[2015] FWC 4329 |
FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.365—Application to deal with contraventions involving dismissal (consent arbitration).
Lynn Masson-Forbes
v
Gaetjens Real Estate Pty Ltd
(C2015/1507)
COMMISSIONER WILSON |
MELBOURNE, 26 JUNE 2015 |
Application to deal with a general protections dismissal dispute by arbitration.
[1] Until 1 December 2014, Lynne Masson-Forbes was employed by Gaetjens Real Estate Pty Ltd, an Adelaide-based real estate company, to be its General Manager Retirement Services.
[2] In the early part of 2014, the relationship between Ms Masson-Forbes and Gaetjens Real Estate (referred to as “Gaetjens”) started to change. Part of this change included the expectations the company had about Ms Masson-Forbes’ work performance. Near to the same time the former Chairman of Gaetjens, Mr Ken Gaetjens, moved out of the business as a result of ill health and his role was assumed by his son, Mr Michael Gaetjens.
[3] In May 2014, Ms Masson-Forbes became ill and she was away from work for several months until November 2014. Not long after returning to work, she was provided with a performance warning, and on 24 November 2014, Ms Masson-Forbes resigned from employment with Gaetjens, setting out her reasons for doing so in an email indicating that her resignation was to take effect on 30 January 2015. Mr Michael Gaetjens accepted the resignation, but in doing so substituted 1 December 2014 as the date on which employment would end.
[4] It is argued that Ms Masson-Forbes had no choice other than to tender her resignation and that the action of Gaetjens in bringing forward the date on which employment ended was in itself a dismissal.
[5] On 5 December 2014 Ms Masson-Forbes made a general protections application to the Fair Work Commission pursuant to the provisions of s.365 of the Fair Work Act 2009 (the Act) seeking the Commission deal with alleged contraventions of the Act involving a dismissal. 1
[6] The matter proceeded to a conference before Commissioner Hampton on 20 January 2015, the conclusion of which was the Commissioner certifying pursuant to s.368 of the Act that he was satisfied that all reasonable attempts to resolve the dispute had been, or were likely to be, unsuccessful.
[7] On 2 February 2015, the parties submitted their consent to the Fair Work Commission dealing with the dispute by arbitration, pursuant to the provisions of s.369 of the Act.
[8] A hearing of the matter was conducted by me on 2 April 2015. In the course the hearing Mr Ralph Clarke appeared as a representative of Ms Masson-Forbes. Mr Clarke provides industrial relations services to the Registered Real Estate Salesperson’s Association of South Australia (RESA), a transitionally recognised association for the purposes of the Act. Ms Masson-Forbes is the President of the Association. For the reason that I was satisfied Mr Clarke was providing services to Ms Masson-Forbes through her membership of the Association and not through a separate fee to Ms Masson-Forbes, it was not necessary for me to consider a grant of permission for his appearance pursuant to s.596 of the Act.
[9] Michael Gaetjens, a Director of Gaetjens, appeared with his daughter, Madeleine Gaetjens, for the Respondent.
[10] The allegations made by Ms Masson-Forbes which require resolution in this matter include;
● That she was subjected to adverse action within the meaning of s.342 of the Act by being dismissed. She was either dismissed through the means of a “forced resignation” on her part when she resigned from employment with Gaetjens on 24 November 2014; or in the alternative, that Gaetjens dismissed her from employment when it “brought forward” the end of her employment to 1 December 2014 from the date that she had given as being her last day, which was 30 January 2015;
● That the adverse action taken by Gaetjens was in contravention of the Act because it was taken for the reason, or reasons that include either of the following;
[11] Consideration of these matters by the Fair Work Commission requires application of the employer onus set out in s.361 of the Act that actions taken are presumed to have been taken for the alleged reason unless proven otherwise.
[12] The Full Bench has considered the applicable provisions, together with the application of the employer onus, in the matter of Keep v Performance Automobiles Pty Ltd, 2 finding as follows;
“(ii) ‘Adverse Action’ and the FW Act
[7] Part 3-1 of the FW Act prohibits an employer from taking adverse action against an employee because, relevantly, that employee exercises a workplace right.
[8] Section 340 is one of the central provisions. It states, in part:
“(1) A person must not take adverse action against another person:
(a) because the other person:
... (ii) has ... exercised a workplace right; ...” [emphasis added]
[9] An employer contravenes s.340 if it can be said that the exercise by the employee of a workplace right was a ‘substantial and operative factor’ in the employer’s reasons for taking the action which constitutes ‘adverse action’ within the meaning of s.342.
[10] Section 341 sets out the meaning of a workplace right, relevantly:
“(1) A person has a workplace right if the person:
... (b) is able to initiate, or participate in, a process or proceedings under a workplace law or workplace instrument.”
[11] The table in s.342 sets out the circumstances in which a person takes ‘adverse action’ against another person. Relevantly, adverse action is taken by an employer against an employee if the employer:
(a) dismisses the employee; or
(b) injures the employee in his or her employment; or
(c) alters the position of the employee to the employee’s prejudice; or
(d) discriminates between the employee and other employees of the employer.
[12] Sections 360 and 361, in Div 7 of Pt 3-1 of the FW Act, make it easier than it otherwise would be for an employee to establish a contravention of the protective provisions in Pt 3-1, including s.340. Section 360 provides that, for the purposes of Pt 3-1, ‘a person takes action for a particular reason if the reasons for the action include that reason’. Section 361(1), casts an onus of proof on an employer to show that it did not take action for a prohibited reason, it says:
“If:
(a) in an application in relation to a contravention of this Part, it is alleged that a person took ... action for a particular reason ...; and
(b) taking that action for that reason ... would constitute a contravention of this Part;
it is presumed, in proceedings arising from the application, that the action was ... taken for that reason or with that intent, unless the person proves otherwise.”
[13] It is important to note that s.361 does not obviate the need for an applicant to prove the existence of the objective facts which are said to provide the basis of the respondent’s conduct. The onus does not shift from the applicant to the respondent until the applicant establishes the elements of each of the general protections upon which it seeks to rely. It is not enough for the applicant to merely make assertions regarding these elements, they must be determined objectively.
[14] The task of the FWC in a consent arbitration proceeding such as this is to determine three factual questions:
(i) Was the employee exercising a workplace right, within the meaning of s.341?
(ii) Did the employer take ‘adverse action’ against the employee, within the meaning of s.342?
(iii) Did the employer take the adverse action against the employee because of a prohibited reason, or reasons which included that reason?
[15] In the context of this case the applicant bears the onus of establishing that he had exercised a workplace right at the relevant time and that adverse action was taken against him. If so established, the respondent then bears the onus of establishing that the adverse action was not taken because Mr Keep had exercised a workplace right.” 3
[13] Ms Masson-Forbes commenced employment with Gaetjens Real Estate in November 2010. 4 Ms Masson-Forbes describes this initial employment as “General Manager Retirement Services5 whereas Michael Gaetjens refers to it as a “Property Sales Representative”6 and the signed Employment Agreement states the position as Manager Retirement Services.7 Her original salary was $50,000 with superannuation paid in addition,8 with access to a commission structure and payment of a motor vehicle allowance. The signed Employment Agreement acknowledges that Ms Masson-Forbes’ employment was also subject to the Real Estate Award 2010.
[14] Ms Masson-Forbes’ employment with Gaetjens was subject to several changes through the period of her employment and, in May 2012, her position was changed to that of “CEOs Seniors Card Real Estate SA”, and later in January 2013, her position became that of “General Manager Sales and Corporate Development”. Her essential terms and periods of employment, indicated in the Respondent’s outline of submissions include the following; 9
● Property Sales Representative - 22 November 2010 - 3 May 2012 - $50,000 per annum plus 30% commission on sales;
● CEO Seniors Card Real Estate SA - 3 May 2012 - 17 January 2013 - $50,000 per annum plus 30% commission on sales;
● General Manager Sales & Corporate Development - from 17 January 2013 - $75,000 per annum plus 15% commission on sales.
[15] Until 2014, Ms Masson-Forbes worked closely with Mr Ken Gaetjens who at the time was Chairman of the firm. Her evidence about her role and the reporting relationships within the firm include;
“I was employed by the Chairman of Gaetjens, Mr Ken Gaetjens, and professionally responsible to Mr Trevor Elburn, the Managing Director of the Seniors' program. At the time I advised Ken and Trevor that I was President of the Registered Real Estate Sales Persons Association, and would be required from time to time attend meetings locally and occasionally interstate. I was assured that this would be supported by Gaetjens Real Estate. Michael Gaetjens, Ken's son, also working in the company, had no involvement in my appointment, nor the job description and the day to day running of this division.
It was Ken Gaetjens who recognised that the future of the company lay in the development of a new stream of income through a focus on the seniors market and ownership of the Australian rights to the seniors' real estate training program.
In May 2012, due to the success of my work in implementing the program, I was appointed as CEO for Seniors Card Real Estate SA.” 10
[16] The performance measures on Ms Masson-Forbes in May 2012 included that she would be required to complete 12 settled sales over the 12 months commencing on 1 May 2012. After 12 settled sales had been achieved she would be eligible to receive a sales commission.
[17] When Ms Masson-Forbes position was changed in January 2013, Mr Ken Gaetjens provided her with an updated letter of offer, which was signed by Ms Masson-Forbes. The letter provides as follows;
Dear Lynn,
RE: EMPLOYMENT AGREEMENT
This letter is your latest employment terms and conditions agreement and is to be read in conjunction with your employment agreement which was signed on 3rd May 2012 and it will form an addendum to your existing employment agreement.
This addendum win also prevail over any inconsistent terms and conditions in your current employment agreement.
The following new terms and conditions are agreed.
1. From February 1st 2013, your remuneration will be $75,000 pa - non debitable, paid fortnightly.
2. You are to personally settle 18 properties per year as per the Seniors Real Estate Specialists (SA) - budget attached.
3. The additional remuneration to the above will be on an 85/15% basis for the listed, sold and settled properties and, 70/30% basis for properties settled by you above 18 properties pa.
4. Your Motor Vehicle, Mobile Phone and Superannuation will be paid to you as per normal.
6. Upon achieving on a pro-rata basis (From 1st February 2013 to 1st February 2014) the attached budget, you will be provided with a study trip to the value of $5,000 to attend the 2013 NAR conference in San Francisco USA in November 2013 and which time to attend, will be provided in addition to your normal award leave provisions.
7. If the total net budget is exceeded by 7.5%:- i.e. a net return and accumulated surplus to the company of $242,056 - plus an additional 7 .5%, you will be granted an additional $5,000 for further study costs whilst in the US NAR SRES conference. Please note, the amount separately or collectively must be taken simultaneously together and cannot be provided in cash. They must be work related to SRES activity.
8. You will report to Mr Ken Gaetjens administratively and Mr Trevor Elburn, professionally during the course of this agreement.
9. All of the above will be reviewed again in January 2014.
In summary, the SCRES concept and implementation represents an exciting opportunity for you to really advance your career in the growing and challenge Seniors arena.
Yours faithfully
KEN GAETJENS REAL ESTATE PTY LTD
KENNETH A GAETJENS
Managing Director” 11
[18] The evidence given in this matter indicates that the reference in the various materials to a sales target of either “12 settled sales” or “personally settle 18 properties per year” are to be read as a reference to properties that have actually completed the full sales process to the point of full execution of the contract of sale, rather than merely as a reference to those which had been subject to offer and acceptance but which did not, for some reason, eventuate in a full execution of the contract of sale.
