Pregnant employee receives more than $235,000 in compensation and penalties - cause to pause?

Background

The employee commenced employment with R & C Piccoli Investments Pty Ltd (Piccoli) in 2000 as a photographer. Robert and Christine Piccoli were managers of the business and owners of a 50% share each in Piccoli.

The managers' son, also worked for the business. It was intended that the managers' son and the employee would take over the business upon the retirement of the current business owners at the end of 2012.

On 28 August 2012, the employee advised Piccoli that she was 10 weeks pregnant. She further advised that she was flexible regarding the length of her maternity leave and expressed a desire to initially return to work on a part time basis after the birth of the child.

On 30 August 2012 and over the following weeks, Piccoli through a series of meetings and correspondence, undertook a course of action including advising the employee that:

• they were concerned that due to the pregnancy she would not be as dedicated to work and it would be at least 5 years until her child was school age before she would be fully dedicated to work again and she would be able to work late;
• the business owners had intended to retire at the end of the year, and the employee's pregnancy and maternity leave affected those plans;
• as a result of her taking maternity leave, the business may need to consider downsizing and reducing the photographers to the managers' son and an assistant;
• she could continue her normal role until the end of the year but she would then need to take long service leave after the Christmas holidays and before she had her baby;
• if she insisted on returning to work after the Christmas holidays she could only work in a "behind the scenes capacity", could not continue to do photo shoots, have appointments with or be seen by customers as this was "not a good look" and would make the business look like "slave drivers" and her look "desperate";
• if she returned to work after the Christmas holidays her pay would be decreased as she was no longer generating income for the business as she would be working in alternative duties;
• that she and the managers' son were not 'earning [their] keep'(sic), and consequently their remuneration was going to be reassessed if they failed to reach certain sales targets (of which had never been reached previously). In addition, they were required to work "all hours necessary" including an extra full Monday or two late nights until 9.00pm on top of their normal working hours. The employee was further advised she needed to sign the new employment contract to "continue as an employee";
• the business would not agree to her working on a part-time basis upon her return from maternity leave and further, there was no guarantee that there would be a position for her to return to; and
• she only had 4 days in which to advise Piccoli of the length of time that she wished to take maternity leave and when she wished to take it.

The employee forwarded to Piccoli a letter advising it that she considered she was being subjected to discrimination due to her pregnancy and asked that the discrimination stop. She further expressed how upset she was about her treatment and said:

"I hope we can work these issues out however, if your treatment of me continues I will have no other alternative than (sic) to take more formal steps to protect myself, which is not something I want to do."

The managers then called the employee into a meeting and subjected her to a tirade of abuse.

On 18 September 2012, the employee resigned from her employment in writing on the basis that she had no other alternative but to do so as a result of the conduct of Piccoli.

The employee lodged a general protections claim alleging that Piccoli:

• dismissed her from her employment as she was forced to resign due to Piccoli's conduct which either intended to bring the employment to an end or had that probable result; and
• injured her in her employment because she had exercised a workplace right and/or because of her pregnancy, sex and/or family or carer's responsibility.

Decision

Judge Whelan found that Piccoli:

• made an unreasonable request that the employee work additional hours;
• refused to allow the employee to work in her usual occupation or alternative duties after the Christmas break;
• refused to consider a return to work on a part time basis; and
• undertook abusive conduct directly related to the employee's refusal to work additional hours and her complaint alleging discrimination;

and that conduct amounted to an injury to the employee in her employment.

Judge Whelan found that the meeting of 30 August 2012, the employee's response and subsequent tirade of abuse by the managers amounted to a course of conduct which gave the employee no choice but to resign.

The employee was awarded compensation of $164,097.00 for economic loss and a further $10,000.00 for distress, hurt and humiliation. Additionally, the Court ordered that Piccoli pay $45,000.00 by way of penalties and that Robert and Christine Piccoli each pay a penalty of $8,000.00 as persons knowingly concerned in the contravention.

In considering the penalties, Judge Whelan stated:

"In this case I regard the conduct as being serious:

• First, the demand that the Applicant work 'all hours necessary' could only be an unreasonable demand and one which employers should be discouraged to make; and

• Second, the capacity for women to continue in employment during their pregnancy and to be able to continue with their career after having a child are matters which as a society we consider should be protected.

The meeting on 30 August 2012, the Respondents embarked on a course which was designed to place pressure on the Applicant ..... to meet sales targets which had not previously been achieved. A demand was made to work additional hours and a document drawn up which would make the Applicant’s remuneration conditional upon her meeting those targets and her on-going employment conditional upon her commitment to achieving them. Despite her letters of 10 September 2012 and 14 September 2012, the Applicant was subjected to an aggressive and abusive tirade by the Third Respondent, supported by the Second Respondent, on 14 September 2012 and a reiteration of the demand that she work additional hours and commit to achieving the targets demanded. On 18 September 2012, these demands were reinforced by the tabling of the notes of the meeting on 11 September 2012 which inferred that she had agreed to those conditions. At the same time, some of her supervisory duties were removed from her and her Google password changed.

I am satisfied that the actions of the Respondents amounted to a course of conduct which gave the Applicant no choice but to resign".

Conclusion

This case clearly demonstrates that significant penalties may be imposed on employers and their senior employees when they engage conduct which contravenes the general protections provisions and impinge upon societal norms.

If you would like more information about the case, please contact National Workplace Lawyers on +61 2 9233 3989. 

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Note — this is for information purposes only and does not purport to be comprehensive or to render legal advice.