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Cases and Legislation November 2020

The Federal Circuit Court of Australia has rejected an employee’s claim that she was discriminated against because of her pregnancy and potential pregnancy.

NEWS ALERT: Modern Award increase for Group 2 Awards from 1 November 2020

The Fair Work Commission’s (FWC’s) Expert Panel announced on Friday 19 June 2020 the outcome of its annual review of the national minimum wage (NMW) and minimum wages under the modern awards. You can view our initial article reporting on the decision here

At the time, the FWC determined to divide the modern awards into three groups, with each group having different operative dates for the increase to minimum wages.

The minimum wages for Group 2 modern awards will increase by 1.75%, taking effect from the first full pay period on or after 1 November 2020.

The awards in Group 2 include, but are not limited to:

  • Building and Construction General On-site Award 2010
  • Business Equipment Award 2020
  • Clerks—Private Sector Award 2020
  • Food, Beverage and Tobacco Manufacturing Award 2010
  • Manufacturing and Associated Industries and Occupations Award 2020
  • Real Estate Industry Award 2020
  • Seafood Processing Award 2020
  • Security Services Industry Award 2020

The full list of Group 2 modern awards and the FWC’s decision can be found here.

The modern award minimum wages for Group 1 modern awards have already increased as of the 1 July 2020 and Group 3 modern awards will increase from 1 February 2021.

Discrimination

“Court rejects claim that employee was discriminated against on the grounds of pregnancy”

Ayra v Kone Elevators Pty Ltd & Anor [2020] FCCA 2693


Executive Summary

The Federal Circuit Court of Australia (FCCA) has rejected an employee’s claim that she was discriminated against because of her pregnancy and potential pregnancy.  


Background

The employee was employed as a Credit Controller at KONE Elevators Pty Ltd (the Employer) and was responsible for following up unpaid invoices. She worked with the Acting Regional Controller whose role was to provide support and assistance to her.

The employee claimed that, in or about May 2018, she fell pregnant but unfortunately suffered a miscarriage one month later. She also claimed that she informed the Acting Regional Controller of her pregnancy and of her subsequent miscarriage at the time.

The employee claimed that after becoming aware of the pregnancy, the Acting Regional Controller started to treat her differently and acted less favourably towards her. For instance, the employee claimed that the Acting Regional Controller would speak to her in a ‘cold’ and condescending manner and would yell at her in front of her colleagues in relation to her job performance.

Subsequent to suffering her miscarriage, the employee took a period of personal leave but did not inform the Employer of the reasons for taking this period of leave. She claimed that she informed the Acting Regional Controller that the leave related to her miscarriage. She also claimed that they had had a discussion about the employee’s hope to fall pregnant again within the next couple of months.

The employee claimed that in response to her disclosure, the Acting Regional Controller responded in a number of discriminatory ways, such as telling the employee she was not career focused and that she had no reason to stay in her employment.

The employee was called to a meeting in July 2018 with the Acting Regional Controller and another employee as witness. The employee alleged that, in this meeting, the Acting Regional Controller criticised her performance and told her that she could either resign or be placed on a three-week performance improvement plan and then dismissed. 

Subsequent to this meeting, the employee lodged a complaint with Human Resources alleging that she was bullied and harassed. Human Resources found the claims to be unsubstantiated. The employee then lodged a complaint in the Australian Human Rights Commission (AHRC). The matter was unable to be resolved and the employee tendered her resignation because of discrimination, victimisation, harassment and bullying in August 2018.

After resigning, the employee commenced proceedings in the FCCA against the Employer and the Acting Regional Controller alleging discrimination in breach of the Sex Discrimination Act 1984 (Cth). Specifically, the employee alleged that:

  1. the Acting Regional Controller discriminated against her on the basis of pregnancy and/or potential pregnancy during employment; and
  2. the Employer was vicariously liable for the actions of the Acting Regional Controller, as it did not take all reasonable steps to ensure that its employees would not be discriminated against.

The Acting Regional Controller and the Employer denied any knowledge of the employee’s pregnancy, miscarriage and subsequent potential pregnancy until the employee lodged the AHRC complaint in August 2018.

The Acting Regional Controller stated that she believed her relationship with the employee was polite and cordial and denied that she ever spoke to her condescendingly. She also denied ever discussing pregnancy, miscarriage or potential pregnancy with the employee. In relation to the meeting in July 2018, the Acting Regional Controller denied the claims that the employee was asked to resign and argued instead she had issued the employee with a verbal warning about her performance which was confirmed in a subsequent email.


Decision

In determining whether or not the employee disclosed her pregnancy to the Acting Regional Controller, the FCCA considered a medical report prepared in or about May 2018 which the employee had tendered as evidence. The report stated that the employee’s pregnancy was not confirmed as at 9 May 2018, which was the date the employee claimed she disclosed her pregnancy to the Acting Regional Controller.

The FCCA also noted the employee’s own admission that, for cultural reasons, she would not disclose her pregnancy to anyone for 12 weeks.

