FEDERAL COURT OF AUSTRALIA INDUSTRIAL LAW - TERMINATION OF EMPLOYMENT - whether there was an express termination of employment by the respondent or a resignation by the applicant. - whether the resignation was initiated or resulted from the actions of the employer - whether there is a termination of employment at the initiative of the employer or the employee - whether there has been a contravention of s170CK - whether a proscribed matter formed any part of the reason for the termination of the employment at the initiative of the employer. Workplace Relations Act 1996 (Cth) ss 170CK, 170CR. Johns v Gunns Ltd (1995) 60 IR 258 BILL ITALIANO v BETHESDA HOSPITAL VG 0057 of 1998 PARKINSON JR MELBOURNE 19 JUNE 1998 IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VG 0057 of 1998 BETWEEN: BILL ITALIANO Applicant AND: BETHESDA HOSPITAL Respondent JUDicial PARKINSON registrar: DATE OF ORDER: 19 june 1998 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: 1. Pursuant to s170CR(1) of the Workplace Relations Act 1996 (Cth) a penalty of $500.00 be imposed upon the respondent; 2. The penalty in Order 1. hereof be paid to the applicant; 3. Pursuant to s170CR(3) of the Workplace Relations Act 1996 (Cth) the respondent pay to the applicant compensation in the sum of $ 3,105.72; 4. Payment of the amounts in Orders 1 and 3 hereof be made within twenty-one days of the date of this order. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VG 0057 of 1998 BETWEEN: BILL ITALIANO Applicant AND: BETHESDA HOSPITAL Respondent JUDICIAL REGISTRAR: PARKINSON DATE: june 1998 PLACE: MELBOURNE REASONS FOR JUDGMENT This is an application made pursuant to S170CK of the Workplace Relations Act 1996 (Cth) ("the Act"). The applicant contends that his employment was terminated by the respondent by reason of or partly by reason of his sexual preference and in contravention of s170CK(2)(f) of the Act. The respondent denies this contention and further says that there was no termination of the employment at the initiative of the employer. The respondent contends that the applicant resigned his employment on 14 November, 1997 when he attended at the respondent's premises and verbally advised of his resignation. The applicant denied that he advised the respondent that he was resigning on 14 November, and contends further that the conduct of the employer, in particular his supervisor in the workplace, left him with no choice but to leave his employment and that the termination of employment was initiated by the respondent and that he was constructively dismissed. The question in this proceeding is whether having regard to the expression "termination at the initiative of the employer" there was an express termination of employment by the respondent, or a resignation by the applicant. If it is found to be the latter, it is then necessary to determine whether the resignation was initiated or resulted from the actions of the employer. I am of the view that whilst it is not necessary for the employer to directly coerce the resignation, the acts of the employer must be of sufficient seriousness and proximity to the act of resignation, that it can truly be said that the conduct of the employer "initiated" or "set in train" the termination of the employment. In this respect the applicant bears the onus of establishing on balance that there was a termination of employment at the initiative of the employer; that being the type of termination of employment in respect of which the Court has jurisdiction pursuant to s170CK(2)(f) of the Act. I accept the submission of the applicant's counsel that a termination of employment resulting from even an unequivocal resignation, such as that alleged against the applicant on 14 November 1997, could, in some circumstances, be characterised as a termination of employment at the initiative of the employer. The circumstances would, in my opinion, require persistent conduct of a prescribed nature on the part of the employer. It can be seen therefore that in this proceeding, the question of whether there is a termination of employment at the initiative of the employer or the employee and the question of whether there has been a contravention of s170CK, may well be matters which are inextricably linked by any finding on the facts in this case. This is so notwithstanding that there may be other conduct, outside of the scope of the prohibitions in s170CK, which may nevertheless support a finding of constructive dismissal or termination at the initiative of the employer. In this proceeding the matters about which the Court is concerned in any substantive hearing, are those which arise under s170CK(2)(f) of the Act. There is no capacity for the Court to inquire more generally into the conduct, for the purposes of establishing whether there was conduct of a type which might otherwise be described as constituting the termination of employment as harsh, unjust or unfair. In considering the preliminary issue of jurisdiction it is necessary to consider the factual background to the cessation of employment. The applicant was employed as