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Introduction

In this matter before the Federal court of Australia, the company agreed that it had breached the FWA in relation to discriminating against an employee due to her state of pregnancy.

Found

With the FWO prosecuting the matter (see media release later), the FCA found and ordered that:

  1. On or about 1 April 2016 the company contravened s 351 of the Fair Work Act 2009 (Cth) (FW Act) by taking adverse action against Ms Aragon because of her sex and pregnancy by refusing to allow her to return to work following a period of unpaid leave to have and care for her first child (Contravention).
  2. The part owner was involved, within the meaning of s 550 of the FW Act, in the Contravention.
  3. By the statement of agreed facts, it is agreed that:

“[Austrend] has admitted that it contravened section 351 of the FW Act by taking adverse action against Ms Aragon, by injuring Ms Aragon in her employment or altering Ms Aragon’s position to her prejudice when it refused to allow Ms Aragon to return to work on 4 April 2016 on a fulltime basis because of her sex and pregnancy in the circumstances set out in this [statement of agreed facts]”.

Fines

  1. The company pay a pecuniary penalty in respect of the Contravention in an amount of $15,500 in accordance with s 546 of the FW Act.
  2. The part owner pay a pecuniary penalty in respect of his involvement in the Contravention in an amount of $2,800 in accordance with s 546 of the FW Act.
  3. The penalties imposed on the respondents be paid to the Commonwealth within 90 days of the Court’s orders.
  4. The respondents (jointly and severally) pay compensation to Ms Aragon in the sum of $2,000 for the hurt and distress caused by the Contravention within 28 days of the Court’s orders.
  5. In the event that the respondents are unable to locate Ms Aragon they are to pay the compensation referred to in order 6 to the Commonwealth within 28 days of the Court’s orders.
  6. Within six months of the date of this order the first respondent engage, at its own expense, a person or organisation with professional qualifications in workplace relations to provide training, to the directors of and management personnel engaged by the first respondent, that covers the obligations on employers under the National Employment Standards and Part 3-1 (General Protections) of the FW Act.
  7. Within 30 days of completing the training in order 8 above, the first respondent provide to the applicant in writing:
    1. the date on which the training was completed;
    2. the name of the person or organisation that conducted the training; and
    3. the details of the method of delivery of the training and the content of the training.

Company “pleaded guilty”

The FCA, having regard to the company and part owners’ admissions, it decared:

 

  1. On or about 1 April 2016 the company contravened s 351 of the Fair Work Act 2009 (Cth) (FW Act) by taking adverse action against Ms Aragon because of her sex and pregnancy by refusing to allow her to return to work following a period of unpaid leave to have and care for her first child (Contravention).
  2. The part owner was involved, within the meaning of s 550 of the FW Act, in the Contravention.

Penalties

 

  1. The company pay a pecuniary penalty in respect of the Contravention in an amount of $15,500 in accordance with s 546 of the FW Act.
  2. The part owner pay a pecuniary penalty in respect of his involvement in the Contravention in an amount of $2,800 in accordance with s 546 of the FW Act.

Compensation

  1. The respondents (jointly and severally) pay compensation to Ms Aragon in the sum of $2,000 for the hurt and distress caused by the Contravention within 28 days of the Court’s orders.
  2. Within six months of the date of this order the first respondent engage, at its own expense, a person or organisation with professional qualifications in workplace relations to provide training, to the directors of and management personnel engaged by the first respondent, that covers the obligations on employers under the National Employment Standards and Part 3-1 (General Protections) of the FW Act.
  3. Within 30 days of completing the training, the company provide to the FWO in writing:
    1. the date on which the training was completed;
    2. the name of the person or organisation that conducted the training; and
    3. the details of the method of delivery of the training and the content of the training.

Previous monies paid to the woman

Prior to the FCA hearing, the parties had agreed (ie additional to the FCA award) to pay Mr Rao:

  • Her wages for the period from 4 April 2016 to 19 July 2016, plus two weeks with respect to payment in lieu of notice; and
  • Ms Aragon would resign her employment with Austrend and withdraw her complaints with the Fair Work Ombudsman.

Ms Aragon signed a letter at the meeting giving effect to the arrangement and Austrend paid Ms Aragon an amount of $16,343.80 less tax or $14,653.80 (net). Ms Aragon’s employment with Austrend ceased effective 19 July 2016.

Following further intervention by the FWO, the company agreed to pay Ms Aragon further monies for annual leave and superannuation:

  • An additional amount of $2,893.05 less tax ; and.
  • $1,552.66 into Ms Aragon’s superannuation fund.

The Fair Work Ombudsman’s news release

The Fair Work Ombudsman has commenced legal action in the Federal Court against Austrend International Pty Ltd, trading as Austrend Foods, and company director and part-owner Denzil Godfrey Rao.