The FCCA also had regard to the relationship between the employee and the Acting Regional Controller and was of the opinion that they did not have a personal relationship and it was business focused.

Having regard to the above, the FCCA found that it was unlikely that the employee would have disclosed her pregnancy at such an early stage as she claimed. 

As to whether or not the employee disclosed her miscarriage to the Acting Regional Controller, the FCCA considered text messages between the employee and the Acting Regional Controller when the employee took personal leave. The FCCA noted that the Acting Regional Controller made no reference to the miscarriage in those text messages which supported the view that the Acting Regional Controller had no knowledge of the miscarriage at that time.

Accordingly, the FCCA found that the Acting Regional Controller had no knowledge of the employee’s pregnancy and therefore the employee was not discriminated against on the grounds of her pregnancy.

In relation to the meeting held in July 2018, the FCCA considered email correspondence which detailed the contents of the meeting. The FCCA was satisfied that the meeting was based only on the employee’s performance and not her pregnancy or potential pregnancy, as the emails confirmed that the employee was given a verbal warning and was placed on a performance review, with no mention of her potential pregnancy.

Given that the FCCA had found that the Acting Regional Controller had not discriminated against the employee on the grounds of pregnancy, it concluded that it was more likely than not that the Acting Regional Controller did not discriminate against her on the grounds of potential pregnancy either. 

The FCCA accepted the Acting Regional Controller’s submission that she had no knowledge of the employee’s pregnancy and/or potential pregnancy until the AHRC complaint was filed in August 2018. Accordingly, the FCCA held that the alleged discrimination could not be substantiated by the employee, stating that:

“the fact that [the employee] has a strongly held belief that she has been subjected to discrimination is not proof that discrimination occurred.” [at 69]

Given the FCCA’s findings that the Acting Regional Controller had not discriminated against the employee on the grounds of pregnancy and/or potential pregnancy, it was also found that the Employer was not vicariously liable.


What can your business learn from this decision?

Due to the contested nature of discrimination allegations, Courts will take extra care when assessing the evidence put forward by both parties. This case is a reminder that while an aggrieved employee may strongly believe they have been discriminated against, their claims will not be substantiated without sufficient evidence.

Employers are also reminded that meetings with employees should be documented, including by way of file notes taken during performance or disciplinary meetings, with follow up emails being sent to employees after every discussion held. 

Sexual Harassment and Discrimination

“Appeal Panel confirms employee was sexually harassed and discriminated against by employer and contractor"

 

Vitality Works Australia Pty Limited v Yelda; Sydney Water Corporation v Yelda [2020] NSWCATAP 210


Executive Summary

The NSW Civil and Administrative Tribunal Appeal Panel (Appeal Panel) dismissed an appeal and confirmed that an employee had been sexually harassed and discriminated against by her employer and a contractor following the distribution of a work health and safety poster.


Background

Sydney Water Corporation (Sydney Water) engaged Vitality Works Australia Limited (Vitality Works) to implement a work health and safety program, “SafeSpine”.

The employee was employed by Sydney Water as a customer liaison officer. A photo taken of the employee was utilised by Vitality Works in the SafeSpine program. In particular, a poster was put up outside the male bathrooms in a Sydney depot which used the photo taken of the employee, with her right hand outstretched above her head and toward a slogan which read, “Feel great - lubricate!”.

The employee lodged an anti-discrimination claim alleging that under the Anti-Discrimination Act 1977 (NSW) (AD Act):

  1. Sydney Water and Vitality Works sexually harassed her; and
  2. Sydney Water discriminated against her on the basis of sex.

At first instance, the NSW Civil and Administrative Tribunal (the Tribunal) found that both Sydney Water and Vitality Works had sexually harassed the employee and Sydney Water had sexually discriminated the employee in breach of the AD Act.

You can read our summary of the Tribunal’s initial decision here

Sydney Water and Vitality Works lodged an appeal on a number of grounds, including that the Tribunal erred in finding that their conduct constituted ‘conduct of a sexual nature’ within the meaning of the AD Act. Sydney Water also alleged that the Tribunal erred in finding that it discriminated against the employee by treating her less favourably on the basis of her sex. 


Decision

Both Sydney Water and Vitality Works argued that the Tribunal applied the wrong test in determining whether the conduct was “conduct of a sexual nature”.

On appeal, Sydney Water submitted that its conduct did not amount to conduct of a sexual nature as its intention was to implement a safety campaign and that the poster should be interpreted in this context. Vitality Works also submitted that it did not intend for the poster to have any sexual connotation. 

The Appeal Panel did not accept these submissions and found that Sydney Water and Vitality Works could not escape liability purely because of a lack of intent. The Appeal Panel held that intention was irrelevant in determining whether Sydney Water and Vitality Works’ conduct was ‘conduct of a sexual nature’.

Sydney Water also argued that just because someone may interpret a slogan as being sexual in nature did not mean that the poster, or Sydney Water’s conduct in approving the poster, was of a sexual nature and amounted to sexual harassment.

