DISCRIMINATION UPDATE
Termination not unfair where employee cannot perform the inherent requirements of their position.
The Australian Industrial Relations Commission has ruled1 that it is not unfair to terminate an employee’s employment
where the employee is not able to perform all of his pre-injury duties.
The employee was employed by Coles initially under a 2002 enterprise bargaining agreement as a Store Worker
Grade 2. At the time he was injured he was employed as a Store Worker Grade 3 under the 2002 agreement.
The employee injured his spine whilst attempting to lift a roller door which had become jammed. The employee was
absent from work for two weeks. He then returned to work on a graduated return to work plan. When the 52 weeks of
modified duties as required by the Accident Compensation Act (Vic) 1985 had passed, Coles withdrew the employee’s
modified duties and arranged for a doctor to examine the employee. The doctor certified that the employee was fit to
return to full-time duties, but with restrictions. Coles then terminated the employee’s employment on the basis that he
was unable to fulfil the inherent requirements of his position.
The central issue of the case was whether the employee was performing the inherent requirements of his position or
whether he had the capacity to perform them at the time his employment was terminated.
The 2002 agreement was superseded by a new agreement in 2005 under which the employee was re-classified from a
Store Worker Grade 3 to a Team Member. The duties of a Team member were wider than those of a Store Worker
Grade 3. The employee argued that the new agreement had varied the inherent requirements of his position and the
tasks applicable to his employment should be judged against his pre-injury classification. Under both agreements, the
employee’s main duties were forklift driving.
Senior Deputy President Lacey ruled that under the 2002 agreement, part of the employee’s duties were to bend and
twist. The employee’s doctor and the employer’s doctor had certified that the employee was fit to resume full-time
work but was unable to bend and twist. Coles argued that as the employee was unable to bend and twist he was
unable to fulfil the inherent requirements of the position.
SDP Lacey accepted the argument put forward by Coles and dismissed the employee’s application. As the worker had
agreed that the only task that he could perform was forklift driving he did not have the capacity to perform the inherent
requirements of his position under either the 2002 agreement or under the 2005 agreement.
Refusal to offer an injured worker redundancy constitutes discrimination
The Victorian Civil Appeals Tribunal has found an employer to have illegally discriminated against one of its employees
by refusing to offer him a redundancy package.2
The employee was injured at work and had been on restricted duties. The day the employee returned to full duties he
was involved in a traffic accident. He received transport accident payments, and when these ceased he received
workers compensation payments. While the employee was absent from work, the employer began moving premises
from one side of the city to the other. Employees that were working at the original site (and not absent due to injury)
were informed that the factory would be moving premises. The injured employee was not informed of the move. The
employees who were not absent received an offer to either move to the new premises or they could accept a
redundancy under the employer’s enterprise bargaining agreement. This offer was not made to the injured employee.
The employee received a certificate from his treating doctor stating that he was fit to return to his normal duties. His
job at the original factory site was no longer available and the employer did not offer him the choice of transferring to
the new site or a redundancy package. In addition, the employer did not take any steps to terminate the employee’s
employment. This resulted in the employee being unable to claim Centrelink benefits.
The employee argued that his employer indirectly discriminated against him by not offering him the same choice other
employees received.
The employer argued that its obligations under the Victorian Occupational Health and Safety Act 2004 meant that it
was permitted to require that any employee be “100% fit” if they were to be offered a transfer or a redundancy
package.
Deputy President Coghlan did not accept the employer’s argument ruling the employer’s requirements to be
unreasonable. The employee’s injuries constituted an impairment for the purposes of sections 9(1) and (2) of the
Equal Opportunity Act 1995 (Vic). The employer had illegally discriminated against the employee as it had imposed
requirements upon him that due to his impairment he was unable to comply but those employees who did not have
impairments were able to comply.
The employer was ordered to offer the employee the choice of a redundancy payment or to have his employment
transferred.
Main implications for Employers:
Employers should ensure that employees with impairments are not precluded from any workplace entitlements as a
result of their impairment.
Workplace Health and Safety obligations will not be a sufficient excuse to deny employees with an impairment the
same entitlements and opportunities as those employees who do not have an impairment.
Employer receives a $33,000 penalty for refusing to allow an employee the right to
return to work following maternity leave
On appeal, the Federal Court has upheld a penalty of $33,000 awarded against an employer by the Federal
Magistrate’s Court for refusing to allow an employee to return to her job following maternity leave.3
The employee was a Marketing Manager. In 2004 she had taken maternity leave and while she was absent on
maternity leave a contractor was engaged to perform her duties. During this time, management formed the opinion
that the replacement contractor would be a more superior employee than the employee who was on maternity leave.
