Failure to consider status of role costs $10,000 in sex discrimination ruling


Failure to consider status of role costs $10,000 in sex discrimination ruling

A former manager at Merck Sharpe & Dohme has won $10,000 in compensation and a written apology after the drug company failed to reinstate her to a position of comparable status when she returned from maternity leave.


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A former manager at Merck Sharpe & Dohme has won $10,000 in compensation and a written apology after the drug company failed to reinstate her to a position of comparable status when she returned from maternity leave.


The manager applied under s46PO of the Human Rights and Equal Opportunity Commission Act 1986 for a declaration that the company had engaged in unlawful sex discrimination and that it had unlawfully breached her contractof employment.

Prior to maternity leave she was employed as manager, technology support in the finance and administrative group. This position had a grade of MO5. The manager said that when she requested an extension of her maternity leave she accepted that her stand-in would fill her job permanently on the basis that she would be placed in an equivalent position on her return.

The manager’s new role was titled business improvement facilitator. She claimed that while her remuneration was retained at her old level, the position was in substance a lower grade (MO7) position and that the work and responsibilities of the position were inferior. She went on to argue that the company’s conduct amounted to a repudiation of her employment contract and that she accepted this repudiation by resigning her employment.


Federal Magistrate Driver found there was 'nothing novel or sinister' in the company’s approach to negotiating the manager’s return to work and that the agreement was consensual. He said there were benefits for both parties if the company were able to fill her former position permanently and place her in an equivalent role on her return allowing her to undertake further career development.

The Federal Magistrate went on to find that this original proposal was 'overtaken by events' when the IT group was restructured. He said the manager was in a difficult spot. She had voluntarily given up her old position and it was too late to withdraw her consent to that position being filled. Only one position was on offer and her manager was persuasive that the position would be 'ideal' for her as a developmental opportunity. The new position was two grades lower than her former role.

The company contended that the two positions were comparable because the manager’s remuneration was maintained at the MO5 level and because the duties of the position were augmented. While agreeing with this, Federal Magistrate Driver found the manager reported to a less senior manager which he concluded was a loss of status.

The Federal Magistrate said the manager accepted this state of affairs for approximately 12 months, but then challenged management about the situation in the context of her performance plan. She was concerned in particular that the performance plan appeared to formalise her loss of status. He said this was an opportunity for the company to remedy the situation, however it did not take the opportunity. He found management instead confirmed her loss of status by insisting she accept she was no longer in an MO5 position.

Federal Magistrate Driver concluded the manager’s new position was inferior in status to the position she had vacated and, therefore, was not 'comparable' for the purposes of s66 of the Industrial Relations Act and the company’s maternity leave policy. He found the company breached its contract of employment by failing to honour its maternity leave policy.

The Federal Magistrate also found the company breached the Sex Discrimination Act by treating the manager less favourably than a comparable employee who was not pregnant. He said the manager had accepted a new position on the basis that it was a developmental opportunity but it appeared 'more like a dead end'. He said management made serious and genuine attempts to address her concerns about her duties, but failed to address her loss of status. Ultimately she accepted a merger management role which delivered the promised career development opportunities, however it did nothing to improve her status.

Consequently, Federal Magistrate Driver found this new role did not remedy the company’s breach of the Sex Discrimination Act.

What it did do, in the Federal Magistrate’s opinion, was mean the manager forgave the company’s breach of contract - a finding which undermined her claim for constructive dismissal. 'Her conduct was wholly inconsistent with the acceptance of a repudiation of contract by the [company], even if that conduct had amounted to a fundamental breach ... [She] resigned of her own accord. She was under stress when she resigned but she was not under duress.'

Federal Magistrate Driver found the company was liable to compensate the manger for non-economic loss from the time she returned from maternity leave to the time she took up the merger management role. He said this compensation was to reflect the fact that 'she had suffered a loss of status, she felt that she was not being given important work to do and she was concerned that she would suffer a loss of career opportunity'.

He said his award of $10,000 was a “substantial sum' in recognition that her loss of status was experienced over approximately 16 months and was aggravated by being confirmed in a performance review. He also said it recognised 'the need to enforce respect for the public policy behind the SDA'.

See: Rispoli v Merck Sharpe & Dohme & Ors, [2003] FMCA 160, (3 October, 2003).



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