be dismissed.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT SYDNEY

SYG 2168 of 2009

CHRISTINA WOODHILL

Applicant

And

AUSTRALIAN HOTELS ASSOCIATION (NSW)

Respondent

REASONS FOR JUDGMENT

Introduction

The applicant, Ms Woodhill, was employed by the respondent (“AHA”) from 7 August 2006 until 26 September 2008. Her original position was co-ordinator of the AHA’s accommodation division but on 28 March 2008 she was promoted to the position of Accommodation Division Manager, subject to a three month probation period. On 30 June 2008 Ms Woodhill was advised by the chief executive of the AHA, Ms Fielke, that her position as Accommodation Division Manager would not be confirmed and that she was to be appointed to the position of Member Services Co-ordinator (Accommodation Division), a role similar to her original position and paid at a similar rate. Ms Woodhill declined to accept the demotion and took stress leave. She never returned to work at the AHA.
Ms Woodhill alleges that the AHA’s refusal to confirm her in the position of Accommodation Division Manger and its related proposal to demote her to a co-ordinator’s position amounted, in the circumstances, to a constructive termination of employment which she subsequently accepted. She claimed reinstatement and damages for wrongful termination of her employment as well as the imposition of a pecuniary penalty. Claims for reinstatement and a sum in lieu of notice were not pressed.

Statutory provisions

Prior to the commencement of these proceedings, the provisions of the Workplace Relations Act 1996 (“WRA”) relevant to these proceedings were repealed by sch.1 to the Fair Work (Transitional Provisions & Consequential Amendments) Act 2009 (“Fair Work (TPCA) Act”). Nevertheless, item 11 of sch.2 to the Fair Work (TPCA) Act provides that the WRA continues to apply on and after its repeal in relation to conduct that occurred before the repeal. Consequently, the WRA applies to these proceedings and to the issues which the proceedings raise.
Section 659 of the WRA relevantly provided:
659 Employment not to be terminated on certain grounds
(1) In addition to the principal object of this Division set out in section 635, the additional object of this section is to make provisions that are intended to assist in giving effect to:
(a) the Convention concerning Discrimination in respect of Employment and Occupation, a copy of the English text of which is set out in Schedule 1 to the Human Rights and Equal Opportunity Commission Act 1986; and
(b) the Family Responsibilities Convention; and
(c) the Termination of Employment Recommendation, 1982, which the General Conference of the International Labour Organisation adopted on 22 June 1982 and is also known as Recommendation No. 166.
(2) Except as provided by subsection (3) or (4), 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:
…
(f) race, colour, sex, sexual preference, age, physical or mental disability, marital status, family responsibilities, pregnancy, religion, political opinion, national extraction or social origin; …
Section 664 provided:
664 Proof of issues in relation to alleged contravention of section 659
In any proceedings under section 663 relating to a termination of employment in contravention of section 659 for a reason (a proscribed reason) set out in a paragraph of subsection (2) of that section:
(a) it is not necessary for the employee to prove that the termination was for a proscribed reason; but
(b) it is a defence in the proceedings if the employer proves that the termination was for a reason or reasons that do not include a proscribed reason (other than a proscribed reason to which subsection 659(3) or (4) applies).
Section 665 relevantly provided:
665 Orders available to courts
(1) If the Court is satisfied that an employer has contravened section 659 in relation to the termination of employment of an employee, the Court may make one or more of the following orders:
(a) an order imposing on the employer a penalty of not more than $10,000;
(b) an order requiring the employer to reinstate the employee;
(c) subject to subsections (2), (3), (4) and (5), an order requiring the employer to pay to the employee compensation of such amount as the Court thinks appropriate;
(d) any other order that the Court thinks necessary to remedy the effect of such a termination;
(e) any other consequential orders. …

