Taking a pregnant pause: Unlawful termination due to pregnancy

A recent court decision found that a real estate agency unlawfully terminated an employee on the final day of her probation period because she was pregnant and had taken personal and annual leave.

The employee started working for the employer in December 2015 as an administrative assistant and in January 2016 she found out she was pregnant. Over the following months, leading up to her termination of employment in June 2016, she took seven days’ sick leave. She also took four days of annual leave to attend pregnancy-related medical appointments.

Minutes from a number of directors’ meetings were submitted into evidence. The minutes of the meeting held in late January 2016 stated that “[the employee] is pregnant and her attendance is bad”. However the minutes of the April 2016 meeting did not identify any performance concerns regarding the employee, even though a number of other employees were identified as not performing or regularly absent.

At the hearing, the employer conceded that he hadn’t raised any performance concerns with the employee and she’d therefore not had an opportunity to take corrective action.

The employee alleged that, at the termination meeting in June 2016, the employer said: “Due to your circumstances, your employment has become unreliable and we have decided not to continue with your employment.” The employer vehemently denied using the words “due to your circumstances”.

Filing a complaint in the Federal Circuit Court, the employee alleged that the employer had acted unlawfully in dismissing her because she was pregnant and for taking personal leave and annual leave. The employer strongly denied the allegation and said the employee was terminated due to her unsatisfactory work performance (he pointed to certain instances) and lack of punctuality.

What was the decision?

The judge was scathing in her assessment of the quality of the employer’s evidence and arguments, and held that the employer had dismissed the employee because she was pregnant and because she took personal leave and annual leave.

The judge ruled that the employer’s contention that he had not dismissed the employee because of her pregnancy was not credible. Further, the judge found that the employer had used the words “due to your circumstances” and they could only have referred to the employee’s pregnancy.

According to the judge, “it beggars belief” that the employee’s employment had become unreliable on the basis that she was a little late to work on six or seven occasions. And it was “preposterous” that the employee could be dismissed for not picking up discrepancies in valuation figures (as that responsibility lay with the valuer who prepared the report). The judge also found that the employer treated the employee’s annual leave absences as pregnancy related, which in turn affected her reliability.

The judge added that failure to raise performance issues with the employee during her employment tended to undermine the credibility of allegations about poor performance, which were only raised with her for the first time at the termination meeting. It was also significant that the employer dismissed the employee during the last working hour on the last day of her probation period. “If the [employee’s] performance had genuinely been bad enough to dismiss her, the employer could have been expected to dismiss her much earlier,” the judge said.

Compensatory orders resulting from the decision are still to be made. However, unlike claims of unfair dismissal which are capped at six months’ salary, compensatory orders in this jurisdiction are uncapped. There may also be penalties imposed on the agency for three breaches of the Fair Work Act 2009 of up to $54,000 for each breach, plus the possibility of penalties of up to $11,000 for each breach against the individual director.

What can we learn from this case?

There are a range of instances where claims can be made by an employee who is still within their Minimum Employment Period (commonly referred to as a probationary period). This case is one such instance and is notable for a number of reasons.

  • Importance of evidence. It’s essential to be able to produce evidence of an employee’s poor performance, even if they’re within their Minimum Period of Employment. In this case, the employer would have benefited from evidence showing that genuine concerns had been expressed to the employee about her poor performance and the concerns were not trivial in nature.
  • Performance of witnesses. How witnesses conduct themselves while in the witness box can have a significant effect on the prospects of success. There’s no doubt that the judge in this case preferred the evidence of the employee over that of the employer. Equally, ‘loose’ comments made to an employee about the reasons for termination can have an impact.
  • Reverse onus of proof. The reverse onus of proof that applies in cases of this type can make it difficult for an employer to disprove allegations. Here, the judge ruled that “significant and substantial reasons for [the employer] dismissing the [ex-employee] were her frequent absences due to personal and annual leave because of pregnancy-related illness.
  • Performance management. Perhaps most importantly, this case shows how difficult and problematic the management of an employee can be when poor performance is intertwined with other considerations such as pregnancy, illness or temporary absence from work.

Give REEF a call

If you’re contemplating the termination of an employee within their Minimum Employment Period, you should carefully consider whether there are any grounds for the employee to allege that the termination is (in whole or in part) unlawful or discriminatory.

If you are in any doubt, call the REEF Helpline on 1300 616 170. One of our Workplace Relations Advisors will be able to give you the advice you need.