GENERAL DISTRIBUTION CATCHWORDS INDUSTRIAL LAW — TERMINATION OF EMPLOYMENT — UNLAWFUL TERMINATION — OPPORTUNITY TO RESPOND — CONDUCT AND PERFORMANCE — VALID REASON – UNLAWFUL TERMINATION ON GROUNDS OF PREGNANCY — REINSTATEMENT IMPRACTICABLE — COMPENSATION — DISTRESS CAUSED BY TERMINATION — DAMAGES FOR FAILURE OF EMPLOYER TO TAKE REASONABLE STEPS TO PROTECT EMPLOYEE FROM INJURY — ASSESSMENT OF DAMAGES FOR NON-ECONOMIC LOSS CAUSED BY UNLAWFUL TERMINATION Workplace Relations Act 1996 (formerly known as Industrial Relations Act 1988) Sections 170DC, 170DE, 170DF(1)(f), 170EDA(2), 170EE Occupational Health & Safety Act, 1987, s.19 Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371 Perrin v Des Taylor Pty Ltd (1994) 58 IR 254 Liddell v Lembke (1994-95)1 IRCC 466 McLean v Tedman (1984) 56 ALR 359 Maria Burazin v Blacktown City Guardian Pty Limited (IRCA, Full Court, 13 December 1996, unreported decision no. 606/96) Victoria v Commonwealth of Australia & Ors (1996) 138 ALR 129 Qantas Airways Ltd v Christie [1998] HCA 18; (1998) 152 ALR 365 Johns v Gunns Ltd (1995) 60 IR 258 MIRELA ANTHONESS V THE FORTE GROUP PTY LIMITED NI 1519 of 1996 Before: MCILWAINE JR Place: SYDNEY Dates of hearing: 21 & 22 October 1996 & 21 March 1997 Date of judgment: 20 July 1998 GENERAL DISTRIBUTION IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NI 1519 of 1996 BETWEEN: Mirela Anthoness Applicant AND The Forte Group Pty Limited Respondent ORDER Judicial Registrar: MCILWAINE Date of Order: 20 JULY 1998 Where Made: SYDNEY THE COURT DECLARES THAT: 1. The Applicant was an employee of The Forte Group Pty Limited between 12 December 1994 and 13 December 1995. 2. The Respondent has contravened s 170DC of the Act. 3. The Respondent has contravened s 170DE(1) of the Act on the grounds that there was no valid reason for the termination of the employment of the Applicant on 13 December 1995. 4. The Respondent has contravened s170DF(1)(f) of the Act on the grounds of pregnancy. 5. It is impractical to reinstate the Applicant in any position with the Respondent. 6. It is appropriate to award compensation to the Applicant in the sum of Twelve thousand five hundred dollars ($12,500). THE COURT ORDERS THAT: 8. The Respondent pay to the Applicant within twenty one days the amount of Twelve thousand five hundred dollars ($12,500). 9. Any sum paid within twenty one days to the Australian Taxation Office, which the Respondent is obliged to pay on behalf of the Applicant or which can lawfully be made on her account, in respect of the sum ordered in paragraph 8 shall be pro tanto satisfaction of the obligations of the Respondent under that order. Kate Benson Legal Assistant to Judicial Registrar McIlwaine GENERAL DISTRIBUTION IN THE INDUSTRIAL RELATIONS COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NI 1800 of 1996 BETWEEN: MIRELA ANTHONESS APPLICANT AND THE FORTE GROUP PTY LIMITED RESPONDENT BEFORE: MCILWAINE JR PLACE: SYDNEY DATE: 20 July 1998 REASONS FOR DECISION APPLICATION This is an application by Mirela Anthoness ("the applicant") claiming unlawful termination of her employment under Division 3 Part VIA of the Industrial Relations Act 1988 (Cth) ("the Act"), now known as the Workplace Relations Act 1996(Cth) against her former employer, The Forte Group Pty Limited (ACN 003 672 734) (the "respondent"). In her claim, the applicant records the work performed for her employer as "Computer Operator Graphic Designer". The business was conducted at North Sydney, which is a major New South Wales metropolitan centre. The applicant maintains that she started work with the respondent on 12 December 1994. There is no dispute between the parties on that date or that the last day the applicant worked in the business was 13 December 1995. The remedy sought by the applicant in her claim is reinstatement and compensation which was amplified in her application by requesting: "Applicant has leased on hire purchase a computer at the request of the respondent so the applicant could work at home. Seek that the respondent pay out the lease and keep the computer." Attached to her application was a copy of a letter as follows: The Forte Group Communication Presentations Slide Creation Slide Imaging Slide Duplicates Canon Colour Copies Light Box Displays Photography Laminating Exhibitions Overheads Doc Binding Graphic Design Image Retouching Finished Art Art Mounting CIBA Prints Animation Multimedia Compuprints 14th December 1995 Ms Mirela Saric . . . . . . . . Dear Mel Re: Our meeting of Wednesday 13th December 1995 I just wanted to confirm our conversation regarding your employment with The Forte Group. Having thought about what we discussed I am writing to confirm that I formally accept your resignation. Admittedly I was shocked to have you resign the way you did. Anyway I have thought about it and I agree it is best for both parties. I have attached you cheque and payslip. Acceptance of the cheque will serve as your acknowledgment and agreement of this letter. I want you to know that I don't have any hard feelings and that I would still love you to come to our Christmas Party. I hope you can make it. Mel good luck with your career, I wish you every success. I hope you might like to do some freelance work for us next year. Once again good luck. Kind regards Sam Fawzi Managing Director PS I have given you two weeks pay in advance on top of your holiday pay as a sign of good faith. CONGRATULATIONS and Happy Honey Moon." The application dated 16 January 1996, was received by the Australian Industrial Relations Commission and Deputy President Drake issued a certificate, dated 9 May 1996, in the following form: "In accordance with subsection 170ED(1) of the Industrial Relations Act 1988 (the Act), the Commission hereby certifies: i. That it has been unable to settle this matter by conciliation within a reasonable period, and ii. That the parties in this matter, having been invited to elect to have the matter dealt with by consent arbitration have not so elected. Under paragraph 170EA(3)(b) of the Act, the Commission allows the lodgment of the application to be extended until 16 January 1996." There was no objection to the certificate made by either party, therefore the matter is properly before the Court. The respondent is a Graphic Design organisation and the various components and activities of the business are set out in detail on the letterhead of the firm which is earlier is reproduced in these reasons. HEARING The applicant was represented at the hearing by Mr Heath of Counsel and the respondent by Mr Moore of Counsel. Written submissions were received on behalf of the applicant and the respondent after the hearing was completed. BACKGROUND There are some issues of fact in this matter which both parties do not dispute. The applicant is a young woman, who was, at the time of her dismissal, twenty three years of age. Her wage was agreed to be twenty-five thousand dollars or a gross figure of $481.00 per week. At all material times the applicant was an employee of the respondent. On Wednesday 13 December 1995 the applicant claimed that she orally requested Mr Sam Fawzi, a Director of the respondent ("Mr Fawzi"), that she be allowed to take annual leave from her employment and that he had approved her three days for this purpose. This request was made as a result of the applicant being distressed by constant changes to a design which she was working on for a client, Goodman Fielder and after she had been told of