O'Grady v Challenge Bank Limited [1994] HREOCA 1 (5 January 1994)

HUMAN RIGHTS AND EQUAL OPPORTUNITY COMMISSION

Sex Discrimination Act 1984

No. H93/OO3

Between:

PHILOMENA O'Grady

Complainant

and

CHALLENGE BANK LIMITED

trading as NATIONAL PERMANENT

MANAGEMENT SERVICES PTY LTD

Respondent

Reasons for Decision

of Kevin o'Connor

Inquiry Commissioner

Hearing: Melbourne, Victoria

Date: 13, and 14 September 1993

The Complainant, Philomena O'Grady, commenced employment as an Account Manager in thePrivate Banking unit of the Victorian branch of the Challenge Bank on 13 March 1990. The Challenge Bank was at that time a relatively new entrant to the Victorian market. It was owned in Western Australia by National Permanent Management Services Pty Ltd which is the respondent in these proceedings. Ms O'Grady's complaint is that, in contravention of the federal Sex Discrimination Act 1984, she was, as an employee treated in a manner which involved unlawful discrimination on the grounds of sex and pregnancy.

The complaint was lodged with the Commission's Victorian agent, the Commissioner for Equal opportunity in January 1992. The complainant requested that the matter be dealt with under the Sex Discrimination Act. Attempts at conciliation proved to be unsuccessful. The complaint was referred in February 1993 by the Sex Discrimination Commissioner to the Commission for inquiry.

Evidence was heard in Melbourne on 13 and 14 September 1993 and included the presentation of numerous documents (exhibits C1 - C26 and R1 - RS). Final written submissions werereceived from the legal representatives for the parties during November 1993.

The complainant's employment which, as noted, had commenced on 13 March 1990 ended on 16 January 1991. She was 6 months pregnant at the time. The complainant contends that the treatment of her from July onwards, and in particular the handling of her maternity leave application, were influenced at least to a degree by unlawful considerations, being her sex and her pregnancy.

Difficulties with management over the adequacy of her work performance had commenced in July 1990. The complainant had been employed as an Account Manager, with responsibility for generating new loan business. To that end, it would seem that she was expected to develop relationships with solicitors, investment advisers and the like who had an interest in procuring funds for their clients. one of her roles was to make these intermediaries aware of the Challenge Bank and to promote its products. She was expected to generate $1 million per month in new loans. The complainant had after three months failed to reach this target, even remotely, and concern had developed in management over her performance.

Formal counselling occurred in July, leading to a performance appraisal report being completed and signed by the complainant and her manager, Mr Ron Harman, in August (exhibit C1). Employed initially at a salary of $43,600 plus provision of a car and a car-space, the complainant was demoted during July to Assistant Account Manager, required to report to an Account Manager (Mr S. Vainouras) and had her car and car-space removed (though the car-space was later reinstated). She said in evidence that she was then confined to quoting for new business and placed on a target of $1 million in loans per month.

The complainant had had, it would appear, a successful career in "private banking". In particular she had worked in this area for 9 years with the ANZ Bank. on a number of occasions in her evidence she referred to the way business had been done at that bank and contrasted it with the way that the Challenge Bank went about procuring loan-clients. She regarded the approach that she had been taking in her first three months in the new job, based it would seem on strategies she had used in the past, as preferable to those used by her new employer in procuring good quality long-term loan business. Management at Challenge Bank did not share her views.

In the performance appraisal report completed in August, Mr. Harman, stated:

"Philomena has tried hard to win business contacts with very limited success. Whilst eager greater attention is required to focus on our core business and target markets. Counselling sessions have been held on performance. Should this not improve by 31/8 in the areas designated from discussions then long term employment needs to be discussed".

