High cost for an employer breaching the general protections provisions of the Fair Work Act

Background

In an earlier judgement, the Court found that Macquarie University had contravened the general protections provisions of the Fair Work Act 2009 (Cth) (the Act) by making a former employee redundant because the former employee had made complaints about her direct report. The University had also failed to redeploy the former employee to available roles. The Court was satisfied that the reason for this failure was also due to the complaints the employee had made and that the failure also amounted to a breach of the applicable Enterprise Agreement.

Having made the initial findings in favour of the aggrieved employee, the Court, in a subsequent decision, considered the issue of remedies and that decision provides some good guidance on the matters that a Court may take into account when determining the appropriate remedies in a general protections matter.

Reinstatement

Importantly, the Court reiterated that reinstatement is not automatically denied just because the exact ‘position’ which the employee had prior to the termination now no longer exists.

The Court declined to order reinstatement after considering a variety of issues, including that the employee’s supervisor had said the employee was ‘poisonous to the team environment’; the Consultant Psychiatrist’s evidence regarding the ‘stressors’ for the employee if she was to recommence working at the University; and the impact of the COVID-19 pandemic.    

Pecuniary penalties

In determining the penalties that should be awarded against the University, the Court considered:

• the size of the employer being a University and its human resources capabilities;
• the lack of ‘contrition’ by the University due to the University ‘strongly defending the matter’;
• the University had ‘taken corrective action’ in the form of enhanced ‘restructuring and redeployment processes’; and
• the need for a ‘specific and general deterrence’ for employers generally and the University in relation to breaching the general protection provisions.  

The Court imposed a penalty of $45,000 which was awarded to the aggrieved employee.

Compensation for loss of wages

When the Court came to its consideration of compensation for loss of wages, several issues were considered, for example:

• the former employee ‘made significant efforts to mitigate her loss’ including by applying for other jobs;

• the employee’s ‘personal financial affairs’ were not relevant when determining lost wages; and  

• the later ‘restructure of the area’ where the employee was formerly employed and the University’s argument that the employee ‘would have been made redundant and terminated anyway as of 4 December 2018’ did not result in a decrease to the compensation awarded for loss of wages. The Court held that it would be speculation as to what would have happened if the University ‘had meaningfully engaged with the Applicant, in redeployment and retraining process’. The Court stated that there was the possibility that the employee would have been redeployed into a section which did not later undergo restructuring.

Compensation for loss of wages equated to $221,163.45 (plus $55,156.19 in superannuation) being the employee’s wages from the date of dismissal to the date of judgment. There was to be an adjustment for taxation consequences due to the former employee receiving the amount as a single payment.

Compensation for future economic loss

Several issues and circumstances of the case were considered, including for example, the ramifications of COVID-19 on this sector of the economy. In total, $278,282 was awarded to the former employee for future economic loss.

Compensation for non-economic loss

The Court awarded $15,000 (plus interest) for non-economic loss. In this regard, the Court considered that:

• the employee was ‘deeply distressed and hurt’;
• the ‘intensely uncomfortable’ ‘intense cross examination’ experienced by the employee during Court hearings; and
• there was ‘medical evidence’ that the termination led to ‘a mental health issue’.

Significantly, the Court also explained that the fact ‘the Applicant’s reaction may have been disproportionate to what occurred does not mean that the Respondent can escape any blame for the Applicant’s adjustment disorder and depressed mood.’

The total amount payable to the former employee exceeded $600,000.

Tran v Macquarie University (No.3) [2020] FCCA 1010 (6 May 2020)

National Workplace Lawyers

Note – this article is for information purposes only and does not purport to be comprehensive or to render legal advice.