further required changes. Mr Fawzi denied that she had asked for leave and maintained that the applicant advised him that she was resigning her employment with the respondent to take effect on Wednesday 13 December 1995. It was claimed by Mr Fawzi that she used the words: "I have had it here. I resign" in the board room of the respondent whilst discussing an urgent project. It is admitted that Mr Fawzi and the applicant were the only persons present in the room. Mr Fawzi maintained, the applicant was adamant, stating, "I am resigning. It's not a joke. I do not want to work here anymore." Mr Fawzi testified he advised the applicant that he was shocked by the immediacy of her decision and that he would need to move immediately to replace her on the project. Mr Fawzi stated, "I am shocked but if that's what you want to do then okay. I'll make arrangements to get someone else to finish the project straight away." The applicant denies and contradicts his version. There was also a claim made that the termination was harsh, unjust or unreasonable under section 170DE(2) of the Act by the applicant. This cannot be sustained as Section 170 DE(2) was not a valid enactment of the Commonwealth Parliament and such a claim cannot be maintained (see Victoria v Commonwealth of Australia & Ors (1996) 138 ALR 129). EVIDENCE OF THE APPLICANT The applicant gave evidence that her current occupation is as a graphic designer, having obtained a diploma in graphic arts from a private college known as KVB College, North Sydney, for which she paid a course fee of about $30,000. Her maiden name was "Saric" and she married on 6 January 1996. She gave evidence that she had fallen pregnant about September 1995 and that her twins were born on 4 June 1996, which was 3 weeks premature. The applicant commenced with the respondent on a work experience period on 7 December 1996 having been initially interviewed by Ms Angela McKinnon and Mr Ray Moxon. Subsequently, she received a telephone call from Mr Fawzi, offering her a position with the respondent, although there was no discussion about wages or salary at the time. About a week later there was a meeting between Mr Fawzi and the applicant and it was agreed that a salary of $20,000 per annum would be paid. After negotiation, the amount was increased to $25,000 per annum. Initially, the applicant was supervised by Ms Angela McKinnon. Subsequently, the supervision was taken over by Ms Fiona Sultana, who was a senior graphic designer in the company. The applicant maintained that she had applied for leave and been approved leave commencing 8 December 1995 as she was to be married in January. Subsequently in a conversation with Mr Fawzi and Mr Moxon the applicant had agreed to put the leave back to 22 December 1995. It is suggested that Mr Fawzi had accepted her offer, saying, "That would be terrific." The applicant maintained that her workload had doubled during the period of her employment. She was involved in producing packaging for Goodman Fielder in the nature of "hot cross buns" for an Easter 1996 promotion. This involved her in the design of packaging, and promotional material. The applicant worked on the Goodman Fielder job for quite a few months with one of the difficulties being the client kept changing the specifications of the design. The applicant did not have actual contact with the client. This was done by Mr Fawzi, and this arrangement probably led to serious communication difficulties and a significant deterioration in the relationship of the applicant with her employer. On the morning of Wednesday13 December 1995, the applicant says that she was called into a meeting in the board room by Mr Fawzi. She was greeted by Mr Fawzi, who said words to the following effect. "You are not going to believe it, Goodman Fielder has come back with changes." The applicant admits that she said: "I've had enough". The conversation then continued: Mr Fawzi: "Mel, what has been wrong with you lately, you haven't been very enthusiastic." The applicant: "I'm under a lot of stress." The applicant also said that she had brought up the fact that she had asked for a pay rise and had not received it and that her hours were very long and she was not getting any bonuses. The applicant says that she told Mr Fawzi she was stressed with the workload and that everything was going wrong. The applicant said that Mr Fawzi then said: "What can I do for you?" The applicant said: "I need a couple of days off." Mr Fawzi said: "Okay". The applicant testified she then left the board room, went to speak to "Jason", who was a person who was training to take her position, and Stephen together with Mr Fawzi. The applicant says she spoke with Jason and told him that she was taking a couple of days off and then proceeded to brief both Jason and Mr Fawzi on the work that was left outstanding. This work was apparently the Goodman Fielder project together with another computer type project. The applicant said that she told Jason that if he had any difficulties he could telephone her at home on her phone number which was in the black contact phone book. The applicant clarified her evidence to the effect that she spent about half an hour originally speaking with Mr Fawzi and then about 2 hours briefing Jason. The applicant says that she then left the office to catch a bus. At the bus stop she had seen Fiona Sultana and that she had a conversation to the effect that "I'm not feeling very well, I'm a bit stressed with all the work. I'm having a couple of days off." The applicant says that Ms Sultana responded, "I hope you feel better." This conversation was suggested to have taken place at about 11.15 am which differs from the time recalled by Ms Sultana. However this time difference is not of great consequence in the factual situation. The applicant states that Mr Fawzi then called her on the next day, being 14 December 1995. Mr Fawzi had asked her how she was feeling. She responded, "I'm feeling fine." The applicant then says that Mr Fawzi said to her, "Why don't you take the next week off, as well?" That is, the week beginning 18 December 1995. At that stage the applicant asked him about the Goodman Fielder job and he replied that she "should not worry as he had a freelancer working on it." The applicant maintains that Mr Fawzi said to her, "I'll send you your holiday pay plus a bonus to help you out with your wedding." Mr Fawzi then indicated that he would see her at the firm's Christmas party at Doyle's restaurant on 22 December 1995. Subsequently, the applicant said that she received a cheque and letter, which has been reproduced above, by courier. The cheque was for an amount of $2600. Upon receipt of that letter, the applicant attempted to phone Mr Fawzi and eventually made contact with him. During the course of that conversation Mr Fawzi mentioned to her that he had gathered from the other staff in the company that she wanted to leave. The applicant says she told Mr Fawzi, "Yes, everybody knew that I was leaving in May for maternity leave." I said to Mr Fawzi, "What will I do with this cheque, will I rip it up?" He said, "No, just put it in your pocket and we will discuss this next week in a meeting." Eventually the applicant again contacted Mr Fawzi and arrangements were made for a meeting on Thursday 21 December 1995 at noon. During the course of a meeting in the board room, the parties were disturbed. Mr Moxon and the applicant then left to go to a coffee shop across the road and