Badman v Grasshoppers Early Learning Centres Pty Ltd [2009] FMCA 32 (27 January 2009)

Last Updated: 29 January 2009

FEDERAL MAGISTRATES COURT OF AUSTRALIA

BADMAN v GRASSHOPPERS EARLY LEARNING CENTRES PTY LTD

[2009] FMCA 32

INDUSTRIAL LAW – Alleged unlawful termination of employment – matters to be proved by employee – whether applicant employee has proved that her temporary absence was within the meaning of the Regulations. INDUSTRIAL LAW – Alleged unlawful termination of employment – onus on employer to prove that termination was not for a reason that includes a proscribed reason – whether reason for termination need be a valid reason – onus satisfied.

Workplace Relations Act 1996, ss.240, 659, 663, 664, 665, 666, 809, 824 Workplace Relations Regulations 2006, Regulation 12.8 Federal Magistrates Act 1999, s.17A Federal Magistrates Court Rules, Rule 13.10 Evidence Act 1995, s.140

Hayward v Rohd Four Pty Ltd T/as CM Testing Service & Ors [2008] FMCA 1490 Galvin v Renito Pty Ltd [1999] FCA 1005 General Motors Holden Pty Ltd v Bowling (1976) 12 ALR 605 Buckingham v KSN Engineering Pty Ltd & Anor [2008] FMCA 546 Rojas v Esselte Australia Pty Limited [2008] FCA 1585 Johns v Gunns Ltd (1995) 60 IR 258 Heidt v Chrysler Australia Ltd (1976) 26 FLR 257 Stewart v Nickles [1999] FCA 888 Laz v Downer Group Ltd [2000] FCA 1390; (2000) 108 IR 244 Nikolich v Goldman Sachs J B Were Services Pty Ltd [2006] FCA 784 Ninatoca Pty Ltd ATF The Fagence Investment Trust & Anor v Kovari Professional Pty Ltd ATF The Kavar Professional Trust & Ors (No. 2) [2008] FMCA 947 Balding v Ten Talents Pty Ltd [2007] FMCA 145 Duong v Crown Ltd [1999] AIRC 748 Byrne v Australian Airlines Ltd [1995] HCA 24; (1995) 185 CLR 410 Briginshaw v Briginshaw [1938] HCA 34; (1936) 60 CLR 336 Kanan v Australian Postal & Telecommunications Union (1992) 43 IR 257 Re Ross; ex parte Crozier [2001] FCA 1665 Construction, Forestry, Mining and Energy Union v Clarke [2008] FCAFC 143

Applicant:

LOUISE IRENE BADMAN

Respondent:

GRASSHOPPERS EARLY LEARNING CENTRES PTY LTD

File Number:

BRG 743 of 2006

Judgment of:

Wilson FM

Hearing dates:

12, 13, 14 & 16 March 2007

Date of Last Submission:

16 March 2007

Delivered at:

Brisbane

Delivered on:

27 January 2009

REPRESENTATION

Counsel for the Applicant:

Mr Rangiah

Solicitors for the Applicant:

Carne Reidy Herd

Counsel for the Respondent:

Mr Healy

Solicitors for the Respondent:

Macrossans Lawyers

ORDERS

(1) The Application pursuant to s.663 Workplace Relations Act 1996 is dismissed.
(2) The respondent’s application for summary termination of the initiating application is dismissed.
(3) The applicant shall pay the respondent’s costs of and incidental to the proceedings to be taxed, save and except for the costs ordered to be paid by order 4 hereof.
(4) The respondent shall pay the applicant’s taxed costs of and incidental to its application to summarily terminate the initiating application, and shall bear its own costs of and incidental to that application.

FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISBANE

BRG 743 of 2006

LOUISE IRENE BADMAN

Applicant

And

GRASSHOPPERS EARLY LEARNING CENTRES PTY LTD

Respondent

REASONS FOR JUDGMENT

1. On 20 July 2006 the applicant was summarily dismissed from her employment by the respondent. The applicant alleges that the termination of her employment was unlawful. The legislative scheme under which the applicant’s case is to be determined is the Workplace Relations Act 1996 (Cth). Significant amendments to that legislation came into force on 27 March 2006. Those amendments apply in this case.
2. In particular, the Applicant relies on s.659(2)(a) of the Act, which provides:
   • (2) Except as provided by subsection (3) or (4), an employer must not terminate an employee’s employment for any one or more of the following reasons, or for reasons including any one or more of the following reasons:
     • (a) temporary absence from work because of illness or injury within the meaning of the regulations;
3. Section 664 of the Act is important in these proceedings. It provides:
   • In any proceedings under section 663 relating to a termination of employment in contravention of section 659 for a reason (a proscribed reason) set out in a paragraph of subsection (2) of that section:
     • (a) it is not necessary for the employee to prove that the termination was for a proscribed reason; but
     • (b) it is a defence in the proceedings if the employer proves that the termination was for a reason or reasons that do not include a proscribed reason (other than a proscribed reason to which subsection 659(3) or (4) applies).
4. It was not contended by either party that ss.659(3) or (4) of the Act had any application to this case.
5. By application filed 6 October 2006 the applicant sought the following orders:
   1. An order imposing on the respondent a penalty of $10,000;
   2. An order requiring the respondent to pay the applicant an amount in relation to the remuneration lost because of the termination of employment.
6. The application is made pursuant to ss.663 and 665 of the Act.
7. Both parties accepted that in these proceedings the respondent bore a ‘reverse’ onus of proof under s.664 of the Act. Before proceeding further, it is helpful to understand what that means. I discussed these procedural aspects pertaining to applications concerning alleged unlawful dismissal in Hayward v Rohd Four Pty Ltd T/as CM Testing Service & Ors [2008] FMCA 1490. In order to fully appreciate what is said in the authorities, it must be borne in mind that the statutory predecessor to s.659(2) was s.170CK, and to s.664 was s.170CQ.
8. In my view, in proceedings under Part 12 of the Act the applicant bears the legal onus of proving her case to the requisite civil standard. As will shortly be discussed, the respondent bears the evidential onus of proving a negative, regarding the reason or reasons for termination of employment. That is, in the absence of the employer proving that the reason for termination of employment was not for a proscribed reason under s.659(2) of the Act, it is not necessary for the employee to prove such facts; they are presumed in her favour.
9. In my view, the applicant employee has to prove that:
   1. She was an employee; and
   2. Her employment has been terminated.
10. Neither of those facts is contentious in this case and they have been established.
11. Is it then sufficient for the employee to simply allege that the employment was terminated for one or more of the proscribed reasons in s.659(2) of the Act or is something more required?
12. Common sense dictates that, at the least, the applicant must identify those reasons under either s.659(2) that are alleged to have formed the contravening conduct. In a case with pleadings, such particulars would be ordered as a matter of course. Otherwise a respondent would have to devote resources to proving a negative that could never arise on the facts.
13. In Galvin v Renito Pty Ltd [1999] FCA 1005 Ryan JR applied the reasoning of Mason J in General Motors Holden Pty Ltd v Bowling (1976) 12 ALR 605 concerning an earlier statutory incarnation of ss.659(2) and 664. At [28] Ryan JR said:
    • “At 617 Mason J referred to the onus on the employer of establishing affirmatively that it was not actuated by the reason alleged in that case in the charge laid under s. 5. He held that the consequence was that the employee, in order to succeed, was not bound to adduce evidence that the employer was actuated by that reason, a matter peculiarly within the knowledge of the employer. He found the employee was entitled to succeed if the evidence was consistent with the hypothesis that the employer was so actuated and that hypothesis was not displaced by the employer. He said:
    • “To hold that, despite the subsection, there is some requirement that the prosecutor brings evidence of this fact is to make an implication which, in my view, is unwarranted and which is at variance with the plain purpose of the provision in throwing on to the defendant the onus of proving that which lies peculiarly within his own knowledge.””
14. In Bahonko v Sterjov [2007] FCA 1244 Jessup J said:
    • “95 The applicant relies upon s 170CQ of the WR Act. At the relevant time, it provided:
      • In any proceeding under section 170CP relating to a termination of employment in contravention of section 170CK for a reason (a proscribed reason) set out in a paragraph of subsection (2) of that section:
        • (a) it is not necessary for the employee to prove that the termination was for a proscribed reason; but
        • (b) it is a defence in the proceedings if the employer proves that the termination was for a reason or reasons that do not include a proscribed reason (other than a proscribed reason to which subsection 170CK(3) or (4) applies).
      • Although it is well-established that the effect of this provision is to reverse the onus of proof on the matter of reason under s 170CK(2), there is an aspect of the operation of s 170CQ of the WR Act which has been little discussed in the cases, but which is of some importance in the present matter, largely because there is no evidence as to the applicant’s political opinion, social origin or physical or mental disability. Notwithstanding that she has not proved those matters, is the applicant entitled to rely upon s 170CQ merely by alleging that she was dismissed because of those reasons, or one or more of them?
      • 96 There were two distinct groups of provisions of the WR Act which used "reverse onus" sections in circumstances where the reason for which an act was done was part of the legislative prohibition. One group was that with which this proceeding is concerned, s 170CK(2)(f). For the sake of convenience, I shall call that paragraph the anti-discrimination provision. The other group was to be found in Part XA of the WR Act, which I shall call the anti-victimisation provisions. The latter group had its origins in s 5 of the Conciliation and Arbitration Act 1904 (Cth). That section created a prohibition, as part of the criminal law, upon employers taking specified action against their employees for the reason that the employees were union members or officers, or in other specified respects involved in union activities. Under s 5(4) of the 1904 Act,
      • ... if all the facts and circumstances constituting the offence, other than the reason for the defendant’s action, are proved, it shall lie upon the defendant to prove that he was not actuated by the reason alleged in the charge.
    • Under that provision, it lay upon the prosecutor to prove the existence of the factual circumstance alleged to provide the basis of the defendant’s reasons for dismissal. For example, if it were alleged that an employee had been dismissed because of his or her union membership, it was for the prosecutor to prove that the employee was a union member; by s 5(4) it then lay upon the defendant to prove that that circumstance was not the reason why the employee had been dismissed. Examples of informations which were dismissed because the prosecution had failed to prove the existence of the circumstance said to provide the basis of the defendant’s reason may be seen in Heidt v Chrysler Australia Limited (1976) 26 FLR 257, 270-271 and Leontiades v F T Manfield Pty Ltd [1980] FCA 49; (1980) 43 FLR 193, 198-199.
    • 97 Section 5 of the 1904 Act was replaced by s 334 of the Industrial Relations Act 1988 (Cth). The provision setting up a reverse onus of proof was subs (6), as follows:
      • In a prosecution for an offence against subsection (1), (2), (3), (4) or (5), it is not necessary for the prosecutor to prove the defendant’s reasons for the action charged nor the intent with which the defendant took the action charged, but it is a defence to the prosecution if the defendant proves that the action was not motivated (whether in whole or in part) by the reason, nor taken with the intent (whether alone or with another intent), specified in the charge.
    • In Lawrence v Hobart Coaches Pty Ltd (1994) 57 IR 218, 219, Northrop J held that the legal effect of the new s 334(6) was the same as the effect of the previous s 5(4).
    • 98 The anti-discrimination provision was first introduced by an amendment made to the 1988 Act in 1993 (with effect from 30 March 1994). The new provision, s 170DF(1), was supported by a reverse onus section, s 170EDA(2), in the following terms:
      • If an application lodged under section 170EA alleges that a termination of employment of an employee contravened subsection 170DF(1) on the ground that the termination:
        • (a) was for a particular reason or reasons referred to in that subsection that were stated in the application; or
        • (b) was for reasons stated in the application that included a particular reason or reasons referred to in that subsection;
      • the termination is taken to have contravened subsection 170DF(1) unless the employer proves, in any consent arbitration arising from the application or in any proceedings arising on the referral of the application to the Court, that:
        • (c) the employment was not terminated for the particular reason or reasons or for reasons that included the particular reason or reasons; or
        • (d) the particular reason was a reason, or the particular reasons were reasons, to which subsection 170DF(2) or (3) applied.
      • One difference between s 170EDA(2) and the pre-existing s 334(6) was that the new provision operated in a civil, whereas the other provision operated in a criminal, context. That difference does not, however, explain why the legislature chose different terminology by which to give effect to its reverse onus policy in the context of the new anti-discrimination provision.
    • 99 The 1988 Act was substantially amended, and renamed as the WR Act, in 1996. What was s 334(6) – reverse onus in the context of the anti-victimisation provisions – became s 298V, and what was s 170EDA(2) – reverse onus in the context of the anti-discrimination provision – became s 170CQ. In the course of these amendments, a transposition occurred. The terminology of the new s 298V followed the general terms of what had been s 170EDA(2), and the terminology of the new 170CQ followed the general terms of what had been s 334(6). That is to say, the now anti-victimisation reverse onus section looked more like the previous anti-discrimination reserve onus section; and vice-versa. The Parliamentary materials accompanying the amendments of 1996 do not explain this transposition. The circumstance that, at the same time, the anti-victimisation provisions were broadened and de-criminalised does not, of itself, provide an obvious explanation.
