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Adverse Action Costs Employer Over $220,000

Adverse Action

Sagona v R & C Piccoli Investments Pty Ltd & Ors [2014] FCCA 875

Ms Sagona was awarded over $174,000 in compensation after it was found her former employer took ‘Adverse Action’ against her.  The small business employer and Directors were also required to pay $66,000 in penalties. 

“The demand that the Applicant work ‘all hours necessary’ could only be an unreasonable demand and one which employers should be discouraged to make; and the capacity for women to continue in employment during their pregnancy and to be able to continue with their career after having a child are matters which as society we consider should be protected”.

The sentencing remarks of Judge Whelan, prior to imposing a $45,000 penalty on a small business employer, and an $8,000 penalty on each director for taking adverse action against Ms Sagona serve as a reminder to employers that appropriate consideration must be made for pregnant employees. 

Background 

Ms Sagona had been employed for 12 years, and had an expectation that she would eventually take over the day to day running of the business from Mr and Mrs Piccoli. 

In August 2012, Ms Sagona told the Respondents she was 10 weeks pregnant and that she proposed to take a period of maternity leave in 2013. Ms Sagona told the Piccoli’s she wanted to provide as much notice as possible so preparations could be made for her departure. She also indicated she had a desire to return to work on a part time basis after the birth of her child. Ms Sagona stated that at first her Employer has happy for her – however, that attitude soon changed. 

Conduct of the Employer 

A week after Ms Sagona informed her employer of the pregnancy, the Piccoli’s suggested that Ms Sagona would not be dedicated to work, would not be able to work late and it would be at least five years until her child was at school before she could be fully dedicated to work again. The Piccoli’s threatened that they may need to downsize the business, and they would not be able to retire as they had planned. 

Ms Sagona was told that she was allowed to work until December 2012, after which she would need to take long service leave prior to the birth of her child. If Ms Sagona insisted on returning to work in the summer, she would need to be ‘behind the scenes’ as it was ‘not a good look’ for customers to see a pregnant woman. Her pay would be cut as she was not generating income for the business. 

The Piccoli’s also sought to introducing sales targets that were unachievable and linked to a reduction in her salary if those targets were not met. Ms Sagona was told that if she didn’t sign the document containing those terms she would be fired. The Piccoli’s also made a demand that Ms Sagona work additional hours.

Ms Sagona’s passwords were also changed and her appointments were cleared. Ms Sagona resigned on 20 September 2012. 

Breaches of the Fair Work Act 

Ms Sagona submitted that her employer had taken adverse action against her by dismissing her from her employment, threatening to alter her position to her prejudice and injuring her in her employment. Justice Whelan held that the Respondents had taken Adverse Action against Ms Sagona for the following reasons: 

Compensation 

Ms Sagona was awarded $164,097.00 in economic loss, being:

  1. $55,000 for the lost opportunity had the Piccoli’s not refused Ms Sagona the ability to return to work after the Christmas break or refused her the opportunity to return on a part time basis, and 
  2. $115,600 for future loss. 

Ms Sagona was also awarded $10,000 compensation for distress, hurt and humiliation. 

If you think your employer has taken adverse action against you, we can help. Find out more about Employment Law.  

If you are an employer and would like to implement measures into your business to ensure you comply with the Fair Work Act 2009, contact our office for advice.