a cook at the respondent's hospital in Richmond, Victoria in 16 May, 1995 to 14 November, 1997, a period of approximately 2 and a half years. He was initially employed as a replacement for an employee on maternity leave. In November 1995 he was employed in a permanent part-time position of 20 hours per week, which was brought about by a job share arrangement. It appears that he was also called upon to work overtime on account of staff absences or peak demands. The applicant was one of four cooks employed in the catering department, together with a number of food service assistants and a manager and assistant manager of the department. The applicant's evidence is that the initial period of employment was without incident. In late 1995 he says that the manager, Ms SherronHarberger, began to refer to him in derogatory terms as a result of his recently disclosed homosexuality. Ms Harberger denies the allegation. In 1997 the applicant was involved in an unsatisfactory personal relationship which ultimately broke down in August 1997. The evidence is that as a result of this situation he sought professional assistance and was treated for depression at about that time. The treatment continued for a period of over six months. The evidence of the applicant's medical practitioner, Dr Russell, was that there was a co-incidence of causes of the ongoing depression, being the relationship difficulties and the difficulties the applicant described he was having with his supervisor at work. Dr Russell's evidence was that the work difficulties were a contributing factor after August 1997 and were an ongoing source of distress to the applicant. The applicant alleges that in the period late 1995 to November, 1997 he was the subject of ongoing verbal abuse often instigated by his supervisor, Ms Sherryn Harberger. His evidence is that he was referred to by her in derogatory terms after she became aware of his homosexuality. In addition he says he was subjected to humiliating treatment both verbal and physical. Although the applicant says generally he was the subject of hostile behaviour in the workplace as a result of his sexuality, he specifically refers to the following incidents as evidencing the conduct about which he complains. The applicant's evidence was that Ms Harberger · frequently joked about the applicant's sexuality and referred to him in offensive terms such as "poofter, pooh jabber and faggot"; · attributed to him extreme mannerisms usually associated with a derogatory representation of a homosexual male; · addressed him by the female name "Wilhelmina", despite his objection that he did not like being referred to by her in those terms; · pushed him into a closet and locked the door, saying "you are going back in the closet"; · issued him with uniform trousers for work which were too tight and were deliberately issued to him to humiliate him; · demeaned him further by refusing to sit near to him in the canteen when consuming food and overtly signifying to other staff her distaste for any physical proximity between them; · took no action about a demeaning caricature drawn on his fortnightly roster and posted on the notice board; · took no action in relation to an offensive telephone call made to his home by another supervisor, wherein a message was left on his answering machine referring to him as a "poofter" and making other derogatory suggestions. The applicant alleged that the conduct complained of was persistent and ongoing over the two years prior to the cessation of the employment, and continued despite his objections. The respondent's evidence was that the allegations against Ms Harberger were untrue. In it's contentions and in the evidence of Ms Harberger a number of matters going to the work performance and conduct of the applicant in the workplace were raised. These matters were dealt with in detail in both examination in chief and cross examination. It was conceded by Ms Harberger that they did not constitute conduct or performance issues of sufficient significance to warrant the implementation of the disciplinary or warning procedure. Further, in my view, those matters as to Mr Italiano's conduct or work performance would not operate to mitigate or excuse conduct of the type alleged by the applicant. Ms Harberger denied any of the allegations made against her and denied knowledge of any conduct occurring on the part of other employees under her supervision. Ms Hunter also denied hearing Ms Harberger refer to the applicant in the manner he alleged, although she conceded that some references to the applicants' and other persons sexual preference were made in jest. This version was supported by Mr Slater, who also denied ever hearing Ms Harberger refer to the applicant in derogatory terms, although he too conceded that on occasions Mr Italiano had complained to him of the way Ms Harberger spoke to him and treated him, and that he had observed some derogatory remarks, albeit he said, made in jest. Documentary evidence of the type of treatment about which Mr Italiano complains is to be found in the roster document