Unlawful Discrimination: Fair Work Ombudsman v WKO Pty Ltd [2012] FCA 1129

Fair Work Ombudsman v WKO Pty Ltd [2012] FCA 1129

In the recent decision of Fair Work Ombudsman v WKO Pty Ltd [2012] FCA 1129, the Federal Court imposed penalties on a child care operator and a director arising out of adverse action taken against an employee upon the disclosure of her pregnancy.

The employee, Ms Nederpel, was employed a permanent part-time basis as a child care worker with the WKO.  Ms Nederpel’s employment with WKO commenced in July 2010 and ended with her resignation in November 2012.  However, significantly, Ms Nederpel had been employed by the previous operator and accrued approximately two years of continuous service at the child care centre.

From about June 2010, Ms Nederpel informed Ms Leary, a director (and the controlling mind of WKO), that she was pregnant and that she intended to take parental leave from 4 January 2011.  As a result of Ms Nederpel’s pregnancy:

  • Her hours of employment were reduced by 15 hours/week;
  • Her claim for unpaid parental leave was refused – on the basis that she had not been employed for the 12 months stipulated in the National Employment Standards;

As a direct result of these steps, Ms Nederpel resigned her employment with WKO.

The agreed facts disclosed that Ms Leary had sought advice from the Fair Work Infoline about the impact of the transfer of business on WKO’s obligations to pay parental leave under the National Employment Standards.  The advice provided by the infoline was that Ms Leary should obtain legal advice.  However, at no time did Ms Leary obtain legal advice (or advice from any other industry association or representative body).

The Federal Court agreed that this conduct had resulted in:

  • A breach of s. 44 of the Fair Work Act arising from the denial of Ms Nederpel’s application for parental leave under the National Employment Standards;
  • A breach of the Children’s Services Award by unilaterally altering Ms Nederpel’s working hours.
  • A breach of Ms Nederpel’s workplace rights and, accordingly, unlawful adverse action under s. 342 of the Fair Work Act
  • Misrepresentation by Ms Leary in breach of s. 345 of the Fair Work Act in relation to her entitlement to take unpaid parental leave.
  • Pregnancy discrimination under s. 351 of the Fair Work Act.

The Federal Court characterised Ms Nederpel’s resignation as a constructive dismissal and found that, but for the unlawful actions of Ms Leary and WKO, Ms Nederpel would have continued her employment with WKO.

The Federal Court made a number of observations about the appropriate penalty to be paid by WKO and Ms Leary in relation to the breaches.  The Federal Court noted, amongst other things:

  • The small size of WKO, which operated a single child care centre;
  • The fact that the breaches were not deliberate (although the Court did characterise them as reckless);
  • The contrition of WKO and Ms Leary, particularly by agreeing facts and avoiding the need for a hearing.

In the circumstances, the Fair Work Ombudsman proposed that the penalty be $13,200 and that no penalty be imposed on Ms Leary.  However, the Federal Court noted that Ms Leary had contributed to the breaches as the controlling mind of the company and that, particularly, she had failed to obtain advice about WKO’s obligations even when this was suggested by the Fair Work Infoline.  For these reasons, the Court imposed a penalty on Ms Leary, to be paid if the penalty was not paid by WKO.  The Court also ordered that damages be paid in the amount of $5,000.

Although no specific findings were made, it is clear from the judgement that the breaches by WKO arose from the failure of Ms Leary, the director, to appreciate the significance of the transfer of business on her employee’s rights and entitlements.  This failure was compounded by a further failure to obtain professional advice.  As a consequence, a number of breaches of the Fair Work Act occurred.  In a case such as this, the advice need not be complex or costly.

* PCC Lawyers are a team of employment practitioners based in Sydney, with many years of combined knowledge and experience in workplace law, industrial relations, workplace investigations and training.  They provide a high standard of excellence and an exceptional level of personal service to a variety of clients in the Sydney metropolitan area, Central Coast, regional NSW and interstate.

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