Mr Fawzi joined them later. Although there are some differences between the parties as to the way this meeting was conducted, these are of little consequence in the overall resolution of the matter. At the coffee shop, Mr Moxon started to talk to the applicant about how he and his partner , had looked after a small wounded bird. He also said how he had fixed up the bird and he wanted to let the bird go and it would not leave his home. It was at this stage that she said that Mr Moxon told her that he did not want her to come back next year, that he pointed out that his wife had been pregnant and that she had got plenty of work while she was pregnant. Mr Moxon also said, "Your babies and your pregnancy are far more important than work." The applicant stumbled over the use of the word "babies". However, she quickly corrected herself saying that she meant "baby" by clarifying the position that at the time of the conversation, she did not know that she was to have twins. The applicant maintains that she told Mr Moxon that she was not resigning, she needed the job as her wages were paying for everything at home. The applicant suggested that she gained the impression that they were forcing her to resign. After a period of about an hour in the coffee shop, the applicant says they returned to the board room and here again Mr Moxon brought up the fact that her pregnancy was more important than her work, that it was a stressful job and the applicant alleges that he said, "I don't think you should come back next year." The applicant says that a discussion evolved that she would work from home. At this stage the applicant says that Mr Moxon suggested, and Mr Fawzi agreed, that she might work from home. Her response was that she would need to lease a computer. The applicant said that Mr Fawzi then said that he would make the job in the office obsolete and that she would do all the graphic design work at home. There was further contact between them in January. At this stage of the testimony of the applicant it was proposed to introduce the evidence of her consulting medical gynaecologist Dr Michael van der Griend. Before he testified the applicant said she was generally stressed because of the loss of her job, as well as other factors such as there was no income coming in to her new family, her wedding plans had been spoilt and finally she was in a state of crisis. The loss of her job meant that they had to cancel the reception at the Oxford Halls Tennis Centre and get married in the house of the celebrant. The applicant testified that she used $2000 to purchase a computer to use in her work from home. The applicant gave evidence of speaking with Dr Griend to the effect that she was suffering a lot of stress particularly arising out of her unemployment. Also he was told there was no money and things were going wrong. The applicant confirmed that she had been referred to the Social Worker at the Royal North Shore Hospital by Dr Griend. There, the social worker provided her with some assistance in relation to the stress, the problems of her marriage and social security benefits. EVIDENCE OF SPECIALIST MEDICAL PRACTITIONER Dr Michael van der Griend gave evidence that he was a specialist gynaecologist being a member of the Royal College of Obstetricians and Gynaecologists and a fellow of the Royal Australian College of Obstetricians and Gynaecologists practising from North Sydney (referred as the "Gynaecologist"). Most of his experience was in hospital based training and he had taken up a private practice in mid-1995. The Gynaecologist gave evidence of the applicant visiting him on 10 January 1996 and there were ten following antenatal visits up until 28 May 1996. The babies were born on 4 June 1996 and he had a subsequent post-natal visit. On the second visit he referred her to the Social Worker at the Royal North Shore Hospital. On 10 January 1996, the applicant was anxious and a little bit upset and that it was hard for him to gauge whether that was from having a multiple pregnancy or just being pregnant. He confirmed that she certainly was anxious and upset. It appears that the applicant was not advised that she was to have twins until 31 January 1996, or possibly, still later on 8 February 1996. He was able to confirm that the issues of her relationship with her husband, their marriage and her employment were also raised during the consultations. The Gynaecologist recalled being told by the applicant that she was dismissed from her work. After an objection from Mr Moore, Counsel for the respondent, about an answer by the Gynaecologist and a further question by Mr Heath, he volunteered the following information: "Put it this way, I think that if she didn't have employment difficulties then I think she wouldn't be quite as distressed as just having a relationship problem. Alternatively, she would not be as stressed when I was undertaking her ante-natal care" The Gynaecologist also confirmed the stress levels of the applicant were significantly higher than other patients. He gave evidence that at 23 July 1996, the post-natal visit, the applicant was substantially less anxious then she was on her first two antenatal visits. With twins, the applicant should have been off work for about six weeks after having the children. The evidence of the medical specialist was virtually unchallenged. EVIDENCE OF FORMER EMPLOYEE OF RESPONDENT ON BEHALF OF THE APPLICANT Ms Fiona Sultana was a former employer of the Forte Group and is currently a Mac Operator with a small design company. The applicant had been with the respondent for two years, primarily as a graphic designer and a finished artist as well as managing or supervising some aspects of the work of the staff. Ms Sultana acknowledged that she had resigned from her employment in November 1995, leaving in quite amicable circumstances. Ms Sultana testified that the applicant had come under her supervision when she started work in December 1994, that she provided a checking role for her work. Moreover, she worked side-by-side with the applicant on most of the jobs. Ms Sultana confirmed that the applicant worked long hours. Asked to provide a comment on her work performance she testified: "her level was the highest that I've ever worked with, that I'd ever had anyone working with me, that for the whole duration of working with Forte." Ms Sultana was unable to confirm that there had been any adverse comments made to her by Mr Fawzi or Mr Moxon in relation to the performance of the applicant. Although she agreed that regular gatherings were held on a Monday to discuss staff matters and Mr Fawzi usually attended these meetings. Ms Sultana suggested that the applicant was one of the few employees who had filled out the job sheets. Ms Sultana confirmed that some of the memos, although personally addressed to the applicant were directed to all the employees under her control. Ms Sultana gave evidence of meeting the applicant at about 2.30 or 3.00 pm on 13 December 1995 at the bus stop. Ms Sultana confirmed that she was surprised to see the applicant out of the office. She testified that the applicant said: "I'm going home. I just had an argument with Sam and I need a few days off. We've agreed – Sam and I have agreed that I need a few days off" Ms Sultana then says that after leaving the applicant with an informal arrangement to meet in the future, she had returned to her office and within about a half an hour Mr Fawzi had called her. He said: "I'm