Told she was welcome back, then told to wait for her second baby

Back from parental leave

Lindsey Aragon was a sales executive for Austrend International Pty Ltd, a Perth gourmet food and beverage distributor, from September 2013. She visited supermarkets and grocery stores to take orders, which meant long drives, lifting and climbing stairs.

She told Austrend she was pregnant in about February 2015 and started unpaid parental leave on 10 July 2015.

In October 2015 she wrote to say she wanted to come back in November, working Mondays and Fridays only. On 13 November 2015 she made a formal request for a flexible work arrangement under s 65 of the Fair Work Act 2009 (Cth). Her emails went unanswered for over a week; her manager was overseas for his wedding.

A full-time return, agreed and then withdrawn

On 26 November 2015 her manager refused the request, listing seven reasons, including that store managers were often away on Mondays and the company could not take any revenue loss. One point "advised" her to provide a medical certificate of fitness before returning. At a meeting that day the director and general manager, Mr Denzil Rao, confirmed she could come back only full-time.

Ms Aragon nominated 4 April 2016 for a full-time return, when she considered her child would be old enough for day care. Her manager replied that she was "most welcome to join duty" that day.

In early 2016 she became pregnant again. In March she told Mr Rao, confirming more than once that she would be back on 4 April. On Friday 1 April, Mr Rao replied that her unpaid leave had been extended "until you deliver your second baby". She had not asked for that. When she pointed to the agreed date, an email sent after 8 pm said "There is no agreement between us", raised the missing medical certificate and her "poor performance" (remarks she said were untrue), and told her not to contact him or any staff before 12 April 2016. She did not go back.

In July 2016, with the Fair Work Ombudsman involved, the parties agreed that Austrend would pay her wages from 4 April to 19 July 2016 plus two weeks in lieu of notice, and she would resign. She received $14,653.80 after tax, and later her annual leave and superannuation.

The legal test: adverse action because of pregnancy

Section 351 of the Fair Work Act says an employer must not take adverse action against an employee because of a protected attribute, which includes sex, pregnancy and family or carer's responsibilities. Under s 342, adverse action includes dismissing an employee, injuring them in their employment, or altering their position to their prejudice.

The prohibited reason only needs to be one of the employer's reasons (s 360). Under s 361 the onus is reversed: once the facts are proved, the employer is presumed to have acted for the alleged reason unless it proves otherwise.

The Ombudsman sued Austrend and Mr Rao in the Federal Court. Most of its claims were dropped, and its claim that Ms Aragon had been forced to resign was dismissed on summary judgment in 2018, with indemnity costs against the Ombudsman. What remained was admitted: refusing to let her return full-time on 4 April 2016 was adverse action because of her sex and pregnancy, and Mr Rao was knowingly involved in it, which made him personally liable too (s 550).

What the Court decided

Justice Banks-Smith rejected the argument that the only problem was a missing medical certificate. Mr Rao admitted insisting on one was unlawful and had no reasonable basis. If a certificate had been the real concern, Austrend could simply have welcomed her back on condition she bring one.

Her lost wages had already been paid, so the Ombudsman sought compensation for hurt and distress. The Court awarded $2,000. It found she suffered "more than the usual element of distress which accompanies most terminations": she was left in the dark, told she was welcome, then had that reversed at the last minute in "unnecessarily harsh, threatening and combative language".

The maximum penalties were $54,000 for the company and $10,800 for Mr Rao. The Court ordered $15,500 and $2,800, below the Ombudsman's range, and required training for Austrend's directors and managers. It accepted Mr Rao's contrition: the harsh emails had been drafted by a friend in India and sent unreviewed, which the Court called irresponsible. It also found that the Ombudsman's media release, still on its website at the time, unfairly suggested Austrend had made her sign a pre-prepared resignation letter. The Court still said that making a return from parental leave this difficult "simply should not happen in this day and age".

What this means for you

If you are returning from parental leave, keep in writing what was agreed about your return date and hours. An employer that changes its mind because you are pregnant again, or demands a medical certificate because you are pregnant, may be taking adverse action.

On flexible work, even in 2015 an employer could refuse a request only on reasonable business grounds, with written reasons. For requests made from 6 June 2023, it must also discuss the request and genuinely try to reach agreement first, and a refusal can be taken to the Fair Work Commission, which can order that the request be granted. Civil penalty amounts were raised for conduct from 27 February 2024.

For employers, the case shows the cost of unchecked letters. If adverse action takes the form of a dismissal, a general protections application must usually be made to the Fair Work Commission within 21 days.