Domitrovic v Smith Family Holdings Pty Ltd [2005] QIRC 149 (2005) 180 QGIG 841

[Extract from Queensland Government Industrial Gazette, dated 4 November, 2005, Vol. 180, No. 14, pages 841-844] QUEENSLAND INDUSTRIAL RELATIONS COMMISSION Industrial Relations Act 1999 – s. 74 – application for reinstatement Sandra Narelle Domitrovic AND Smith Family Holdings Pty Ltd (No. B/2005/589) COMMISSIONER FISHER 20 October 2005 Application for reinstatement – Respondent operates two businesses – Applicant resigns – Applicant recruited back to work – Maternity leave – Applicant requested to return to work early – Applicant agrees to return one day per week – Applicant unable to continue working due to family responsibilities – Applicant contacts respondent to resume duties and advised her employment no longer available – Alternative employment offered at other business – Applicant declines – Effect on maternity leave by early return to work – Industrial Relations Act 1999 ss. 17, 18, 26, 28 & 33 – Employment status on return to work – Applicant resumed employment as casual employee – Applicant not immediately aware of change in employment status from full-time to casual – Respondent found to have terminated applicant’s full-time employment on or about 6 August 2004 – Grounds for dismissal – Family responsibilities – Discrimination – Invalid reason s. 73(2)(m) – Remedy – Factors taken into account in assessing compensation – Mitigation – Respondent found to have acted in error not mischief – Global sum of compensation to be paid within 22 days of release of decision. DECISION The applicant, Sandra Domitrovic, has made an application for reinstatement stating that she was dismissed from her full-time employment with the respondent, Smith Family Holdings Pty Ltd, (the Company), on 30 March 2005. The Events The respondent, Smith Family Holdings Pty Ltd, operates two businesses: (i) Strata and Body Corporate Services; and (ii) Anthony Smith and Company. Glenis and Anthony Smith are the Directors of Smith Family Holdings Pty Ltd. Mrs Smith effectively runs Strata and Body Corporate Services while Mr Smith operates Anthony Smith and Company. Being a family owned and operated Company, both Mr and Mrs Smith are familiar with each business. Ms Domitrovic initially commenced work with the respondent on 17 January 2000 and worked in the Strata and Body Corporate Services business. Ms Domitrovic periodically performed work for Anthony Smith and Company and according to her evidence, Mr Smith’s treatment of her caused her to resign on 14 September 2001. On 3 December 2001 Ms Domitrovic returned to work for the Company, again in its Strata and Body Corporate Services division, having been recruited back by Mrs Smith. Ms Domitrovic continued to work until 1 March 2004 when she departed on six months’ maternity leave. That leave would have expired on 31 August 2004. In July 2004 Mrs Smith telephoned Ms Domitrovic and asked her to return to work early. Ms Domitrovic agreed and re-commenced employment on 6 August 2004 working one day per week. She continued to work until 18 February 2005 when she advised Mrs Smith that her son required surgery. As a result Ms Domitrovic said she could not continue working and did not know when she would be available to return to work. However, she did work one further day on 2 March 2005. On 21 March 2005 Ms Domitrovic contacted Mrs Smith advising of her ability to recommence work. Mrs Smith said that Ms Domitrovic was not required immediately. When Ms Domitrovic telephoned Mrs Smith on 30 March 2005 she was informed that her employment was no longer available but that she could contact Mr Smith about work with Anthony Smith and Company. Ms Domitrovic declined to do so because of her treatment by Mr Smith in 2000/2001. There are two issues that must be determined: (i) the effect on Ms Domitrovic’s maternity leave when she returned to work on 6 August 2004; and (ii) the effect on Ms Domitrovic’s employment status when she returned to work on 6 August 2004. Effect on Maternity Leave -- 1 of 5 -- 2 Ms Domitrovic gave evidence that when she was contacted by Mrs Smith in July 2004 to invite her to return to work before the expiry of her six month’s maternity leave, the parties agreed that her maternity leave would be extended to twelve months. This would mean that the maternity leave would expire on 28 February 2005 and she would be able to return to full-time work on 1 March 2005. Mrs Smith’s evidence on the effect of Ms Domitrovic’s return to work in August 2004 on her maternity leave was unclear and inconsistent. At one point she said that the maternity leave was left open-ended, dependent upon the condition of the child. It was not however extended for 12 months as claimed by Ms Domitrovic. Mrs Smith thought Ms Domitrovic would return to full-time work in September, after the six months of maternity leave had expired. No discussions occurred between the parties in September 2004 about the status of Ms Domitrovic’s employment or her maternity leave. Later in her evidence Mrs Smith said that the maternity leave was never cancelled but then said it came to an end when Ms Domitrovic returned to work in August. Mrs Smith also said that they knew that Ms Domitrovic would be unable to resume full-time work because of the medical status of her son. The documentary evidence that is available sheds a better light on the Company’s position in respect of the maternity leave. Mr Smith wrote to Ms Domitrovic by letter dated 14 April 2005 in response to a letter from Ms Domitrovic complaining that she had been unlawfully terminated from her employment in March 2005. In his evidence Mr Smith said he sought industrial advice before responding. The letter stated: “You were re-employed after maternity leave by agreement as a casual employee to suit your availability. You were pleased to work on this basis.”