The employer created a new position description for the contractor and offered her permanent employment. Despite
the fact the position held by the employee on maternity leave still existed, the employer went about creating a paper
restructure of the company and of the position in order to make it appear to be redundant.
When the employee attempted to return to work after maternity leave in 2005, she was informed that her position had
been made redundant and if she wished to receive a redundancy entitlement she would be required to sign a release
preventing her from taking any legal action against the employer. The employee did not sign the release and she did
not receive any redundancy entitlements.
At first instance Federal Magistrate Burchardt found that the redundancy was contrived by the employer; that the
employee’s position still existed and that she should have been re-instated to it following her return from maternity
leave according to the provisions of Schedule 1A of the Workplace Relation Act. Burchardt FM applied the maximum
penalty applicable under Schedule 1A of the Act. Schedule 1A was replaced by the Australian Fair Pay & Conditions
Standard following the introduction of WorkChoices on 27 March 2007.
Schedule 1A was very similar to the current section 280(3) of the Act. Section 280(3) provides:
“(3) Subject to subsections (4) and (5), the employee is entitled to return:
(a) unless paragraph (b) or (c) applies--to the position she held immediately before the start of
the maternity related leave period; or
(b) if she was promoted or voluntarily transferred to a new position (other than to a safe job
under paragraph 268(2)(a)) during the maternity related leave period--to the new position; or
(c) if paragraph (b) does not apply, and she began working part-time because of her pregnancy--
to the position she held immediately before starting to work part-time.
(4) If subsection (3) would, apart from this subsection, entitle the employee to return to a position that
the employee had been transferred to under paragraph 268(2)(a), the employee is instead entitled
to return to the position she held immediately before the transfer.
(5) If the position (the former position ) no longer exists, and the employee is qualified and able to work
for her employer in another position, the employee is entitled to return to:
(a) that position; or
(b) if there are 2 or more such positions--whichever position is nearest in status and
remuneration to the former position.”
On appeal to the Federal Court, Justice Gordon held that Schedule 1A had been breached by the employer. Schedule
1A is a penalty provision and applies a maximum penalty of $33,000 in cases where the section is breached. The
imposition of a penalty is a discretionary matter for a judge, because a contravention is not the worst imaginable
contravention does not mean that it is inappropriate for the maximum penalty to be applied. FM Burchardt had not
made any appealable error in imposing the maximum penalty on the employer.
Main implications for Employers:
Employees have a statutory entitlement to return to their positions, or a position similar in status and remuneration if their
position is not available, when they return to work from maternity leave (or any parental leave).
It is not unlawful to terminate an employee’s employment for redundancy where it is a bona fide redundancy and there is
no other position available for the employee to fill. However, it will be considered unlawful and a breach of the legislation
if the redundancy is contrived in order to retain replacement employees rather than to allow the employee to return to the
position they held prior to maternity leave. In these circumstances, employers may receive hefty penalties where the
employee chooses to take the matter to court or the Workplace Ombudsman investigates and prosecutes the matter.
Accordingly, employers should ensure that they comply with the requirements with respect to parental leave in section
280 of the Workplace Relations Act or risk a penalty of up to $33,000.
Coles was justified in terminating a manager for bullying behaviour
The manager of a Coles Supermarket in Melbourne brought an application before the Australian Industrial Relations
Commission for relief on the grounds that the termination of her employment was harsh, unjust or unreasonable.
Coles argued that the termination of the manager’s employment was based on the following grounds:
• The Manager’s rude expulsion of a sales representative from the store using foul and intimidatory language.
• The bullying of a subordinate employee, which included treating her in a manner designed to intimidate and
humiliate and dragging her by the hair.
• Inappropriate physical behaviour with a male subordinate employee over several hours which was caught on video
surveillance. This behaviour was repeated after an earlier warning when the Manager had engaged in similar
conduct whilst the manager of another store. During this warning the Manager had acknowledged that the
behaviour was inappropriate and should not be repeated.
Senior Deputy President Lacey accepted the arguments made by Coles. It was held that each incident separately gave
rise to sufficient cause to terminate the Manager’s employment. The reasons for the termination were “sound,
defensible and well founded” and were “in no way a disproportionate response to the [Manager’s> behaviour.” SDP
Lacey noted that the Manager was given an opportunity to respond to the allegations of misconduct and that the
decision to terminate was made at the conclusion of the internal inquiry into the employee’s behaviour.