The Fair Work Ombudsman alleges Austrend and Mr Rao took unwarranted performance-management action against a sales executive after she fell pregnant with her first child, denied her lawful right to return to work after taking parental leave and constructively dismissed the employee by presenting her with a pre-written resignation letter after she informed management that she had fallen pregnant with her second child.

In early 2015, the employee informed Austrend that she intended to commence a period of parental leave in mid-2015. The Fair Work Ombudsman alleges that a short time later, Austrend raised performance issues with her for the first time and subsequently issued her a written warning.

It is alleged that Austrend’s performance management action against the employee was unwarranted and was a form of adverse action taken against the employee in response to her flagging her intention to exercise her lawful right to take parental leave.

Two months after receiving the written warning, it is alleged that the worker agreed to delay her maternity leave in order to assist Austrend in covering a staff shortage. The employee’s formal leave period began one day before she gave birth to her first child.

The Fair Work Ombudsman alleges that in November 2015, while the employee was on parental leave, Austrend rejected her request to return to work with flexible working arrangements and advised in writing that the employee could return to full-time duties in April 2016.

The employee subsequently fell pregnant for a second time and advised Austrend of her pregnancy in March 2016. The Fair Work Ombudsman alleges the employee advised Austrend that it was still her intention to return to work in April, however the company told her it was extending her unpaid leave until after the birth of her second child.

It is alleged that the employee subsequently alerted Austrend to the fact she had not requested an extension of unpaid leave and informed the company that she had received advice that she was within her rights to return to work in April 2016 as originally agreed.

It is alleged that Mr Rao and Austrend responded by denying the existence of any agreement that she return to work in April 2016, raised allegations of performance issues and asked her to obtain a medical certificate as to her fitness to return to work.

It is alleged that after the employee provided a medical certificate in July 2016, Austrend asked her to attend a meeting where she was asked to sign a Letter of Resignation pre-prepared by Austrend management.

It is alleged the Letter of Resignation, which the employee signed, amounted to a constructive dismissal of the employee.

It is alleged the conduct of Mr Rao and Austrend in denying the employee’s lawful right to return to work and constructively dismissing her contravened the National Employment Standards and the pregnancy discrimination and workplace rights provisions of the Fair Work Act.

Fair Work Ombudsman Natalie James said the agency initiated proceedings as the allegations were particularly serious.

“Under the Fair Work Act employees have a lawful right to return to work following a period of parental leave,” Ms James said.

“Allegations that pregnant women are facing discrimination in the workplace are of grave-concern and it is important that all employers are aware of their obligations under the law.

“A 2014 report published by the Australian Human Rights Commission found that 49 per cent of mothers surveyed reported experiencing some form of discrimination during pregnancy, while on parental leave or returning to work.

“Under the Fair Work Act, it is unlawful to discriminate against employees on the grounds of pregnancy, race, colour, sex, sexual preference, age, physical or mental disability, marital status, family or carer responsibilities, religion, political opinion, national extraction or social origin.

“Discriminatory behaviour can include dismissing an employee, threatening to dismiss an employee, reducing an employee’s hours, denying training and promotion opportunities or refusing to employ, promote or train an employee,” Ms James said.

The Fair Work Ombudsman is seeking penalties against Austrend and Mr Rao for alleged contraventions of workplace laws, as well as a Court Order requiring them to pay compensation to the employee for economic and non-economic loss.

Past similar cases

The Fair Work Ombudsman has secured penalties against a number of employers for contravening the pregnancy discrimination provisions of the Fair Work Act:

  • The operators of a chain of Victorian discount retail stores were penalised a total of $53,592 in 2013 after reducing a pregnant employee’s work hours and then constructively dismissing her (see: Record penalties imposed in pregnancy discrimination matter).
  • The operators of a Victorian aged care facility were penalised a total of $30,888 in 2013 for discriminating against an employee when she attempted to return from parental leave (see: Fines imposed over treatment of employee seeking to return from maternity leave).
  • The former operator of a mobile phone business was penalised $5940 in 2012 for discriminating against a Geelong employee when she attempted to return from parental leave (see: Phone retailer fined almost $6000 over discrimination against new Mum).
  • The former owner-operators of a Sydney printing business were fined $23,760 and ordered to pay $2,207 compensation in 2012 after demoting and mistreating an employee after she told them she was pregnant (see: Court imposes $23,000 penalty over sex and pregnancy discrimination).
  • The operator of a Perth childcare centre was penalised $13,200 in 2012 and ordered to pay $5000 compensation to an employee it pressured into resigning after she became pregnant (see: Operator of Perth child care centre fined over pregnancy discrimination).