. It is apparent from this paragraph that the respondent acted on the basis that Ms Domitrovic’s maternity leave ceased on her return to work in August 2004. This position was confirmed in submissions. Mr Corrigan, who appeared for the respondent, submitted that by agreeing to return to work early, Ms Domitrovic’s maternity leave ceased as at the day she returned. From that point she was treated as a casual employee. In light of the contradictory evidence on the issue it is appropriate to first consider the provisions of the Industrial Relations Act 1999 which relate to maternity leave. These are found in Chapter 2 Part 2 Division 2, Parental Leave. Section 17 defines long parental leave to mean maternity leave for a pregnant employee. Section 18(2) of the Act provides that a pregnant employee is entitled to an unbroken period of up to 52 weeks unpaid maternity leave for the child’s birth and to be the child’s primary caregiver. In accessing six months’ maternity leave, Ms Domitrovic was taking less than the minimum entitlement available under s. 18(2) of the Act. She was entitled to take this period of leave as a continuous block, however, the Act recognises that circumstances sometimes arise which necessitate the employee’s return to work before the expiration of the full period of the leave. Section 28 of the Act makes provision for an employee to return to work before the expiry of the maternity leave as follows: “28 Interruption of parental leave by return to work (1) An employee and employer may agree that the employee break the period of parental leave by returning to work for the employer, whether on a full-time, part-time or casual basis. (2) The period of parental leave cannot be extended by the return to work beyond the total period allowed under s. 18.”. Mr Corrigan submitted that the effect of Ms Domitrovic returning to work in August 2004, before the expiry of the maternity leave, was to cancel the maternity leave. Mr Steinitz, who appeared for the applicant, contended that the return to work constituted an interruption to the continuity of the leave and not a cessation of the leave. In my view Mr Steinitz’s interpretation of s. 28 of the Act is correct for the following reasons. Section 18(2) provides that maternity leave is to be for an unbroken period. Section 28 recognises that it is possible to break that period to allow for a return to work during the period for which maternity leave was taken. That the maternity leave may resume after being broken is contemplated by s. 28(2) where it provides that the period of parental leave is not able to be extended beyond the total period allowed under s. 18 by the return to work. These two provisions, when read together, make it clear that a return to work serves to interrupt rather than cancel the maternity leave. Support for this view can also be drawn from the heading to the section. A heading to a section is part of an Act if the Act is enacted after 30 June 1991: s. 14(2) of the Acts Interpretation Act 1954 (Qld). The Industrial Relations Act 1999 -- 2 of 5 -- 3 falls into that category. In the event the language of s. 28 was considered to be doubtful or ambiguous the meaning which is consistent with the heading must be adopted: Ragless v District Council of Prospect [1922] SASR 200. The heading of s. 28 is “Interruption of parental leave by return to work”. The word “interrupt” from which “interruption” is derived means: “1. to make a break in (an otherwise continuous extent, course, process, condition, etc.). 2. to break off or cause to cease, as in the midst or cause: He interrupted his work to answer the phone”: The Macquarie Dictionary 1998. When this meaning is applied to s. 28 of the Act, it is clear that the effect of a return to work is to break for a time a continuous period of leave. However, once the interruption has ceased, the leave continues, provided that the total period of maternity leave does not extend beyond the 52 week period allowed by s. 18 of the Act. Further, s. 26 of the Act deals with the cancellation of parental leave. Some import can be drawn from the different use of language in ss. 26 and 28. The use of the word “cancel” in s. 26 is clearly intended to convey a different meaning to the word “break” in s. 28. Had the Legislature intended that a return to work cancel the parental leave then given its use in s. 26 the word cancel would have been used in s. 28. For all of these reasons then, the effect of Ms Domitrovic’s return to work on her maternity leave on 6 August 2004 should not have been to cause it to irrevocably cease. The respondent either did not know or did not consider that maternity leave could be interrupted by a return to work on a casual basis. The respondent acted in the belief that when Ms Domitrovic returned to work she no longer had any entitlement to maternity leave. A large part of the reason this matter is before the Commission is the lack of documentation about any part of the leave. There is no paper trail about the leave sought and granted as well as the return to work. In this regard, s. 33 of the Act is relevant. It provides that on becoming aware that an employee is