It was not clear from the evidence whether any further counselling occurred on or near 31 August. The routine quarterly review of performance as an Assistant Account Manager fell due on 30 September. Further discussions would appear to have occurred during October and early November, leading to the completion of a formal report (exhibit C3) by Mr. Harman on 14 November 1990. In his comments Mr. Harman stated:

"Most recent structural changes place Philomena in an Assistant Account Manager role, one which will provide her ample opportunity to consolidate her knowledge and in conjunction with her account manager focus clearly on desired business segments. It is important that an approved [sic] performance be evident as at the 1st quarterly review"

(I take it what was meant in the last sentence quoted was an "improved" performance.)

During November/December, relations between the Complainant and the Bank had, it would seem, deteriorated markedly. The Complainant lodged a 10 page handwritten reply to Mr. Harman's report of 14 November, and on a separate letter of 15 November (exhibit C4) she formally disputed the legality of her demotion. In a reply to this correspondence of 7 December (exhibit 6A) Mr. Harman's statements included the following:

- "Effective immediately, I confirm that your overall performance will be monitored on a monthly basis, commencing period ending 3 1/1 2/90"; - "Quite clearly, I am no longer prepared to continue your terms of employment against indicators and objectives that I do not agree with or set"; - "Please be fully cognisant that there will be no further warnings or addresses. Non- performance will result in your dismissal".

Earlier, on 3 October she had notified Mr Harman of her pregnancy and presented him with a leave application form (exhibit C2). She ticked the box indicating it was a "maternity leave" application. In her application she gave the intended date for commencement of leave as 29 March. She advised that her confinement date was 23 April 1991 (the day on which, in fact, the baby was born). She states after she gave him the form, he altered the period of proposed maternity leave without notice to her. What appears on the form is a handwritten notation, made by Mr Harman, stating "from 11/3/93 to 29/9/93". Mr Harman's evidence, which I accept, was that though he could not recall the matter with certainty he thought that he had altered the dates in discussion with her, taking account of the "six-week" rule referred to on the back of the form. That rule was to the effect that it was compulsory for pregnant employees to leave work 6 weeks prior to the due date. This rule was also reiterated in the company's employment policy.

In the present instance an alteration of this kind had particular significance as 11 March fell one or two days short (depending on how the calculation is made) of 12 month's service by the Complainant: company policy required employees to have served for 12 months before being eligible for maternity leave. The complainant attributed significance to Mr. Harman's alteration as involving an attempt by management to avoid incurring maternity leave obligations to her.

The application was referred to the personnel section, located at head office in Western Australia. The complainant received no reply. The complainant saw the failure of the personnel department to respond to the application as constituting another attempt to avoid incurring maternity leave obligations to her.

She also saw what she regarded as the harsh assessment made by Harman in November, already referred to, as linked to the fact that she had become pregnant and could become a long-term cost for the company.

The explanation given by the respondent for failing to respond to the October application related to the fact that it was presented in a confused form, as it also included references to one-day's leave being sought for an absence on 20 August 1990.

In this regard, Mr Dara o'Sullivan, Senior Manager, Human Resources, stated in a letter of 10 May 1991 (exhibit C21) to the complainant's solicitors:

"Mrs O'Grady's application for maternity leave was most certainly not a factor in the decision to dismiss her. In her initial application on 3rd October, 1990, Mrs O'Grady had attempted to use one form to apply for both one day's sick leave and for maternity leave. The form therefore contained inconsistencies as follows:

"Date leave to commence on 2913191

Last date of leave 20/8/90

Date of return to work 21/8/90

Total no. of working days 1 "

When the dates of maternity leave were subsequently discussed between Mrs O'Grady and Mr Harman the proposed dates "from 11/3/91 - 30/9/91" were inserted on the form by Mr Harman as he believed that accorded with Mrs O'Grady's intentions.

On processing the form, the Personnel Department notified Mrs O'Grady that her maternity leave could not commence before the anniversary of her employment, i.e. on 13 March, 1991. She was requested to complete a further form, which she did. That form (specifying that leave would commence on 29 March, 1991) was dated 27 November, 1990. Her application was approved and you were notified of that fact by letter dated 11 January in response to your inquiry of 3 January. At this time the Bank was continuing to request Mrs O'Grady to accept ongoing employment consistent with her demonstrated abilities."

