Can a pregnant employee’s term of employment be unilaterally changed?

The short answer to this question is no, as was demonstrated in the recent case of Fair Work Ombudsman v Jewel Bay 2015 Pty Ltd.[1] In this case, an employer was found to have discriminated against its employee on the basis of her pregnancy, by unilaterally reducing her hours. It specifically highlighted pertinent factors which courts will give weight to when issuing penalties against employers who are considered to have discriminated against their employees.

The case resulted in a Perth restaurant and its company director being fined $44,800 for taking adverse action against a casual pregnant employee by cancelling and reducing a significant number of her shifts for reasons which included her pregnancy. In addition to this, the court also ordered a compensation payment of $7,000.

The court here sought to heavily discourage employers from taking adverse action against pregnant employees by issuing penalties which “well outweigh any perceived financial benefit of doing so”.

Facts of the Case & Parties Involved:

There are three relevant parties;

Applicant – Fair Work Ombudsman (on behalf of Ms T who was employed as a casual waitress by Jewel Bay Pty Ltd)

First Respondent  – Jewel Bay Pty Ltd ( the restaurant where Ms T was employed)

Second Respondent – Mr Tajeddine (director and shareholder of Jewel Bay)

What was the adverse action?

Ms T was employed as a casual waitress by Jewel Bay where she was rostered for shifts which could ordinarily be changed with one day’s notice. Around 12 April 2017, Ms T verbally informed Mr Tajeddine (Second Respondent) that she was pregnant. From July 2017 onwards, Ms T was visibly pregnant.

The parties presented an agreed to statement of facts outlining comments made by Mr Tajeddine and subsequent discussions relating to the cancellation and reduction of Ms T’s shifts. One such instance involved Mr Tajedine directing Mr Audrain (the supervisor) to send Ms T home early during her shift because “she looks disgusting”. Following this, on 22 July 2017, Mr Audrain was again directed by Mr Tajeddine to cancel her evening shift, and in doing so, specifically referred to Ms T’s pregnancy and the effect it had on both her appearance and her ability to perform her duties. 

 Ms T was rostered to work 65 shifts between July 2017 and her eventual resignation on 19 September 2017. Of those 65 shifts, 10 were worked as rostered, 19 were reduced in length and 36 were cancelled.

Both respondents conceded that the substantial and operative reason for their conduct in reducing and cancelling Ms T’s shifts, was her pregnancy. By reducing and cancelling Ms T’s shifts, both Respondents have taken adverse action against her for the purposes of section 342(1). Relevantly, Section 351 of the Fair Work Act 2009 (Cth) (“The Act”) prohibits an employer from taking adverse action against a pregnant employee.

A number of orders were agreed to by the parties as a result of the contravention. These included the following;

  • Pursuant to s545(2)(b) — Jewel Bay (First Respondent) pay $7,000 to Ms T as compensation for economic and non-economic loss suffered as a result of the contravention.
  • Pursuant to s545(1) – Jewel Bay is to undertake training of its Directors on the obligations under the National Employment Standards within two months of the orders being made.
  • Pursuant to s546(1) – The Fair Work Ombudsman (Applicant on behalf of Ms T) seeks pecuniary penalties against, Jewel Bay (First Respondent) and Mr Tajeddine (Second Respondent) in respect of their contraventions.

Accordingly, the court here was tasked with considering what reasonable pecuniary penalties should be paid by the respondents in light of their contravention.

What Penalties were awarded?

In assessing what penalty would be appropriate, the court referred to a non-exhaustive list of factors outlined in Mason v Harrington Corp Pty Ltd t/as Pangae Restaurant & Bar [2007] FMCA 7, [26]-[29]. Each of these factors was subsequently applied to the circumstances of Ms T’s employment in ordering penalties of $31,500 against Jewel Bay and $6,300 against Mr Tajeddine. Among others, some of the factors considered are outlined below;

  • The nature and extent of the contravening conduct was taken to represent a serious breach by the Respondents, of their obligations under the Act especially with the adverse action flowing from explicit and derogatory remarks made by Mr Tajeddine to other employees.
  • The nature and extent of any loss as a result of the contraventions; Whilst an agreement was made between the parties for compensation amounting to $7,000, the court noted that it “would have considered making a much higher order for compensation because of the derogatory nature of the comments that were made and their unacceptable place in a modern Australian workplace”.
  • Contrition; The court noted that no formal apology had been tendered to Ms T, nor had the agreed to compensation amount of $7,000 been paid. Accordingly, the Respondents, in the view of the court, had not provided evidence of a real contrition or remorse.
  • Cooperation; A 15% discount was applied in light of admissions made by the Respondents in reaching an agreed statement of facts thereby obviating the need for contested liability hearing. The court noted however, that it would not award the maximum discount where the admissions were not made at the first available opportunity.
  • Specific Deterrence; The court emphasised the need for the penalty to reflect specific deterrence, in light of the serious nature of the Respondent’s conduct, including the lack of contrition and derogatory nature of comments made in regards to Ms T’s pregnancy.

In considering the overall penalty, the court placed significant emphasis on the vulnerability of Ms T, both in light of her pregnancy and her casual position which left her without recourse to either sick leave or employer-paid maternity leave.

Factors which courts will give significant weight to:

In this case, the court emphasised the importance of sending a clear message of general deterrence to employers who subject their casual employees to the same or similar treatment as that of Ms T. Adverse weight was also given to the lack of any direct apologies to Ms T on behalf of the Respondents and the general absence of any real remorse or contrition.

Employer Takeaway:

Employers must exercise caution when taking any action which is in detriment to an employees position, in ensuring they are fulfilling their obligations under the Fair Work Act. This is especially the case where pregnant employees are exercising workplace rights such as taking leave, lodging enquiries or making complaints.

This case also highlights a turning point wherein courts are emphasising the vulnerability of pregnant employees and coming down harshly on employers who take adverse action against them.

If you are a pregnant employee or know pregnant employees and have questions regarding their employment, please contact our client engagement team to make an appointment with us today.

[1] & ANOR [2019] FCCA 3561

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