The Appeal Panel rejected this submission and stated at [60]:

"…Sydney Water’s conduct in printing the Poster and displaying it at the Ryde Depot was ‘conduct of a sexual nature’ because the double entendre intrinsic in the poster, viewed objectively, is apparent. In other words, Sydney Water’s intentions and objectives are not determinative of the question of whether its conduct in printing and displaying the Poster constituted conduct of a sexual nature."

Accordingly, the Appeal Panel held that the Tribunal did not fall into error and confirmed that the Tribunal correctly applied an objective test. It concluded that the conduct was conduct of a sexual nature.  

The Appeal Panel also rejected Sydney Water’s submissions that the Tribunal erred in finding that the employee was treated less favourably because of her sex.

Having found that each ground of appeal failed and refusing Vitality Works’ application for leave to appeal a question of fact, the Appeal Panel dismissed the appeal by Sydney Water and Vitality Works.

What can your business learn from this decision?

Sexual harassment is unwelcome conduct of a sexual nature which a reasonable person, having regard to the circumstances, would have anticipated that the other person would find offensive, humiliating or intimidating.

It is irrelevant as to whether the employer intends to sexually harass or discriminate against an employee, as the objective test used by the Courts looks only to the conduct itself through the eyes of a reasonable person.


Unfair Dismissal and Workplace Investigation

“Failure to properly investigate an employee's workplace conduct resulted in unfair and harsh dismissal"


Hatch v WesTrac Pty Ltd [2020] FWC 5729


Executive Summary

An employee has been awarded compensation after the Fair Work Commission (FWC) found the employer failed to properly investigate allegations of serious misconduct, which resulted in the employee being unfairly dismissed.


Background

The employee was employed as a full-time Fields Services Technician by WesTrac Pty Ltd (the Employer). The Employer provided services to coal mines and the employee was based at the Bengalla mine.

At the Bengalla mine, when a worker was finished with an item, it was to be placed on a “store bench” or returned to store area. The item would then be assessed to determine if it was still fit to be used and, if so, returned to the store room.

On 11 April 2020, four struts were left on the store bench. The employee picked up the bundle of struts and took them to his work ute. The employee claimed that he had taken the struts to his ute to compare them with his own struts. He then removed two struts from the bundle and returned them to the store bench, leaving the other two in his work ute.

At the store bench, the employee was confronted by a subcontractor about his actions. The employee then returned to his work ute and subsequently returned the two struts back to the bundle.

The Employer put allegations to the employee that he had removed the struts with the wilful and deliberate intention of stealing them. The Employer relied on two written statements from subcontractors who witnessed the employee returning only two struts to the store bench. One of these statements provided that, when confronted and asked if he was stealing the struts, the employee did not provide an answer.

The employee denied that he was stealing the struts and told the Employer that he took them to his work ute for the purpose of undertaking a comparison with his own struts.

The Employer did not accept the employee’s explanations as being plausible and found it more likely that the employee took the opportunity to take the struts, intending to steal them and only returned them when confronted by a co-worker.

The employee was summarily dismissed from his employment on the basis that the Employer believed that the employee had intended to steal struts from the workplace.

The employee filed an application in the FWC alleging that his dismissal was harsh, unjust or unreasonable.


Decision

The FWC held that Employer did not have a valid reason for the employee’s dismissal and was not satisfied on the balance of probabilities that the employee intended to steal the struts. The FWC found that the employee provided evidence of the purchase of his own struts, had directly answered questions in a logical sense and was a credible witness.

The FWC was also critical of the Employer’s conduct of the investigation. Significantly it was noted that the two witnesses were not interviewed at any point throughout the investigation and the Employer only relied on their written statements. The FWC considered that a thorough and comprehensive investigation required the Employer to take reasonable steps to put inconsistencies to the subcontractors, but the Employer did not do this.

Accordingly, the FWC held that the Employer made assumptions about matters and relied on these assumptions to form its position, but the Employer did not actually put these matters to the employee for his response.

The FWC also found that the summary dismissal of the employee was harsh as the employee did not engage in any misconduct and the dismissal also had significant consequences on the employee’s personal and financial circumstances.

Due to the absence of a valid reason for dismissal, the deficiencies in the investigation and its findings that the summary dismissal was harsh, the FWC found in favour of the employee that his dismissal was harsh, unjust and unreasonable.

In relation to remedy, the FWC considered that reinstatement was impracticable due the loss of trust in the employment relationship and because the employee was not welcome at other customer sites. The FWC ordered the Employer to pay the employee compensation totalling $28,313.41, being four months of the employee’s pay.


What can your business learn from this decision?

Employers must ensure that investigations are conducted in a thorough and procedurally fair manner. This includes testing inconsistent versions of events with witnesses, providing the employee in question with the allegations against them and providing them with an opportunity to respond.

This case is a good example of the FWC’s tendency to find dismissals unfair when they are based on flawed investigations. 

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