    • 100 Whatever be the reason for the legislative changes of 1996 to which I have referred, the result was that s 170CQ came to be expressed as s 334(6) had been. As held by Northrop J in Lawrence, that provision was of the same legal effect as s 5(4) of the 1904 Act. It follows that s 170CQ was likewise of that legal effect, and that the established jurisprudence, to which I have referred in par 95 above, applied to the construction and operation of s 170CQ. The jurisprudence to which I refer, of course, is that which made it part of the prosecutor’s (or applicant’s) case to prove as an objective fact the circumstances alleged to constitute the basis of the "reason" to which the reverse onus section applied. Indeed, one of the three grounds in Lawrence itself was determined in favour of the respondent employer for the very reason that the prosecutor had called no evidence to establish that the union in question was seeking better industrial conditions: see 57 IR at 220. The same approach, in my view, should be taken under s 170CQ.
15. In Buckingham v KSN Engineering Pty Ltd & Anor [2008] FMCA 546 at [93] Lucev FM said:
    • “A consideration of s.809(1) makes it immediately apparent that any application (here the Amended Statement of Claim) must allege conduct (and more than merely a breach reciting the relevant provisions of the WR Act). The onus of proof in relation to the conduct alleged is what is reversed, as was explained in Geraldton Port Authority as follows:
      • “If the applicant proves the conduct and alleges that the conduct was carried out for a prohibited reason, it is for the respondent to prove, on the balance of probabilities, that it was not motivated by an impermissible reason: s 298V; Heidt v Chrysler Australia Ltd (1976) 26 FLR 257 at 266-271 per Northrop J. The reversal of the onus in respect of proof of the reasons for the conduct is a recognition that "the circumstances by reason of which an employer may take action against an employee are, of necessity, peculiarly with the knowledge of the employer": Heidt v Chrysler Australia Ltd at 267.””
16. In Rojas v Esselte Australia Pty Limited [2008] FCA 1585 at [46] – [50] Moore J held that the applicant must prove the existence of objective facts which are said to be a basis for the respondent’s conduct.
17. I respectfully adopt the reasoning of Jessup J, Moore J and Lucev FM and conclude that the applicant must prove the preliminary facts necessary to enliven the need for a respondent to embark upon attempting to discharge its evidential onus of proof.
18. The historical background to the enactment of provisions such as s.170CQ and s.664 was usefully discussed by Northrop J in Johns v Gunns Ltd (1995) 60 IR 258. In that case, his Honour said, at 258:
    • “The right (if that is now the correct word) of an employer to dismiss, or to use the expression which is now common, to terminate the employment of an employee, has been restricted by statutory provisions. In broad terms the right is limited to cases where the employer is able to satisfy the Court of valid reasons for terminating the employment connected with the employee’s capacity or conduct or based on the operational requirements of the employer.” (my emphasis)
19. I should point out at this stage that his Honour’s reference to valid reasons was in the context of a legislative scheme which then required an employer to have such valid reason to dismiss an employee. Such a provision is no longer in the legislation that I must apply. This omission is highlighted when I come to consider the effect that a failure on the part of the respondent to prove a valid reason for dismissal has in the proceedings.
20. At page 267 Northrop J said:
    • “The reasons of an employer for terminating the employment of an employee are solely within the knowledge of the employer. The employer may state a reason but that reason need not be the actual reason nor need it be the only reason. Parliament has, from time to time, devised procedures to transfer to an employer the onus of proving the reason for termination of employment.”
21. His Honour then referred to Heidt v Chrysler Australia Ltd (1976) 26 FLR 257 at 268:
    • “It has been held that a defendant need not prove the reason why he dismissed an employee: Atkins v Kirkstall-Repco Pty Ltd (1957) 3 FLR 439. The mere proof of a reason for dismissal, other than the reason alleged in the charge, does not necessarily negate the reason alleged in the charge. A mere denial of the reason alleged in the charge may not be sufficient to satisfy the onus cast upon the defendant. All the facts and circumstances leading up to the dismissal must be considered, including any reason expressed at the time of the dismissal, as well as any denial of the reason alleged in the charge.”
22. His Honour made it clear at page 268 that it is not sufficient for the employer to prove a valid reason for dismissal. What the employer must do is prove a negative, namely that the reasons for dismissal did not include one of the proscribed reasons. The employer’s onus is to be satisfied on the civil standard.
23. In my view, not only is it not sufficient for an employer to prove a valid reason for dismissal, it is not necessary for it to do so. The onus on the employer is to prove, to the satisfaction of the court, that the reason or reasons for dismissal did not include a proscribed reason. The Court may conclude that the reason established by the employer was entirely unmeritorious, or even capricious. In those circumstances, provided the reason for dismissal did not encompass a proscribed reason, the respondent would successfully discharge its onus of proof.
24. This conclusion is not inconsistent with what Moore J said in Rojas, supra, at [48] that in most cases the employer will have to prove the real reason for dismissal, consistent with the absence of a prohibited reason, to rebut the statutory presumptions. The real reason should not be equated with an acceptable or valid reason.
25. In Stewart v Nickles [1999] FCA 888 Ryan JR said, at [67] – [68]:
    • “I have long thought that the reverse onus applied by averment provisions as outline by Dixon J in R v Hush, ex parte Devanny [1932] HCA 64; (1932) 48 CLR 487 and, more particularly, as outlined by Northrop J in respect of dismissal prohibitions in Heidt and in Johns place an almost insuperable burden on respondents in circumstances in which a termination of employment at the initiative of the employer is established but where the employer fails to demonstrate any valid reasons for termination. Where the dismissed employee alleges termination for reasons including a prohibited reason and the employer is able to demonstrate that the dismissal included a valid reason or reasons, this may assist the employer when faced with the allegation that the termination also included a prohibited reason.
    • In discharging the reverse onus the employer gains no such assistance if unable to call in aid any valid reason for termination. There are no doubt good public policy considerations for the reverse onus, but there will still be cases where an employer does not, and perhaps cannot, demonstrate a valid reason for termination and fails to demonstrate, on a balance of probability, that, whatever the reason or reasons for termination, a prohibited reason was not included, although such a prohibited reason was not in truth included. Be that as it may, the onus lies with the employer . . .”
26. If his Honour was then referring to ‘valid reasons’ as it was used in the now repealed legislation, in my view the statement just extracted no longer has application to ss.664 and 809 of the Act. However, his Honour may have been referring to valid reasons in a more generic sense, akin to a genuine reason. If what his Honour was saying was that if the employer advances a reason for dismissal that does not withstand scrutiny (i.e. it is not valid or genuine) then the evidential burden will not be discharged, I have no disagreement with his Honour’s remarks. Or his Honour may have been using ‘valid’ in the sense of not being proscribed. Again, I have no disagreement with that. If however, his Honour was saying that to discharge the onus under ss.664 and 809 the employer must not only establish that none of the proscribed reasons were the reason for termination, but also that the reason was a ‘valid’ one, then I respectfully disagree. This added gloss or qualification is not needed to the plain language of s.664 and 809.
27. In Laz v Downer Group Ltd [2000] FCA 1390; (2000) 108 IR 244 at 255 Moore J said at [26]:
    • “In my opinion an applicant alleging termination in contravention of s. 170CK(2) will succeed in the application unless the employer establishes a defence by proving that the alleged reason was not the reason or one of the reasons for the termination. Perhaps it can be put in terms that though the applicant must prove on the balance of probabilities each element of the contravention, s 170CQ enables the allegation that a reason was a proscribed reason to stand as sufficient proof of that fact unless the employer proves otherwise. . . The success of the allegation does not depend on the Court being satisfied, other than by reference to the allegation of the applicant, that the termination was for a proscribed reason (or one reason was a proscribed reason) if the employer fails to make good its defence.”
28. From the above review of the authorities I conclude that the determination of this proceeding requires the following:
    1. The applicant proving the fact of employment and its termination;
    2. The applicant proving such of the facts as she intends to rely upon to invoke one or more of the provisions in ss.659(2) of the Act;
    100. The respondent proving that such identified reasons were not the reason, or one of the reasons, for the termination of the applicant’s employment;
    4. In discharging that onus the respondent does not have to prove that the applicant’s employment was terminated for a valid reason, as long as it was not terminated for a proscribed reason, but the failure to establish a valid reason can be taken into account in assessing whether the respondent has discharged its onus of proof.
29. As I have said, the applicant’s employment with the respondent and its termination are not in issue.
30. The applicant conducted her case in sole reliance on a contravention of s.659(2)(a) of the Act. It seems to me, therefore, that the applicant bears the onus of proving:
    1. That she was temporarily absent from work;
    2. Because of illness or injury; and
    100. That such temporary absence was within the meaning of the Regulations.
31. In this regard, there is no issue as to elements (a) and (b). The applicant was initially absent from work because she injured her ankle. She subsequently contracted gastroenteritis. Thereafter the applicant was diagnosed with deep vein thrombosis. The applicant was absent from work from 29 May until she returned to work on 14 June, apart from a few hours on 5 June. She was again absent from 17 June until she was certified fit to return to work on 7 July.
