A recent decision of the Federal Circuit Court awarding a woman significant damages for the termination of her employment due to her pregnancy has resulted in some scaremongering but don’t go running for discrimination law advice just yet. The facts of the case are extreme and the general nature of the orders made by the Court are not novel in any way.

On 30 April 2014 Judge Whelan ordered a compensation payment of just over $174,000 to Samantha Sagona. This included lost income of approximately $164,000, reimbursement for medical expenses and $10,000 for distress, hurt or humiliation. The Judge also imposed a penalty (to be paid to Ms Sagona) of approximately $66,000 against the employer company and two individuals (shareholders, directors and managers of the employer) (Sagona v R&C Piccoli Investments Pty Ltd & Ors [2014] FCCA 875). The decision has been reported with focus on the quantum of the award as being high compared to previous awards in discrimination cases. Much has also been made about the fact that the individual shareholder directors and managers of the employer entity were fined as well as the employer entity and the fact that the penalty was directed to Ms Sagona rather than the public purse.

However, the decision in favour of Ms Sagona can be distinguished from many other allegations of discrimination on the basis of pregnancy due to the following facts:

  • Ms Sagona had been employed in the business for over 12 years, she had an expectation that her employment would continue and, further, that she would share in the profits of the business given the imminent retirement of the two business managers (Mr & Mrs Piccoli)
  • From the time Ms Sagona announced her pregnancy to her employer’s representatives until she left her employment about 4 weeks later the conduct of Mr & Mrs Piccoli and their son, who was also employed in the business, was highly inappropriate. For example:
    • The Piccolis questioned Ms Sagona’s dedication to her work and her ability to work late. They also suggested that they would need to reconsider their plans to allow Ms Sagona to participate in the profits of the business after their retirement
    • Ms Sagona was told that once her pregnancy was visible she would have to work in a ‘behind the scenes capacity’ because it was ‘not a good look’ for customers to see a pregnant woman (Ms Sagona is a photographer) and that consequently she would be paid less
    • Ms Sagona was required to advise (at 12 weeks’ gestation) of the exact duration of her parental leave.
    • Ms Sagona worked 45 – 50 hours per week but was then required to work ‘whatever hours it takes’ to meet her sales targets
    • The Piccolis refused to even entertain Ms Sagona’s request to work part-time for a period after the birth of her child
    • The Piccolis sought to unilaterally reduce Ms Sagona’s remuneration based on her failure to meet newly imposed sales targets
    • Ms Sagona was required to take her long service leave before the birth of her child because it would be too hot in January and February for her to work as a photographer given her pregnancy
  • Despite clearly discriminatory conduct by the employer’s representatives outlined above and which was held to have amounted to constructive dismissal of Ms Sagona, the owners and managers of the business consistently denied liability including during the hearing. They claimed, without any medical or other objective evidence in support, that Ms Sagona would not be able to perform the inherent requirements of her job due to her pregnancy and then status as a parent.

In addition, the fact the claim was brought against individuals and penalty awarded against them is not novel and can be easily justified in this case where the employer entity was a family owned business and the individuals were its shareholders, directors and manager. Further, they were the main perpetrators of the discriminatory conduct and consistently denied their liability.

The decision in Sagona v Piccoli should not concern you or your business if the workers in your business:

  • Understand what unlawful discrimination on the basis of pregnancy is
  • Understand parental and long service leave and hours of work entitlements
  • Understand that they must properly consider requests to work part-time by parents, and
  • Are prepared to admit mistakes when they occur.