[19] Ms Masson-Forbes’ duties in early 2013 involved her marketing the firm as a potential sales agent for older clients who were contemplating selling their property as part of an overall retirement plan, including perhaps to move to retirement village accommodation. As the more senior of several other staff, Ms Masson-Forbes’ duties would also include receiving or developing sales leads and then providing the leads to other staff for finalisation. Ms Masson-Forbes evidence is that she understood the expectations upon her had changed appreciably in early 2013;
“4. At the beginning of 2013, the business name was changed to Seniors Real Estate Specialists SA, (SRES) and my employment agreement was updated with an increase in salary from $50,000 per annum to $75,000 pa, based on their valuing of the work I had done to date, and recognition of an increased work load and expectations. (Addendum B)
New work tasks included:
● representing SRES on the Property Council (Retirement Living Division), and attending all meetings of the committee,
● working directly with the RAA, with whom I had created a strategic alliance, which included attending many of their promotional activities and writing seniors' related articles for their website,
● liaising directly with COTA, (Council on the Ageing), as sponsor and supporter.
At the same time the 2013 budget increased my sales expectations by 50%, with a reduction in commission per sale, (to 15%), but it was agreed, in my presence, between Ken Gaetjens and Trevor Elburn that my individual sales budget was not significant as long as the overall sales targets were being met.
This 2013 budget was produced by Trevor Elburn, designed specifically to show Ken Gaetjens that the SRES program could pay its own way. He told me privately that this was because Ken was coming under pressure from his son Michael and other family members, to stop funding the program. Over the course of 2013, it became increasingly apparent that Michael was not interested in the new direction and was constantly advising his father to stop the investment.
Trevor frequently told me that he had spent the first 2 hours of the day re-assuring Ken about the potential of the program after he had been strongly pressured in the evenings by Michael to pull out. (Michael and his daughter Madi live in Ken's house). Trevor would then tell me to ignore any negativity from Michael and keep my focus on the bigger picture, the SRES development.
At this time, my title was changed to General Manager, Sales and Corporate Development, as it was considered that Michael should have the CEO title.” 12
[20] By early 2014, some difficulties were emerging in the business plan that had been set by Gaetjens. Not only had pressures in the market emerged, but also planned advertising and other marketing expenditure had not been undertaken. Ms Masson-Forbes’ evidence acknowledges the extent of the problems at that point;
“5. During 2013, Trevor Elburn and Ken Gaetjens were successful in securing the Australian rights to an American based seniors real estate training program, SRES International. I was advised that my role would become a national one, hence it was imperative that I become directly involved in the creation of the Australian version of the training program. This was a significant addition to my existing work load. It was indicated that I would become National Training Manager. This required a great deal more of my time, most of which I needed to do after hours. Michael was rarely involved in these discussions and would have been totally unaware of the significance and time required for this new process.
As the year progressed, little of the television advertising and marketing budgeted expenditure occurred, and it was explained to me that this was due to family resistance to further investment into the SRES program. As a result sales were slow and well below budget. This was also exacerbated by a depressed market.
This was symptomatic of the pressure and contradictory direction I was working under, resulting in me trying to meet Michael's requirements for listing and selling during the day and open inspections on weekends, and working on extra SRES requirements at night and weekends. Trevor's demands during the day were also significant and Madi Gaetjens, Michael's daughter also working in the business, was frequently a witness to his demands for my attention and assistance at times when I was supposed to be trying to get listings, and the need to maintain connections with people both interstate and overseas as well as continuing to expand our strategic affiances.
From that time on, the pressure particularly on me was to achieve more sales, presumably because I was on a high contracted salary, unlike the sales staff. I was also keeping up with all the SRES development activities, and the workload was significantly increasing relating to the planned national roll out. Ken Gaetjens offered that he and Trevor, in particular, would relieve me from some of my duties to free up more time for listing and selling. On many occasions I requested he do so, and each time he replied by telling me only I knew how to do the tasks. I explained this meant doing more after hour's work which was not recognised within the company.” 13
[21] In late January 2014, Ms Masson-Forbes attended a meeting with Mr Ken Gaetjens and Mr Elburn. Ms Masson-Forbes’ evidence about that meeting, on 28 January 2014, which is the only evidence on this subject before the Commission, refers to Mr Gaetjens stressing that the company needed to achieve more sales income and there was discussion about the ways that could occur. On 18 February 2014, Mr Ken Gaetjens wrote to Ms Masson-Forbes reinforcing the matters that had been discussed in January;
“Dear Lynn,
Confirming our discussion of Thursday 28th January I reiterate my concerns about the budget figures set in January 2013. The budget showed 16 sales at an average commission of $8,500 estimated gross income of $136,000 whereas the sales settled during that period by you produced a gross commission of $23,421.00.
I also discussed the matter of relieving you of some of your committee duties so that you could concentrate on sales. Your comment was that you do not spend a great deal of time on these matters as they have settled down over the years.
This is ok as long as you produce the required budget target.
For the year ending 31st December 2014 we require the budget figures to be set with 16 sales P.C.Y. but we would like this figure to be 20 sales if possible to endeavour to make up some of the loss of last year.” 14
[22] Not long after this communication, Mr Ken Gaetjens became seriously ill, as a result of a stroke, and ceased to have an active involvement in the business. His role in this regard was taken over by his son, Mr Michael Gaetjens. The evidence is that the expectations on Ms Masson-Forbes from that point forward changed, as did Gaetjens’ overall business strategy.
[23] On 28 March 2014 Mr Michael Gaetjens wrote to a number staff, including Ms Masson-Forbes, advising them that he wished to have a discussion with them about their budgets and performance. A meeting was set with Ms Masson-Forbes in early April 2014. The product of that meeting included a communication from Mr Gaetjens to Ms Masson-Forbes on 17 April 2014 which included the following;
“Hi Lynn
Further to our Budgets & Performance meeting last week:
Your budget was set last year and agreed to at two settled sales per month
In the meeting we asked if you required any assistance with Appraisals or listings and you were satisfied with what was available in the office.
There were no concerns about how things were done in the office and that you could handle somewhere between 6-8 listings at a time.” 15
[24] After recording the results achieved by Ms Masson-Forbes in the 2014 period to date, the same email then states the following, as well as specifying the metropolitan regions she would have responsibility for;
“Your budget to the 31st March was 6 settled sales
So far this year your settled sales were 2
What can we do to help you get on track with the budget”
[25] Ms Masson-Forbes disputes that there was ever agreement that her sales expectations were “agreed to at 2 settled sales per month” and instead argues that that amount was imposed upon her by Mr Michael Gaetjens.
[26] In late May 2014, a further meeting with Ms Masson-Forbes was requested by Mr Gaetjens, with his witness statement indicating following;
“23rd May 2014- requested a meeting, the meeting that was planned for 26th May 2014 to discuss her performance since that written warning the applicant never showed up to. The applicant was to receiver her second official warning due to her lack of improvement since her last official warning in February 2014.” 16
[27] Ms Masson-Forbes’ evidence is that she was notified of this request after-hours, the request being received on Friday, 23 May for a meeting to be held on the following Monday, 26 May and that the meeting would be for the purposes of Mr Gaetjens and his daughter, Ms Madeleine Gaetjens, conducting a performance review about her. She became overwhelmed and distressed and required hospitalisation. The way in which this occurred meant that she did not meet with Mr Gaetjens as had been scheduled and she did not herself tell Mr Gaetjens that she could not attend the meeting. However, the circumstances laid out in her witness statement would indicate that Mr Gaetjens was aware on the day that she required hospitalisation, having been one of the people who provided assistance to her, at least over the telephone. 17 The performance discussion that Mr Gaetjens had sought to have with Ms Masson-Forbes did not then take place and in particular what he refers to as “her second official warning” was not given. Mr Gaetjens is critical that Ms Masson-Forbes did not show up to the meeting that had been scheduled. On the other hand the evidence includes that Mr Elburn, Ms Masson-Forbes’ supervisor at the time, was aware of her absence by at least the following day. On 27 May he responded to an email from Ms Masson-Forbes from the same day about her absence to the effect that “we were all concerned” and that she should “have a good restful and enjoyable break”.18
[28] The following day Ms Masson-Forbes left the hospital and progressed on a prearranged period of annual leave. Her departure from hospital was apparently against medical advice that she received. Ms Masson-Forbes’ evidence through her witness statement on this subject includes;
“On Tuesday, 27th May, 2014, against medical advice, I checked myself out of hospital in order to catch a plane for a planned and approved 10 day leave. I took this action because I knew that for 10 days I would be in the constant company of a good friend, rather than at home with no family support available.
On my return, I was examined by my family doctor and a consultant psychologist and based on the Medical Report of my hospitalisation and their independent assessment they both concluded that my actions were a result of extreme work related stress and recommended that under the circumstances it would be unwise for me to return to work at that time. An extended sick leave certificate was given.
During this time off, on the advice of my industrial officer, I sought legal advice on my position as an employee working in a seriously stressful environment. Due to my belief that I was no longer welcome at Gaetjens my legal advisor attempted to achieve a satisfactory solution to my circumstances. This was not successful and I decided I would attempt to return to work in the hope that things would be better. Michael Gaetjens was advised that I would be returning to work on Monday, 4th August, 2014.
Before recommencing work I saw my doctor again and, based on her examination she strongly advised that I not return to that work environment. She urged me to pursue a Workcover Claim and said that she would be very willing to provide a report supporting my claim. On Friday, l st August, 2014, I emailed Michael Gaetjens that I would not be returning on Monday, 4th August, 2014, and was commencing a Workcover claim.
It was my belief that Workcover could provide me with more time to recover my health and confidence, and could assist a constructive return to work. (Addendum D)
Prior to this communication there was no contact made by either Michael or Trevor regarding my welfare and intentions. While my circumstances were not determined, my name and photo was removed from the "our team" page of the Gaetjens website. During the period of my sick leave, that part of the website was updated twice, but my name was not restored, even though it was later claimed to be an oversight. I was also told privately by some of my clients for whom I had property listings, that Gaetjens staff had told them that I would not be returning to Gaetjens. I took it as a pretty clear indication that they no longer considered to me be a member of their team, or wished me to return.” 19
[29] Subsequently Ms Masson-Forbes’ workers compensation claim was rejected and at about the same time the medical advice she received was not to return to work at that time. In about August 2014 she learned that Mr Elburn was no longer with the company. 20 She sought a review of the workers compensation decision through what she refers to as “an ombudsman investigation” which I take to be a reference to an approach to the WorkCover Ombudsman as provided for under the SA workers compensation system, and then decided to “return to work in the hope that I could successfully establish the SRES training program”21 and on Monday, 3 November 2014 advised Mr Michael Gaetjens that she proposed to return to work on Friday, 7 November, 2014.22 Upon returning to work with Gaetjens, Ms Masson-Forbes states;
“On my return to work, I asked Michael about Trevor Elburn and his response was, "I got rid of him". In a later conversation with one of the sales persons I was told that Michael was convinced that the pressure Trevor applied to Ken to keep funding the SRES program was the direct cause of his stroke.
I was advised by Michael that SRES was not being focussed at the moment and my task was to only list and sell. The office had been re-arranged, with the separate SRES work area dismantled, and my desk was now with the sales people, my business cards with my title had gone, the computer allocated to me did not have my signature and title installed for email, and all my communication was to be just as a sales person.
When I asked for my business cards and personal marketing material, I was told that they were locked in a filing cabinet that no-one could find the key for! I asked, in writing, for new business cards to be printed for me, but to my knowledge no attempt was ever made to do this.” 23
[30] Having returned to work on Friday, 7 November 2014, Ms Masson-Forbes advised her resignation to Mr Gaetjens only a little over two weeks afterwards, on Monday, 24 November 2014.
[31] From Mr Gaetjens’ perspective, when Ms Masson-Forbes returned to work, he desired to take up the performance discussion he intended to have with Ms Masson-Forbes in May 2014 where it had been left.
[32] After returning to work, there were discussions between Mr Gaetjens and Ms Masson-Forbes about the company’s forward expectations, and in the course of those discussions she was informed that she would be expected to no longer focus on the SRES activities but to instead focus on listing and selling properties 24 and she understood that the sales staff who had previously been reporting to her would no longer do so.25 She was also told that there were to be changes in the way sales regions were organised and how sales leads were to be distributed, including to her.