Evidence

Christina Woodhill

An important background fact to these proceedings is that during her employment as the AHA’s Accommodation Division Co-ordinator, Ms Woodhill embarked on an intra-office affair. In her affidavit affirmed 27 November 2009 Ms Woodhill said that the relationship continued until January 2008 at which time she ended it.
On 22 January 2008 the then-acting CEO of the AHA recommended that Ms Woodhill be promoted to manager of the AHA’s accommodation division. She deposed that she acted as de facto manager of the division from that time, although without any increase in her remuneration. The actual promotion did not occur until some months later, after Ms Fielke assumed the role of CEO. At that time, Ms Woodhill’s salary increased from $44,000 p.a to $55,000 p.a.
On 9 May 2008, during Ms Woodhill’s probation period as Accommodation Division Manager, a ceremony called “Awards for Excellence” took place and she was the primary organiser. Ms Woodhill deposed that on a day about a week before the awards night, which the evidence later identified to be 5 May 2008, her former partner telephoned her and yelled aggressively at her in relation to an invitation to the awards night which had been given to a state parliamentarian. After the telephone call concerning the invitation, she started to cry and was comforted by a fellow employee, Mr Cameron. Shortly afterwards, Mr Cameron spoke to Ms Fielke about the telephone call and she then went to see Ms Woodhill. Ms Woodhill deposed that Ms Fielke said that Mr Cameron had told her what had happened, including the fact of the affair, and said that she would speak to the other party and get his side of the story. Ms Woodhill deposed that although at first she told Ms Fielke that she and her former partner had merely kissed, she went on to say that in fact they had had an affair.
The Awards for Excellence night went well but it was impossible to realise all the proceeds from a raffle because some raffle ticket stubs, bearing purchasers’ credit card details, were lost through poor organisation and co-ordination. Ms Woodhill deposed that a meeting to discuss the awards night was held a few days later, which Ms Fielke and Mr Fletcher (the Director, Marketing and Operations) attended, and that Ms Fielke was not critical of her.
According to Ms Woodhill’s affidavit of 27 November 2009, the missing ticket stubs did not assume any significance until Monday 30 June 2008 when Ms Fielke met with her to review her performance as Accommodation Division Manager during her probation period. Ms Woodhill deposed that, at that meeting, Ms Fielke said that she was not happy with the way that the role of manager had been performed, one of the main reasons being what had happened with the raffle. Other issues were also raised.
At the meeting on 30 June 2008 Ms Fielke had a criticism of Ms Woodhill based on the latter’s failure to promptly provide a job description of the manager’s position. Ms Fielke commented that she had requested that it be provided within fourteen days of the commencement of the probation period but it had only been supplied in the week before the meeting. Ms Woodhill’s evidence was that, in fact, they had agreed to do it together. In her affidavit in reply Ms Woodhill deposed that they had never set the position description because, although Ms Woodhill had attempted a number of times to discuss it, Ms Fielke was too busy as she had just begun her role as CEO. In her email to Ms Woodhill of 9 June 2008, Ms Fielke said:
I still haven’t got your position description which was to be provided within 14 days of your original probationary promotion so we could set some KPI’s for you. I note we’re up for review on that at the end of this month, so I really need something to work with.
Ms Woodhill appeared to concede in her cross-examination that she had never contested this assertion by a reply email, although she said that she had said to Ms Fielke many times that she would like to go through the KPIs with her.
Ms Woodhill deposed that at the 30 June 2008 meeting Ms Fielke advised her that she was demoting her to her previous position of Accommodation Division Co-ordinator with a salary of $46,500. Later that day Ms Woodhill went to Ms Fielke’s office saying that as the demotion occurred after the probation period had finished, she rejected it and alleged that, in any event, it had been engineered by her former partner “because of the past”.
Ms Woodhill deposed that on 1 July 2008 she was given a letter of appointment to the position of Member Services Co-ordinator (Accommodation Division) and a first and final warning concerning allegedly indiscreet conversations which she had had regarding her position within the AHA and the remuneration packages of AHA staff. The letter indicated that such conduct contravened the AHA’s policies and procedures and that any further breach would result in the termination of Ms Woodhill’s employment.
Ms Woodhill wrote to Ms Fielke on 2 July 2008 purporting to reject her demotion.
Ms Woodhill deposed that for about a week after her meeting with Ms Fielke she continued to perform the work of manager but one day Mr Fletcher told her to move out of her office, return her business cards as well as her laptop. About an hour after that, she left the AHA premises, saw a doctor and obtained a medical certificate. She remained on sick leave until her employment ceased in late September 2008.
In response to a subpoena for production, Ms Woodhill produced a number of bank statements. Missing from those statements were pages covering the period 2 September 2008 to 3 November 2008. She said that those pages did not show her to have received “other” income. She denied working in the period before the end of her employment with the AHA, saying that she was on stress leave. However, when confronted with a PAYG payment summary in respect of salary or wages paid by PKL Personnel Pty Ltd (“PKL”) in the period 1 September 2008 to 29 March 2009, she conceded that it appeared that she had worked in that period. When shown PKL payslips for the period 1 September 2008 to 28 September 2008, disclosing a total of 60.30 hours worked, she said that she had not remembered this. Ms Woodhill said that she had not withheld pages of her bank records because they would have shown income from PKL.
Ms Woodhill acknowledged that working for someone else while on AHA sick leave was inconsistent with an employee’s obligations to the AHA and conceded that she had done this. She was taken to that section of the AHA’s polices and procedures manual headed “Outside Interests”. That section contained the following:
You are expected to devote the whole of your time, and attention and skill to your duties during normal business hours and at such other times as may be reasonably necessary to fulfil those duties.
Ms Woodhill said that she supposed that it applied to working simultaneously for another employer. She agreed that she had breached this policy.
Ms Woodhill said that she would not have worked when she had a doctor’s certificate. When taken to the medical certificate of a Dr Austin dated 11 August [sic] 2008 certifying that she was diagnosed with work-related stress and was unfit for work from 25 August 2008 to 5 September 2008, Ms Woodhill conceded that in so far as the certificate covered days when she was working at PKL it appeared to be “false”. In relation to a medical certificate by a Dr Ozser, also dated 11 August [sic] 2008 which certified that because of work-related stress she was unfit for work from 5 September 2008 to 19 September 2008 inclusive, Ms Woodhill said that she was not fit enough to work at the AHA and was not working consistently for PKL. Ms Woodhill said that she could work for another organisation just not the AHA.
Ms Woodhill said that she did not recall when she started looking for other jobs but the bundle of job applications which were tendered indicates that she had started making applications by at least 18 August 2008. She stated that the curricula vitae enclosed with those job applications were true notwithstanding that they described her as having been, from August 2006 to “current”, “Manager, Accommodation Division Australian Hotels Association (NSW)”.
Ms Woodhill tendered two sets of documents which were admitted subject to a ruling on their relevance and provisionally became exhibits 1 and 2. I find that the documents are relevant at least to the question of the existence of the relationship which is the foundation of Ms Woodhill’s allegation that her employment with the AHA was unlawfully terminated. Exhibit 2 comprises two text messages from Ms Woodhill dated 24 September 2007 breaking off the relationship with her partner. Her evidence was that his two texts to her of 24 September 2007, reproduced at pp.21 and 22 of exhibit 1, were his replies accepting her decision. She said that although the relationship stopped in September, it had restarted and continued until January 2008.
Ms Woodhill said that although exhibit 1 contained a considerable number of text messages from her partner dated 3 October 2007 which appeared to be responsive to texts which she had sent him, she did not bombard him with messages that day, saying that the dates and times on the messages were wrong. She denied pursuing him.
Ms Woodhill said that she saved all of her former partner’s messages but not her own because there was no need to save those.
Prior to the upsetting telephone call on 5 May 2008, Ms Woodhill’s former partner had started to be impolite and failed to respond to all of her emails. An example of this behaviour was at a meeting a month before the Awards for Excellence evening where, on numerous occasions, he ignored her and her comments regarding the awards night. She said that after her probationary period commenced her dealings with him had become strained.
In cross-examination Ms Woodhill was taken to an email of 16 May 2008 which she had sent to the President of the AHA, copied to Ms Fielke, in which she complained about rumours that she had slept with two men whom she identified. One of them was her former partner. In that email she described these as “very serious accusations” which had “no grounds whatsoever to be stated”. She conceded that that part of the email which denied a relationship with her former partner was a lie, saying that she had lied “for obvious reasons”. Ms Woodhill also said that she sent the email to cover her former partner’s integrity, out of loyalty to the position not to him. She said that Ms Fielke knew that the denial of a relationship was a lie because in the conversation on 5 May 2008, Ms Woodhill had disclosed the affair to her.
On 14 July 2008 Ms Woodhill’s then-solicitor wrote to the AHA alleging that the demotion amounted to a repudiation of the contract of employment which Ms Woodhill was free to accept and treat as a constructive dismissal. Ms Woodhill’s solicitor demanded a return to the status quo prior to 30 June 2008, with litigation foreshadowed in default.

