Adverse Action Update: Settlement deed “forced” on employee and $5 million payout for serious contravention

By 15 October, 2020 No Comments

Recent litigation under the general protections provisions of the Fair Work Act 2009 (Cth) (Act) have reminded employers just how costly it can be to fall foul of these protections. 

General Protections

The Act establishes a set of protections for employees against “adverse action” being taken by their employers. An “adverse action” includes dismissing or refusing to employ someone, discriminating against a person or injuring a person during their employment.

The role of the general protections is to:

  1. protect employees’ workplace rights;
  2. protect freedom of association;
  3. provide protection from workplace discrimination; and
  4. provide effective relief for persons who have been discriminated against, victimised, or have experienced other unfair treatment.

Some of the commonly litigated general protections include:

  1. taking adverse action where an employee has, has not or proposes to exercise a workplace right.
  • employers are subject to penalties under the Act if the workplace right was a “substantial and operative reason” for the employer taking adverse action against the employee.[1] Adverse action may include, but is not limited to:

– dismissing the employee;

– injuring the employee;

– altering the employee’s position to the employee’s prejudice or detriment;

– discrimination against an employee or between the employee and other employees of the employer;

– discriminating against the prospective employee in the terms or conditions contained in the prospective employment contract;

– refusing to employ the prospective employee; or

– inciting, advising or encouraging any action to coerce another person to take action against the employee.

A person has a workplace right if the person:

  1. is entitled to the benefit of a workplace law, workplace instrument or an order made by an industrial body;
  2. has a role or responsibility under a workplace law, workplace instrument or order made by an industrial body;
  3. is able to initiate or participate in a process or proceedings under a workplace law or instrument;
  4. is able to make a complaint or inquiry to a person or body with capacity to seek compliance with a workplace law or instrument; or
  5. is able to make a complaint or inquiry in relation to his or her employment.

Former Amazon Engineer claims he was forced to resign

A Chief Engineer formerly employed by e-commerce giant Amazon alleged he was forced to resign after the HR team refused to provide further details regarding his completion of a performance improvement plan. The employee alleged that after resigning, he was:

  • called in to a meeting and provided with a copy of a deed of release and separation notice
  • asked to sign both documents on the spot and told that if he left the room or took time to take legal advice, the offer would be withdrawn

The former employee is seeking compensation of more than $168,000, including shares in the company.

Software company ordered to pay $5.2 million for adverse action breach

An ASX-listed enterprise software company, TechnologyOne Limited, has been ordered by the Federal Court to pay more than $5.2 million in compensation, damages and fines to a former senior employee who was dismissed after making several bullying complaints.

The employee, Mr Roohizadegan successfully established that his dismissal by TechnologyOne constituted adverse action on the basis that he was dismissed after exercising a workplace right when he made seven complaints about bullying to his employer.

Amongst the penalties ordered was a $7,000 fine against the chief executive whose executive team “twice rejected professional HR advice” that it should not dismiss Mr Roohizadagan on the “basis of mere allegations” which were never investigated, contrary to the advice TechnologyOne had received.

Justice Duncan Kerr condemned the CEO’s choice and imposed penalties closer to the highest end of the scale against the corporation and the CEO personally, due to the serious nature of the contravention.

Key Takeaways

  • Employers should ensure their reasons for dismissing an employee do not include unlawful reasons. Having evidence to support the reasons as well as a clear paper trail is essential.
  • Mutual separation discussions should be handled very carefully and employers should seek advice before initiating such processes.
  • All allegations should be properly responded to an investigated even where the employer doubts the veracity or legitimacy of the allegations.

For assistance or advice in regards to the above, please reach out to one of our specialist employment lawyers on (08) 6188 3340 or hello@nullpragma.law.

[1] Board of Bendigo Regional Institute of Technical and Further Education v Barclay [2012] HCA 32 [104] (Gummow and Hayne JJ).