[33] At around the same time, Ms Masson-Forbes prepared for potential publication a newspaper article entitled “what to look for when employing a real estate agent”. This was intended for submission to a suburban newspaper for the purposes of raising awareness about the SRES brand. Ms Masson-Forbes’ evidence is that it was motivated by a discussion by Ms Madeleine Gaetjens to the effect that;
“On my second day back at work Madi directed me to a list of suggested activities for sales acquisition which included submitting articles for publication. I wrote an article immediately and presented it to Michael at midday the same day for approval. The intention was for this article to be submitted to the Eastern Suburbs courier to raise awareness of the SRES brand, and similar articles submitted by me to various publications had resulted in enquiries and leads. His email response was to say it was not what I should be doing, not what I had been instructed to do, and "sitting at the computer writing articles does not pay the bills". This communication was emailed minutes after I had left work.
I responded to Michael's criticism of writing a news article pointing out that it was one of a small list of recommended activities that Madi had told me to address. I received no response to this and the article was not submitted under my name for publication.” 26
[34] Mr Gaetjens’ response to the submission of the article was to suggest that Ms Masson-Forbes put her energies elsewhere, stating the following in a return email to her on 11 November 2014;
“Hi Lynn
Thanks for your initiative writing this article however this is not what we need you doing at present. We discussed with you on Friday when you returned to work that you must concentrate on getting listings & sales for the next few months, sitting at the computer writing articles does not pay the bills.
Please put all your effort towards getting appraisals & listings which will turn into sales.
So far this year your budgeted figures are well down as you are aware.” 27
[35] The above email was sent at 4:38 PM, and shortly afterwards at 4:39 PM Ms Masson-Forbes received a further email from Mr Gaetjens, and without the benefit of prior conversation. The email commences;
“Hi Lynn,
NEW KPI from 10th November 2014 to 9th November 2015
Sales & Listings:
We need you to settle 4 sales per month
To achieve three sales per month you will require to do at least the following:
Three to four appraisals per week each week
From these appraisals you should list one to two of those appraisals per week
From those listings, if priced correctly you should sell on average one property per week
All Corporate Development work and Office functions are on hold until we have commission money to spend on advertising and Promotions.
It is the sales persons responsibility to acquire their own listings.
Company listings will be distributed by management as they see fit and management will not be responsible for sales people not meeting their budget based on a lack of company listings being given to them.” 28
[36] Mr Gaetjens’ evidence is that this email, or a variant of it, was sent not only to Ms Masson-Forbes, but that it was also sent at about the same time to the other sales staff within the company. Consistent with that explanation, the email also provides what would be considered general advice to employees, and especially those within a sales environment, about their conduct at work. For example in respect of “office management” and “clients” the email communicates that personal conversations should be kept to a minimum; that “Surfing the net or looking at 'realestate.com" does not make your phone ring. Reading junk emails does not pay the rent”, and that Facebook is banned from the office.
[37] Nonetheless the email very pointedly states to Ms Masson-Forbes that the company’s expectation is that she should in future settle “four sales per month”. Ms Masson-Forbes’ evidence is that this was not the subject of consultation with her and that the first she knew of the expectation was when it was communicated in Mr Gaetjens’ email on 11 November 2014. Mr Gaetjens’ evidence is that all sales staff received revised KPIs at that time;
“All sales staff received revised KPI's on the 11th November 2014. The applicants KPI's was to increase to 4 sales per month, as was another staff member. These new KPI's were to stay in place until the 9th November 2015 but could be revised within 1 month at the individual monthly staff meeting. The sales staff performance is monitored and discussed at these meetings are the staff are specifically asked if they believe these target are fair and achievable. As the applicant was asked to focus solely on the sales requirements of her employment for this period her KPI's needed to increase as her time spent on sales did.” 29
[38] Mr Gaetjens’ evidence on this point includes that what was communicated in the correspondence of 11 November is a “new KPI”, meaning a new key performance indicator, and that such stands in contradistinction with what had previously been set as a “budget” in January 2013 to “personally settle 18 properties per year” 30, or April 2014 of “at least two settled sales per month”.31
[39] The day after receiving this communication, that is 12 November, Ms Masson-Forbes responded to Mr Gaetjens and informed him of her need to undertake several activities relating to her position as President of the Real Estate Salesperson’s Association of South Australia (RESA). 32 In particular, she advised she needed to attend a meeting at the South Australian Parliament House on the coming Friday to meet the new manager of the Real Estate Employers’ Federation (REEF), and that in the following week there was a meeting of state representatives of the employee associations in Melbourne, “at the Fair Work Tribunal” to discuss matters associated with the Modern Award.
[40] Mr Gaetjens responded to Ms Masson-Forbes over several emails as follows;
● Firstly that he had no records or notes in the company’s file pertaining to any discussion between Ms Masson-Forbes and Mr Ken Gaetjens about attendance at such meetings;
● That Ms Masson-Forbes was “paid to work for Gaetjens Real Estate 38 hours a week not REEF/RESA” and that “[s]hould you wish to attend this meeting or any future meeting that will be on your own time not Gaetjens time”; 33
● In response to Ms Masson-Forbes’ advice that she needed to attend the meeting on 14 November leaving the office at about 12 noon, Mr Gaetjens responded by stating;
“Thank you for confirming your departing time tomorrow.
Regardless of that fact that I was not a part of your employment interview, nowhere in your employment agreement does it state that these responsibilities form part of your employment with Gaetjens Real Estate. We never requested you to participate in RESA and if you cannot handle your expected responsibilities with RESA as well as your requirements of being employed full time with Gaetjens Real Estate you will have to make other arrangements.
Time off to complete your responsibilities with RESA as well as your personal responsibilities will be granted once you have completed work related tasks such as open inspections on weekend as required to sell properties. You are well aware that salespeople are entitled to time off during the week if they have conducted open inspections during the weekend and at this time since your return to work you have not done so and therefore you are not entitled to time off at full pay.” 34
[41] On 21 November 2014 Mr Michael Gaetjens issued Ms Masson-Forbes a written warning about her performance, about which Mr Gaetjens’ witness statement indicates;
“21st November- Second official warning sent to the applicant for failing to improve. This is the warning that the applicant was to receive on the 26th May had she turned up to the meeting.” 35
[42] The performance warning itself communicates the following;
● Since returning to work on 7 November Ms Masson-Forbes so far had not arranged any appraisals;
● That the lack of such appraisals did not result in listings and sales;
● He believed her effort was insufficient compared with what he would expect from a sales manager to obtain listings;
● He looks “forward to seeing some better results from you in the coming week” 36
[43] The email indicates that it was sent late on Friday, 21 November 2014, at 4:47 PM. Ms Masson-Forbes responded to the email late on Monday, 24 November at 5:32 PM with a lengthy email which sets out a number of matters, including her resignation with effect from Friday, 30 January 2015. With reference both to Mr Gaetjens’ email of 21 November and her intention to resign, Ms Masson-Forbes wrote in conclusion;
“This continual and unreasonable barrage of criticism and expectation, that reflects a lack of real knowledge of how listing and selling actually works, simply substantiates my belief that you are trying to make work conditions at Gaetjens untenable.
I am concerned that these conditions will greatly increase the likelihood of my illness returning. It is clear to me that intimidation and bullying tactics are being used consistently in order to put pressure on me and ensure that I feel unwelcome in the workplace.
Clearly this is not working for either of us, however, I do understand that you may need to replace my position, so may need time to do so. Therefore, I wish to submit my resignation, taking effect on Friday 30th January, 2015.” 37
[44] There is little doubt that in sending this email overall Ms Masson-Forbes believed that what happened after her return was a “deliberate process designed to make me feel unwelcome”. 38
[45] Mr Gaetjens responded two days later on Wednesday, 26 November indicating a number of matters, including the following in relation to Ms Masson-Forbes’ resignation;
“I would like to advise that I have accepted your resignation. As per the terms of your employment agreement, namely Clause 18.1 "if you resign you must give one week's notice", your resignation will be effective on Monday the 1st December 2014 at 4.30 pm being 1 weeks' notice.” 39
[46] Ms Masson-Forbes finished her employment with Gaetjens on 1 December 2014. 40
Consideration
Introduction
[47] The Applicant argues two forms of adverse action on the part of Gaetjens, within the meaning of s.342(1), that is;
● Firstly that she was “dismissed” for the purposes of the Act, for reason of a forced resignation, when she submitted her resignation to Gaetjens on 24 November 2014, evincing an intention to finish with the company on 30 January 2015. It is argued that the forced resignation came about through the conduct or a course of conduct on the part of Gaetjens for reasons that contravene the general protections provisions. The proposition that Ms Masson-Forbes was dismissed for the purposes of the Act depends upon an analysis of Gaetjens conduct or course of conduct and its impact on her.
● Secondly, or in the alternative, that through its action of bringing forward the date on which Ms Masson-Forbes would finish, Gaetjens again dismissed her, but with a different date of operation, being 1 December 2014.
[48] The argument as put initially by the Applicant through her originating application to the Commission in that these forms of adverse action were taken against Ms Masson-Forbes because she held a workplace right within the meaning of s.341 of the Act, and in particular that she was entitled to the benefit of personal leave with or without pay and the entitlement to make a claim for workers compensation payments. The argument as then developed through the evidence of the Applicant has been expanded to include an allegation that the adverse action against Ms Masson-Forbes came about either because she held a role or responsibility under a workplace law, being the Fair Work Act, as President of the RESA, which might be a breach of s.341, or that the adverse action was taken against her because she was an officer or a member of an Industrial Association, which protection is given by s.346.
[49] The reasoning of the Full Bench in Keep v Performance Automobiles Pty Ltd 41 is referred to above. That decision sets out broadly the task to be undertaken by the Commission in this matter, and with suitable modification to the issues requiring determination, as follows;42
● Was Ms Masson-Forbes exercising a workplace right, within the meaning of s.341, or entitled to a protection within the meaning of s.346?
● Did Gaetjens take ‘adverse action’ against Ms Masson-Forbes, within the meaning of s.342?
● Did Gaetjens take the adverse action against Ms Masson-Forbes because of a prohibited reason, or reasons which included that reason?
[50] Keep reinforces that Ms Masson-Forbes bears the onus of establishing that she had exercised a workplace right at the relevant time or a protection, and that adverse action was taken against her. If so established, Gaetjens then bears the onus of establishing that the adverse action was not taken because Ms Masson-Forbes had exercised a workplace right or a protection.
Was Ms Masson-Forbes exercising a workplace right or a protection?
[51] The evidence leads to a finding that Ms Masson-Forbes exercised a workplace right when she did not attend for work on 26 May 2014 for reason of illness; when she proceeded on pre-approved annual leave in May and June 2014; when she subsequently did not attend for work for reason of personal illness; and when she subsequently made an application for workers compensation as a result of illness she alleges arose in or during the course of her employment.
[52] The workplace right that Ms Masson-Forbes had to personal leave derives initially from the National Employment Standards and is reinforced in the modern award and the employment agreement that applied to her. The National Employment Standard requires that the notice of personal leave is given to an employer as soon as practicable, which may be at a time after it started, together with advice of the period or expected period of leave; and makes provision for the evidence that should be provided. 43 The evidence and submissions has not disclosed an argument of substance that would suggest Ms Masson-Forbes has not complied with those obligations. With reference to her initial leave, the evidence shows the circumstances were known to Gaetjens, both to Mr Michael Gaetjens on the day of her initial illness, and to Mr Elburn by at least the following day. There is no evidence that the circumstances of her personal leave after a period of authorised annual leave, including a period of workers compensation, was not appropriately notified and documented.