not too sure if you know about this but Mel has resigned" and Ms Sultana replied: "I don't think so Sam, because I've just bumped into her and actually spoke to her and if Mel felt that she had resigned, she would have said so when I saw her." Mr Fawzi then explained that he'd called her to ask if she could give some technical support to Steve and Nick, two of the employees. Ms Sultana had no further contact with the respondent except to attend their Christmas party at Doyles Restaurant. At the party, she had discussed the matter with Anne Bahgat and in a conversation with Mr Moxon he had suggested the best way of sorting the matter out would be for the applicant to work from home. Ms Sultana gave evidence that Mr Fawzi had not raised any issues of performance with her about the applicant. Ms Sultana conceded he had raised the issue of wastage generally but this was normally at the Monday meeting. EVIDENCE OF ADMINISTRATIVE MANAGER Ms Anne Bahgat, Administration Manager of the Forte Group, gave evidence in support of the respondent. Ms Bahgat testified that she had typed each of the memoranda contained in Exhibit "A", being a series of warning or counselling letters. The computer records were kept on a computer disk (floppy). Ms Bahgat coded each of the entries "by date and the initials of whatever the letter is about or the memo is about". On the morning of giving her evidence, she had generated a document by: "I just entered my disk into the computer and basically printed the screen." She maintained that the dates and times on which the documents in Exhibit A were prepared are able to be ascertained from the document. There was no entry for 10 March 1995 as the earliest document so recorded was 17 May 1995. Ms Bahgat could not recall exactly how many of the memoranda she had given the applicant but thought she would have given the majority to her. If she did not hand them to the applicant she would give them to either "Sam" or "Sharon". Ms Bahgat gave the impression of being extremely loyal to Mr Fawzi but her testimony lacked any convincing detail of her contact with the applicant when passing on these important letters. EVIDENCE OF MANAGING DIRECTOR OF RESPONDENT Mr Sam Fawzi was a company Director and Managing Director of the respondent. He had been with the company since its inception. He could not recall whether the words the applicant had used were "I quit" or "I resign". He conceded that the applicant removed her stereo equipment from the office on 21 December 1995. After the applicant left her employment, there was increasing tension between Mr Fawzi such as they could not come to an agreement about the amount or type of work she was to do for the firm at home. Prior to her terminating he had also come back late into the office one evening and found her completing some personal work using the office equipment. The work which she did has been introduced into evidence and does not appear to be substantial or indicate that she was acting as a competitor of the respondent. Her actions may justify some disciplinary action but would not extend to the termination of her employment. One of the matters that he strongly denied under cross-examination was a telephone conversation, which was put to him in the following terms: "that Fiona had phoned him on the day that the applicant had left, and he had told her that Mel had resigned, to which Fiona replied, "I don't think that's right because I just saw her at the bus stop." He agreed with the cross-examiner that Fiona would have no reason to lie about that statement. At this stage of his cross-examination, Mr Fawzi retreated into a, "I don't recall" mode of answering a question. I am satisfied that when he was adopting this style of response it was not a proper lapse of memory but a device that has recently been publicised as having some effect in a court. At one point this method of reply became quite ridiculous when he indicated he did not recall whether the applicant was distressed or not. Mr Fawzi admitted that he knew that the applicant was getting married but did not recall the timeframe. Mr Fawzi testified that he had a meeting with the applicant on 21 December 1995. Mr Fawzi referred to the meeting of 21 December 1995 in the coffee shop. It was put to him that he had said to the applicant, "Mel, you've got this far, you don't want to lose your baby." He denied that he had any recollection of such a comment. Asked if at any time she cried during the meeting, Mr Fawzi replied, "no". However, this response conflicts with his "I don't recall" answers to earlier questions. Mr Fawzi was no doubt a very intelligent man and successful businessman. During the course of his cross-examination he regularly paused, appeared to think carefully about a question and then would often say he did not understand. I find that he used this device to avoid answering any questions that he might have found difficult. Occasionally he was evasive in giving his evidence, often gesturing with his hands in a non-commital way. Mr Heath is a tenacious and experienced cross-examiner. The cross-examination of Mr Fawzi occurred over a number of days. On the second occasion, Mr Fawzi adopted the tactic of facing the presiding officer, thus having his back to Mr Heath while answering his questions. In those circumstances, he was able to exhibit much more control in relation to his cross-examination. However, I do accept that he is capable of responding to a crisis in the manner the applicant has outlined in her evidence. EVIDENCE OF FORMER EMPLOYEE OF THE RESPONDENT Ms Sharon Bentick, an employee of the respondent, gave evidence that she had formerly worked for the respondent and had worked for a different firm from 30 June 1996. In December 1995 or at some time shortly before Christmas, she could not remember the exact date, Ms Bentick was sitting in the main reception area and noted that: "Sam had been in a meeting with Mirela." She described Mr Fawzi coming down to speak with Anne( Bahgat) and she had overheard the following being said: "Mirela has quit. She has walked out." This witness did not see the applicant leave the building. It was also her duty to take incoming phone calls, which she shared with another person. She had no recollection that the applicant had ever come back on the premises or that she had seen her again. Her only other recollection was speaking with her in a telephone conversation, when the applicant asked, "Please tell Sam that it is now 30 hours and not 10." Since then she has spoken to her once on the telephone but the instrument had been hung up. Ms Bentick testified that she had on a number of occasions handed memoranda to the applicant about her wastage, her performance levels, her personal telephone calls. Ms Bentick testified that on one occasion the applicant said that she was not going to do a requested task and had similar conversations about other memoranda. Ms Bentick was not able to identify any of the exhibits as being the memoranda that were handed to the applicant by her. In cross-examination she conceded that the memoranda which were handed to the applicant had gone to all of the staff. While the applicant was working on the Goodman Fielder job, she had a conversation during a lunch break in which the applicant advised her, "That she was planning on quitting after 3 weeks' holiday, because she would not trust anybody to care for her child." The applicant had also stressed her own importance to the