pregnant, the employer must inform the employee of the employee’s entitlement to parental leave and the employee’s obligations to inform the employer of any matter. Failure by the employee to provide any notice or other document cannot be relied on by the employer unless the employer has met its obligation. In this case, the employer did not establish that it had complied with s. 33(1) and thus cannot rely on any failure by Ms Domitrovic to give a notice or document to support its position. Effect on Employment Status While Ms Domitrovic was prepared to interrupt her maternity leave to return to work on a casual basis there is no evidence from her that she agreed to terminate her full-time employment to do so. At the time she agreed to resume work she believed her maternity leave had been extended to 28 February 2005 and had an expectation that her full-time position would be available to her on the expiration of her leave. This position is confirmed by Ms Domitrovic’s querying her rate of pay with Mr Smith on her return to work when she discovered she was being paid more than she had received as a full-time employee. Mr Smith told her she was being paid as a casual employee as she was working one day per week. According to Ms Domitrovic, this was the first she was aware that she was being treated as such but she did not understand that it also meant a permanent change to her employment status had been effected. That Ms Domitrovic was unaware of the change is also supported by the payment to her, at her request, of her holiday pay in December. Mr Smith had no recollection of why the money was paid. Given that the respondent treated her employment status as casual, the money ought to have been paid to her on her engagement as a casual employee in August 2004. That it was not paid until a request was made does not show that the change in employment status had not been effected, rather it evidences that the respondent was confused about employment requirements. The duties performed by Ms Domitrovic on resumption of work were a component of her full-time position. Because they had been previously performed by her, Ms Domitrovic believed that her substantive full-time position would be hers to return to on the expiration of her maternity leave. In my view Ms Domitrovic’s parting comments to Mrs Smith on 18 February 2005 are not indicative of her acceptance of a change in her employment status but show that she was intending to resume her maternity leave. I have some concerns about her statement that she did not know when she would be available for further work but I do not consider that this was an indication of acceptance to any change in her employment status. Ms Domitrovic believed her maternity leave to have been extended to 28 February 2005 and was ceasing her casual engagement to resume her leave, as permitted by s. 28 of the Act. On that basis Ms Domitrovic should have returned to work on a full-time basis on 1 March 2005 but did not do so because of her family responsibilities. Given the absolute lack of formality in seeking leave of any kind in this Company, Ms Domitrovic’s parting words on 18 February 2005 to Mrs Smith may perhaps (by a stretch) constitute an application for unpaid leave to tend to her -- 3 of 5 -- 4 family responsibilities to commence on the completion of maternity leave should further leave be required. It was not an extension to maternity leave which is permitted by agreement pursuant to s. 29(3) of the Act. No response was forthcoming by Mrs Smith because of her belief that Ms Domitrovic had permanently changed her status to that of a casual employee. The absence of any proper system of applying for and recording leave contributed to the confusion that existed. Support for the view that the respondent believed that Ms Domitrovic was not going to return to her full-time position is further evidenced by their replacement of her by another person, their daughter-in-law. There is no evidence to support a contention that this employee was a replacement employee pursuant to s. 35 of the Act. From 6 August 2004 Ms Domitrovic was regarded by the respondent as a casual employee. Mrs Smith’s surprised reaction to Ms Domitrovic’s enquiry about her return to work in March 2005 confirms the respondent’s belief that Ms Domitrovic’s employment status had permanently changed in August 2004. This was also confirmed in their letter of 14 April 2005. As I have said there was no agreement to a permanent change in employment status. The casual employment was an interruption to the maternity leave and did not serve to cancel it. In my view the actions of the respondent in treating Ms Domitrovic’s return to work as a cancellation of her maternity leave, by engaging her on a new contract of employment as a casual and by permanently replacing her with another employee support the conclusion that the respondent terminated Ms Domitrovic’s employment as a full-time employee. That termination occurred on or about 6 August 2004. After being terminated as a full-time employee the Company re-engaged Ms Domitrovic as a casual employee. That casual employment ceased on 2 March 2005. Ms Domitrovic later declined an offer of potential further work. For reasons explained earlier Ms Domitrovic accepted casual employment but it was accepted in the context of s. 28 of the Act and was not regarded by her as a permanent change to her employment status. Ms Domitovic‘s application claims the dismissal on 30 March 2005 to be unfair. The employment that concluded