“Best Brothel in Australia” to pay $173,000 for Adverse Action
Daily Planet, the 18-time “best brothel in Australia” (but which is currently in liquidation) has been ordered to pay over $173,000 to a former receptionist, Ms Gabriella Rosa, who successfully claimed Adverse Action.
Section 340 of the Fair Work Act 2009 (Cth) (‘FW Act’) mandates that a person must not take adverse action against another person because they have, exercise or propose to exercise a ‘workplace right’.
Adverse action by an employer against an employee is defined by s.342 of the FW Act as being when the employer:
(a) dismisses the employee; or
(b) injures the employee in his or her employment; or
(c) alters the position of the employee to the employee’s prejudice; or
(d) discriminates between the employee and other employees of the employer.
This means that employers are not allowed to disadvantage an employee for taking sick leave, maternity leave, taking part in protected industrial action, etc. This includes making threats in respect of these matters.
In the 2016 litigation concerning liability, Judge Riethmuller of the Federal Circuit Court found Daily Planet did take adverse action against Ms Rosa by threatening to change her from a part-time employee to a casual employee against her wishes and by then dismissing her.
Ms Rosa had tried to resist the proposed change to her employment as “the certainty of the existing arrangement was of great importance to [Ms Rosa] who had a child to support”.
It was noted by Judge Reithmuller that despite Ms Rosa earning over the minimum wage, she was “nonetheless a low income earner”.
It was also held that Ms Rosa, as a receptionist, was covered by the Clerks — Private Sector Award 2010 and that her employer failed to provide a number of entitlements under it including meal breaks and penalty rates.
The second phase of the litigation, Rosa v Daily Planet Australia Pty Ltd & Anor  FCCA 512, published on 17 March 2017 was in relation to the calculation of damages.
Judge Reithmuller found the “actions of the employer were at best ham fisted and at worst high handed, showing no regard for the needs of the employee”.
Furthermore, while the Judge accepted that while the breaches of the Award were not deliberate, the adverse action was a deliberate. It was also “serious and aimed at exploiting the employee”.
Additionally, the employer was put on notice of the breaches of the Award and not only failed to rectify them but instead took adverse action.
As such, the Respondent was instructed to pay Ms Rosa $98,129.26 in compensation and a further $75,240 in penalties for the severity of the breaches.
Message for Employers
Employers must always ensure that their employees are free to exercise their workplace rights and that they do not take adverse action against them for doing so.
The FW Act also protects prospective employees, independent contractors and prospective independent contractors from adverse action in addition to current employees.
When quantifying damages, the Court will look at the surrounding circumstances of the parties to determine the severity of the adverse action.
In this case, the serious breach was calculated as 70% of the maximum while the Award breaches which “largely came from a misconception as to the terms of the employment and a lack of care with respect to following the Award” and taking into account the fact the employee was paid above the Award rate was only calculated as 20% of the maximum.
If any employer is unsure whether an employee has a workplace right or whether a proposed action it wants to take may be (or become) adverse, seek legal advice as a breach of the FW Act may result in significant damages and also penalties as seen in this case.