exhibited in the proceedings. Attached to that roster was a caricature drawing of a person in unflattering terms, grossly exaggerated tight and short trousers, together with a description of the person as being "Wilhemenia" , making the unhappy refrain, "why is everyone always picking on me." The answering machine tape recording was exhibited in the proceedings and was accepted as being a true and correct representation of what occurred in the telephone conversation by the maker of the statement. The evidence of Ms Rhonda Meehan, a former catering department employee of the respondent, was that she had heard Ms Harberger speak to the applicant in the derogatory manner about which he complained on a number of occasions prior to Ms Meehan leaving the workplace in 1996. Her evidence was that the language was, on many occasions, hostile and used offensively, although she conceded that there were some occasions when the manner was jocular and the applicant participated in the jocularity. Ms Meehan impressed me as a frank and thoughtful witness. I accept her evidence. I accept the evidence of the applicant that he was the subject of frequent derogatory and sometimes abusive remarks by the manager, Ms Harberger and other employees. That there were occasions when the remarks were made thoughtlessly or truly in jest is not to diminish their significance in circumstances where the employee is hurt or offended by the remarks. I also accept the applicant's evidence that he was told by Ms Harberger on the telephone on 13 November "not to bother coming in tomorrow." However, in so far as it was put on behalf of the applicant that his employment was expressly terminated in the course of a telephone conversation between Ms Harberger and the applicant on 13 November, I am not satisfied that this is so. It is not clear from the circumstances and content of the conversation that the applicant's employment had been terminated on that occasion. It is apparent that no steps were taken by Ms Harberger at the workplace to put into effect any termination of employment after the telephone call. It is also clear that by his own conduct the applicant did not treat the conversation with Ms Harberger as having been one where his employment was terminated. There is an unexplained discrepancy between the applicant's evidence of the telephone conversation in which he says his employment was terminated and the evidence that he attended at work the next day with a separation certificate, having informed his medical practitioner that he was intending to resign his employment and stating "hurry up and fill out this fucking form". That there was a resignation tendered by the applicant was conceded in the applicant's contentions of fact filed on 1 April 1998. However the applicant's evidence-in-chief conflicts with the contents of the contentions in that his evidence was initially that when he arrived at work he knew he had been dismissed and that he went there for the purpose of having the separation form completed to ensure he had his entitlements paid quickly. His evidence-in-chief was that the conversation between them went as follows: "Can you fill this out you bitch." When asked did he say anything else or use any other language towards her his evidence was: "Not really. All I said was 'I'm just going to get my stuff in the locker' and she came back and said 'there's no need to talk to me like that' and I said 'well that's how you've been talking to me for the last three years or so'." Later in cross-examination the applicant conceded that he said "Fill this fucking form in you bitch" and then threw the form at Ms Harberger. He did not concede that he added the words "I quit" at any time in that conversation. However, that he did resign his employment and understood himself to be resigning on 14 November 1997 is apparent from his evidence in cross-examination in the following exchange with counsel for the respondent: "I put it to you Mr Italiano that she doesn't want to write it down because she doesn't have to write it down. You resigned your employment and you told your doctor the morning before you did so, that that's what you (sic) going to do. Isn't that right?" "Well what other choice would I have had? I mean I would have stayed there and I probably would have worked on Friday but my life would have been hell. What you know how much can I take? I mean I left work because of the way I was treated - all the homophobic jokes and stuff like that. I was getting sick of it, all right. Does that mean like next week she can say 'Don't come in'? Well that's why I told the captain you know there has been a lot of mismanagement." It is clear from the applicant's correspondence to the respondent on 19 November, that he did not treat the telephone conversation as a dismissal but as a threat to dismiss him. I do not accept that there was a termination of the employment in the course of the telephone conversation, or that there was any understanding on the part of the applicant that his employment had been terminated in the course of that telephone