[53] The taking of personal leave has been held to be the exercise of a workplace right. 44 The making of a claim for workers compensation has been held to be the exercise of a workplace right.45
[54] As referred to above, at the time that she left employment, Ms Masson-Forbes was President of RESA, being a Transitionally Recognised Association for the purposes of the Act. The evidence indicates that on 12 November 2014, Ms Masson-Forbes informed Mr Gaetjens of her need to attend two events in connection with her position as President of RESA. 46 The evidence is therefore consistent with a finding that Ms Masson-Forbes had a role or responsibility under a workplace law.
[55] The possibility that Ms Masson-Forbes might be subject to a protection is a reference to the provisions of s.346 of the Act, which provides as follows;
“346 Protection
A person must not take adverse action against another person because the other person:
(a) is or is not, or was or was not, an officer or member of an industrial association; or
(b) engages, or has at any time engaged or proposed to engage, in industrial activity within the meaning of paragraph 347(a) or (b); or
(c) does not engage, or has at any time not engaged or proposed to not engage, in industrial activity within the meaning of paragraphs 347(c) to (g).
Note: This section is a civil remedy provision (see Part 4-1).”
[56] A finding is therefore also available to the effect that Ms Masson-Forbes was an officer of an industrial association (s.346(a)), and that when she drew to Mr Michael Gaetjens’ attention her need to attend RESA activities in November 2014, she was participating in a lawful activity organised by or promoted by an industrial association (s.346(b)).
Did Gaetjens take ‘adverse action’ against Ms Masson-Forbes?
[57] The relevant consideration of “adverse action” in this matter is that set out within item 1 of the table in s.342(1) to the effect that
“Adverse action is taken by…
1 an employer against an employee if…
the employer:
(a) dismisses the employee; or
(b) injures the employee in his or her employment; or
(c) alters the position of the employee to the employee’s prejudice; or
(d) discriminates between the employee and other employees of the employer.”
[58] As set out above, the possibilities for adverse action in this matter include that Ms Masson-Forbes was dismissed, having been forced to resign; then, or alternatively, dismissed through the actions of Gaetjens in “bringing forward” her termination date to 1 December 2014. An alternative construction, that Ms Masson-Forbes was injured in her employment arises, but ultimately is not necessary to be considered in this matter for the reason that I find that she was dismissed through a forced resignation.
[59] That a person’s forced resignation may be a dismissal is well established, and is explicitly identified in s.386(2) of the Act.
[60] The principles of forced resignation, or constructive dismissal, have been extensively analysed in many cases, including by the Full Bench. Those principles require all of the circumstances of a termination to be examined, and not only the actions of the employer. The employer’s conduct must be weighed objectively and arising from that it “may be shown to be a sufficiently operative factor in the resignation for it to be tantamount to a reason for dismissal”. 47
[61] Terminations on the initiative of the employer have included those in which an act of an employer either directly or consequentially has led to the departure of an employee; namely, had the employer not taken the action it did, the employee would have remained in the employment relationship.
[62] In relation to what is meant by a termination at the initiative of the employer, the Full Court of the Industrial Relations Court of Australia found the following in an early case, Mohazab v Dick Smith Electronics Pty Ltd (No. 2) 48;
“In these proceedings it is unnecessary and undesirable to endeavour to formulate an exhaustive description of what is termination at the initiative of the employer but plainly an important feature is that the Act of the employer results directly or consequentially in the termination of the employment and the employment relationship is not voluntarily left by the employee. That is, had the employer not taken the action it did, the employee would have remained in the employment relationship.”
[63] In doing so, the Commission must carefully consider what has occurred, with the Full Bench finding as follows;
“Where it is the immediate action of the employee that causes the employment relationship to cease, it is necessary to ensure that the employer's conduct, said to have been the principal contributing factor in the resultant termination of employment, is weighed objectively. The employer's conduct may be shown to be a sufficiently operative factor in the resignation for it to be tantamount to a reason for dismissal. In such circumstances, a resignation may fairly readily be conceived to be a termination at the initiative of the employer. The validity of any associated reason for the termination by resignation is tested. Where the conduct of the employer is ambiguous, and the bearing it has on the decision to resign is based largely on the perceptions and subjective response of the employee made unilaterally, considerable caution should be exercised in treating the resignation as other than voluntary.” 49
[64] In all though, a resignation that may be involuntary in and of itself may not be sufficient on “an objective analysis of the employer’s conduct” to be said to form a constructive dismissal;
“However it is plain from these passages that it is not sufficient to demonstrate that the employee did not voluntarily leave his or her employment to establish that there had been a termination of the employment at the initiative of the employer. Such a termination must result from some action on the part of the employer intended to bring the employment to an end and perhaps action which would, on any reasonable view, probably have that effect. I leave open the question of whether a termination of employment at the initiative of the employer requires the employer to intend by its action that the employment will conclude. I am prepared to assume, for present purposes, that there can be a termination at the initiative of the employer if the cessation of the employment relationship is the probable result of the employer’s conduct.” 50
[65] The Full Bench developed on these matters in the matter of Bruce v Fingal Glen Pty Ltd (in liq) in which the following was said about the paragraph above from Rheinberger;
[23] The situation contemplated in this passage is one in which the Act of an employer which led to an employee’s resignation was not intended to cause an employee’s resignation (as was the case in Mohazab), but “would, on any reasonable view, probably have that effect”. Rheinberger therefore qualifies the passage from Mohazab quoted above in two respects. First, an employer may be found to have constructively dismissed an employee notwithstanding that it did not engage in the relevant conduct with the subjective intention of forcing the employee to resign. Secondly, although it is an “important feature” of constructive dismissal, it is not sufficient that “the Act of the employer results directly or consequentially in the termination of the employment and the employment relationship is not voluntarily left by the employee”. 51
[66] I take the following from my analysis of the relevant authorities;
● the employer’s conduct must be weighed objectively;
● forced resignation may result from some action on the part of the employer intended to bring the employment relationship to an end or an action which would, on any reasonable view, probably have that effect;
● an employer may be found to have constructively dismissed an employee notwithstanding that it did not engage in the relevant conduct with the subjective intention of forcing the employee to resign;
● while an “important feature” of constructive dismissal, it is not sufficient that “the Act of the employer results directly or consequentially in the termination of employment and the employment relationship is not voluntarily left by the employee”
[67] The conduct that I take into account in this matter are the decisions of Mr Michael Gaetjens and Ms Madeleine Gaetjens upon the return to work of Ms Masson-Forbes on 7 November 2014.
[68] The evidence and submissions provided by Gaetjens about its decision-making includes four elements on their part as follows;
● By early 2014, at about the time that Mr Ken Gaetjens ceased to be involved in the day-to-day management of the business, Ms Masson-Forbes was struggling and was at a point where she needed to be held to account for her work performance;
● Gaetjens accommodated Ms Masson-Forbes’ need for personal leave when it arose in May 2014;
● The company returned to the performance management of Ms Masson-Forbes when she returned to work in November 2014;
● The company did no more than hold Ms Masson-Forbes to account for her deficiencies in her work performance.
[69] The argument in respect of a delayed and then recommenced performance management of Ms Masson-Forbes depends upon the view, which is factually correct, that Ms Masson-Forbes was well behind her budgeted expectations at the start of 2014. That much is recorded within the correspondence Mr Ken Gaetjens provided to the Applicant on 18 February 2014 in which he confirms a discussion with her in January. The correspondence refers to an expectation on the part of Ms Masson-Forbes to achieve over the 2014 year 16 sales with an estimated gross income of $136,000. At the time the letter was written, Ms Masson-Forbes had achieved a “gross commission” of substantially less than that amount, being $23,421. 52
[70] Whether or not this differential had come about because of changed market or corporate considerations, including Mr Ken Gaetjens’ health, it is a substantial difference, and no doubt one that should be the subject of discussion between an employer and employee. The evidence records that around this time, this matter was the subject of considerable concern on the part of Ms Masson-Forbes. It also records that Mr Michael Gaetjens sought to have further discussions with her about the matter. He couches both content discussions as being a “second warning”, however such event never occurred, at least at the intended time of May 2014, not the least of which was because of Ms Masson-Forbes’ illness and subsequent absence from the workplace for an extended period.
[71] The evidence given by Mr Michael Gaetjens and his daughter, Ms Madeleine Gaetjens, about the events in 2014 prior to the time that Ms Masson-Forbes went on leave is plausible and capable of acceptance. The evidence shows that the company had concerns and they wished to discuss those concerns with Ms Masson-Forbes. In and of itself, those matters would not give rise to an implication of being adverse action against Ms Masson-Forbes because either she had a workplace right or an industrial protection.
[72] On 26 May 2014, Ms Masson-Forbes required hospitalisation; then took planned leave, followed by personal leave; made a workers’ compensation claim, which was refused; and then returned to work on 7 November 2014.
[73] The evidence presented by Gaetjens is that upon her return to work in November 2014, Mr Michael Gaetjens then endeavoured to take up with Ms Masson-Forbes the substantive concerns that he had about her work performance when she had left in May 2014.
[74] This evidence would be capable of acceptance if it is able to be established that the period of Ms Masson-Forbes’ leave between the end of May and the start of November 2014 was merely a hiatus in a well-reasoned and implemented performance management process.
[75] The circumstance in which the parties find themselves is further complicated because of the business circumstances of Gaetjens which shifted appreciably between May and November. First of all, Mr Ken Gaetjens ceased to have a day to day involvement in the business; secondly, and perhaps related to the departure of Mr Ken Gaetjens, the business moved away from the SRES work that had been performed by Ms Masson-Forbes; thirdly, the wider business environment of Gaetjens appears to have deteriorated. In view of those matters, all of which amount to significant strategic impacts on a small business, it would not be unreasonable either that an underperforming employee who had gone on an extended period of leave would be held to account for their performance when they returned; or that the nature of the work that they were performing or their reporting relationships may well have changed by the time that they returned to work.
[76] Such matters, being externalities to the relationship between Ms Masson-Forbes and her employer, referred to from this point as “business externalities”, are mentioned for the reason that decisions which are attributable to those matters could likely discharge the onus held by Gaetjens if the evidence is accepted.
[77] Upon returning to work on 7 November 2014, Ms Masson-Forbes was faced with several changes of importance to her working arrangements, including;
● Gaetjens changing its focus away from the SRES work and the consequential changes to the layout of the office area in which she worked;
● the reporting arrangements of sales staff previously reporting to her;
● directions about how she should undertake work and the avenues from which she could expect to receive referrals;
● changes to her performance expectations;
● refusal, or significant restrictions, on the part of Gaetjens to permit her to attend RESA meetings.
[78] Objectively considered, at least some of these changes would have placed considerable pressure upon Ms Masson-Forbes at a time when she had been away from work for a considerable period including for reason of psychological or psychiatric illness.
[79] In particular, the changes made to Ms Masson-Forbes’ performance expectations are likely to have had a considerable impact on her. The expectations were imposed upon her without consultation, and when she complained, her complaints were met by indifference on the part of Mr Michael Gaetjens.
[80] Before she left for extended leave in May 2014, Ms Masson-Forbes’ 2014 calendar year performance obligations were referred to in correspondence from Mr Ken Gaetjens as being a budget of “16 sales at an average commission of $8,500 estimated gross income of $136,000”. 53 However, on 11 November 2014, Ms Masson-Forbes was informed of a new expectation, to the effect that “[w]e need you to settle 4 sales per month”.54 The evidence before the Commission included generally that the parties viewed a “settled sale” as being the ones which could be counted for this purpose, as distinct from a conditional sale. While there is not direct evidence addressing the terminology used in the correspondence from Mr Ken Gaetjens in February 2014, the consistency of the evidence is that the reference in his letter to “16 sales” in 2014 is to be viewed as being a reference to “16 settled sales”. As a result, the expectation of a salesperson now achieving four settled sales per month is significantly different to the expectation 16 sales per year.