organisation, saying: "it could not survive without her." EVIDENCE OF FORMER MANAGER OF THE RESPONDENT Mr Raymond Moxon, a former manager of the Forte Group, left the organisation in the middle part of 1996. He pointed out that from 10 March 1995 to 15 November 1995 he had been responsible for the employees and for the photography. He suggested the reason for this procedure was that Mr Fawzi thought he could talk to the staff better than Mr Fawzi. He had had regular dealings with the applicant, particularly when there were any problems with her performance. He did not recall how and when, or the exact details, but there were quite a number of times. Mr Moxon maintained that he would discuss with the applicant any deficiencies she had and that he would then write a letter. This contrasts with the letters dated 10 March 1995, 17 May 1995, 17 May 1995 and 22 June 1995, all signed by Mr Fawzi, which make no specific mention of who was involved in the meetings with the applicant. Also some letters do not carry a "cc" marking to Mr Moxon. He was asked to look at Exhibit A, being the series of warning letters, which he spent a considerable period of time examining. If he was familiar with the documents, as he said he was, he would not have required the time to examine them carefully. Mr Moxon testified he had also discussed the performance of the applicant with Fiona Sultana, who felt she was doing all the work, working until 11 pm or midnight. This claim is not supported by the evidence of Ms Sultana. His first knowledge of the incident was when Ms Bahgat told him that the applicant had resigned in a meeting with Mr Fawzi and that they needed someone quickly and quite early. Subsequently he had arranged a meeting at the office with the applicant after the termination. When the applicant arrived at the office, Mr Fawzi was in a meeting with other clients and they agreed to go to a nearby coffee shop. Mr Moxon said he put to the applicant the following: "How can we sort the problem out?" The applicant replied, "Yes, I've resigned but I hadn't meant to." Later on in the meeting he suggested that they might give her some freelance work at home. In justifying the offer of freelance work at home, Mr Moxon said that he felt that she was a good designer and therefore it was fine to give her work. This testimony should be contrasted with his other evidence in relation to the performance issues. Under cross-examination it was put to Mr Moxon that he had said words to this effect to the applicant: "Are you sure that you can cope with this job?" He denied saying these words but he pointed out that he was concerned about her leaving late at night. He denied specifically that he said words such as: "Are you able to cope with this job because of the pregnancy?" He denied that the question of pregnancy and her ability to cope with the work was ever raised in the coffee shop meeting. He recalled her telling him that she was desperate for her job as her wage was supporting her partner. He denied saying to the applicant words to this effect: " When my wife was pregnant she could find heaps of work." Mr Moxon admitted that both he and Mr Fawzi knew that the applicant had equipment at home but agreed that she would have to lease additional equipment if she was to work for their business. TERMINATION AT THE INITIATIVE OF THE EMPLOYER A key issue, upon which the applicant bears the onus of proof was whether there was a termination at the initiative of the employer. The respondent maintained quite strongly that the applicant resigned her employment and asserts that the termination of the employment of the applicant was not at its initiative. On 13 December 1996, the applicant arrived at work to find Mr. Fawzi in attendance. There are some differences between the parties as to how the termination occurred, however, when all the factors are taken into account, it seems that the disputed facts between the two persons is of little consequence. The direct evidence arises out of the context of the discussions between Mr Fawzi and the applicant. I have sufficiently outlined, in my earlier remarks, the way in which the termination occurred. Both parties were able to provide secondary evidence of a corroborating or supporting nature as to what had occurred in their private conversation. The applicant was supported by the evidence of a person to whom she spoke fairly briefly after leaving the office on that day. The version given by Mr Fawzi is supported by Ms Bentick and Mr Moxon in a secondary way. However, these recollections could just as easily have arisen out of a rationalisation of the events given by Mr Fawzi. There is a discrepancy between his oral evidence and the letter dated 14 December 1995. If he was sure that he accepted her resignation orally, as his evidence implies, there would be no need to write the confirmatory letter. In the absence of persons who might be, or be seen to be, independent witnesses, this is a difficult issue to resolve. On balance I am prepared to accept the applicant's denial that she used the words "I resign". Mr Fawzi, after hearing the rumours as to what the applicant was alleged to have said about her future with the respondent after the birth of her child, determined to construe the conversation which he had with the applicant as a resignation. This, no doubt, led to the confirmatory letter dated 14 December 1995 to the applicant. I am satisfied it was not the intention of the applicant to resign. On the balance of probabilities I am satisfied that there was clearly a termination at the initiative of the employer. I find that the letter of 14 December 1995 completed the termination of the applicant. ALLEGATION OF DISCRIMINATION ON GROUNDS OF PREGNANCY – WAS PREGNANCY AN ISSUE? There was also a claim made that the respondent terminated the employment of the applicant by reason of her pregnancy contrary to section 170DF(1)(f) of the Act. In Milica Stojanovic v The Commonwealth Club Limited (unreported, AI267R of 1994, 8 December 1995) Moore J outlines some of the issues involved in a claim that the applicant was dismissed from her employment on the grounds of her pregnancy. After discussing the concerns of one witness as to the advisability of the applicant continuing to perform the heavy duties of a supervisor at the club rather than an apparently less physically demanding job of a secretary. He observed: "I do not suggest that these concerns did not flow from views genuinely held and I have no doubt they reflect views shared by others in the Australian community. However the legal obligations of the Club derive from the Act. Parliament has made plain in s 170DF(1)(f) that pregnancy is not a reason justifying the termination of an employee's employment subject to the qualifying effect of s.170DF(2) which provides: "Subsection (1) does not prevent a matter referred to in paragraph (1)(f) from being a reason for terminating employment if the reason is based on the inherent requirements of the particular position" and s 170DF(3) concerning staff at religious institutions. Ľ However the relationship between s 170DE and s 170DF(1)(f) is a matter I need not consider further nor determine. That is because the views then held by at least two members of the committee about the likely effect of the applicant's pregnancy on her capacity to perform her duties were a matter of speculation and not based on any observed incapacity. Such views are symptomatic of the type of