conversation. This conclusion is supported by the evidence of the applicant's treating doctor as to information he provided in an attendance on 14 November, shortly before the cessation of the employment. However, I am satisfied that there was a termination of employment at the initiative of the employer on 14 November, 1996 as a consequence of what was a persistent course of conduct of harrassment on account of the applicant's sexual preference. I make this finding based upon a finding that the conduct alleged to have occurred did in fact occur. In a number of respects I found the evidence of Ms Harberger to be unsatisfactory. The applicant's evidence was also the subject of some discrepancy, and in some respects he appeared to alter his evidence from time to time, in particular as to the conversations which occurred at the workplace on 14 November 1997, much of which is set out above. However, on balance, I prefer the applicant's evidence to that of Ms Harberger. One of the principal reasons for this preference is the various documents which were tendered in the proceedings as diary notes or file notes, made by Ms Harberger on the occasion of various events. These notes included references to issues, such as "at no stage did Bill complain about being threatened with dismissal", when such matters had not been raised in the course of the conversations occurring at the time the notes were allegedly made, and were not raised until the applicant's correspondence dated 19 November with Captain Philp, the respondent's Chief Executive. In my view the documentation is littered with references of that type which are clearly responsive to matters raised after the event in the correspondence of 19 November. Whilst it may have been perfectly proper to make additional notations upon the file as issues arose, there was a denial by Ms Harberger that this had occurred. I do not accept that the notes were, in their entirety, contemporaneous documents made without reference to or knowledge of the complaint which had been made by the applicant after the termination of the employment. This matter affected Ms Harberger's credit significantly. Similar observations may be made as to Ms Hunter's evidence on the documentary records, however she was not quite as unequivocal as to the times at which the notes were made. Secondly, there was lengthy evidence as to the contents of a tape recording and the identity of a person on the recording. Ms Harberger's evidence was that she did not know of the identity of the person on the tape recording. Ms Hunter acknowledged in her evidence that it was herself on the tape recording and it was Ms Hunter's evidence that it was possible Ms Harberger was present at the time the telephone call was made. Finally, the evidence of all witnesses, except Ms Harberger was that there was a deal of horseplay in the workplace relating to the sexual preference and or activities of the employees. In addition, the documentation reveals that derogatory and deliberately offensive representations of the applicant were not uncommon and it is clear that Ms Harberger knew this to be the case. As the manager of the area she took no steps to prevent any conduct of this type and denied any knowledge of such conduct occurring and any participation in it. I do not accept that denial. In view of my findings of fact as to the conduct alleged, I turn now to my reasons for determining that the harassment constituted conduct which could be characterised as initiating the termination of the employment by leaving the applicant with no alternative but to resign his employment. At first consideration there would seem to be an incongruity between the concept of "subjective reason" for termination where there is found to be a resignation, albeit one which was in fact a termination of employment initiated by the employer. However it has long been established that a mere denial of a prohibited reason is not of itself sufficient to displace the onus of proof resting upon an employer in s170CK(2)(f) proceedings, (see Johns v Gunns Ltd (1995) 60 IR 258). I am satisfied that the evidence establishes that but for the conduct of the respondent the applicant would not have left the employment. I am also satisfied that the conduct, being frequent sexual harassment which led to the termination of the employment, occurred in part, for the reason of the applicant's sexual preference. The respondent bears the onus in these proceedings to establish the contrary and I am not satisfied that it has done so on balance of probabilities. The respondent raised the failure of the applicant to complain to any person in authority of the matters relating to sexual harassment until after the employment had ceased as a reason why the applicant's evidence should be disbelieved. I accept that there is some cause for a careful consideration of this matter. However in this case, having regard to the circumstances, in particular that the applicant would be complaining of the conduct of a supervisor to whom he reported directly and who determined his rosters, the failure