32. Regulation 12.8(1) of the Workplace Relations Regulations 2006 provides:
    • (1) For paragraph 659(2)(a) of the Act, an employee’s absence from work because of illness or injury is a temporary absence if:
      • (a) the employee provides a medical certificate for the illness or injury within:
        • (i) 24 hours after the commencement of the absence; or
        • (ii) such longer period as is reasonable in the circumstances.
33. The term ‘medical certificate’ is given the meaning given by s.240 of the Act. The applicant has produced a medical certificate only in respect of her second period of absence from her employment.
34. There were two periods of temporary absence by the applicant: from 29 May to 14 June (putting to one side the very short return to work on 5 June); and from 17 June to 7 July. In respect of neither period did the applicant contemporaneously provide the respondent with a medical certificate relating to her period of absence. A medical certificate for the second period of absence was provided with the applicant’s initiating documents in the Industrial Relations Commission on 10 August, which were given, obviously, after the termination of the applicant’s employment.
35. To the extent that the applicant said, at paragraph 36 of her first affidavit, that she believed she provided a copy of a medical certificate to her employer, the applicant was mistaken.
36. The respondent initially submitted that unless the employee was absent from work at the time of the termination of employment, s.659(2)(a) could not be engaged. The respondent, correctly in my view, abandoned that submission.
37. The respondent submitted that the applicant bore the onus of strictly complying with Regulation 12.8 because these were proceedings in which a penalty is sought. Reliance was placed on Nikolich v Goldman Sachs J B Were Services Pty Ltd [2006] FCA 784 at [163] – [167] and [174]. I accept that the applicant’s absence from work will only be sufficient to engage s.659(2)(a) of the Act if either of the possibilities in Regulation 12.8(1)(a) (i) or (ii) are satisfied.
38. Quite clearly, in the case of neither period of absence was a medical certificate provided within 24 hours of the commencement of the absence. The question to be determined, therefore, is whether it was reasonable for the applicant not to have provided a medical certificate before her employment was terminated, or, to put it in the language of the Regulation, the applicant should be allowed a longer period of time, extending up to the termination of her employment, to do so.
39. In respect of the first period of absence, I do not consider that it was reasonable for the applicant not to provide a medical certificate to her employer before her employment was terminated. The applicant returned to work, albeit briefly on 5 June and on 14 to 16 June. She should have provided the medical certificate by the latter period, at the latest. In submissions, counsel for the applicant sensibly did not seek to rely on this period of absence, but rather focussed on the second period.
40. The second period of absence is more problematic. The applicant in fact obtained a medical certificate for the period 19 June – 7 July. It was provided by a Dr Wang. It was dated 30 June. The applicant had the certificate available to her from that date.
41. Was it reasonable for the applicant not to provide the medical certificate to the respondent between 30 June and 19 July? Mr and Mrs Thurecht, the guiding minds of the respondent, knew that the applicant was absent from work because she was unwell, and knew that she had been diagnosed with deep venous thrombosis, a potentially life threatening condition. They had each been in telephone communication with her. However, what they did not know was whether, and if so when, the applicant would be fit to return to work, at least before 7 July. They had, in the applicant’s absence, arranged for other employees to cover for the applicant.
42. In her evidence in chief the applicant was asked why she didn’t give the medical certificate to her employer. The applicant said she had a badly sprained ankle. She was on crutches for eight weeks and could not drive so she could not physically get the certificate to the centre (T87.42). That reason obviously did not subsist after 7 July when the applicant was certified fit to return to work. The applicant says that she took the medical certificate to a meeting that she had with Mr and Mrs Thurecht on 19 July, but the meeting broke down and she did not provide the certificate.
43. The applicant was certified fit to return to work on 7 July. I accept that there were telephone discussions between the applicant and Mr and Mrs Thurecht as a result of which the applicant was directed not to return to work on 7 July and until there was a meeting convened to discuss ‘serious issues’. That meeting could not be convened until 19 July. The applicant proffers as an excuse for not providing the medical certificate dated 30 June, the fact that although she was ready to return to work, she was directed not to.
44. In my view the discretion to extend the period of 24 hours in Regulation 12.8(1)(a)(i) to a period that is ‘reasonable’ in the circumstances requires the court to take all factors into account, both from the point of view of the employee and the employer.
45. An employee may be so disabled that he or she simply cannot get the certificate to the employer by any means. The employer may waive the requirement for a certificate. Neither of those scenarios applies in this case. In my view, it is not necessary to look at any reason for delay beyond the termination of employment. That is because s.659(2)(a) of the Act obviously looks to matters that have happened up until the date of termination.
46. In this case, the following facts seem to be relevant to determine whether the failure to provide the medical certificate before the termination of employment was reasonable (not in any order of importance):
    1. The applicant did not make any attempt to post the certificate to the respondent;
    2. The applicant did not make any attempt to deliver the certificate to the respondent: in this regard a distinction should be drawn between returning to work and the simple act of delivering the medical certificate;
    100. The applicant did not ask her husband or any other person to deliver the medical certificate to the respondent;
    4. A period of 19 days elapsed from when the applicant had the certificate until when her employment was terminated;
    5. The respondent’s officers knew the applicant was incapacitated and why;
    6. The respondent’s officers knew that the applicant had been certified to return to work on 7 July;
    7. Neither of the respondent’s officers insisted on the provision of a medical certificate;
    8. The respondent’s officers directed the applicant not to return to work until a meeting had been convened;
    9. The respondent’s officers were absent on holidays for at least part of the period between 7 July and 19 July;
    10. Although the meeting on 19 July concluded in an acrimonious manner, the applicant could nevertheless have left a medical certificate with the respondent’s representatives at the meeting. In this regard, it is relevant to note that the applicant had taken advice before the meeting from a union officer.
47. Regulation 12.8 focuses on the need to provide a medical certificate expeditiously. The reference to a 24 hour period makes that plain. The reasons for this are obvious. An employer needs to be kept aware of when employees are likely to be able to return to work. The period that is to be allowed to provide the certificate beyond 24 hours is such as is reasonable in the circumstances. The legislation in my view postulates the provision of a medical certificate as soon as reasonably possible. In my view, the failure to deliver a medical certificate dated 30 June 2006 until at least 19 July 2006 was not reasonable, particularly when the applicant was certified fit to return to work on 7 July. There was no physical impediment to the applicant posting or delivering the certificate.
48. If my view, because of the nature of these proceedings a strict view should be taken of the need to comply with Regulation 12.8, and to the circumstances in which it will be held reasonable to allow a longer period of time. In my view waiting for the period of time that the applicant did in this case when there was no factor precluding her providing the certificate, was not reasonable.
49. Section 659(2)(a) of the Act is only engaged if there is a temporary absence from work ‘within the meaning of the regulations’. I find that there was no such absence in this case because the applicant did not provide a medical certificate to her employer with such period as was reasonable in the circumstances.
50. In those circumstances, the application must be dismissed because the applicant has failed to prove an element of her case in respect of which the onus lies on her.
51. In case a different view is taken on my determination of that aspect of the matter, I turn to address the other issues in the case.
52. It is convenient at this stage to deal with an application made by the respondent at the commencement of the final hearing.
53. The respondent applied, pursuant to s.17A Federal Magistrates Act 1999, and Rule 13.10 Federal Magistrates Court Rules to summarily terminate the applicant’s proceeding on the ground that the applicant had no reasonable prospect of successfully prosecuting the proceeding and obtaining the relief sought.
54. The application was made without proper notice to the applicant.
55. I considered the principles applicable to the determination of an application for summary termination, and the competing tests applied by justices of the Federal Court in Ninatoca Pty Ltd ATF The Fagence Investment Trust & Anor v Kovari Professional Pty Ltd ATF The Kavar Professional Trust & Ors (No. 2) [2008] FMCA 947. I do not propose to reiterate what I said on that occasion. It is sufficient for me to observe that in my view the test to be applied on such an application is now much broader than that traditionally applied.
56. An application for summary dismissal was considered, in an industrial law context, by Lucev FM in Balding v Ten Talents Pty Ltd [2007] FMCA 145.
57. The respondent’s primary submission was that the application should be summarily dismissed because the applicant could never succeed in obtaining the relief sought, i.e. the imposition of a penalty and compensation. This followed, it was argued, from the applicant’s repudiation of her contract of employment. It was contended that pursuant to her contract of employment, and the relevant provisions of the Child Care Act 2002 (Qld) and the Child Care Regulations 2003 (Qld), the applicant was obliged to have certain qualifications, which she did not have. It followed, so it was argued, that whatever reason the respondent had for terminating the applicant’s employment didn’t matter because the applicant was susceptible to summary dismissal for lack of a necessary qualification: Duong v Crown Ltd [1999] AIRC 748.