This explanation is, I consider, unsatisfactory in light of the evidence given by Mr Harman andMr Stock (from the personnel area) at the hearing. Both indicated that they would not strictlyenforce the 12 months service requirement where a pregnant employee's period of service fell a few days short of that time. Mr Stock in particular said that during the time be was Personnel Administration Manager in exercising his authority to approve applications that were outside the rules, he would have been guided by the manager in the area. He said that if an application was made in circumstances that did not meet company policy, he would discuss it with the relevant manager and would support it if, for example, the manager wanted to keep the employee. He then went on to state that he would have approved an application a few days outside the rules. He said that he would only have denied an application where a person had been with the bank only for a short period of time.

In light of this evidence, it seems to me that it was not essential for a new form to be submitted.

As to the confusing nature of the application form, I am of the view that this was minimal. The complainant had ticked the box "maternity leave" in describing the application. She had, l recognise, under heading C of the form referred to "last date of leave" as 20/8/90 and "date of return to work" as 21/8/91 and applied for 1 day's leave. But it is clear when one reads the "Maternity Leave" section of the form (heading E) and takes into account the amendment included there "from 11/3/91 - 30/9/91", hand-written by Mr Harman, that what was being sought was clear, as were the dates involved. Moreover the medical certificate appropriate for a maternity leave application was attached, again indicating the true nature of the application. The seemingly inconsistent references to 20/8 and 21/8 under heading C, which were it seems an application for approval of one day's sick leave recently taken, could have been clarified by a telephone call.

I consider that an inference can be drawn in favour of the complainant's case that the personnel department of the bank adopted a technical approach to her application, not consistent with usual company practice. Nevertheless it did permit submission of a fresh application (exhibit CS), approved again by Mr. Harman this time giving 29 March 1991 (a date later than the normal 6 week retirement requirement and beyond the 12 months service date) as the starting date for maternity leave. But then it failed to respond to the application until a solicitor's letter of demand was presented, and then only did so on 11 January 1991 (exhibit C12).

There can be little doubt, I think, that by the time of the fresh maternity leave application (27 November) relations between the complainant and the Bank had reached a low point. As noted earlier, she had again in November been formally counselled by her manager over her performance including what was seen as her continuing inability to write any significant new loan business for the Bank. She was also having difficulties with her pregnancy and had taken leave on several occasions. By December she had engaged solicitors to assist her in claims she was making against the Bank in relation to the fairness with which she was being dealt.

Apart from the way in which the application for maternity leave was dealt with, the complainant also points to an incident on Christmas Eve, 24 December 1990, when she claims she was refused permission by her immediate supervisor, Mr Patterson, to leave work to visit her doctor over breathing difficulties that she was having connected with the pregnancy. She says that he denied her request, and that she feared that if she left work she would be sacked. She said she contacted her solicitor to get advice on what to do. Mr Patterson denied refusing the request but recalls that his emotion at the time was one of frustration. He stated that perhaps the first time she left his office after making the request for leave that she may not have fully understood that he had said she could have time off. on a second visit, after the complainant had sought advice from her solicitor, she was clearly given permission to be absent.

It is also reasonably plain that by the end of December the Bank was set on a course which was quite likely to lead to the termination of the complainant's employment. on 3 January 1991 on return to work from the New Year break, the complainant found placed on her desk a letter, headed "letter of guidance" (exhibit C 1 O), from Mr Patterson, attaching her new position description setting out the various duties expected to be performed by her in the position of Assistant Account Manager. The covering letter was in broadly similar terms, with language identical in places, to that sent to the solicitors for the complainant by the general manager of the bank, Mr D. Napoli, on 24 December (exhibit C9).