[81] In these circumstances, it is likely that Ms Masson-Forbes and, indeed many other employees, would have been of the view that they were being moved out of the organisation, or that they were being asked to work under unreasonable demands. Ms Masson-Forbes reported her reasons for resigning in the following manner;
“Going into the office every day was traumatic. There was just a horrible sense of uncomfortableness, stress. It was clear that the other two sales people felt uncomfortable about the whole situation; rarely spoke to me. If they did, there was always a look round the corner to see if Michael or Maddie was there before – particularly Roland – engaging in conversation with me. I felt enormous pressure being there, whilst I made sure that I worked diligently in the office and out distributing documentation to prospective households and so forth. I just felt – it came to the point where I felt sick going into the office and – and the constant barrage of threatening – it appeared threatening or uncomfortable emails from Michael Gaetjens. I used to come into the office every day almost terrified to turn on my computer because I didn't know what I was going to receive. My name had disappeared off the staff list on the computer long before, so I wasn't regarded as part of the team and I honestly recognised in myself the rising of some of the stress that had caused my breakdown and I really felt that I had to resign because the thought of continuing under those circumstances, I was very concerned that I would have another breakdown.” 55
[82] I accept this evidence as a truthful and compelling recollection of how Ms Masson-Forbes felt at the time and that she reasonably believed she had no alternative other than to resign from employment with Gaetjens. In such circumstances, it follows that I must also find that her resignation from Gaetjens was a dismissal within the meaning of s.386 of the Act, for the reason that it was a forced resignation.
[83] Mr Michael Gaetjens submits that his motivation in bringing forward Ms Masson-Forbes’ end working date to 1 December 2014 was for reason that she was only obliged to provide one weeks notice of her resignation. No other reason has been put forward by Mr Gaetjens about why it was necessary to bring forward the termination date.
[84] Unilaterally substituting an earlier termination date for a date an employee has indicated to an employer on which they will resign has been held to be a termination at the initiative of the employer: per Nohra v Target Australia Pty Ltd. 56
[85] Following this analysis, I find Ms Masson-Forbes to have been subject to a forced resignation, that was to take effect on 30 January 2015, but the date of which was unilaterally brought forward by Gaetjens with the earlier termination date of 1 December 2014.
[86] The combination of these events is, and I find, a dismissal for the purposes of the Act that took place on 1 December 2014.
[87] Having made these findings, I also find that Gaetjens took ‘adverse action’ against Ms Masson-Forbes both in respect of;
● its dismissal of her, through a forced resignation, notified to Gaetjens on 24 November 2014 and to be operative from 30 January 2015; and
● Gaetjens’ subsequent purported acceptance of her resignation, but in turn with a termination of her with effect from 1 December 2014.
Did Gaetjens take the adverse action because of a prohibited reason, or reasons which included that reason??
[88] The evidence is that Ms Masson-Forbes, by the time she commenced leave in May 2014, was either underperforming or perhaps was no longer required by the company because its strategic purpose was changing. The case could relatively easily be made that she needed to be the subject of performance management or alternatively that she should be made redundant for the reason that Gaetjens no longer required her role to be undertaken.
[89] However such was not the case. She was not made redundant, and the performance management that she was put under when she returned in November 2014 appears significantly punitive. No allowance was apparently made to the 2014 expectations even though she had been away at that time for slightly more than five months of the year. No allowance appears to have been made for the fact that the reason for her absence had been personal illness. Instead Ms Masson-Forbes was confronted with significant changes which on any reasonable view would likely cause anxiety. Those significant changes included taking a budget of expectation of 16 settled sales in the whole course of 2014 to an expectation of 4 settled sales per month.
[90] What had occurred in the period that Ms Masson-Forbes was away was, of course, the business externalities referred to previously, but in addition the personal and other leave she had taken, as well as having made a workers compensation claim. In response to the proposition about whether it was a reasonable request that she concentrate on sales, Ms Masson-Forbes gave the following evidence;
“I just think it was the whole attitude of I had a respected position, corporate position, in the company prior to going on sick leave and upon returning, I just felt that every form of communication, verbal or written, was demeaning and disparaging in implication and in manner, but I did as was requested and just focused on listings and sales.” 57
[91] While it could be said that changes to the company’s operations because of the business externalities referred to above might lead to Ms Masson-Forbes having significantly more time to concentrate on, and thereby achieve, a direct sales target for the reason that she would now be unencumbered by the need to focus on business development or staff management activities, the evidence given does not lead to this conclusion. Instead the evidence indicates that Ms Masson-Forbes might have had some, but not appreciably greater, time to concentrate on direct sales. In addition it indicates that she believed she would need time to grow into the expectation, which in any event she considered to be unreasonable, and that she considered she would need to be assisted through marketing and other business support activity by Gaetjens itself.
[92] Mr Michael Gaetjens’ evidence in relation to the changed circumstances is unconvincing. While he gave evidence that other salespersons in the office were similarly affected with changes to their performance expectations, he did not give a convincing explanation as to why the change was made in relation to Ms Masson-Forbes. His evidence endeavoured to explain the difference between key performance indicators (KPIs), and “budgets”. In essence Mr Gaetjens saw the changes made in November as being the an aspirational or stretch target and therefore perhaps not as punitive as Ms Masson-Forbes took them to be. In this regard, he gave the following evidence about KPIs in comparison with what might be a budget. His claim in setting new KPIs is taht they were something for salespeople to aim for
“But you'd had a discussion with your other two sales staff about, “Well, look, don’t worry about the KPIs, that’s purely aspirational; as long as you're meeting budget.” That was the tenor, wasn't it, of that discussion?---No. The discussion was that we needed something to aim for and the idea is to take the – put the aim up to four sales a month and give them something to aim for.
What would have been the consequences – KPI stands for key performance indicator?---Yes.
What was your understanding, or their understanding, during this meeting you had in October that if they fell short of 48 settled sales in 12 months, given that there would be their new KPI, what was their understanding as to how that would fit in with the company’s requirements, what the company might do about it?---Well, they had their budget figures and this – as I say, the KPI was just something for them to aim for.
To settle four sales per month and you say you – the heading of this email was “new KPI” – it was for 12 months, November 2014 to November 2015?---Yes.
So to settle four sales a month or settle 48 sales in a year, in your experience is that – was that achievable?---As I said, this is what the sales people wanted to aim for.” 58
[93] This evidence was not connected with any evidence about the distinction between the two terms used being discussed with Ms Masson-Forbes. To the contrary, the evidence indicates that there was no such discussion. Altogether, and in the context of all of the evidence and submissions in this matter, this evidence on the part of Mr Gaetjens is implausible. The plausibility of this evidence may have been assisted either through the discussions referred to that did not take place, or alternatively through some evidence relating to the business pressures Gaetjens was endeavouring to respond to and which caused it to amend its expectations about performance.
[94] Overall, I am unable to accept Mr Gaetjens’ evidence about his motivations for the changes made upon Ms Masson-Forbes’ return to work. I prefer the evidence of Ms Masson-Forbes to the effect that when she returned from leave she felt pressured and demeaned and that this was as a consequence firstly of the leave she had taken and secondly because she had a need to ask Mr Gaetjens for time to attend to her duties as President of RESA.
Consideration of presumed reasons
[95] At this juncture, it is necessary to consider whether the adverse action referred to was not taken for a prohibited reason. In this regard, and in connection with the evidentiary onus held by the Respondent, s.361 provides the following;
“361 Reason for action to be presumed unless proved otherwise
(1) If:
(a) in an application in relation to a contravention of this Part, it is alleged that a person took, or is taking, action for a particular reason or with a particular intent; and
(b) taking that action for that reason or with that intent would constitute a contravention of this Part;
it is presumed that the action was, or is being, taken for that reason or with that intent, unless the person proves otherwise.
(2) Subsection (1) does not apply in relation to orders for an interim injunction.”
[96] In relation to the question “why was the adverse action taken?”, the High Court has found;
“This question is one of fact, which must be answered in the light of all the facts established in the proceeding. Generally, it will be extremely difficult to displace the statutory presumption in s 361 if no direct testimony is given by the decision-maker acting on behalf of the employer. Direct evidence of the reason why a decision-maker took adverse action, which may include positive evidence that the action was not taken for a prohibited reason, may be unreliable because of other contradictory evidence given by the decision-maker or because other objective facts are proven which contradict the decision-maker’s evidence. However, direct testimony from the decision-maker which is accepted as reliable is capable of discharging the burden upon an employer even though an employee may be an officer or member of an industrial association and engage in industrial activity.” 59 (references omitted)
[97] In relation to the same proposition in relation to the protection afforded to officers and members of industrial associations through s.346, the Federal Court has elaborated that determination of the question will be a matter of acceptance of evidence;
“The question of why Bengalla took adverse action against Mr Dever is a question of fact and it must be answered in the light of all the facts. Direct evidence from the decision-maker(s) is obviously relevant, albeit not decisive. The central question is why the action was taken, not what the employer says was the reason it took the action: Barclay at [44] per French CJ and Crennan J. As Heydon J put it in the same case at [141], “mere declarations” by a witness as to his or her mental state may not be enough to discharge the employer’s onus of proof; “[e]xternal circumstances could put into question the reliability or credibility of those declarations”. But if the decision-maker says that the prohibited reason had nothing to do with his decision and that evidence is accepted, then the employer will have discharged its onus: Bowling at 612 per Gibbs J. The position is perhaps best encapsulated in the reasoning of Gummow and Hayne JJ in Barclay at [127]:
In determining an application under s 346 [it is necessary to] assess whether the engagement of an employee in an industrial activity was a “substantial and operative factor” as to constitute a “reason”, potentially amongst many reasons, for adverse action to be taken against that employee. In assessing the evidence led to discharge the onus upon the employer under s 361(1), the reliability and weight of such evidence [is] to be balanced against evidence adduced by the employee and the overall facts and circumstances of each case; but it [is] the reasons of the decision-maker at the time the adverse action was taken which [is] the focus of the inquiry.” 60
[98] As a result of the foregoing analysis, I am unable to find that Gaetjens has discharged its evidential onus. It has failed to demonstrate that its reasons for acting in the way it has in relation to Ms Masson-Forbes was for reasons that were not those as alleged by Ms Masson-Forbes. There is not a plausible reason in evidence about Gaetjens’ decision making, either through the evidence of Mr Michael Gaetjens or Ms Gaetjens.
[99] The likelihood that Gaetjens faced difficult times at around the time that Ms Masson-Forbes returned from leave and needed better sales performance from her and others insufficiently explains the actions it took against her. While it is an argument that might form a foundation for properly implemented performance management, the actions taken by Gaetjens against her were not that. Its new sales targets were unilaterally imposed and bore no relationship to those she had before commencing extended leave. She was given insufficient time after returning from leave, and unreasonably so in the circumstances, to demonstrate her ability to meet her sales targets. When she sought time to attend to her RESA duties, there was no negotiation, merely an instruction that attendance would be in her unpaid time, which she believed was contrary to her prior arrangements with Gaetjens.
[100] That Gaetjens might have taken its actions because of Ms Masson-Forbes’ workplace rights is demonstrated in the following correspondence from Mr Michael Gaetjens on 13 November. The email was sent by him after Ms Masson-Forbes had advised she needed to attend a meeting at the South Australian Parliament House to meet the new manager of the REEF, and to attend in the following week a meeting of state representatives of the employee associations in Melbourne. Mr Gaetjens’ email from 13 November sets out the following;
“Hi Lynn
I have no records/notes in your file of any discussion with Ken allowing time off at normal pay to attend RESA meetings.
You are paid to work for Gaetjens Real Estate 38 hours a week not REEF/RESA.
Should you wish to attend this meeting or any future meeting that will be on your own time not Gaetjens time.
Please advise us of the hours you will be absent as this will need to be deducted from your pay.
This is not a good start to returning to work on the 7th November after being absent since the 23rd May.