58. The respondent argued that it had, during the course of the litigation, been seeking details of the applicant’s qualifications, but these had not been provided. A subpoena was addressed to the applicant required production of the documents at the final hearing. After argument as to their relevance, the documents were produced. The applicant, by her counsel, then conceded that the applicant did not hold the requisite qualifications at the time of the termination of her employment. There was no concession that the applicant was not appropriately qualified at the commencement of her employment.
59. The concession made by the applicant emboldened the respondent to persist with the application for summary determination of the proceedings, notwithstanding that it was not made until the final hearing, and when both sides had filed their evidence in chief by affidavit.
60. In my view, ordinarily an application for summary termination of proceedings should be made well in advance of a final hearing or at the latest when the party against whom the application is made has put on its evidence. The excuse proffered in the present case, concerning the non disclosure of documents, is unsatisfactory in the sense that the issue of disclosure should have been raised at a much earlier time than the first day of trial.
61. That being said, I reserved my decision on the summary termination application and proceeded to hear the evidence adduced by the parties on the final hearing. That to some extent makes the summary termination application otiose, because I can and will determine the proceedings on a final basis. However, I can see how the determination of the summary termination application might be relevant to the question of costs, particularly if it is successful, so I will shortly express my reasons for its determination.
62. In the present case, the summary termination application did not rely on the applicant’s failure to prove a requisite fact, namely the production of a medical certificate. Rather it focussed on the applicant’s lack of qualifications. In my view, the applicant’s lack of qualifications would be relevant; first, if it was the reason or one of the reasons advanced by the respondent for the termination of the applicant’s employment to discharge the onus cast on the respondent by s.664(b) of the Act; and secondly, on the question of whether a penalty should be imposed or compensation ordered to be paid.
63. The fact that the lack of qualifications is relevant at those stages of the proceedings demonstrates why the application for summary termination should not succeed. Upon proof of the facts necessary to enliven one of the subparagraphs of s.659(2) the applicant employee will succeed in proving that his or her employment was unlawfully terminated unless the respondent employer discharges its onus under s.664(b). Whether or not the employer discharges its onus will depend on the view that the Court takes of the employer’s evidence. The court may reject the contention that the applicant’s lack of qualifications was the, or a, reason for the termination of her employment. It cannot be said that where success of the respondent depends upon the court accepting the veracity of its evidence, that an applicant employee has no reasonable prospect of success in the proceedings.
64. To be fair, counsel for the respondent did not focus his submissions on that part of the enquiry. Rather, he submitted that, even if the applicant established that her employment was unlawfully terminated, she could not succeed to the relief sought, because she had repudiated the conditions of her employment.
65. Counsel for the respondent referred to Laz v Downer Group, supra, to submit that the court would not impose a penalty where the applicant did not comply with essential terms of her employment. It was submitted that the court would not order compensation in circumstances where the employer was justified in terminating the applicant’s employment, even if it was on a ground not taken at the time of termination. Laz v Downer Group does not put the matter so strictly. There, the court did not order a penalty, but that was in the exercise its discretion. The court did not say that it would never be appropriate to order a penalty in such circumstances.
66. Counsel for the applicant countered that if it was found that her employment was unlawfully terminated the applicant was entitled to succeed, if only to obtain a declaration to that effect.
67. In my view, the respondent may be right at the end of the day about the matters that are raised (subject to one qualification that I will shortly deal with). However, that does not mean that the proceedings should be summarily terminated. Questions of penalty often involve considerations going beyond the position of the immediate parties to the proceedings. A public deterrence aspect may be involved. It cannot be said that the applicant has no prospect of persuading the court to impose a penalty, if unlawful termination be found, even if the matters raised by the respondent are correct.
68. In my view, where the basis of the application for summary termination relies on the court accepting the respondent’s evidence, or accepting that in no circumstances would a penalty be imposed or compensation ordered, before any facts are determined, the application should be refused.
69. The qualification to which I have referred relates to the submission made by the respondent that, regardless of the reason or reasons for dismissal, if facts were in existence at the time of termination that justified summary dismissal, the subsequent acquisition of knowledge of those facts by the employer will suffice to support the summary dismissal. Reliance was placed on the decision of the High Court in Byrne v Australian Airlines Ltd [1995] HCA 24; (1995) 185 CLR 410.
70. In my view, the decision does not support the submission made by the respondent. The matter there under consideration was whether a dismissal could be challenged as harsh, unjust and unreasonable. It did not concern a situation where there was an applicable provision such as s.664(b). In cases where there is a breach of contract alleged, it is correct to say that the party alleging breach can rely on subsequently discovered facts that were in existence at the time of termination to justify or support that termination. However, in my view, s.664(b) requires the employer to persuade the court that the reason or reasons for termination of employment did not include a proscribed reason. That enquiry is necessarily focussed at the time of termination, and looks at what reason or reasons the employer then had to terminate the employment. It is not possible, in my view, for an employer to discharge the onus under s.664(b) by pointing to a reason that would have justified summary termination, but about which the employer did not have knowledge at the time the employment was terminated.
71. The existence of such a reason or justification for summary dismissal is undoubtedly relevant when it comes to considering the question of compensation. However, it is not applicable at the stage of proceedings where the court has to determine whether the employer has persuaded it that the reason or reasons for dismissal do not include a prohibited reason. The unknown reason could not then be operative on the mind of the employer.
72. Turning then to the remaining substantive issue in these proceedings: has the respondent discharged its onus of persuading the court, on the balance of probabilities, that the applicant’s temporary absence from work was not the reason, or a reason for her dismissal?
73. The respondent contends that there were a number of reasons that culminated in the decision to terminate the applicant’s employment, and the applicant’s absence through illness or injury was in no way part of those reasons.
74. The principal reason given by the respondent for the termination of the applicant’s employment was because of alleged misappropriations by the applicant during the course of her employment. In this regard, the importance of the distinction to which I referred earlier in these reasons, between the real reason for termination and whether it had to be a valid reason, comes sharply into focus. In my view, in order to discharge its onus of proof, the respondent does not have to prove that the applicant actually misappropriated any money. It is sufficient if the respondent’s reason for termination was its belief that such conduct had occurred. Of course, that belief must have been honestly and reasonably held.
75. The proof of misappropriation would, because of the nature of the allegation, attract a standard of proof commensurate with such seriousness, in according with the oft quoted judgment of Dixon J in Briginshaw v Briginshaw [1938] HCA 34; (1936) 60 CLR 336; see also s.140 Evidence Act 1995.
76. On that standard, I am not persuaded that the applicant in fact misappropriated money from the respondent, or its clients, as has been alleged. The allegations were not explored in any detail during the cross examination of witnesses, and certainly not with sufficient precision to enable me to make findings of what amounts to serious criminal behaviour.
77. Rather, counsel for the applicant approached the cross examination of the respondent’s witnesses by pointing to:
    1. The close connection in time between the termination of the applicant’s employment and her absence from work;
    2. The failure of the respondent to raise the allegations of misappropriation in writing at any earlier point in time;
    100. The fact that the respondent praised the applicant in writing and gave her a pay rise at a time when she was apparently under suspicion;
    4. The fact that during telephone conversations with the applicant, during her absence from work, the respondent’s officers questioned her capacity to resume work, thereby leading to the inference that such matters was in their mind when the decision was made to terminate the applicant’s employment.
78. It was then submitted that sufficient doubt was cast on the respondent’s asserted reason for termination such that the court could not be satisfied by the respondent that the reason or reasons for termination did not include a prohibited reason.
79. Understandably, given the degree of proof required, counsel for the respondent did not press for findings that there had been the alleged misappropriation. For the reasons I have just give, it is not necessary for those findings to be made for the respondent to succeed in making out its defence.
80. There was considerable attention paid during the final hearing to the terms of the letter from the respondent’s solicitors dated 20 July 2006 that terminated the applicant’s employment. It states, in part:
    • “It has come to our client’s attention that:
      • On 1 December 2005, a sum of money amounting to approximately $288 was given to you, being funds raised for the Centre through sale of photographs. You did not inform your employer that funds were being raised through the sale of photographs and you have kept the money;
      • You removed a box of fundraising chocolates from the Centre valued at approximately $72. You did not record that you had taken the chocolates and you did not account to your employer for the cost of the chocolates or proceeds of sale of the chocolates;
      • During 2006, an amount of approximately $30 was given to you to be refunded to Janelle McDonald. You did not give the money to Ms McDonald and you have kept the money;
      • There is money missing from petty cash for which you are responsible.