Sally Fielke

Ms Fielke joined the AHA as CEO on 10 March 2008. She deposed that within her first two weeks of employment Ms Woodhill came to her saying that she was doing two jobs and asking to be promoted to Accommodation Division Manager. At that time Ms Woodhill was employed as the Accommodation Division Co-ordinator and the role of manager was vacant. Ms Fielke deposed that although, during this time, there may have been some overlap in the roles of accommodation division co-ordinator and accommodation division manger, she was overseeing the section until a new manager was appointed. Ms Fielke deposed that Ms Woodhill did not say to her that she had been formally appointed to the role of acting or de facto manager of the accommodation division. Indeed, until she was provisionally promoted Ms Woodhill was instructed to run everything past Ms Fielke and they would meet on a regular basis to run through her workload.
Later in March 2008 Ms Woodhill was appointed to the position of Accommodation Division Manager. Her contract was embodied in a letter dated 28 March 2008 and the appointment was subject to a probation period. The letter relevantly stated in this regard:
Your promotion to this role is subject to a three month probationary period. Prior to the end of this period your performance will be reviewed against the key performance indicators. Should you meet all key performance indicators to a satisfactory standard, you will be offered this Position on a full time basis and your salary will be reviewed. In the event that your performance during the probationary period does not meet the key performance indicators to a satisfactory standard, you will resume your previous role on the terms and conditions attached to the previous role or an alternative role on similar terms and conditions as your previous role can be negotiated.
Ms Fielke deposed that although the AHA’s records disclosed that a recommendation had been made in January 2008 for Ms Woodhill to assume the role of Manager (Acting) – Accommodation Division, no further action was taken in relation to this issue until Ms Woodhill was offered the position in March 2008.
Ms Fielke deposed that on a date not identified in her affidavit, Mr Cameron had come into her office saying that Ms Woodhill was upset because her former partner had just “gone off at her”. Ms Fielke deposed that she immediately went to Ms Woodhill’s office where it was obvious that she had been crying. Ms Fielke said to Ms Woodhill that she had been told what had happened and although it was none of her business nor was it her place to judge her, she needed to know if the affair was going to affect Ms Woodhill’s working relationship with her former partner. Ms Fielke deposed that Ms Woodhill replied:
Nothing happened, we only kissed.
Ms Fielke advised Ms Woodhill to speak to her former partner about moving forward and about the maintenance of a working relationship with him.
On 16 May 2008 Ms Fielke was copied into an email which Ms Woodhill had sent to Mr Leach, the President of the AHA, complaining about rumours of her sleeping with two named persons, one of whom was her former partner. The email in question described the rumours as false and groundless, “hurtful and cruel”. At the time, Ms Fielke was overseas and upon her return she replied to Ms Woodhill and advised her that she would be advising her how the issue was being handled. Ms Fielke subsequently amended the AHA’s policies and procedures manual to incorporate a policy promoting a rumour/gossip free workplace which was distributed in about mid-June 2008. On 12 June 2008 she wrote to Ms Woodhill advising her of how the matter had been handled and inviting her to discuss the matter further if she felt the need to.