to pursue a formal complaint is understandable. Whilst it was not tendered in the proceeding, Captain Philp's evidence was that the respondent has a policy in relation to sexual discrimination and sexual harassment which makes it clear that such conduct is not acceptable in the workplace. I am not satisfied however, that the applicant or his work colleagues were sufficiently familiar with either the policy, or the procedures for complaints to be made. This is another factor which explains the applicant's failure to pursue a formal complaint or to deal productively with the workplace issue. It is appropriate to observe that in this proceeding the conduct of the applicant is not without some degree of fault. I am satisfied that the applicant did not always conduct himself appropriately, nor was he blameworthy in the context of the relationships between himself and other employees in the workplace. That said however, the issue for the Court to determine is whether a proscribed matter formed any part of the reason for the termination of the employment at the initiative of the employer. Whilst the cessation of the employment on 14 November did not occur in the context of an incident of harassment on that day, I am satisfied that the applicant left the employment as a direct consequence of the ongoing and systemic harassment to which he had been subjected as a result of his sexual preference. I accept that the hostile telephone conversation with Ms Harberger was only the final straw in the applicant being unable to continue in the workplace, and not the catalyst. I find that the termination of the employment was initiated by the employer. I turn now to consider the question of remedy. In my view there are a number of factors relevant to the question of remedy in this case. The first is the conduct of the applicant on the day the employment ceased. His conduct towards the other employees was unacceptable and without excuse. Whilst I accept that his medical condition and the drug treatment he was receiving for the condition may have been a contributing factor to his extreme behaviour, this is not sufficient excuse. It is clear that the applicant bears some responsibility for the hostility in relations between himself and other employees. It is apparent that the applicant has no desire to return to the employment, and in the circumstances I would not view an order for reinstatement as being appropriate or practical. Further it is also clear from the evidence that the applicant had intended to leave the employment of the respondent within a defined period of time and I am not satisfied that the only reason for this decision was the issue of harassment in the workplace. In this regard I am satisfied that an order for compensation ought be made which reflects the likely period of the employment, had the proscribed conduct not intervened. I am of the view that the employment was likely to have ceased of the applicant's own motion within months of the termination date. This was the evidence of the applicant also. The order for compensation shall be in the sum of $3,105.72. This amount represents a period of eight weeks pay, together with accrued annual leave and superannuation applicable for that period. As to the question of penalty, I accept the submission of the respondent that there was an absence of knowledge of the complaint in the persons ultimately responsible within the respondent. I also accept that had a complaint been generated by the applicant that it would have been acted upon by Captain Philp in good faith. Whilst I have earlier stated that the applicant's failure to complain was understandable, the respondent's senior managers were however unaware of the issue and this is a significant factor in the determination of any penalty. Nevertheless there is a responsibility that an employer ensures that such conduct does not occur in it's workplace and to supervise the workplace adequately in this regard. That regard be had to that obligation, and that employers understand the significance of that obligation, is, I accept, a matter relevance. I have decided to impose a penalty of $500.00 payable to the applicant. The orders of the Court will be that: 1. Pursuant to s170CR(1) of the Workplace Relations Act 1996 (Cth) a penalty of $500.00 be imposed upon the respondent; 2. The penalty in Order 1. hereof be paid to the applicant; 3. Pursuant to s170CR(3) of the Workplace Relations Act 1996 (Cth) the respondent pay to the applicant compensation in the sum of $ 3,105.72; 4. Payment of the amounts in Orders 1 and 3 hereof be made within twenty-one days of the date of this order. I certify that this and the preceding nine (9) pages are a true copy of the Reasons for Judgment herein of the Judicial Registrar Parkinson Associate: Dated: 19 JUNE 1998 Counsel for the Applicant: MS M YOUNG Solicitor for the Applicant: MS V WILES JOB WATCH INC Counsel for the Respondent: MR M RAHILLY Solicitor for the Respondent: MR M P RAHILLY SERVICE INDUSTRY ADVISORY GROUP Date of Hearing: 20, 21 & 30 APRIL 1998, Date of Judgment: 19 JUNE 1998