    • Our client has launched an investigation to identify any other financial misappropriation. In addition our client is investigating other issues related to your employment such as the removal of child details from the Centre and your failure to keep Centre records accurate and complete.
    • Our client believes the above facts amount to criminal offences . . .
    • As Director of the Centre you are in a position of trust and responsibility. Your breach of that trust by theft or misappropriation of Centre funds amounts to a fundamental breach of your employment contract warranting summary dismissal.
    • Therefore, your employment is terminated, effectively immediately.”
81. Counsel for the applicant said that this letter set out the reasons for termination, and the respondent was confined to proving that the termination of the applicant’s employment was for those reasons.
82. In my view, the respondent is not restricted to relying on the four matters expressly referred to in this letter as being the reason or reasons for the termination of the applicant’s employment. If there were other reasons relied on for the termination, the respondent’s witnesses would of course have to explain why those matters were not referred to in the letter of termination.
83. The letter itself hints at there being other reasons when it refers to the respondent “investigating other issues’.
84. The respondent’s principal witnesses, Mr Steven Thurecht, and Mrs Kathy Thurecht, referred to other matters that they said were relevant to the decision to terminate the applicant’s employment. They were:
    1. The applicant’s repeated tardiness in commencing work for the day, and otherwise completing her required hours of work;
    2. The applicant’s qualifications;
    100. The alleged plagiarism of documents from the applicant’s previous employers;
    4. The applicant’s multitudinous breaches of her contract of employment.
85. I am satisfied that the respondent, by its solicitors, set out what were thought to be the most serious matters justifying summary termination of the applicant’s employment. In those circumstances, there was no need for the respondent to go on ad nauseam and set out all matters about which they had concern. After all, the respondent could not be made subject to an unfair (as opposed to unlawful) termination claim.
86. I should, at this stage, say something further about the issue of the applicant’s qualifications, and the part they play in the determination of whether the respondent has made out its defence under s.664(b) of the Act. Right up until the commencement of the final hearing the respondent was not sure if the applicant held the necessary qualifications to be a director of its child care centre. In my view, therefore, it cannot credibly be said that a reason for the termination of the applicant’s employment was the lack of certain qualifications.
87. What can be said, however, is that the respondent’s uncertainty about whether the applicant did have the necessary qualifications, the fact that a copy of the qualifications was not kept at the centre, and the frustration experienced by the officers of the respondent who were not provided with a copy of the qualifications, despite having requested them, were matters that could credibly have been in the mind of Mr and Mrs Thurecht at the time the applicant’s employment was terminated.
88. Mrs Thurecht, as director of the respondent, denied on oath that it was any part of the reason for the termination of the applicant’s employment that she was absent through injury or illness. A bare denial, whilst relevant, will not ordinarily be sufficient to discharge the onus of proof under s.664(b). That is particularly so in a case such as the present where the termination of employment was more or less contemporaneous with the absence from work.
89. There was a very large measure of disagreement between the evidence of the applicant, on the one hand, and Mr and Mrs Thurecht, on the other. In many cases the disagreement was so fundamental that it could not be explained by differing recollections of the same event. For example, it was alleged by the respondent that there was a meeting between Mr Thurecht and the applicant on 5 June and 16 June, and a second meeting on 16 May. The applicant denied that these meetings even took place. In respect of admitted meetings on 16 May and on 16 June when both Mr and Mrs Thurecht were present, diametrically opposed accounts were given of what was said. The applicant also denied that Mrs Thurecht had requested her to prepare a staff handbook, which is the subject of the plagiarism allegations.
90. It is necessary in those circumstances, to prefer the evidence of one witness against that of the other. With two particular exceptions, that I will shortly discuss, I generally prefer the evidence of Mr and Mrs Thurecht to that of the applicant. My reasons for doing so are as follows.
91. It cannot be said that any of the three witnesses were particularly impressive when giving their oral evidence. The applicant was unduly defensive, vague and unhelpful when being cross examined. Mrs Thurecht was also very defensive and was prone to trying to get her version across to the court whether or not it was responsive to questions asked of her in cross examination. I thought Mr Thurecht was the most credible witness in his demeanour. He gave his evidence in a frank and open manner. He made concessions where appropriate. Where there was a conflict between Mr Thurecht’s evidence and the applicant, I would prefer that of Mr Thurecht. Mr Thurecht corroborated his wife’s evidence in important respects.
92. There were some inconsistencies in both parties’ evidence, but more so in the evidence of the applicant. The applicant was not credible when giving evidence about her qualifications to hold the position she did. Her explanation that she thought she had twelve months to undertake a course of study lacked credence or any factual basis. At T90/12 the applicant admitted that she had not enrolled in a course of study. The applicant’s reluctance to disclose to the respondent copies of her qualifications, first requested in writing on 31 July 2006, and repeatedly requested until trial, and to remain coy about the matter, underscored her willingness not to co-operate with the respondent, which adds credence to the evidence of Mr and Mrs Thurecht who gave other examples of such behaviour in the applicant.
93. When asked whether she possessed the qualifications necessary for a director of a child care centre her answer was: “The qualifications were never discussed”. Given the strict legislative requirements applicable to child care centres, in my view that answer lacks veracity.
94. The applicant accepted that it was her responsibility to ensure that the staff qualifications and records were kept at the centre for each member of staff. When shown a letter of 14 February 2006 from Department of Families saying staff records were incomplete the applicant was particularly non-responsive and hedged around giving a direct answer.
95. The applicant admitted that she prepared a staff handbook for the respondent’s child care centre. She also admitted that she had in her possession a staff handbook from Victoria Point Early Learning Centre, where she had previously worked. When it was put to her that part of the two documents were identical, and that she had copied one into the other, the applicant’s responses, and attempts not to answer questions, did her no credit.
96. The applicant’s denial that she did not start work at 8:30 as required by her contract of employment (at T109/5) was contradicted by the evidence of other employees.
97. When regard is had to the totality of the evidence the evidence of the respondent is inherently more credible than that of the applicant. The applicant’s case is really brought on the hypothesis that because her employment was terminated at around the same time that she was absent through illness there must be a connection between the two.
98. I said that there were two matters in respect of which I do not accept the respondent’s evidence. The first relates to a tape recording of the meeting that took place on 19 July. It was a recording made by the applicant’s husband, who was present at the meeting. A digital reproduction of the recording was put into evidence, as was a typed transcript. It was contended by both Mr and Mrs Thurecht that the recording had been tampered with or altered to remove two matters; first a request by Mr Thurecht for a copy of the applicant’s medical certificate; and, secondly, a reference at the conclusion of the meeting by Mr Badman to the Thurechts as ‘animals’.
99. I reject that there has been any tampering with the recording. Such a tampering does not readily appear from the exhibit. The respondent foreshadowed an application to subject the exhibit to forensic analysis. That was not pursued. It does not make sense that the applicant would cause a section of the recording during which Mr Thurecht asked for a medical certificate to be deleted. The fact that such a matter was on the mind of the respondent’s officers at the meeting on 19 July would have been helpful to the applicant’s case rather than detrimental to it.
100. Secondly, I reject Mrs Thurecht’s evidence that she paid Mr Brett Patman at a Christmas function at the child care centre on 17 December 2005. That evidence was directly contradicted by Mr Patman, who swore an affidavit and was cross examined about the matter.
101. For the sake of completeness I should add that when preferring the evidence of the respondent’s principal witnesses to that of the applicant, I gave no weight to the evidence of Melissa Acworth concerning the circumstances in which an earlier affidavit had been prepared for her by the applicant’s solicitors, and her alleged discussions with those solicitors. There is no suggestion that the applicant took part in any such conduct, if it occurred.
102. I accept, on the balance of probabilities, that the following are the relevant facts, against which the application must be determined:
     1. The applicant commenced her employment with the respondent on 11 July 2005. At that time the applicant had some 20 years experience in the child care industry;
     2. The applicant was offered employment as non-contact director at the respondent’s child care centre. A letter of employment dated 1 July 2005 is exhibited to the applicant’s first affidavit;
     100. The applicant’s employment was governed, in part, by the terms of two documents:
          1. “Terms and Conditions of Employment Contract”
          2. “Role Accountability Non-Contact Director”;
     4. The terms and conditions of the applicant’s employment relevantly provided:
        1. (by clause 2) Engagement is on a full time basis subject to acceptable performance during a three month probation period and subject to the operational requirements of Grasshoppers Early Learning Centres;
        2. (by clause 7) You will be required to work a 38 hour week, Monday to Friday, 8:30 am to 5:00pm and other hours to meet operation requirements;
        100. (by clause 14) it is a condition of employment that your employment is regulated by both this contract and the centres policies and procedures . . . ;
        4. Clause 10 of the contract of employment provided for termination by the employer:

“Summary dismissal (without notice)

In the event that an employee is found guilty of a serious breach of this contract or the policy procedures of the company or a contravention of statutory provisions such employee will be terminated instantly and without notice”;

5. In the document entitled “Role Accountability Non Contact Director”, the applicant’s required qualifications were:

“Completed (or studying within 6mths of commencement and hold the qualification of a Group Leader)

1. an Advanced Diploma in an area of study applying to child care workers under the AQF; or
2. a bachelor degree or higher qualification, or another qualification that is at least a 3 year qualification, in early childhood studies or child care studies from a higher education institution; or
3. a post-graduate qualification that is at least a 1 year qualification in early childhood studies or child care studies from a higher education institution”

5. the applicant did not hold any of the required qualifications, and did not advise either Mr or Mrs Thurecht of that fact. The applicant had completed a NSW Department of Technical and Further Education course and obtained a Child Care Certificate course in 1980 (exhibit 2). The applicant admitted that she did not hold the requisite qualifications to be a child care centre director at T89/10 (see also T90/45);
6. the applicant did not keep copies of all staff members’ qualifications at the centre as the legislation required;
7. the applicant regularly arrived at work well after 8:30 am. This conduct occurred throughout her employment. The applicant also absented herself from the centre without informing Mrs Thurecht;
8. Mrs Thurecht had serious concerns by about Christmas 2005 regarding the applicant’s lack of punctuality and failure to notify her of absences;
9. Mr Thurecht was not comfortable about the applicant’s ability to carry out her employment from the outset. However, because she was taking over from an existing management company he and his wife made some allowances for the applicant. Further, Mr and Mrs Thurecht were extremely reluctant to confront the applicant about her shortcomings because they were of the view that it would be very difficult to obtain a replacement for the applicant, and she seemed to have a good rapport with parents who were customers of the centre;
10. Mr and Mrs Thurecht gave the applicant a Christmas card in 2005 (ex LB14) which said: “I am so happy you are with us and feel like it is a great thing”;
11. Mr and Mrs Thurecht spoke to the applicant about her attendance and punctuality after the Christmas party in 2005. Notwithstanding their concerns, they had no thought of terminating the applicant’s employment at that time;

50. In late 2005 or early 2006 Mrs Thurecht asked the applicant to prepare a staff handbook, which she did;

13. Sections of the handbook were copied by the applicant from a staff handbook that she took from a previous employer. This was discovered by Mrs Thurecht during the applicant’s later absence from work as a result of her injury then subsequent illness;
14. By early May 2006 Mrs Thurecht was dissatisfied with the applicant’s performance in many areas including:
    1. Fee and debt collection;
    2. Collection of child care benefits from the Commonwealth government;
    100. Administrative management of CCB claims;
    4. Petty cash management;
    5. Fundraising drives such as the chocolate drive;
    6. Punctuality;
    7. High staff turnover;
    8. Compiling daily attendance rolls;
    9. Legislative compliance issues, such as recording child details;

• Mrs Thurecht asked her husband to speak to the applicant;

16. Mr Thurecht did so on 16 May 2006; The meeting, which was about an hour in length, and although conversational in nature, squarely raised with the applicant the concerns that the respondent’s officers then had with her performance and punctuality. The meeting was not documented;
17. On 16 May 2006 the respondent in letter signed by both Mr and Mrs Thurecht, and given to the applicant by Mr Thurecht after the meeting, said to the applicant:

“We would like to take the opportunity to thank you for your effort and dedication over the past ten months. During this period Grasshoppers has seen a steady improvement in many areas. In particular, Hoppers is delivering a very pleasing outcome for children, parents, staff and owners.

In recognition of this, we are pleased to confirm that your salary has been increased to $46,350 per annum, effective 15th May 2006.

We know that the next few months will be busier than ever for you as you take on the next set of challenges on behalf of Grasshoppers. Please keep in mind that we are committed to supporting you in whatever way we can to help ensure your success.”

18. This letter had been discussed by Mr and Mrs Thurecht prior to it being given to the applicant. It was Mr Thurecht’s idea. He thought the letter would be a good motivational tool to improve the applicant’s performance. Mr Thurecht agrees that in hindsight the letter was not a good idea because it sent a mixed message to the applicant (T222/20).
19. By 16 May neither Mr nor Mrs Thurecht, despite having concerns about the applicant’s performance and her punctuality, favoured terminating her employment, although by that date Mr Thurecht regarded the continuation of the applicant’s employment as untenable (T216/23);
20. On 17 May the applicant turned up for work at 11 am, which greatly shocked both Mr and Mrs Thurecht as she had been told the day before there were concerns about her punctuality;
21. The applicant injured her ankle on Friday 26 May 2006 and did not return to work until 5 June;

5. The applicant returned to work on 5 June on crutches, but lasted only a few hours. She had contracted gastroenteritis;

23. Whilst she was at the centre on 5 June, there was another meeting between the applicant and Mr Thurecht. During the applicant’s absence from 29 May, some irregularities had been discovered in the centre’s records. Mr Thurecht discussed with the applicant her mistakes with automatic credit card payments, her arriving late for work, and her failure to plan and communicate events to customers;

10. On Friday 9 June the applicant telephoned Renae Thompson (another employee) and asked her to take her to and from a medical appointment. Ms Thurecht did not think this was appropriate;

25. Later on 9 June the applicant telephoned Ms Thurecht. Her tone was angry and aggressive. During this telephone call the applicant said words to the effect of: “Don’t worry about the flowers. I have had enough. I resign”;
26. As a result of this, Mrs Thurecht called on Melissa McKay and Melissa Acworth to step into the applicant’s role until the respondent could find a new director;
27. The applicant did not contact either Mr or Mrs Thurecht again until she presented herself for work, still on crutches, on 14 June. Mrs Thurecht said to the applicant she thought she had resigned. The applicant said that Mrs Thurecht should have known her well enough to realise she didn’t mean it.
28. Two meetings took place with the applicant on 16 June. The first was with Mr Thurecht, and the second was with both Mr and Mrs Thurecht;

0. The second meeting was a highly charged one and ended acrimoniously. Mr and Mrs Thurecht discussed a number of aspects of the applicant’s performance, but they did not put to her that they thought she had misappropriated funds or seek any explanation about this from her. At this meeting it was put to the applicant that she had to improve her work performance very considerably. Mr and Mrs Thurecht made it clear to the applicant that they were seriously dissatisfied with her work performance and that in the absence of a marked improvement that her job was in serious jeopardy;

30. Notwithstanding this, Mr Thurecht at least harboured a hope that things would turn around and that the applicant would make the position work
31. The applicant was diagnosed as suffering from deep venous thrombosis on 19 June 2006. The applicant’s husband telephoned Mrs Thurecht to inform her;
32. Mr and Mrs Thurecht became aware of what they considered to be further instances of misappropriation between 19 June and early July 2006 (paragraph 33 of Mrs Thurecht’s first affidavit);
33. During her convalescence, Mr and Mrs Thurecht telephoned the applicant on a number of occasions;
34. The first call was from Mr Thurecht during which he enquired as to the applicant’s condition. I reject that during this conversation Mr Thurecht said anything about requiring a certificate from the applicant saying that all five clots had disappeared before the applicant could return to work;

2. The second call was from Mrs Thurecht. I reject that Mrs Thurecht had a discussion with the applicant about a conversation that she (Mrs Thurecht) had had with Kylie Lang, a mother at the centre. Despite having earlier indicated an intention to call Ms Lang to give evidence, the applicant chose not to do so;

36. The third call was from Mr Thurecht. In it, the applicant advised Mr Thurecht that she was certified fit to return to work on 7 July. Mr Thurecht informed the applicant that they had some serious issues to discuss with her, and she should not return to work until a meeting had been convened;
37. There were a few subsequent telephone calls to set up the meeting that ultimately occurred on 19 July;

0. Present at the meeting were the applicant and her husband and Mr and Mrs Thurecht;

39. the applicant’s husband recorded the meeting;
40. at the meeting the applicant was asked for a copy of her qualifications but did not provide them;
41. the applicant refused to sign a document that Mr Thurecht had prepared, and Mr Thurecht would not proceed with the meeting unless she did, and the meeting thereafter degenerated into farce;
42. no allegations of misappropriation were put to the applicant at the meeting;
43. The applicant’s employment was terminated on the receipt by her of a letter from the respondent’s solicitors dated 20 July 2006, referred to previously;
44. At the time of termination the respondent, by Mr and Mrs Thurecht, were concerned about the applicant’s qualifications, her performance as centre director, and that monies had been misappropriated from the centre and its customers.