As to the awards night, Ms Fielke deposed that although the event had been a success and she thought that Ms Woodhill had done a good job, there were things which could have been done better. For that reason, a meeting was held for a general de-briefing on how the awards function could be improved for the following year. Ms Fielke gave Ms Woodhill what she thought was constructive criticism, guiding her on what she expected of a manager. She also wanted to address with Ms Woodhill her style of management.
Ms Fielke deposed that during the course of Ms Woodhill’s probation period she had been concerned with the latter’s ability to prioritise tasks and on 9 June 2008 sent her an email raising this as an issue. One of the matters raised in that email was Ms Woodhill’s failure to provide Ms Fielke with a job description for the role of manager of the accommodation division.
Ms Fielke deposed that in the final week of Ms Woodhill’s probation period she extended that period by one business day to enable Ms Woodhill’s review to be undertaken after an accommodation division strategy meeting had taken place. She deposed that Ms Woodhill agreed to this extension. In this regard, annexed to Ms Fielke’s affidavit is an email train commencing on Monday 23 June 2008 with Ms Woodhill observing to Ms Fielke that the probation period would end on Friday and enquiring when they would meet to discuss it. Ms Fielke replied that day, asking if the “probation discussion” could occur the following Monday at 4pm because the accommodation division strategy workshop had been set for the Friday. She said “I confirm that your probationary period is extended until then”. Ms Woodhill replied on Wednesday 25 June 2008 “4pm Monday is great”.
Ms Fielke said that there was no change to Ms Woodhill’s role apart from the extension of the probation period. Nothing was offered for the extension although Ms Woodhill remained on the manager’s salary.
Ms Fielke deposed that on Monday 30 June 2008 she had two meetings with Ms Woodhill. Ms Fielke deposed that in the first of these she raised concerns about Ms Woodhill’s ability to perform in the manager’s role and pointed to a number of specific issues concluding with the advice that, in her view, Ms Woodhill was not at the standard required for the position of Accommodation Division Manager. Ms Fielke went on to say that she would not be offering Ms Woodhill that role but would offer her a role similar to her previous position. Ms Fielke deposed that the only reason for her decision to not confirm Ms Woodhill in the position of manager and to demote her was the latter’s performance and conduct discussed by them at the meeting on 30 June 2008.
Following that meeting, there was a second meeting commencing at approximately 4:15pm. This was a disciplinary meeting at which Ms Fielke raised with Ms Woodhill aspects of her conduct which Ms Fielke described as “unacceptable and unprofessional”. Ms Fielke said that she would issue Ms Woodhill with a first and final warning in relation to these matters, together with a written warning in relation to Ms Woodhill having discussed salaries with other staff.
Ms Fielke kept notes of these meetings and subsequently provided Ms Woodhill with letters containing a first and final warning in relation to the conduct issues and an offer of employment in a new but reduced position. Ms Fielke said that the new role to which Ms Woodhill had been assigned was not quite the job she had originally held, being perhaps a little broader than her original position. This was in line with changes to management and administration practice which Ms Fielke was seeking to implement at the AHA. Nevertheless, in the proposed new role, Ms Woodhill would have continued to have some contact with her former partner.
Ms Fielke deposed that on 1 July 2008 she and Ms Woodhill met and the latter suggested that her probation period had been extended without formal arrangement. Ms Woodhill also raised other issues arising out of the matters discussed at the review meeting on 30 June 2008 but made no mention of her former partner. Ms Fielke deposed that during the meeting on 1 July 2008 she did not say that there had been a number of complaints about Ms Woodhill.
Ms Fielke deposed that on 2 July 2008 she sent an email to Ms Woodhill asking her to put in writing any concerns she had regarding the demotion and requesting her to attend a meeting that afternoon. Ms Woodhill replied by letter that day asserting that the probation period had expired on 28 June 2008 and that, in the circumstances, her original contract stood and her salary should remain at its former level. Ms Woodhill said in that letter:
I therefore reject, as having no legal standing, the reduction in salary.
As Ms Woodhill was unable to organise a support person in time for the meeting on the afternoon of 2 July 2008, Ms Fielke sent her an email offering to reschedule the meeting to 3 July 2008. However, as Ms Woodhill had not replied by the beginning of that day Ms Fielke sent a further email advising that she would not be proceeding with the meeting. In that email, Ms Fielke said, amongst other things:
You are required to perform the position detailed in my correspondence to you of 30 June 2008. I will be in touch with you shortly to discuss the transition of office arrangements etc.
On 7 July 2008 Ms Fielke informed the AHA staff that Ms Woodhill would be performing the role of Member Services Co-ordinator (Accommodation Division), reporting to Mr Fletcher. Ms Fielke instructed Mr Fletcher to meet with Ms Woodhill and co-ordinate Ms Woodhill’s move to a different work station and the return of office equipment. Later that day Mr Fletcher advised Ms Fielke that he had spoken to Ms Woodhill. Not long after, he sent Ms Fielke an email advising that Ms Woodhill had left the building and was going to see a doctor. Ms Fielke deposed that in the ensuing period Ms Woodhill submitted a number of medical certificates certifying her unfitness for work.
On 14 July 2008 the AHA received a letter from Ms Woodhill’s then-solicitors which asserted that the AHA’s conduct amounted to a repudiation of her contract of employment.
On 19 August 2008 the AHA received a letter from a second firm of solicitors acting for Ms Woodhill asserting that Ms Woodhill’s former partner had had a major influence on the decision to not confirm her in her position as manager and alleging that the demotion was a biased move against her suggesting constructive dismissal. The letter demanded that Ms Woodhill be offered the position of manager on the same terms as applied before 30 June 2008.