conduct to which s170DF(1)(f) was directed. More importantly they constitute evidence from which it might reasonably be inferred that at least one reason for the termination of the applicant's employment was her pregnancy and the belief that she would, while pregnant, not be able to perform her duties or, in doing so, would put at risk her health. A reason for the termination of the applicant's employment may have been a belief, genuinely held, that the applicant's behaviour had led to a significant and material deterioration of the relationship between her and Mr Stowell in particular. However there is evidence that points to a further reason being the applicant's pregnancy. The Club has not demonstrated it was not. I am not satisfied that the pregnancy of the applicant was not a reason for the termination of her employment. Accordingly, having regard to the combined effect of s 170DF(1)(f) and s 170EDA(2), I find the termination was in contravention of a provision of Division 3 of the Act." Mr Moxon testified that he and his female partner were persons who had experience of a difficult childbirth in their own personal circumstances. No male can ever personally experience the joys or, indeed, suffer the pain or sorrow or anguish associated with childbearing. It is possible for men to share the joy at the birth, or sorrow or suffering that occurs when there are miscarriages or complications at birth. Consequently, it is understandable that males can develop a sensitivity about the health and safety of the mother and child while the mother continues working in a stressful environment. The way for an employer to approach this matter is to be prepared to compromise on the high standards or demands that have previously been placed on the female employee who is having her first or subsequent children. It is conceded that such an employee may be reluctant on some occasions to discuss her health generally with her female workmates or to fully inform her employer about any complications or difficulties that she is facing during the time of pregnancy. The fact that the applicant was pregnant at the time throws an additional obligation on the employer to provide her with a safe system of work. Under the provisions of the Occupational Health and Safety Act 1983 in (NSW) an employer is obliged to: "ensure the health safety and welfare at work of all his employees". It should not be forgotten that an employer is under a general duty at common law to protect an employee from injury. In McLean v Tedman (1984) 56 ALR 359 at 364, Mason, Wilson, Brennan, and Dawson JJ in a joint judgment state: 'The employers obligation is not merely to provide a safe system of work, it is an obligation to establish, maintain and enforce such a system. Accident prevention is unquestionably one of the modern responsibilities of the employer' (Fleming, Law of Torts, Law Book Co, 6th ed, 1983 (pages 480-1)). In deciding whether an employer has discharged his common law obligations to his employees the court must take account of the power of the employer to prescribe, warn, command and enforce obedience to his commands. These obligations are wide enough to ensure that an employer will endeavour to reduce the levels of stress for women who are pregnant and are endeavouring to continue the relatively difficult task of working until shortly before their confinement. I find that the Managing Director of the Respondent was in breach of these obligations by the way he conducted himself regarding the necessity to complete the Goodman-Fielder job. I have drawn the conclusion that one of the reasons for the employment of the applicant being brought to an end was concern by senior managers of the respondent about the effect her pregnancy was having on her ability to cope under work imposed stress. This is demonstrated by the attempts of Mr Fawzi and Mr Moxon to negotiate an arrangement whereby the applicant could continue to work for the employer but from her home, where the demands placed on her by the surrounding home/office environment would not be so high. Mr Fawzi in his evidence quite astutely and definitively made no reference to pregnancy as being a factor in his decision. The crucial difficulty for the respondent on the question of pregnancy arose out of the testimony of Mr Moxon where he acknowledged having discussed the issue with the applicant . It follows from this that the prohibition contained in s170DF(1)(f) was contravened by the respondent, there being a causal nexus between the termination of the applicant's employment and her pregnancy. In this matter I am satisfied that Mr Fawzi improperly took the pregnancy of the applicant into account in his consideration of the difficulties which had arisen between them over the Goodman Fielder job. I do not suggest that this was done with any malicious intention or improper motives except that it would seem that Mr Fawzi has failed to put in place methods which would not impose added strain on her during her pregnancy. In Johns v Gunns Ltd (1995) 60 IR 258, Northrop J examined the scope of the operation of section 170DF(1)(f) and concluded: "The respondent has to establish a negative, namely that the reasons for dismissal did not include the reason that Mr Johns was temporarily absent from work because of injury. A mere denial may not be sufficient. All the facts and circumstances of the case have to be considered." On this issue Northrop J also cites with approval a passage appearing at page 268 in Heidt v Chrysler Australia Ltd (1976) 26 FLR 257 which he observes has equal application where s170DF(1)(a) of the Act applies: "The provisions of s.5(4) of the Act cast an onus of disproving facts, namely, that the reason for the defendant's action was not actuated by the reason alleged in the charge. It has been held that a defendant need not prove the reason why he dismissed an employee: Atkins v Kirstall-Repco Pty Ltd (1957) 3 FLR 439. The mere proof of a reason for dismissal, other than the reason alleged in the charge, does not necessarily negate the reason alleged in the charge. A mere denial of the reason alleged in the charge may not be sufficient to satisfy the onus cast upon the defendant. All the facts and circumstances leading up to the dismissal must be considered, including any reason expressed at the time of the dismissal, as well as any denial of the reason alleged in the charge." For similar reasons, I do not accept the denials of Mr Fawzi or Mr Moxon that her pregnancy was not a factor in the decision that was taken to terminate her employment.. Accordingly, this decision contravened s170DF(1)(f) of the Act on the ground of pregnancy. There will be for a declaration that the respondent contravened s 170DF(1)(f) of the Act on the grounds of pregnancy. WAS THERE A VALID REASON FOR TERMINATION? It was also alleged that the respondent terminated the applicant's employment without a valid reason connected with the applicant's capacity or conduct or the operational requirements of the respondent's business within the meaning and in contravention of section 170DE(1) of the Act. Under the provisions of the Act, the respondent carries the burden of showing that at termination it had a valid reason or reasons for bringing the employment to an end summarily. In his decision in Selvachandran v Peteron Plastics Pty Ltd (1995) 62 IR 371, Northrop J describes the meaning of this phrase in the following way: "Section 170DE(1) refers to "a valid reason, or