An expensive lesson – always have genuine reasons when dismissing an employee

The Full Bench of the Fair Work Commission (FWC) has recently re-confirmed the importance of having genuine and documented reasons for dismissing employees who have exercised their workplace rights, by upholding a FWC decision awarding $52,094.60 to an employee who had her employment terminated while pregnant and suffering gestational diabetes.

The decision reaffirms that best practice requires employers to assume they will be required to positively prove that any decision to terminate an employee does not include any prohibited reason.

Recap of the general protections and the reverse onus

The Fair Work Act provides protection against adverse action for prohibited reasons, including discrimination.  Damages in such claims are uncapped.

Such claims include a ‘reverse onus’, so that where an employee alleges adverse action was taken for a prohibited reason, the employer must prove the allegation wrong.

Facts

Ms Liu was a full-time receptionist and accounts keeper employed by Compuworld Pty Ltd for 10 years. Throughout her employment she had issues with taking sick and personal leave associated with her pregnancy and gestational diabetes.

On 30 November 2019, the employee advised her employer she was intending to take maternity leave in 2020.

On the same day she received a letter terminating her employment due to redundancy. The letter stated there was a downturn in business and offered her a casual position. There had not been consultation prior to termination. The employee alleged the employer took adverse action by dismissing her employment because:

  • she had exercised one or more of her workplace rights;
  • she was pregnant;
  • she had a physical disability (gestational diabetes); and
  • the employer threatened to alter her position by prejudice by dismissing her full-time employment and offering casual employment instead.

The employer disputed this and maintained termination was due to a downturn in business.

Fair Work Commission decision (Click here to read)

The FWC concluded the substantial factor/s influencing the employer’s decision to terminate her employment was adverse action because of discrimination, due to her pregnancy and gestational diabetes. The FWC Commission ordered the employer to pay the employee $52,094.60.

Full Bench of FWC decision (Click here to read)

The employer appealed the finding of discrimination on the basis that it was unjust and disregarded the decline in business activity and the fact that two other employees were made redundant prior to Ms Liu. However, the FWCFB affirmed the FWC decision that while the economic situation of Compuworld was a reason for termination, the reasons for termination included a prohibited reason.

When considering the evidence of the downturn in business, given the financial meeting took place in early October and two employees left or were made redundant soon after; the fact Ms Liu was kept on until the end of November was at odds with the allegedly ‘dire’ financial situation.

Conclusion

This appeal decision reaffirms that employers should:

  • Always assume that you will be required to prove that the decision to terminate an employee was not for any prohibited reason.
  • Implement practice to document and record the evidence of the genuine reasons for termination.
  • When considering or implementing a restructure or downsizing, be clear, prompt and consistent in the approach to consultation with employees and the ultimate decision making.

If you have any queries or would like further information regarding this article, please contact:

Brett Cassidy
Principal
M: 0438 368 053
E: bcassidy@pageseager.com.au

Joe Mullavey
Senior Associate
M: 0416 794 061
E: jmullavey@pageseager.com.au

Anna Di Carlo
Lawyer
T: (03) 6235 5141
E: adicarlo@pageseager.com.au

Published: 16 September 2020

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