On Monday 22 September 2008 Ms Fielke was advised that Ms Woodhill had not arrived for work and had not advised that she would not be attending work that day. The same situation applied on 23 and 24 September 2008 and on the latter day Ms Fielke wrote to Ms Woodhill stating that her failure to attend work or to provide documentation substantiating her absence suggested that she may have abandoned her employment. Ms Fielke asked Ms Woodhill to immediately contact Mr Fletcher were this not the case. She also stated that if Ms Woodhill did not contact the AHA by 4pm on 26 September 2008 it would consider that she no longer wished to be an employee of the association and that she was abandoning her employment. A further copy of that letter was sent to Ms Woodhill on 25 September 2008. On Friday 26 September 2008 Mr Ryan, the AHA’s industrial relations manager, left a message on Ms Woodhill’s telephone referring to the recent letters, asking if she was coming to work and also asking that she urgently contact him, Mr Fletcher or Ms Fielke.
On 26 September 2008 Ms Fielke wrote to Ms Woodhill outlining the attempts to contact her during the course of that week and stating the AHA’s view that she had abandoned her employment. Shortly after sending that letter Ms Fielke became aware that the AHA had received a further letter from Ms Woodhill’s second solicitors stating that the AHA’s responses to their letters had:
… demonstrated that you do not intend to employ our client in the position of Manager on the same terms as she was engaged before 30 June.
Accordingly, we consider that you have repudiated Ms Woodwhill’s [sic] contract of employment, and intend to maintain that position. Ms Woodhill accepts your repudiation.
In cross-examination Ms Fielke rejected the suggestion that the shortcomings which she raised with Ms Woodhill in their meeting on 30 June 2008 represented the confection of a reason to demote her. Ms Fielke said that she and Ms Woodhill met regularly and Ms Fielke tried to be a mentor. She did not think that anything that was raised in the interview at the end of Ms Woodhill’s probation period was being raised for the first time; those issues had been raised in earlier meetings.
Ms Fielke said that Ms Woodhill’s demotion was based on her overall ability to perform the role; she was just not up to it. She said that although Ms Woodhill did a great job as co-ordinator and had a good knowledge of how the section worked and what was required, she was not able to provide the high level board reports or write articles for the chairman which the job required; Ms Fielke was having to step in and review Ms Woodhill’s work. Ms Fielke said that she needed someone who could do the job without supervision because she did not have time to micro-manage a manager.
For instance, Ms Woodhill supplied her job description late. When Ms Fielke came to the AHA, the office was not well documented and contracts were not very clear. She wanted the staff to give her an outline of their roles and objectives and what they saw as their key performance indicators. She said that she did that with all departments. In her view, Ms Woodhill would be in the best position to say what her own role involved because she had been working in the area for a while and had observed what the previous holders of the manager’s position had done.
Ms Fielke said that Ms Woodhill’s relationship had nothing to do with the demotion. Ms Fielke said that she knew that Ms Woodhill was single and not married to her partner in the relationship and that it was unlawful to discriminate on the basis of sex or marital status. She said that the reasons for the demotion were those set out in her letter and file note.
In her evidence at the trial Ms Fielke stressed that she had no interest in Ms Woodhill’s private life as such. She did not need to know the details but wanted there to be a working relationship on foot between Ms Woodhill and her former partner. Following the meeting on 5 May 2008, Ms Fielke did not raise the question of the affair with Ms Woodhill’s former partner. She probably spoke to him about Ms Woodhill’s invitation of unapproved persons to the awards night but did not have a formal meeting with him about him having made Ms Woodhill cry. She described her attitude as being that Ms Woodhill should try to sort it out. Her concern was that the people involved could execute their roles and anything else was probably not relevant. In relation to her involvement in this issue she said that the chronology was, first, that Ms Woodhill had said that there had been a kiss, secondly, that Ms Woodhill had complained about rumours and, third, that Ms Fielke amended the policies and procedures manual to address the issue of rumours. In relation to the latter action, Ms Fielke said that if Ms Woodhill had told her that there had actually been an affair she would have approached the complaint about rumours differently.
Ms Fielke denied the proposition that between early May 2008 and 30 June 2008 her actions had been directed towards currying favour with Ms Woodhill’s former partner. She said that her actions had been directed towards exploring how Ms Woodhill was performing as manager but it turned out Ms Woodhill was not quite up to the level which Ms Fielke required. There was no other crying incident and Ms Fielke was not at all concerned that Ms Woodhill could not work out her issues with the relationship.
Ms Fielke rejected the proposition that on 30 June 2008 she was keen to identify as many issues as possible to downgrade Ms Woodhill. She also rejected the proposition that she was concerned, but did not raise on 30 June 2008, that Ms Woodhill would not be able to deal with her former partner. She said that she was not concerned about this as Ms Woodhill had denied to her that there had been anything more than a kiss, Ms Woodhill had been told to sort it out and nothing more had been heard on the subject apart from Ms Woodhill’s concerns about rumours being spread about her.
Ms Fielke said that she had had no thought of trying to force Ms Woodhill out of the AHA. She said that Ms Woodhill was energetic, seemed to like her job and was doing a good job as co-ordinator but she was not quite qualified or ready to step up to manager. Ms Fielke also rejected the suggestion that the disciplinary meeting on 30 June 2008, which immediately followed the meeting at which Ms Woodhill was told that she would not be confirmed as manager, was designed to buttress Ms Fielke’s position in relation to Ms Woodhill’s demotion.