valid reasons", but the Act does not give a meaning to those phrases or the adjective "valid". A reference to dictionaries shows that the word "valid" has a number of different meanings depending on the context in which it is used. In the Shorter Oxford Dictionary, the relevant meaning given is: "2. Of an argument, assertion, objection, etc.; well founded and applicable, sound, defensible: Effective, having some force, pertinency, or value." In the Macquarie Dictionary the relevant meaning is "sound, just, or well founded; a valid reason." In its context in s170DE(1), the adjective "valid" should be given the meaning of sound, defensible or well founded. A reason which is capricious, fanciful, spiteful or prejudiced could never be a valid reason for the purposes of s170DE(1). At the same time the reason must be valid in the context of the employee's capacity or conduct or based upon the operational requirements of the employer's business. Further, in considering whether a reason is valid, it must be remembered that the requirement applies in the practical sphere of the relationship between an employer and an employee where each has rights and privileges and duties and obligations conferred and imposed on them. The provisions must "be applied in a practical, commonsense way to ensure that" the employer and employee are each treated fairly, see what was said by Wilcox CJ in Gibson v Bosmac Pty Ltd (1995) 60 IR 1, when considering the construction and application of s170DC." There are no apparent reasons which justify the respondent dismissing the applicant. There are too many inconsistencies in the case of the respondent. For example, there is the evidence of Ms Sultana that the work of the applicant was of a high standard, this coupled with the admission of Mr Moxon that the applicant was capable of good work does not build a well founded case. The initial preparedness of Mr Fawzi and Mr Moxon to have the applicant work at home for the business also contradicts the poor performance claim. The evidence in this case leads me to the conclusion that there was not well founded or just grounds for the decision to terminate the employment of the applicant. There was not a valid reason to terminate the employment of the applicant. SECTION 170DC: EMPLOYEE OPPORTUNITY TO RESPOND Section 170DC is in the following terms: "An employer must not terminate an employee's employment for reasons related to the employer's conduct or performance unless the employee (a) has been given the opportunity to defend himself or herself against the allegations made or (b) the employer could not reasonably be expected to give the employee that opportunity." In this matter Section 170DC(b) certainly does not need to be considered as there is no evidence that the applicant would not act reasonably in accepting her dismissal. The applicant was not given the opportunity to defend herself against the allegations of poor performance. In the matter of Perrin v Des Taylor Pty Limited (1994) 58 IR 254 at 256-7, Moore J said the following about the purpose of section 170DC: "Its purpose is at least twofold. It is to give the employee the opportunity to demonstrate that the allegations have no foundation in fact or they should not be viewed as reflecting on the employee's capacity. In the present case, the applicant may have been able to show that the complaints about slow delivery parts had no factual foundation or that there was an explanation for their slow delivery that did not relate to any want of effort on his behalf. A second purpose of s170DC is that an employee with whom an allegation has been raised may be able to persuade the employer that, while the allegation is of substance, there are factors that should persuade the employer not to terminate the employment. They may be extenuating personal circumstances or they may involve undertakings about future conduct." The respondent breached section 170DC of the Act, in that none of the allegations of poor performance placed before the court were ever properly raised with the applicant. For whatever reason, there is no clear evidence that the documents which were produced in court were ever put to the applicant other than in a general way as described by Ms Sultana. Mr Moxon cannot recall the details. Miss Bentick testified she delivered unopened envelopes and Ms Baghat could not be specific about which documents she delivered to the applicant. This is most unsatisfactory when the simple device of asking the applicant to acknowledge receipt of adverse or positive comments is an accepted personnel practice. This was done for her letter of engagement dated 11 January 1995 (Exhibit 18). There was no cogent evidence of any proper attempt to give the applicant an opportunity to defend herself against the allegations of poor performance prior to her termination on 13 December 1995 or 14 December 1995. Nor was there any opportunity given to her to make representations as to additional factors to be taken into account on her behalf. In those circumstances I propose to make a finding against the respondent that there was a contravention of section 170DC. IS REINSTATEMENT IMPRACTICABLE? I am required by the provisions of the legislation to determine the impracticability of reinstatement. Some early views were expressed on this issue in Liddell v Lembke (1994-95) 1 IRCR 466. Based on the discussion on this issue in that case, I am satisfied that I have only a limited discretion not to reinstate the applicant. Nevertheless I am obliged by Section 170EE(1) to take into account all the circumstances of the case. It should not be overlooked that Section 170EE(1) allows the Court to take into account the legitimate circumstances of the applicant as well as that of the employer. My assessment of the key witnesses in this case leads me to conclude that a proper working relationship cannot be re-established. Nevertheless, I acknowledge that the finding which I have made on the allegation of discrimination on the ground of pregnancy may in some cases require a declaration reinstating the applicant. However, I have taken into account the observations of Kirby J at p 70 in Qantas Airways Limited v Christie 1998 HCA 18, 19 March 1998: "But if reinstatement were not ordered, questions of compensation and damages would remain. By such means a court could vindicate the provisions of the Act although in circumstances which took into account the mitigating factors, including some of those upon which Qantas relied." I therefore find that it is impracticable to reinstate the applicant in any position with the respondent DISTRESS This termination had a harsh effect on the applicant. Given her prior good conduct, this was an action which was open to all types of adverse interpretations in the graphic design industry in which she was engaged. I am satisfied that the applicant suffered distress of the nature outlined in Burazin v The Blacktown City Guardian Pty Ltd (IRCA Full Court, 13 December 1996, unreported, decision no. 606/96). In that case the full court suggested that in making an assessment of damages caused by stress suffered in a termination of employment restraint must be exercised in the level of damages. The fact that the applicant was pregnant was a contributing stressful factor. Given the position with unemployment generally in this industry. I am satisfied that her termination did and will have a continuing adverse impact on her. Those circumstances justify taking