Main implications for Employers:
In circumstances amounting to misconduct, it is likely that the termination of an employee’s employment will be found
to be fair and reasonable provided the employee is given the chance to respond to any allegations made and proper
investigations are undertaken by the employer with regard to the alleged misbehaviour.
Surgical trainee receives record award of damages
In a recent Victorian case4, a neurosurgical trainee employed by a Monash Medical Centre was awarded $100,000 in
damages as the result of a sexual assault committed against her by her supervisor.
The supervising doctor had asked the trainee to visit him at his rooms late at night for a tutorial to assist her with her
studies. When the trainee attended the rooms, the supervisor suddenly approached her from behind, grabbed her,
spun her around embraced her, began kissing her on the lips and placed his hands on her breasts. When she had
managed to escape his embrace she looked down to see the supervisor’s exposed genitals. The supervisor then
asked the trainee to perform oral sex. The trainee exclaimed “How could you?” and ran to her car. She then drove
home.
The assault deeply affected the trainee to the point that her work performance suffered. She tried to discuss what had
happened with the supervisor who told her to “move on.” The Judge described her reaction as viewing the assault as
being “a gross violation of her body and her trust.”
She revealed what had happened to a colleague who suggested she discuss the matter with her mentor who was a
senior doctor at another hospital. She discussed the matter with her mentor who insisted that she report the incident to
the senior doctor at the hospital where she was working. She reported the matter to the senior doctor who dismissed
her complaints and reprimanded her for dressing provocatively.
Despite the fact that the senior doctor was aware of the accusations of assault, he assigned the supervisor to the
trainee for a rotation where she was required to work in close proximity to him and assist in his surgeries. The
supervisor was also responsible for rating the trainee in the final rotation of her traineeship.
In the months immediately preceding the assault, the trainee had been given very satisfactory performance ratings.
Following the assault the trainees performance did suffer, however she received an unsatisfactory progress report from
the supervisor after he was informed that the trainee intended to make a sexual harassment claim against him. The
day after the supervisor was informed of the complaint he wrote a letter to the senior doctor outlining areas where he
stated the trainee to be incompetent.
The supervisor argued that the trainee would fail her training placement and that the claim of sexual harassment had
been fabricated in order to draw attention away from her poor performance and in order the blackmail him into passing
the trainee in her assessment.
Judge Harbison found that whilst the trainee did not have a perfect performance record, the supervisor had concocted
the accusations of underperformance. The Judge preferred the trainee’s version of events, stating that it was more
likely her version of events were truthful than the denials given by the supervisor. It was further found that the
supervisor had done everything in his power to undermine the professional reputation of the trainee.
General damages were set at $100,000, the Judge did not order compensation for lost earnings. In setting this figure
the Judge noted that neurosurgery was a very specialised area of practice with only around 150 neurosurgeons in the
country at any one time and that the employee’s “enjoyment of her profession .... will now be significantly tarnished by
the sexual harassment which I have found proved.”
Main implications for Employers:
Where an employee has made a complaint of sexual harassment it is important that proper investigations are
undertaken without delay. The employee’s complaint should not be dismissed and contact between the aggrieved
employee and the person accused of the alleged unlawful conduct should be minimised as much as possible.
Depending upon the degree of the alleged sexual harassment complained of, the most appropriate method may be for
both employees to not be required to attend work throughout the investigation period but continue on full pay.
Employers and individual employees can be liable for large damages awards in circumstances where sexual
harassment is proven, particularly where the employer has disregarded the complaint, not investigated it and required
the aggrieved employee to continue working with the accused. Other issues which will impact upon any damages
awarded are whether the employer has a Discrimination & Harassment Policy; has provided training its employees,
has a procedure for employees to make a complaint and how that complaint will be dealt with, etc.
1 Francis Tham v Coles Group Supply Chain Pty Ltd [2008> AIRC 110
2 Brunsch v Venture Mould and Engineering Australia Pty Ltd [2008> VCAT 920 (27 May 2008)
3 Sterling Commerce (Australia) Pty Ltd v Illif [2008> FCA 702 (21 May 2008)
4 Tan v Xenos (No 3) [2008> VCAT 584 (11 April 2008)
This Update has been prepared by Aitken Legal. We recommend that you seek legal advice before applying the information to particular circumstances. If you would like further information in relation to the information provided in this Employment Update please contact Aitken Legal.