Andrew Fletcher

Between 14 April 2008 and 5 June 2009, Mr Fletcher was the AHA’s Director, Marketing and Operations. In his affidavit affirmed 19 January 2010 Mr Fletcher deposed that in that role he was responsible for marketing events, corporate relationships, business development, membership (general division) and other matters. Mr Fletcher deposed to the de-briefing meeting which occurred following the Awards for Excellence evening of 9 May 2008. He deposed that during the course of that meeting some criticism was directed at Ms Woodhill’s management of the evening and to her conduct on the night; including lateness in the distribution of invitations, shortages of wine and beer, lack of stage management procedures, lack of cashiering procedures for a raffle and the degree to which she was affected by alcohol on the night.
Mr Fletcher deposed that on 7 July 2008 Ms Fielke advised him that Ms Woodhill was being demoted from the manager’s role to a member services role and asked him to meet with Ms Woodhill and co-ordinate the transition. He did this at approximately 10:30am on 7 July 2008 at which time Ms Woodhill stated that she understood that she was now reporting to him, that although she had not signed the letter of offer she had a copy of it and understood the duties described and the job description, that she would be required to return certain of the AHA’s property and was required to leave her office and move to a work station. Mr Fletcher made a note of the meeting which he then emailed to Ms Fielke and copied to Mr Ryan for placement on Ms Woodhill’s employee file. Shortly afterwards he was informed by the AHA’s receptionist that Ms Woodhill had left the building and was going to see a doctor, information which he immediately emailed to Ms Fielke and to Mr Ryan.
Mr Fletcher also said that although he had dealings with Ms Woodhill’s former partner, he did not recall the latter talking to him about Ms Woodhill.