that damage into account. Her case is supported by the evidence given by her gynaecologist. In this matter, I assess damages suffered through distress caused by the method of termination at $5,000. That assessment is based upon my observations of the applicant in giving her evidence, her description of how she felt at the time of her termination and the reaction which she illustrated in giving her evidence. This was a young woman with good prospects of a future career in graphic design. On her account she had invested a large sum of money, thirty thousand dollars ($30,000) in equipping herself for the task. The applicant worked in a relatively confined industry where the circumstances of her dismissal would quickly become common knowledge. NON ECONOMIC LOSS CAUSED BY UNLAWFUL TERMINATION ON GROUNDS OF PREGNANCY In order for there to be a connection between a breach of duty and for damages to follow, it is necessary to show that the breach relied upon was a cause of the loss suffered. The test as to whether the act or admission was a cause of damage is one of common sense. The respondent was obliged to ensure her health safety and welfare at work. In this case, the Respondent had a duty of care to its employee (the applicant) to protect her from injury. This is a clear case of a breach of the duty of care to protect an employee from injury. There is extensive discussion of the assessment of non economic loss in sexual harassment cases such as: (1) Bennett & Anor v Everitt & Anor (1988) EOC 92-244 (2) Tammy Jackson v Riste Ilievskil (Innes, Com., Human Rights and Equal Opportunity Commission, 10 February 1997, unreported, decision no. H96/85 (3) Lorelle Dippert v Cliff Luxford and Vrachnas Betabake Pty Ltd (1996) EOC 92-828 (4) Hall, Oliver and Reid v Sheiban (1989) 85 ALR 503. Based on an examination of these cases it is reasonable to conclude that a range exists from $6,000 to $9,000 for such damages. Although in Hall the damages claim was referred back for an assessment by the decision maker. I am satisfied, having reviewed the above cases, that an assessment of $7,000 for the damage suffered through the failure of the respondent to protect the applicant from injury caused by the remarks made about her pregnancy is justified. In making these findings, I am not suggesting that Mr Moxon or Mr Fawzi were vindictive towards the applicant because of her pregnancy. There was genuine concern on their behalf as to whether she could stand the pace whilst pregnant. However as a pregnant woman she would have more difficulty than most females in gaining other employment of the same standard. Other more personal issues include: the injury caused to her by the impact on her family life during her pregnancy. The fact that commitments had been made for her wedding which were disrupted. Her expectation of additional work as is shown by her purchase of additional computer equipment, which was not fulfilled. In my view, these issues justify a reasonable assessment of damages. The assessment I make taking into account all of these factors is $7,000. COMPENSATION Ordinarily, the calculation of the payment of remuneration lost by the employee commences from the date of termination, which was 13 December 1995. The weekly Gross Taxable Income being paid to the applicant was $481 with the annual salary being agreed at $25,000. In the circumstances, the economic loss should be assessed over the period during which she was without work. The applicant was unemployed from 13 December 1995 until 22 February 1996. The applicant then took a short period of employment. The applicant had also applied for a number of jobs but was not successful during that period. Between 23 February 1996 and 18 March 1996 the applicant received $693.59 ($700) from DDK Pty Limited. During this period she was receiving unemployment benefits at varying rates from 7 February 1996 to 4 June 1996. It appears that she received the maternity allowance from 1 May 1996. The advice of the doctor was that she could have worked up until mid-May 1996. If I adopt his opinion, this is a period of 22 weeks or $10,582. The applicant also attempted to continue with her design career by conducting her own business between August and October 1996. I am satisfied that the applicant earnt less in this enterprise than when she was working for the respondent. In May v Lilyvale Hotel Pty Ltd (1995) 68 IR 112, Wilcox CJ, made an assessment of the future economic losses of the applicant based on the difference in terms of the salary which the applicant was likely to receive and that which she would have received in her previous position in her former employment. The calculation of that amount of damages was in excess of the maximum amount of compensation allowed under the legislation. Accordingly the maximum amount was allowed. If the applicant had been supported by proper training, her income might have eventually exceeded the figure that she was earning. Perhaps a bonus or commission system would have been introduced as an incentive for her. However, there was no evidence tendered which would enable me to make that prediction so, accordingly, I have not taken that prospect into account. In the present case there was evidence as to future losses which was led from the applicant. However, I am not able to be satisfied that those losses had a causal connection to the injury caused to the applicant by the loss of her employment. It is possible that some of those losses could be attributable to her desire to spend as much time as possible with her twins at such an early age. It may be that additional evidence could be led from the applicant on this point. However, there is no evidence on which I can rely to make such a prediction. In the circumstances I am limited to assessment of the damages based on the evidence from the applicant for the period she was unemployed, together with the amount for distress and for non-economic loss arising from unlawful termination of employment, all of which I have assessed earlier. The calculation of compensation payable is: Economic loss $10,582.00 Damages for distress $ 5,000.00 Non-economic loss $ 7,000.00 $22,582.00 less Earnings during period 23 February 1996 and 2 March 1996 $ 700.00 $21,8882.00 I assess damages in this matter at $21,882. This exceeds the maximum amount of compensation allowed of $12,500. It is therefore appropriate that there be an award of $12,500. FAIR TRADING ACT CLAIM A claim was said to arise under ss 42 and 47 of the Fair Trading Act 1987 (NSW) from the representations made to the applicant in relation to the possibility of future work being allocated to her. These representations arose well after the termination occurred. I am not satisfied that they arose out of the same sub-stratum of facts as to bring them within the associated jurisdiction of the court under s 430 of the Act. Moreover, the evidence of the applicant as to loss and/or damage on this point is not conclusive. Accordingly, there will be no finding in favour of the applicant on this part of the claim. There will be judgment and orders accordingly. I certify that this and the preceding ____ pages are a true copy of the reasons for decision of Judicial Registrar McIlwaine. Associate: Dated: APPEARANCES Counsel for the applicant Mr M J Heath Solicitor for the applicant: Shailer Dawson Hickey Counsel for the respondent Mr R Moore Solicitors for the respondent: Brown & Partners Dates of hearing: 21 & 22/10/96 & 21/3/97