Your solicitor advised us that you would return to work that Friday and then you advise me that you are take the next Monday off to move house, then this Friday you wish to attend a RESA meeting all afternoon. This is not acceptable given your budget figures.
Your budgeted sales for this year are well behind and taking this time off in the first week will not help your figures or the appraisals required to get those four sales for November.
This Company, Gaetjens Real Estate is not here for you to choose which days you want to work and which you do not. If this is going to continue I suggest you have a discussion with me about part time or some other form of employment rather than full time.
Our office hours are Monday to Friday 9am to 4.30pm. We need 100% of the time put into listings & appraisals which will come then to sales.” 61
[101] The correspondence leaves the impression that Mr Michael Gaetjens was resentful of the time that Ms Masson-Forbes had taken off since May, in accordance with her workplace rights, and that he was similarly opposed to her exercising her rights as President of RESA, and that he was making it difficult for her because of those matters.
[102] There has been no adequate explanation from Gaetjens for the changes to her working arrangements or the people she used to supervise. Support she expected in the form of assistance from Gaetjens, such as sales leads, business cards or advertising, was suddenly no longer there and when she questioned those matters does not appear to have been given a reasonable explanation. She demonstrably was returning from a significant period of illness, and was no doubt still emotionally fragile and lacking resilience. Gaetjens has not explained plausibly what its motivations were for its decisions, or why improbable and unreasonable targets should be unilaterally imposed on her, at the same time as her duties were significantly changed.
[103] The effect of finding that Gaetjens has not discharged its evidential onus is that I accept the presumption set out in s.361 applies. Such finding leads to the further finding that Gaetjens has contravened the provisions of s.340 and s.346 of the Act.
Remedy
[104] I turn to consider any orders that may be suitable in this matter.
[105] The orders that may be made by the Commission when dealing with a general protections dismissal dispute are set out within s.369(2) as follows;
369 Dealing with a dismissal dispute by arbitration
(1) This section applies if:
(a) the FWC issues a certificate under paragraph 368(3)(a) in relation to the dispute; and
(b) the parties notify the FWC that they agree to the FWC arbitrating the dispute; and
(c) the notification:
(i) is given to the FWC within 14 days after the day the certificate is issued, or within such period as the FWC allows on an application made during or after those 14 days; and
(ii) complies with any requirements prescribed by the procedural rules; and
(d) sections 726, 728, 729, 730, 731 and 732 do not apply.
Note: Sections 726, 728, 729, 730, 731 and 732 prevent multiple applications or complaints of a kind referred to in those sections from being made in relation to the same dispute. A notification can only be made under this section where there is no such other application or complaint in relation to the dispute at the time the notification is made. Generally, once a notification is made no such application or complaint can be made in relation to the dispute (see section 727).
(2) The FWC may deal with the dispute by arbitration, including by making one or more of the following orders:
(a) an order for reinstatement of the person;
(b) an order for the payment of compensation to the person;
(c) an order for payment of an amount to the person for remuneration lost;
(d) an order to maintain the continuity of the person’s employment;
(e) an order to maintain the period of the person’s continuous service with the employer.
(3) A person to whom an order under subsection (2) applies must not contravene a term of the order.
Note: This subsection is a civil remedy provision (see Part 4-1).
[106] Ms Masson-Forbes does not seek reinstatement as a consequence of a finding that the general protections provisions of the Act have been contravened in respect of her dismissal. In any event, I do not consider it appropriate both for the reason of Ms Masson-Forbes’ own situation, described in her evidence, as well as the small size of Gaetjens. The evidence before the Commission also leads to the view that the relationship between Ms Masson-Forbes and Mr Gaetjens in particular would not sustain a re-establishment of the working arrangement.
[107] Notwithstanding this situation, Ms Masson-Forbes seeks compensation both for economic and non-economic loss, that is, orders to be made respectively under s.369(2)(c) and (b).
Economic loss
[108] In relation to the assessment of compensation in general protections matters in the Courts, and noting there are differences in the basis of orders that may be made by a Court and this Commission, the following observations have been made about the purpose of compensation;
“The calculation of compensation under s.545 of the Act is approached in accordance with ordinary principles. The fundamental purpose of damages or compensation under s.545 of the Act is to provide a monetary sum to put the employee in the position he or she would have been in if the employer had performed the contract or not contravened the act. As a majority of the High Court stated in Haines v Bendall (1991) 172 CLR 60:
The settled principle governing the assessment of compensatory damages, whether in actions of tort or contract, is that the injured party should receive compensation in a sum which, so far as money can do, will put that party in the same position as he or she would have been in if the contract had been performed or the tort had not been committed. ”62
[109] While the provisions of s.545(2) of the Act allow for an order for “compensation for loss that a person has suffered because of a contravention”, the provisions of s.369(2), which must be applied in this matter, refer to the making of “an order for the payment of compensation”.
[110] In application of these principles the following has also been observed;
“8. The authorities reveal that the assessment of compensation under ss.545(1) and (2) of the Fair Work Act can include both economic and non-economic loss. Insofar as economic loss is concerned, the approach that seems to find favour is that stated in Re Bostik Australia Proprietary Limited v Gorgevski [1992] FCA 209; [1992] 36 FCR 20. The relevant passage is as follows:◦ Where an employee is wrongfully dismissed, he is entitled, subject to mitigation, to damages equivalent to the wages he would have earned under the contract from the date of the dismissal to the end of the contract. The date when the contract would have come to an end, however, must be ascertained on the assumption that the employer would have exercised any power he may have had to bring the contract to an end in the way most beneficial to himself; that is to say, that he would have determined the contract at the earliest date at which he could properly do so.
9. Bostik was a different case to this one. It was dealing with wrongful dismissal, and there are some other factual differences. But the principle remains apposite. It has been applied, most recently, by Barker J of the Federal Court in Australian Licensed Aircraft Engineers Association v International Aviation Assistance Pty Ltd [2011] FCA 333. It is the principle that I intend to apply in this case.” 63
[111] In respect of compensation for her remuneration lost, Ms Masson-Forbes seeks the payment of wages that would have otherwise been earned by her in the period between the date on which she finished with Gaetjens, 1 December 2014 and the date she had originally put forward to the company as being her finishing date, being 30 January 2015. In this regard, I take her to be conceding that an ongoing employment relationship with Gaetjens was improbable.
[112] The circumstances of Ms Masson-Forbes’ employment with Gaetjens include that at the time she left the company she was employed as General Manager Sales and Corporate Development and remunerated on the basis of the payment of a salary of $75,000 per year with the further offer of a 15% commission on sales. 64 The terms of the payment of commission on sales are in turn dealt with in the letter to Ms Masson-Forbes from Mr Ken Gaetjens in January 2013 in which he indicated that sales commission would be paid for in accordance with a budget for settlement of more than 18 properties per year.65 The same correspondence also refers to Ms Masson-Forbes being entitled to payments for motor vehicle, mobile phone and superannuation. In the absence of any evidence to the contrary, I take her superannuation entitlement to be the Superannuation Guarantee rate applicable from 1 July 2014, namely 9.5% of ordinary time earnings. There is no evidence before me in relation to payments for motor vehicle or mobile phone use, and so I make no provision for them in my assessment of compensation.
[113] In relation to her entitlement to sales commission, the correspondence from Mr Ken Gaetjens to Ms Masson-Forbes in February 2014 confirming an earlier discussion with her in January 2014, lays plain that Ms Masson-Forbes had achieved, by that point, considerably fewer sales than had been budgeted. 66 As a result, and for the reason that by the time she finished with Gaetjens on 1 December 2014 Ms Masson-Forbes’ sales position had not turned around, it is clear that no sales commission was due to be paid either for services rendered to date or likely for the foreseeable future, at least until her sales position had become significantly more positive. The evidence shows little prospect of this occurring in the months ahead.
[114] As a result, the correct basis on which to assess Ms Masson-Forbes economic loss is her annual salary of $75,000 per year, upon which she would also have been entitled to a superannuation contribution of 9.5%, but there is no need for consideration of the inclusion of an amount for sales commissions foregone.
[115] Having been terminated on 1 December 2014, Ms Masson-Forbes had no earnings from Gaetjens or any other party between that date and the date of the hearing.
[116] Even though I have found that Ms Masson-Forbes’ decision to give notice to finish with Gaetjens on 30 January 2015 was the product of a forced resignation, this is not a matter where the evidence would indicate an applicant is likely to continue working with an employer until some indefinite time in the future. Instead, the evidence indicates first of all that Ms Masson-Forbes’ health and well-being was impacted to some degree at least by factors external to the employment relationship and secondly that the business externalities to which I have referred to above meant that by the time she returned to work in November 2014, the job that she was performing was under some measure of pressure as to the likelihood of its continuation. Additionally, her own sales performance would clearly also have an impact on her likely future tenure; in early 2014, her sales were demonstrably lower was needed.
[117] The evidence in relation to Ms Masson-Forbes’ health does not disclose whether and how those factors might impact upon her ability to continue working, and so I make no inferences about what, if any, impact her health might have on her future job security.
[118] However the evidence in relation to the business externalities faced by Gaetjens in November 2014 is more cogent.
[119] In that regard, the evidence discloses first of all that the business was under some measure of pressure to achieve sales results, which at that time were not being achieved in the way Mr Michael Gaetjens wanted.
[120] Secondly, it is apparent that with Mr Ken Gaetjens ceasing to have a day-to-day involvement in the business that Gaetjens’ strategy in respect of the seniors real estate market was changing. By the time Ms Masson-Forbes had returned to work the seniors real estate market was no longer a focus of the business, and it is reasonable to infer that within a month or two it probably would not be a market in which the business wanted to be involved at all.
[121] Thirdly, it is also apparent that, even before Mr Ken Gaetjens’ departure from the firm, Ms Masson-Forbes’ performance was under some level of question on the part of the company. In January and February 2014 she had been advised of the need to pay greater attention to the company’s budget expectations. They were, all things considered, reasonable expectations. Despite the fact that Ms Masson-Forbes spent considerable time away from the company between the end of May and the beginning of November 2014 for health-related reasons, and even if those health-related reasons were only partly connected to the anxiety caused from performance related discussions, is also not unreasonable to expect that those discussions would have resumed upon her return to work.
[122] As a result, it is entirely foreseeable that having returned to work on 7 November 2014, both that Gaetjens would have discussed with Ms Masson-Forbes the need for her to pay closer attention to and achieve the budgets that had already been set for her; and that it would have taken some considerable time for Ms Masson-Forbes to get to a point where she could achieve the company’s expectations. Despite her being a senior sales representative with considerable industry experience, the impression gained in the course of her giving evidence was that her operating preference was towards the sales development role of general manager sales and corporate development, to which Mr Ken Gaetjens had appointed her in January 2013, rather than the direct real estate selling role which appears to be the greater expectation of Gaetjens from early 2014. Whether or not she could meet those expectations, only time would tell. However it is reasonable to infer from all of the evidence given in this matter that she may not have achieved those expectations within the relatively short timeframe the firm needed because of its business externalities.
[123] Consideration of these matters leads to the view that either of two eventualities would likely have brought Ms Masson-Forbes’ employment with Gaetjens to an end within a relatively short period. The first of these eventualities is that Gaetjens may well have determined that it no longer required her job to be done by anyone and that it then moved to make her redundant. The second of the eventualities is that Ms Masson-Forbes may well have been the subject of more appropriate performance management processes, leading ultimately to her dismissal, after the giving of appropriate counselling, warning and opportunities to demonstrate the desired performance.
[124] Because Gaetjens is a small business within the meaning of the Fair Work Act 2009, the provisions of s.121 of the Act mean that the redundancy payment otherwise payable under s.119(2) would not be payable in the event of a redundancy.