Applicant’s submissions

Termination of employment

Ms Woodhill submitted that, in the circumstances, she had been dismissed by the AHA contrary to s.659 of the WRA. Central to this submission was the characterisation of the events at the end of June 2008 and whether the purported extension of her probation period as manager had been effective. In this regard, she referred to the exchange of emails between herself and Ms Fielke on 23 June 2008 and to her email of 25 June 2008 referred to above at [34].
Ms Woodhill submitted that the extension of her probation period from 28 June 2008 to 30 June 2008 could only have been effective if there had been consideration for the variation of the agreement which had appointed her to the position of manager of the accommodation division. It was submitted that no consideration was apparent on the face of the email exchange and nothing had been given to her in return for the purported extension of the probation period. It was submitted that, in the circumstances, the purported variation was ineffective with the consequence that the probation period expired on 28 June 2008, at which time she was confirmed in the role of manager. It was submitted that, as a consequence, any rights which the AHA might have had by reason of the probation period were extinguishable or extinguished.
On the basis that her employment as manager had, in effect, been confirmed, Ms Woodhill submitted that the AHA then proceeded to repudiate her contract of employment. In this regard, she pointed to Ms Fielke’s letter to her of 30 June 2008 where the following appeared:
Further to our meeting this afternoon, I confirm that we are unable to offer you the position of Accommodation Division Manager with the Australian Hotels Association (New South Wales) (“AHA (NSW)”). In accordance with the terms of your Letter of Offer dated 28 March 2008, we are able to offer you an alternative role of Member Services Co-ordinator (Accommodation Division) on similar terms and conditions as your previous role.
It was submitted that this did not amount to an offer to Ms Woodhill to return to her original position but an offer of a different job which embraced much or part of the original one but not all of it. In this connection, Ms Woodhill referred to what had been said in the AHA’s letter to her of 28 March 2008 offering her the promotion to the position of manager:
In the event that your performance during the probationary period does not meet the key performance indicators to a satisfactory standard, you will resume your previous role on the terms and conditions attached to the previous role or an alternative role on similar terms and conditions as your previous role can be negotiated.
In this regard, Ms Woodhill’s submissions were, in effect, that the circumstances did not entitle the AHA to require her to return to her original position or to accept the demotion which the alternative position represented. Although it can be accepted that the AHA’s understanding of the situation was that Ms Woodhill had not been confirmed in the manager’s position and was, therefore, to be employed in a lesser position in accordance with the letter of 28 March 2008, Ms Woodhill’s position is that she remained manager and was not obliged to accept the new position which Ms Fielke offered.
Ms Woodhill observed that she had not accepted the job offered on 30 June 2008 and had communicated this to Ms Fielke in a meeting on 1 July 2008. She also submitted that her letter of 2 July 2008 asserted that the probation period had not been extended beyond 28 June 2008 and that she had a right to continue as manager of the accommodation division. Ms Woodhill submitted that, as at 2 July 2008, she remained the manager, had not accepted the offer of alternative employment and would have remained manager in perpetuity unless and until some other action was taken by the AHA.
Ms Woodhill submitted that following the unsuccessful attempt to arrange a meeting between her and Ms Fielke on 2 and 3 July 2008, Ms Fielke wrote to her on 3 July 2008 saying:
I have received your correspondence of 2 July 2008 and I reject the allegations outlined in this correspondence.
You are required to perform the position detailed in my correspondence to you of 30 June 2008. I will be in touch with you shortly to discuss the transition of office arrangements etc.
Ms Woodhill submitted that this email carried with it an implication that she was required to perform in the new role, not that it was being offered to her. She submitted that this constituted a repudiation of her contract of employment because it evinced an intention on the part of the AHA not to be bound by its terms which, she said, entitled her to remain as manager. She submitted that she accepted that repudiation by way of her solicitor’s letter to the AHA dated 26 September 2008.

As to the acceptance of the purported repudiation, it was observed that Ms Woodhill’s solicitor’s letter arrived at the AHA at 3:05pm on 26 September 2008 and thus arrived before the 4pm deadline which the AHA had set for Ms Woodhill to respond to its letter of 25 September 2008 for her to respond to its concerns that she had been absent from work and appeared to have abandoned her employment.
It was also submitted that the 15% reduction in salary which was a consequence of the demotion was a significant one and that, in the circumstances, s.642(3) of the WRA did not prevent Ms Woodhill’s demotion from being a termination for the purposes of s.659. Section 642(3) provided that, relevantly, s.659’s operation in relation to “termination” of employment did not cover circumstances where an employee was demoted unless, amongst other things, the demotion involved “a significant reduction” in the employee’s remuneration.
It was submitted that the AHA’s conduct amounted to a constructive dismissal which amounted to a termination for the purposes of s.659 of the WRA with the result that it fell to the AHA pursuant to s.664 of the WRA to demonstrate that the termination was for a reason or reasons which did not include a reason specified in s.659(2) of the WRA.

Reasons for termination

It was submitted that if Ms Fielke had been influenced in her decision concerning Ms Woodhill by thoughts that, as a matter of habit, young women find it difficult to deal with people with whom they have had failed romances, then that amounted to direct discrimination. It was submitted that the chronology of events suggested that this was the background of Ms Fielke’s decision. In this regard Ms Woodhill pointed to the fact that on 28 March 2008 she was appointed to the position of Accommodation Division Manager and performed that role in an uncontroversial way until 5 May 2008 when Ms Fielke learned about the relationship in which Ms Woodhill had been involved.
It was submitted that perhaps Ms Fielke considered that there was just too much danger that there was going to be a problem and that Ms Woodhill was not going to be able to deal with a failed romance. In this connection, it was submitted that there had only been one instance where there might have appeared to have been a problem and that to have concluded from that that Ms Woodhill would not be able operate effectively suggested that general characteristics had been attributed to her which, in the circumstances, was prohibited conduct. Moreover, it was submitted, to the extent that Ms Fielke criticised Ms Woodhill from 5 May 2008 onwards, the events of 5 May played some part in her thinking. In this regard, it was submitted that the reasons given by Ms Fielke on 30 June 2008 for not confirming Ms Woodhill in the manager’s position lacked validity, particularly where there had been no formal counselling on an earlier occasion. Ms Woodhill queried how an employer might take such action in good faith and she suggested that there was more to matters than those which appeared on the face of the letter advising Ms Woodhill that she was not being confirmed in the manager’s position.
As to discrimination based on a characteristic which might have been imputed to her, Ms Woodhill submitted that such an inference might be drawn from the sequence of events after 5 May 2008 in which case the onus under s.664 fell on the AHA. She submitted that if the AHA had not affirmatively demonstrated that it was not in Ms Fielke’s mind that Ms Woodhill, because of her sex, would have an incapacity to deal with failed romances, then the Court would be entitled to conclude that she had been discriminated against.
Alternatively, if the Court did not accept Ms Fielke’s evidence that she had not spoken to Ms Woodhill’s former partner, the Court could infer that Ms Woodhill was demoted and constructively dismissed at the behest of her former partner because of the failed romance. Ms Woodhill submitted that one question which arose out of the proceedings was whether her former partner had been spoken to by Ms Fielke and whether he had played any role at all in her termination. It was submitted that Ms Fielke’s evidence on this point should be treated with some caution because it lacked clarity. It was also submitted that as Ms Woodhill’s former partner had not given evidence in the proceedings it could be inferred that his evidence would not have assisted the AHA’s case.
It was alternatively submitted that Ms Woodhill’s services were terminated because she had had a relationship with a person to whom she was not married. It was submitted that if Ms Fielke had it in the back of her mind when considering Ms Woodhill’s demotion, the fact that Ms Woodhill was not married to the man with whom she had had an affair, the burden fell on the AHA to show that that thought played no part in the decision making process.
It was submitted that s.665(1) of the WRA provided the remedy sought by Ms Woodhill, in particular, monetary compensation together with the discretionary imposition of a penalty with orders that it be paid to her.