The delays that surrounded the handling of her application for maternity leave and the way she was dealt with by her immediate supervisor on 24 December were in my view symptomatic of a general breakdown in relations between the complainant and the respondent's staff. It is clear, I consider, from the tone of Mr. Harman's letter of 7 December and of the letters of 24 December and of 3 January that management was actively contemplating dismissal during December. When the complainant declined, relying on legal advice, to accept the terms of the letter of guidance of 3 January, the likelihood that the Bank might terminate her employment became very real. It did so on 15 January citing the complainant's response. When the formal reply had been given on 11 January that it had granted the application for maternity leave, the Bank was in my view most likely already set on its course to effect termination.

Conclusions

I do not consider that there is any evidence, direct or indirect, to justify a finding, on the balance of probabilities, that the complainant's sex was a factor in the treatment of her during July when the original demotion and the first round of formal counselling occurred.

I am satisfied, in particular by Mr Harman's evidence, that these events derived from concerns about her failure to meet targets and about the way she went about her work. There were clearly strongly-differing views as between the complainant and Mr Harman about how loan business was to be obtained. Moreover I note that Mr Harman was himself responsible for interviewing and deciding to recruit the complainant, which weighs heavily in my view against the suggestion that his subsequent conduct towards her was influenced by considerations of sex alone.

As I understand the complainant's case, she considers that the fact of her pregnancy, once it became known, in early October, was a factor in the way she was treated from that time onwards, both in relation to the handling of her maternity leave application and in relation to her employment generally. The delays surrounding her application for maternity leave were not in my view consistent with reasonable administrative practice. I am invited to conclude that the explanation for the delay lay in the complainant's pregnancy. However I do not consider that the evidence supports that conclusion.

These delays arose, I consider, because of the overall breakdown in relations between her and the Bank. l do not regard as reasonable to infer that the delays occurred because of a lack of preparedness in the organisation to deal in a lawful way with applications of this nature. While

these matters are not conclusive in themselves I note that the respondent had appropriately- documented policies on maternity leave and on equal opportunity issues generally. It employed a substantial number of women, and women were present at senior levels in the management structure. As noted earlier, the manager who is the principal object of the complainant's criticism (Mr. Harman) in fact was responsible for selecting her for employment.

I regard as credible the explanations given by Mr. Harman and Mr. Patterson that their concerns over the complainant's work were entirely based on what they saw as areas of inadequate performance. Mr. Patterson, who I note left the respondent's employment in early 1991 not long after the complainant, recalled his concerns in a manner which I regard as candid. He gave a detailed account of his perceptions of her. He referred to: her not listening to requests made to her; seemingly not being interested in following directions; commonly complaining that things were done differently in her previous employment; not being able to source clients and generate business; the reluctant acceptance of her by work-mates; and concerns over her analytical skills. I am satisfied that these concerns represented the entirety of those held by Mr. Patterson.

While the maternity-leave application was badly handled, I am not satisfied on the balance of probabilities that the explanation for that state of affairs arose from the complainant's pregnancy as such, but was more likely to be attributable to the dissatisfaction which had developed in senior management over her work performance.

As to the counselling and performance reviews which continued to occur, I regard them as a consequence of continued concerns by management over her performance. Clearly relations had become very strained as between the respondent and the complainant by early December, but I

do not consider that that state of affairs was caused or contributed to by the fact of her pregnancy. Whether properly founded or not, the concerns were related to performance considerations.

As to the unhappy events of 24 December, I am inclined to the view that Mr. Patterson's initial response was reasonably open to be interpreted, as the complainant did, as one of refusal. Nevertheless I regard this as an emotional response arising from the general difficulties that had now developed surrounding the employment relationship rather than one which was by reason of her pregnancy.

I do not consider that it is open to conclude from this constellation of factors that the complainant was the victim of unlawful discrimination, on the ground of her pregnancy, in contravention of the Sex Discrimination Act, 1984.

I note that the contractual and other industrial relations issues raised by this case are the subject

of separate proceedings.

Determination

The complaint is dismissed.

DATED at Sydney this twenty fifth day of January 1994.

Kevin O'Connor

Inquiry Commissioner