Former employee awarded $5.2 million in adverse action case

15 October 2020

A landmark decision delivered by the Federal Court of Australia has resulted in an Applicant being granted more than $5.2 million in damages (plus interest) under the general protections provisions of the Fair Work Act 2009 (Cth) (FW Act) and for a breach of contract in terms of the payment of incentives.

In Issue

  • The main issue in contention was whether the Applicant was terminated because he had exercised a workplace right.

The background

Mr Roohizadegan (the Applicant) initiated proceedings against TechnologyOne (the First Respondent) and Mr Di Marco (the Second Respondent). Mr Di Marco was the Executive Chairman as well as CEO of the First Respondent and the sole decision-maker in the termination of the Applicant’s employment. The Applicant alleged that he was summarily dismissed on 18 May 2016 because he had made complaints multiple times about bullying, and that the reason for this was prohibited by s 340(1) and/or s 351 of the FW Act. The Respondents simply contended that the reason for termination was not because of the Applicant’s exercise of a workplace right.

The decision at trial

The Applicant, through evidence, successfully proved that he was terminated as a result of exercising a workplace right by making several complaints of workplace bullying. The Court also noted that the First Respondent had an “Open Door Policy” and “Workplace Bullying Policy” included in the contract of employment, which meant that the Applicant was entitled to exercise a “workplace right”. Accordingly, the Applicant was therefore protected by s 341(1)(c)(ii) against adverse action being taken against him.

The Respondents argued that the Applicant was terminated due to competing allegations made by other employees. Interestingly, Justice Kerr described Mr Di Marco’s decision as being preferential to the interests of the alleged bullies over the interests of the Applicant. The Court also observed that the company had failed to conduct an international investigation into the allegations prior to terminating the Applicant. As such, it was found that “adverse action” was taken against the Applicant in contravention of the general protections provisions of the FW Act. It was established that Mr Di Marco was advised by HR that it would be unfair to act on the Applicant’s bullying allegations without investigation.

Relevantly, Justice Kerr stated:

“[t]o achieve effective deterrence, CEOs in like positions need to know that such temptations [to reject professional HR advice] as he faced are to be resisted: and that there will be a not insubstantial price for failing to do so”.

Implications for you

This case serves as a reminder to employers and senior management of the significance of properly investigating internal complaints as well as ensuring that the termination procedure is correctly and fairly undertaken in order to reduce exposure.

Further, where employers or organisations have human resources specialist, advice should be sought particularly where there are highlighted risks of adverse action.

Roohizadegan v TechnologyOne Limited (No 2) [2020] FCA 1407

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