103. I reject the applicant’s evidence that:
     1. she performed her duties well throughout her employment;
     2. that at no time during meetings with either Mr or Mrs Thurecht were issues raised about her performance;
     100. that the attitude of Mr and Mrs Thurecht towards her changed because of her illness;
     4. that the meeting of 5 June was called at her suggestion;
     5. her attendance at the centre was never an issue until the proceedings were commenced;
     6. it was her that identified problems in the running of the centre, and suggested changes that were agreed to by the respondent;
     7. the contents of the phone calls after 19 June were as she alleged; and
     8. she didn’t resign on 9 June.
104. The applicant points to a number of matters that she says cast doubt on the respondent’s witnesses’ version of events:
     1. The applicant was given the Christmas card in 2005 and the letter of 16 May 2006 which when read in isolation do not point to any concerns at all with the applicant’s performance;
     2. The absence of any written reprimand of the applicant despite evidence that Mrs Thurecht was a proficient and prolific exponent of email communication;
     100. The absence of any minutes of the meetings with the applicant at which her performance was discussed, against the background of numerous minuted meetings about relatively trivial matters;
     4. The failure to squarely put the allegations of misappropriation to the applicant at any time before her employment was terminated.
105. These are all valid criticisms of the respondent’s evidence. However, when viewed in its totality, I do not think that the respondent’s evidence should be rejected as the applicant contends. I consider that Mr and Mrs Thurecht were confronted with a situation which they did not know how to properly handle. I am sure that in hindsight they would do a number of things differently. They were most reluctant to terminate the applicant’s employment, because the applicant had a good rapport with their customers and they were fearful that if they dismissed the applicant she would take a significant number of customers with her to a new employer. They were also apprehensive as to whether they could engage a suitable replacement.
106. I consider that Mr and Mrs Thurecht were prepared, if not willing, to tolerate a certain degree of laxness on the part of the applicant. However, I consider that the unsatisfactory aspects of the applicant’s behaviour compounded in the minds of Mr and Mrs Thurecht until they reached the point that they were no longer able to tolerate it any longer. Whilst the applicant was absent from the centre information came to light about the absence of the applicant’s qualifications, and the apparent misappropriation of funds.
107. As I have said, I do not accept that there was the misappropriation alleged. I do however accept that Mr and Mrs Thurecht genuinely believed that there were defalcations as set out in their solicitor’s letter of 20 July 2006.
108. The applicant referred to a passage from the judgment in Galvin v Renito Pty Ltd, supra, concerning a termination of employment on performance grounds. Ryan JR said at [34] – [35]:
     • “[34] Performance as a reason for termination is in itself only important in that a termination allegedly based on performance, be that a legitimate or unjustified basis, has that reason as a reason for termination. If that is a valid or invalid reason for termination, it is at least a reason. In some circumstances, a termination which includes a reason of performance may assist an employer establish a defence that, whatever the reason or reasons for termination, the reasons did not include a proscribed reason. At the end of the day that is as far as such evidence can extend.
     • [35] If the employer has terminated the employment, and I have found that to be so, and if an application is made under s. 170CK and the allegation of termination for a proscribed reason is maintained, the employer must prove that a proscribed reason was not a reason of termination and no amount of evidence, weak or strong, of termination on grounds of performance, will of itself avoid the onus or the test of proving that termination was not for a proscribed reason. Strong evidence of a performance-based termination may assist the employer but the employer must meet the test. Weak evidence of a performance-based termination might assist the applicant in that it might make it less likely that the employer will discharge the onus. Either way, and separate from evidence of performance, the respondent must still prove the termination did not include a proscribed reason.”
109. Importantly, his Honour continued at [36]:
     • “In this case there is substantial evidence that a reason for termination, firmly entertained and expressed by the respondent as the reason for termination of the employment, was inadequate performance following warning, counselling and assistance. It is not part of this Court’s function to rule on whether the employment was validly terminated on the grounds of performance. It is not part of the Court’s function to consider whether the termination was in any way harsh, unjust or unreasonable. . .”
110. I accept that the respondent has identified its reasons for terminating the applicant’s employment:
     1. Her alleged misappropriation of funds;
     2. Her lack of appropriate qualifications;
     100. Her failure to properly maintain the records of the centre;
     4. Her lack of punctuality;
     5. Her performance as centre director.
111. As Ryan JR said, it is not this court’s function to decide whether the applicant’s employment was validly terminated on the grounds of her performance, or alleged misappropriation. The function of this court is to decide whether the respondent has discharged its onus of proving that the termination of employment was not for a proscribed reason.
112. I accept that it was not a reason, nor part of a reason, for the respondent’s termination of the applicant’s employment that she was temporarily absent from work due to her injury and subsequent illness.
113. It has not been shown that the reasons given by the respondent were entirely unfounded or spurious, and I accept that they were the reasons for termination of the applicant’s employment.
114. Accordingly, even if the applicant had proved the matters required of her, I would still dismiss the application.
115. Finally, it is necessary to consider the question of costs. Section 666 of the Act provides:
     • (1) Subject to this section, a party to a proceeding under section 663 must not be ordered to pay costs incurred by any other party to the proceeding unless the court hearing the matter is satisfied that the first-mentioned party:
       • (a) instituted the proceeding vexatiously or without reasonable cause; or
       • (b) caused the costs to be incurred by that other party because of an unreasonable act or omission of the first-mentioned party in connection with the conduct of the proceeding.
     • (2) Subsection (1) does not empower a court to award costs in circumstances specified in that subsection if the court does not have the power to do so.
     • (3) In this section:
     • costs includes all legal and professional costs and disbursements and expenses of witnesses.
116. In Kanan v Australian Postal & Telecommunications Union (1992) 43 IR 257 at 264-5 Wilcox J said:
     • “It seems to me that one way of testing whether a proceeding is instituted “without reasonable cause” is to ask whether, upon the facts apparent to the applicant at the time of instituting the proceeding, there was no substantial prospect of success. If success depends upon the resolution in the applicant’s favour of one or more arguable points of law, it is inappropriate to stigmatise the proceeding as being “without reasonable cause”. But where, on the applicant’s own version of the facts, it is clear that the proceeding must fail, it may properly be said that the proceeding lacks a reasonable cause.”
117. In Re Ross; ex parte Crozier [2001] FCA 1665 at [11] the Full Federal Court stated that, given the terms of the statutory predecessor to s.666, an applicant will only rarely be ordered to pay the costs of a proceeding in exceptional circumstances.
118. Most recently, in Construction, Forestry, Mining and Energy Union v Clarke [2008] FCAFC 143 the Full Federal Court had occasion to consider what was meant by the phrase “unreasonable act or omission” in s.824 of the Act, but which also appears in s.666(1)(b) of the Act. Their Honours observed, at [29] that there is a distinction between a party who pursues arguments which are ultimately abandoned or rejected by the Court and a party who commences a proceeding which is misconceived in the sense of being incompetent or unsupportable.
119. In my view two orders for costs should be made. First, the applicant has failed on the application because of her failure to prove that her temporary absence from employment was within the Regulations. The failure to provide to the respondent employer with a medical certificate at all prior to termination ought to have caused the applicant to consider that her proceedings would fail. The failure to provide the certificate prior to termination was a fact well known to the applicant. In my view, in the circumstances, the applicant commenced the proceedings without reasonable cause.
120. Secondly, the application for summary termination ought not to have been made. The argument on the application caused prolongation of the final hearing. Without it, the hearing would have concluded within the allotted three days. In my view, the bringing of the summary termination application late, and without notice, caused the applicant to incur costs within the ambit of s.666(1)(b) of the Act.
121. Orders will therefore be made as set out at the commencement of these reasons.

I certify that the preceding 121121one hundred121121twenty-onefiveone hundred and twenty-one (121) paragraphs are a true copy of the reasons for judgment of Wilson FM

Associate: Lynnette Chin

Date: 27 January 2009