Consideration

Much of Ms Woodhill’s case turned on whether her probationary period in the position of Accommodation Division Manager was extended from 28 June 2008 to 30 June 2008. Her challenge to the efficacy of the extension of her probation period was based not on a lack of consent to Ms Fielke’s proposal that it be extended to 30 June 2008, but on a submission that there had been no consideration for this purported variation of her employment agreement.
Consideration for the variation was not a question which Ms Fielke or Ms Woodhill discussed when Ms Fielke proposed the extension of the probation period. The postponement of the review meeting and the proposal to extend the probation period appears simply to have been a matter of convenience for Ms Fielke with which Ms Woodhill agreed, with no apparent thought being given by either of them to the question of consideration. However, as the evidence and Ms Woodhill’s submissions in relation to s.642(3) of the WRA make plain, the salary which Ms Woodhill drew as manager was greater than the one which she had been paid as Accommodation Division Co-ordinator prior to her probationary promotion or the salary which she was paid in the new role of Member Services Co-ordinator (Accommodation Division).
Under the agreement of 28 March 2008, Ms Woodhill had no entitlement to remain in the position of manager, or to be paid the manager’s salary, beyond 28 June 2008 unless she satisfactorily completed the probationary period. However, Ms Fielke’s proposed extension of Ms Woodhill’s probationary period until 30 June 2008 necessarily involved payment of the manager’s salary during the extended probationary period. As Ms Woodhill had no entitlement to receive that salary after 28 June 2008 unless she was confirmed in the position of manager, its availability to her after 28 June 2008 amounted to consideration sufficient to conclude that her employment agreement had been effectively varied by an extension of the probationary period to 30 June 2008.
As a result, when on 30 June 2008 Ms Fielke declined to confirm Ms Woodhill in the role of Accommodation Division Manager and demoted her, Ms Fielke was exercising the rights provided to the AHA by the agreement which conditionally promoted Ms Woodhill to the manager’s position. Consequently, Ms Fielke’s actions did not amount to a repudiation of Ms Woodhill’s contract of employment which could later be accepted as a constructive dismissal. Rather, Ms Woodhill’s employment came to an end because the AHA accepted that she had abandoned it.
However, if I am wrong in concluding that Ms Fielke’s demotion of Ms Woodhill was not a repudiation of the latter’s employment contract, I nevertheless find that that action did not contravene s.659 of the WRA. I am satisfied that Ms Fielke’s decision was based solely on Ms Woodhill’s performance in the role of Accommodation Division Manager and was not for reasons of Ms Woodhill’s sex or marital status or for reasons including her sex or marital status.
In reaching this conclusion it has been necessary to make an assessment of the credibility of Ms Fielke, and her statements concerning what motivated her to demote Ms Woodhill, and of Ms Woodhill’s evidence, particularly where the two were in conflict.
I found Ms Woodhill to be an unsatisfactory witness. Of significant concern in this regard was her denial that she worked elsewhere while she was on sick leave from the AHA. This evidence was demonstrated to be untrue. Also of concern was her failure to produce on subpoena bank records for a period of her AHA sick leave during which she was drawing her AHA salary as well as being paid as an employee of PKL. Later bank statements recorded deposits by PKL.
Ms Woodhill also conceded that Dr Austin’s medical certificate concerning her unfitness for work from 25 August 2008 to 5 September 2008 appeared to be “false” to the extent that it covered days when she was working at PKL. Her related evidence that the medical certificates she had obtained to support her sick leave from the AHA did not necessarily mean that she could not work somewhere else was disingenuous and, in my view, no more than an attempt to explain away evidence which was unhelpful to her.
It also appears that Ms Woodhill’s untruthful statements are not limited to these proceedings. For instance, in her job applications after July 2008, Ms Woodhill described herself as still occupying the manager’s position from which she had been demoted on 30 June. Further, her email to the President of the AHA on 16 May 2008 complaining about and denying the rumours that she had slept with two men has been shown to be false, at least in relation to her former partner. In cross-examination she conceded that her denial was a lie and her evidence that she denied the relationship in order to preserve the integrity of her former partner, or at least the position he held, is unpersuasive. I prefer her other explanation, that she denied the relationship “for obvious reasons”. I conclude that the obvious reason was that she did not want to be the subject of gossip, whether well-founded or not.
It is in connection with this email that there is an important intersection in the evidence of Ms Woodhill and Ms Fielke. Ms Woodhill says that on 5 May 2008, after Mr Cameron had gone to see Ms Fielke, she told Ms Fielke about the affair she had had with her former partner. Ms Fielke says that Ms Woodhill said that she and the person now known to have been her partner in a sexual relationship had merely kissed. Ms Fielke’s evidence was that if Ms Woodhill had disclosed the true nature of the relationship on 5 May 2008, she would have approached Ms Woodhill’s 16 May 2008 complaint about rumours in a different way. This rings true. Moreover, the text of the email of 16 May 2008 is consistent with Ms Fielke’s evidence concerning what Ms Woodhill had said on 5 May 2008. Given the untruthful and misleading nature of Ms Woodhill’s conduct and evidence in other respects, I am not willing to accept that her evidence concerning what she said to Ms Fielke on 5 May 2008 should be preferred over both Ms Fielke’s evidence and the clear inference to be drawn from the fact that the email of 16 May 2008 was copied to her, namely that on 16 May 2008 Ms Fielke had no reason to believe that Ms Woodhill had had an affair with either of the men mentioned in the email.
Similarly, when it comes to the differences in the accounts of Ms Woodhill and Ms Fielke concerning Ms Fielke’s requirement that Ms Woodhill outline her duties and give a description of her position within fourteen days of her appointment to it, Ms Fielke’s evidence is, in my estimation, a more persuasive account of events than Ms Woodhill’s assertion that the two women were going to talk about the issue. Ms Fielke was new in the role of CEO and had asked other staff members to provide job descriptions, which is what she said she asked Ms Woodhill to do, presumably so that she could know how the office worked and what people were doing or supposed to be doing. Although it can be accepted that a discussion of KPIs had been proposed, in the absence of a job description such a discussion would have been of limited use to Ms Fielke. I also accept Ms Filke’s evidence that she and Ms Woodhill met regularly, that she tried to be a mentor and that the things raised in the 30 June 2008 probation review were not new.
This failure by Ms Woodhill to prepare a job description until one week before the end of her probation period appears to reflect her unpreparedness for the managerial role which Ms Fielke said was the reason for her decision that Ms Woodhill would not be confirmed as manager and would be offered a lesser position.
This issues ties in with the concerns which both Ms Fielke and Mr Fletcher expressed concerning Ms Woodhill’s organisation of the Awards for Excellence evening. Even Ms Woodhill conceded that not everything had gone perfectly but her assertion that Ms Fielke was not critical of her at the subsequent de-briefing meeting is not plausible. Plainly mistakes had been made, as Mr Fletcher indicated in his evidence, and there would have been no purpose in having the meeting if these had not been identified and discussed, a process necessarily involving criticism, even if of a constructive sort.
To suggest, as Ms Woodhill has, that the reasons which Ms Fielke gave on 30 June 2008 for the demotion were confected ignores the two clear examples in the evidence of Ms Woodhill’s inability to promptly and effectively execute tasks required of her.
Further, the conclusion I have reached that Ms Woodhill did not disclose the affair to Ms Fielke on 5 May 2008 and that Ms Fielke remained unaware of it when she read and acted on the complaint email of 16 May 2008 supports a conclusion that, as far as Ms Fielke was concerned on 30 June 2008, the relationship which was the background to Ms Woodhill’s distress nearly two months earlier was a non-issue. Ms Fielke said, and I accept, there had not been another crying incident and, apart from the email of 16 May 2008, which after all was concerned with rumours not with the behaviour of Ms Woodhill’s former partner or any distress she may have suffered as a result of the end of the relationship, nothing more had been heard on the subject. The evidence does not support a conclusion that Ms Woodhill’s former relationship, or anything associated with or arising out of it, was a matter of any importance by 30 June 2008.
Additionally, I draw no adverse inference from the fact that Ms Woodhill’s former partner was not called as a witness in the proceedings. It was not demonstrated that he had any involvement in Ms Fielke’s decision-making when she was considering whether to confirm Ms Woodhill as manager and to demote her to a lesser position. Absent any such involvement, there was nothing he could say to the Court which would have been of any relevance to the question of what matters influenced Ms Fielke in the decision she made.
In any event, I found Ms Fielke to be an impressive and convincing witness and have concluded that where her evidence and the evidence of Ms Woodhill conflict, Ms Fielke’s evidence should be preferred. One particularly persuasive part of Ms Fielke’s evidence was her unaffected praise for Ms Woodhill’s performance as Accommodation Division Co-ordinator and her description of Ms Woodhill as an energetic person who seemed to like her job. In particular, I accept her evidence that she was uninterested in Ms Woodhill’s private life and was concerned only with the latter’s ability to do her job properly. In the context of the issues discussed above at [88], I find that Ms Fielke’s consideration of which position Ms Woodhill should fill was uninfluenced by matters associated with or arising out of a relationship which, as far as Ms Fielke knew, had not progressed beyond a kiss.
It should also be kept in mind that even in the demoted position Ms Woodhill would have continued to have contact with her former partner. It is implausible that Ms Fielke would have demoted Ms Woodhill to that position if she had been concerned that Ms Woodhill might have found it difficult to deal with a former partner of a failed relationship, as Ms Woodhill suggests.
I accept Ms Fielke’s evidence that her decision to not confirm Ms Woodhill in the role of manager and to offer her the position of Member Services Co-ordinator (Accommodation Division) instead was one based solely on her assessment of Ms Woodhill’s skills and abilities and of which role would be the more appropriate fit. I find that the AHA has demonstrated that Ms Fielke’s decision to demote Ms Woodhill was based solely on these considerations. I find that were the demotion to amount to a termination for the purposes of s.659 of the WRA, any such termination was not for reasons of Ms Woodhill’s sex or marital status or for reasons including Ms Woodhill’s sex or marital status.

Conclusion

For the above reasons, the application will be dismissed.

I certify that the preceding ninety-three (93) paragraphs are a true copy of the reasons for judgment of Cameron FM

Date: 10 December 2010