[125] In the eventuality that Ms Masson-Forbes was, instead, dismissed for performance related reasons, the provisions of s.117(2) would require that having been employed for more than three years but not more than five years with Gaetjens, a period of not less than 3 weeks’ notice of termination of employment would be required to be given to Ms Masson-Forbes, together with a further one week notice for the reason that she is older than 45 years old.
[126] The period from 1 December 2014 to 30 January 2015 is a period of 60 days, or a period of slightly less than 9 weeks.
[127] That period, and its potential as a reference for Ms Masson-Forbes’ anticipated period of remaining employment with Gaetjens, viewed at the point at which she did finish with Gaetjens, on 1 December 2014, is a not improbable estimation of the time she would have remained employed with Gaetjens, within the context of the whole of this matter.
[128] Given the time of year that these events took place, it is improbable that were she to have been eventually dismissed by Gaetjens for performance related reasons that such would have happened before the end of 2014, or even very early in the New Year. That being the case, it is likely that any performance related dismissal would take place before the end of January 2015, at which time she would have been entitled to be provided with notice of any dismissal. In Ms Masson-Forbes’ case, the minimum notice period would be 3 weeks’ notice or payment in lieu, with a further 1 week for reason of her age and that she has completed at least 2 years of service. There was also no evidence that would lead to the view that a decision to make her redundant was imminent, or likely to occur by the end of January 2015.
[129] I find therefore that an appropriate amount of compensation for Ms Masson-Forbes’ economic loss is a payment of 13 weeks wages, comprising 9 weeks wages that would have otherwise been earned together with a further 4 weeks payment in lieu of notice upon termination of employment, within which is included a further 1 weeks payment for reason of the Applicant’s age. On the basis of an annual salary of $75,000, 13 weeks wages equates to $18,750 to which I add a further 9.5% in lieu of superannuation contributions that would have otherwise been made on the Applicant’s behalf, an amount of $1,781, making the subtotal amount of $20,531.
[130] I consider it appropriate in a matter such as this to make a deduction for the contingency that the Applicant may not have served the whole of the remaining period of employment for reasons such as ill health or other related factors, or matters relating to the Respondent’s business conditions. 67 While the period of remaining employment that I have assessed is not great, the evidence as a whole points to there nonetheless being some factors that would create uncertainty about the continuation of the relationship on both sides.
[131] I consider it appropriate in this matter to deduct 15% from the subtotal referred to above for the purposes of contingencies. A deduction by that factor is an amount of $3,080, which reduces the total assessment of remuneration lost to $17,451.
Non-economic loss
[132] Ms Masson-Forbes seeks compensation for non-economic loss in the order of $5,000 for the hurt, distress and humiliation caused to her by Gaetjens adverse action against her. 68
[133] Consideration was given by the Federal Court to the question of an award of non-economic loss in the matter of Australian Licenced Aircraft Engineers Association v International Aviation Service Assistance Pty Ltd 69 (ALAEA v IASA). The context of that case was a determination by the Court pursuant to s.545 of the Act, which of course is a different provision to that in consideration in this matter. The relevant part of s.545 includes;
“545 Orders that can be made by particular courts
Federal Court and Federal Circuit Court
(1) The Federal Court or the Federal Circuit Court may make any order the court considers appropriate if the court is satisfied that a person has contravened, or proposes to contravene, a civil remedy provision.
Note 1: For the court’s power to make pecuniary penalty orders, see section 546.
Note 2: For limitations on orders in relation to costs, see section 570.
Note 3: The Federal Court and the Federal Circuit Court may grant injunctions in relation to industrial action under subsections 417(3) and 421(3).
Note 4: There are limitations on orders that can be made in relation to contraventions of subsection 65(5), 76(4), 463(1) or 463(2) (which deal with reasonable business grounds and protected action ballot orders) (see subsections 44(2), 463(3) and 745(2)).
(2) Without limiting subsection (1), orders the Federal Court or Federal Circuit Court may make include the following:
(a) an order granting an injunction, or interim injunction, to prevent, stop or remedy the effects of a contravention;
(b) an order awarding compensation for loss that a person has suffered because of the contravention;
(c) an order for reinstatement of a person.
[(3), (3A) and (4) omitted]”
[134] In contrast, and as referred to above, the provisions of s.369(2), under which this decision is made, are an order for reinstatement (s.369(2)(a)); an order for the payment of compensation (s.369(2)(b)); and an order for payment of an amount to the person for remuneration lost (s.369(2c)). It is notable that the section separately provides for orders for compensation and orders for remuneration lost.
[135] In ALAEA v IASA, the Federal Court held the following about compensation for non-economic loss;
“441. The question arises, however, whether the Court may order compensation, that is to say the payment of a pecuniary sum on account of hurt and humiliation found to be a direct consequence of contravention of s 340 and s 346 of the FW Act. There is no direct authority under the FW Act concerning this question. However, approaching the question as a matter of first principle, it is plain that s 545(1) is intended to provide the Court with a very broad power to make appropriate orders where contravention is established. In this s 545(2) provides confirmation that certain types of orders - for example, an order awarding compensation for the loss a person has suffered because of a contravention - may be made. But s 545(2), in this regard, expressly states that it has effect "without limiting subs (1)".
442. As a matter of principle it is difficult to see why a compensatory financial order cannot be made in respect of hurt and humiliation (or "shock, distress and humiliation" as s 329(4) of the FW Act describes this head of loss) shown to be a direct consequence of a contravention. At common law, courts have been reluctant to provide damages for a breach of a contract which results in hurt and humiliation, unless the parties to the contract can be taken to have contemplated such damages for breach: Baltic Shipping Co v Dillon [1993] HCA 4; (1992) 176 CLR 344 (Baltic Shipping), for example at 365, Mason CJ. There are special reasons usually cited by courts as to why this common law position in respect of breach of contract should obtain. For example, in Baltic Shipping, at 369, Brennan J suggested that if a promisor in a usual commercial setting were exposed to such an indefinite liability in the event of breach of conduct, the making of commercial contracts would be inhibited.
443 However, the power of the Court under s 545(1) and (2) to make appropriate orders following contravention including an order for compensation is quite divorced from this type of contractual consideration. As a matter broad public policy, the Parliament of Australia has provided that the Court may give appropriate relief where contravention is proved. Relief in these circumstances helps to uphold the policy indicated in the FW Act that, amongst other things, contraventions of the freedom of association provisions should not occur and that appropriate orders should be made to remedy the contravention of such provisions. There is, therefore, in my view, no obvious policy consideration that militates against the making of a compensation order under s 545(1) or a compensation order under s 545(2), for the sorts of reasons that have inhibited the award of damages at common law for a breach of contract which is attended by shock, distress or humiliation.
444. Indeed, there are other indications in the FW Act itself that suggest that s 545(1) and (2) should properly be construed to this effect. For example, s 392(4) of the FW Act expressly provides that compensation should not include compensation for shock, distress or humiliation in respect of a proceeding for unlawful dismissal. That provision does not apply in this case, but is in clear contrast to s 545 which contains no such limitation.
445. Further, in relation to the former WR Act s 298U(c), which empowered the Court to make an order requiring the person or industrial association to pay an employee or independent contractor compensation of such amount as the Court considers necessary, this Court took a broad view of the compensation that should be paid. In Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v ACI Operations Pty Ltd [2006] FCA 122; (2006) 150 IR 179, Marshall J observed that:
'Compensation' is a broad concept which should not be interpreted in a narrow way. In an appropriate case the Court is able to order compensation for non economic loss.
446. In a similar vein, in McIlwain v Ramsey Food Packaging Pty Ltd (No 4) [2006] FCA 1302; (2006) 158 IR 181, at [87], Greenwood J in this Court considered both s 298U(c) and s 298U(e) of the former WR Act and held that the Court had the power to award compensation for non economic loss.
447. These decisions, and the view I take of the Court's power to order compensation in respect of non economic loss for distress, hurt or humiliation is also supported by the decision of the Full Court of this Court, in relation to the power to order compensation under s 170EE of the former WR Act, in Burazin v Blacktown City Guardian Pty Ltd [1996] IRCA 371; (1996) 142 ALR 144 at 156-157.
448. In my view, if anything, the power of the Court to make an appropriate order under s 545 of the FW Act is more broadly cast than provisions of the former WR Act.
449. Additionally, I do not consider that the word "loss" in s 545(2), to the extent this provision must be relied upon for the making of a financial compensation order, limits the loss that may be claimed to economic loss. While the respondent contends that a distinction should be drawn between "loss" and "damage", and that shock, distress and humiliation should be considered as "damage", and not as "loss", I find the distinction elusive and unhelpful. Shock, distress and humiliation may be considered, where it exists, as an injury the person suffers which is apt to be described as non economic loss or damage.” 70
[136] Whereas the provision relevant to the Federal Court’s decision in the above matter was the meaning of the term “an order awarding compensation for loss that a person has suffered because of the contravention”, which stands in contrast to the term to which I must have regard, namely “an order for the payment of compensation to the person”, I am satisfied that the reasoning set out above by Barker J has application in this matter and that it is proper in all the circumstances to proceed to assess the factors for any non-economic loss incurred by Ms Masson-Forbes.
[137] In this regard I take into account that the reasoning set out by Barker J in ALAEA v IASA follows the earlier judgement of the Industrial Relations Court of Australia in the matter of Burazin v Blacktown City Guardian, 71 in which consideration to an award of non-economic loss was given but ultimately not awarded. I have also taken into account the specific prohibition upon compensation for shock, distress or humiliation which is provided for within s.392(4) of the Act. That section deals with compensation in unfair dismissal matters. In contrast the section under which this matter is determined is s.369 which contains no prohibition of the type found within s.392(4). I also take into account that s.369(2) provides separate heads of remedy for each of reinstatement, payment of compensation and payment for remuneration lost.
[138] The assessment by the Courts of non-economic loss has included the caution set out in Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing & Allied Services Union of Australia v ACI Operations Pty Ltd, 72 a matter dealing with the termination of employment of a man who had earlier been reinstated to his position by the Court, but in which the residual matter went to whether there should be compensation for non-economic loss. Finding that something more is required for compensation for non-economic loss than the usual element of distress which accompanies most terminations, the Court first noted the basis of the claim but then refused the order, not being persuaded of its basis;
“8 The Union said that Mr Williams suffered an injury in two ways. First, it said that he was not permitted to leave his work premises in a dignified way but was pressed to leave the factory quickly with security summoned. Second, it said that Mr Williams’ sudden unemployment caused him stress and tension as a result of his family losing the income of its sole breadwinner.”
…
“10 In the absence of Mr Williams giving evidence about the effect on him of the manner in which he was forced to leave ACI’s premises on the day of his termination, it is exceedingly difficult for the Court to assess what compensation should be ordered in respect of that treatment. The affidavit evidence referred to at [9] above was filed in support of an application for an urgent interlocutory order for reinstatement. The Court, to a large degree, accommodated the concerns of the parties about delay by giving the matter an urgent trial. A prompt judgment was later given. ACI co-operated in effecting the swift reinstatement of Mr Williams. In those circumstances I do not consider that it is appropriate to make an order for compensation for non-economic loss. The stress and uncertainty suffered by Mr Williams and his family was short lived. Any amount of compensation ordered would only be nominal and not worth imposing on ACI which appears to have accepted Mr Williams back into its fold. It has taken no step to seek to stay or delay reinstatement after the Court’s judgment of 18 November 2005.