at that point was casual employment. Ms Domitrovic’s complaint is about the termination of her full-time employment, which she believed to have occurred on 30 March 2005. Ms Domitrovic was clearly unaware that her full-time employment had been terminated until Mrs Smith spoke to her on 30 March 2005 and the position was made plain by the letter of 14 April 2005. The events showed that the dismissal from full-time employment occurred some seven months earlier, in August 2004. As the complaint is about the dismissal from full-time employment I have considered her application mainly on that basis. If it be necessary to extend time for filing the application, an extension is granted. Reasons for the Dismissal In this matter consideration has to be given to the termination of both the full-time and casual employment with the respondent. With respect to the latter period of casual employment the respondent was clearly acting on the basis that it was short-term and that there was no need for any process to bring the employment to an end or any need for formal notification of that. That position was incorrect given the length of Ms Domitrovic’s full-time employment. She would not be considered to be a short-term casual employee and thus excluded from the dismissal provisions of the Act. Although the reason for the ceasing of the casual employment with Strata and Body Corporate Services seems to be operational because no further work was available, proper processes for concluding that employment were still required by the Act to be followed. What were the grounds for the dismissal from the full-time position? Dismissal on the grounds of being absent on parental leave is not permitted under s. 34 of the Act and is an invalid reason under s. 73(2)(k) of the Act. The evidence shows that the respondent “knew” that Ms Domitrovic was not going to be able to return permanently because of the medical condition of her child. From that, it is clear that the absence on parental leave was not the motivating factor for the dismissal. The respondent considered that it was Ms Domitrovic’s family responsibilities which prevented her from returning to full-time work and that was the reason it acted to terminate the full-time employment. Family responsibilities falls within the meaning of discrimination which is an invalid reason under s. 73(2)(m) of the Act. Remedy Reinstatement is not considered by the parties to be practicable in the circumstances of this case. I agree. At one time, and for a considerable period, Ms Domitrovic and Mrs Smith had a good relationship with Mrs Smith taking an interest in Ms Domitrovic and the welfare of her child. That Mrs Smith also sought to recruit Ms Domitrovic back to work on two occasions is evidence of their harmonious relationship. Regrettably, as a result of error, this relationship has now soured. -- 4 of 5 -- 5 The applicant seeks compensation. In my view the compensation should take account of a number of factors. It should compensate for the loss of full-time employment, the manner in which that employment and the casual employment came to an end and the reason for the loss of the full-time position. Consideration was given to whether a sanction under s. 80 of the Act should be ordered but to go down that path would be inappropriate given the parties did not address such a possible outcome. As well as the matters mentioned above consideration needs to be given to the circumstances in which Ms Domitrovic left the employment on 18 February and, except for 2 March 2005, did not seek to resume work until after her maternity leave, as she understood it, had expired. However, as previously explained I think in the context of this employment and given Mrs Smith was aware of the medical status of the child, that Ms Domitrovic was making an informal application for leave for family responsibilities. I accept that the respondent acted in error and not out of mischief. The previous harmonious working relationship, that extended into the personal sphere, is evidence of this. In addition, the respondent is a small business and acted without advice, until it was all too late. The error of the Company has to be balanced against the loss suffered by Ms Domitrovic as a result of its actions, that is, the loss of her employment when such employment was reasonably anticipated to be ongoing. The respondent alluded to an argument that it had attempted to help mitigate Ms Domitrovic’s loss by the offer of the potential of alternative casual work in the other business of the respondent. Employment in that business was considered to be unacceptable to Ms Domitrovic. Given Ms Domitrovic’s evidence that Mr Smith was discourteous on occasion, a claim that Mr Smith did not deny, it was not surprising that she declined to follow up the invitation. Such employment also did not seem to be certain. Apart from this, there was no evidence before the Commission about Ms Domitrovic’s attempt to mitigate her loss. Taking into account all of these factors the Commission has decided to award a global sum of $9,500. Such amount to be taxed according to law and paid within 22 days of the date of release of this decision. Order accordingly. G.K. FISHER, Commissioner. Hearing Details: 2005 12 September Appearances: Mr R. Steinitz (Advocacy and Industrial Advisory Service) for the applicant. Mr M. Corrigan (Gold Coast Employee Relations) on behalf of respondent. Released: 20 October 2005 Government Printer, Queensland The State of Queensland 2005. -- 5 of 5 --