11 I make no order as to compensation in the circumstances of this case. To do otherwise would not be acting with restraint. In my view Burazin establishes that something more is required for compensation for non-economic loss than the usual element of distress which accompanies most terminations. Whilst "unusual and exacerbating circumstances" is not necessarily the yardstick, there must be something attending a termination which justifies an order for non-economic loss. Such an order may have been made in this case had Mr Williams given evidence of the effect on him of his ejection from his workplace by security personnel.” 73 (underlining added)
[139] In considering the assessment of non-economic loss, within the different context of a matter arising under the Act involving judicial review of an earlier decision of the Commission and allegations of the breach of a certified agreement, the Federal Court in Dafallah v Fair Work Commission 74 has emphasised the need for an examination of the whole of the circumstances of the matter as well as causality and the extent to which it is reasonable to compensate the employee for such consequences;
“159. One of the principal tasks, if compensation is to be awarded, is to ensure that there is the appropriate causal connection between the contravention and the loss claimed: Australian Licensed Aircraft Engineers Association v International Aviation Service Assistance Pty Ltd (2011) 193 FCR 526; [2011] FCA 333 at [423] per Barker J.
160. The Full Court in Burazin [1996] IRCA 371; 142 ALR 144 at 155 approved this approach. Some of the matters referred to by Lee J are similar to those set out as considerations in s 392(2). Although the power under s 545(1) is separate and independent, in my opinion, since the same statutory concept of compensation is involved, it is appropriate to consider factors similar to those set out in s 392(2).
161. In considering causation, in the circumstances of a clearly fraught employment relationship as was the case between Ms Dafallah and Melbourne Health, it is appropriate in my opinion to consider that the employer would have in any event been entitled to exercise any power it had to bring the employment contract lawfully to an end in a way most beneficial to itself. The likelihood of an employer taking such a step will be fact dependent but, in contractual terms, it has been held to be relevant to the assessment of damages: see Bostik (Australia) Pty Ltd v Gorgevski [1992] FCA 209; (1992) 36 FCR 20 at 32. In my opinion, it is a factor which can also be taken into account for the purposes of determining what compensation is appropriate under s 545(1), where compensation is limited to the loss caused by the contravention.” 75
[140] Having considered these matters, Mortimer J in Dalfallah found that while the Applicant had suffered “tangible emotional upset” both in regards to the dismissal and the warning processes that preceded, there was no evidence of psychological damage or treatment, and an award of $3,000 for non-economic loss was made. 76
[141] Other than the circumstances of the matter, together with questions of causation, an award for non-economic loss can only be made if the applicant has in fact suffered distress, hurt, and humiliation as a result of the contravention. 77
[142] In referring to the circumstances in which loss has arisen in the assessment of non-economic loss for general protections applications, Courts have taken into account many factors, including the following;
● what an applicant has deposed to and what a reasonable person might feel on the basis of certain conduct directed them; 78
● questions of negative assessment that might adversely affected an applicant’s reputation in their industry in their home of country; 79
● the lack of probative evidence other than the applicant’s “display of despondency, disappointment and anger” and the circumstances of their summary dismissal; 80
● the conduct of the Respondent, not only in how they treated the party to be compensated, but also that they may have subsequently provided an apology, or an undertaking about future conduct, or a recognition they may need to receive treatment; 81 and
● the Respondent’s conduct toward the Applicant required medical treatment, and that the conduct was abusive. 82
[143] The factors which I have taken into account in my assessment of non-economic loss include that Ms Masson-Forbes, at the time of her departure from Gaetjens, was a senior sales person within her profession; that she was also President of the RESA; and that she also had, until at least February 2014, had a good working relationship with her employer and in particular Mr Ken Gaetjens. The loss then that she incurred went not only to what she saw as maltreatment on the part of Gaetjens both during and after the period of personal leave, but also to the subsequent distress that being seen, as a senior person, to have lost employment and purportedly for performance related reasons. Against these matters I balance that there was no evidence, other than Ms Masson-Forbes own evidence, before me about the nature of her post employment distress or psychological state and the evidence very strongly suggests that there were medical and other factors contributing to her level of psychological anxiety at the time that she departed on personal leave in May 2014.
[144] In all the circumstances I consider it appropriate to make an order for non-economic loss in the order of $3,000. In forming this view, I have taken into account not only the amount sought by the Applicant, but also the amounts awarded by the Courts in the matters referred to above. Of course those awards are heavily circumstantial, however they do provide a range that can be considered in forming a proper assessment of loss in this matter. The approach of Barker J to such task in ALAEA v IASA is set out in the following passage;
“In my view, Mr Puspitono is entitled to some measure of compensation for the distress and humiliation I have found he suffered as a direct consequence of the contraventions proved by the evidence. The Union claims a non economic loss order under this head of $25,000. I consider such an assessment is too high. I am prepared, however, having regard to the status of Mr Puspitono as a licensed aircraft maintenance engineer, the annual income he received of approximately $55,000 at material times, the level of distress and humiliation he felt as disclosed by his evidence, not only at the fact of dismissal, but due to the negative assessment which adversely affected his reputation in the aircraft maintenance industry in Indonesia, that a non economic loss order in the sum of $7,500 is appropriate.” 83
[145] In other matters to which I have regard, orders have been made in the range of;
● $2,500 in comparison with weekly income of $584 for a hospitality worker, following an enquiry about underpaid wages; 84
● $3,000, being “a modest amount of general compensation” for the unlawful way in which termination was effected, was awarded for contraventions relating to a union organiser because of his political opinion, having been employed on a fixed term contract that was brought to an early end; 85
● $3,000 involving “no evidence of lasting psychological damage, nor even of damage sufficient to warrant psychological treatment” for a health worker earning slightly more than $20 per hour; 86
● an amount of $10,000 against a claim of $17,500 in a matter involving termination of a heavy vehicle driver for reason of seeking carers’ leave, and findings of verbal abuse and threats; 87and
● $10,000 awarded in a matter involving a dismissal related to pregnancy for an employee with a salary package of $123,000 per year, and findings of abusive conduct; 88
[146] In Ms Masson-Forbes’ case, I have taken into account the state of the evidence about her distress, and that factors other than Gaetjens’ conduct may have been a contribution. Those factors have not lead me to make an award of a large amount, however I have considered that a modest level of award should be given to her in recognition of her hurt, humiliation and distress.
Conclusion
[147] For the reasons set out above, I have found that;
● Ms Masson-Forbes was dismissed by Gaetjens, for reason of a forced resignation;
● her dismissal was a contravention of the general protections set out in Chapter 3, Part 3-1 of the Act;
● it is not appropriate to make an order under s.369(2)(a) for her reinstatement, and that consequential orders are not necessary under s.369(2)(d) and (e) respectively for continuity of employment or maintenance of continuous services;
● it is appropriate in all the circumstances to make an order under s.369(2)(b) for the payment to her of compensation for her non-economic loss; and
● it is appropriate in all the circumstances to make an order under s.369(2)(c) for the payment to her for remuneration lost, in respect of her economic loss.
[148] An order requiring Gaetjens to make payments to Ms Masson-Forbes in the amounts of $17,451 for remuneration lost, together with $3000 compensation for her non-economic loss is issued at the same time as this decision. The order will require payment of these amounts within 14 days of the date of this decision.
[149] In relation to the order for $17,451, the order will specify that the amount of $15,937 will be paid to Ms Masson-Forbes as wages, taxed according to law and that a further amount of $1,514 will be paid on her behalf to her superannuation account.
COMMISSIONER
Appearances:
Mr R Clarke and Ms L Masson-Forbes for the Applicant
Mr M Gaetjens and Ms M Gaetjens for the Respondent
Hearing details:
2015.
Adelaide:
2 April
1 C2014/8102
3 Ibid, at [7] - [15]
4 Exhibit R2, Appendix B
5 Exhibit A1, para 2
6 Exhibit R1
7 Exhibit R2, Appendix B
8 Exhibit R2, Appendix B
9 Exhibit R4, para 2b
10 Exhibit A1, para 3
11 Exhibit A1, Addendum B
12 Exhibit A1, para 4
13 Exhibit A1 para 5
14 Exhibit A1, Addendum C
15 Exhibit R2, Appendix J
16 Exhibit R1, p2
17 Exhibit A1, para 10
18 Exhibit R2, Appendix I
19 Exhibit A1, para 11
20 Exhibit A1 para 12
21 Exhibit A1 para 13
22 Exhibit A1, Addendum E
23 Exhibit A1, para 14
24 Ibid
25 Transcript, PN 94 - 95
26 Exhibit A1, para 15
27 Exhibit A1, Addendum G
28 Exhibit A1, Addendum H
29 Exhibit R1, p2
30 Exhibit R2, Appendix B
31 Exhibit R2, Appendix J
32 Exhibit R2, Appendix E
33 Ibid
34 Ibid
35 Exhibit R1, p2
36 Exhibit R2, Appendix D
37 Exhibit A1, Addendum J
38 Exhibit A1, para 19
39 Exhibit R2, Appendix C
40 Transcript, PN 7
42 Ibid, at [14] - [15]
43 Fair Work Act 2009, s.107
44 Khiani v Australian Bureau of Statistics [2011] FCAFC 109 and Ross v RC Mackenzie & Sons [2013 FMCA 31
45 See CFMEU v Leighton Contractors Pty Ltd [2012] FMCA 487, (2012) 225 IR 197 and Stephens v Australian Postal Corporation [2010] FMCA 1012; (2010) 202 IR 437
46 Exhibit R2, Appendix E
47 Doumit v ABB (1996) AIRCFB N6999
48 (1995) 62 IR 200, at pp.205-206
49 Doumit v ABB (1996) AIRCFB N6999
50 Rheinberger v Huxley Marketing Pty Ltd (1009) 67 IR 154
51 Bruce v Fingal Glen Pty Ltd (in liq) [2013] FWCFB 5279, at [23]
52 Exhibit A1, Addendum C
53 Ibid
54 Exhibit R2, Appendix H
55 Transcript, PN 104
56 [2010] FWA 6857, at [10], (2010) 204 IR 389, at [10]
57 Transcript, PN 168
58 Transcript, PN 327 – 331
59 Bendigo Institute v Barclay [No 1] [2012] HCA 32, (2012) 248 CLR 500, at [45], per French CJ and Crennan J
60 Construction, Forestry, Mining and Energy Union v Bengalla Mining Company Pty Limited [2013] FCA 267, at [53]
61 Exhibit R2, Appendix E
62 Sagona v R & C Piccoli Investments Pty Ltd & Ors [2014] FCCA 875, at [351]
63 Heriot v Sayfa Systems Pty Limited (No.2) [2014] FCCA 1627, at [8] - [9]
64 Exhibit A1, Addendum B and Exhibit R4, para 2b
65 Exhibit A1, Addendum B
66 Exhibit A1, Addendum C
67 Slifka v J W Sanders Pty Ltd (1995) 67 IR 316, p.328; see also Sagona v R & C Piccoli Investments Pty Ltd & Ors [2014] FCCA 875, at [358]
68 Exhibit A3, para 8
69 Australian Licenced Aircraft Engineers Association v International Aviation Service Assistance Pty Ltd [2011] FCA 333
70 Ibid, at [443] – [449]
71 [1996] IRCA 371
72 [2006] FCA 122
73 Ibid, at [8] and [10] - [11]
74 Dafallah v Fair Work Commission [2014] FCA 328
75 Dafallah v Fair Work Commission [2014] FCA 328, at [159] – [161]
76 Ibid, at [179]
77 Hall v City Country Hotel Management Pty Ltd & Ors (No.2) [2014] FCCA 2317, at [25]
78 Ibid, at [26]
79 ALAEA v IASA, [2011] FCA 333, (2011) 205 IR 392, at [450]
80 Sayed v Construction, Forestry, Mining and Energy Union [2015] FCA 27, at [316]
81 Transport Workers' Union of Australia v Atkins [2014] FCCA 1553 14, at [22]
82 Sagona v R & C Piccoli Investments Pty Ltd & Ors [2014] FCCA 875, at [359]
83 [2011] FCA 333, (2011) 205 IR 392, at [450]
84 [2014] FCCA 2317, at [25]
85 [2015] FCA 27, at [316]
86 [2014] FCA 328, at [179]
87 [2014] FCCA 1553, at [22]
88 [2014] FCCA 875, at [335] and [359]
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