Company Pays Over $5 Million For Unfair Dismissal

The employer of a senior manager who denied his claims of bullying and then unfairly dismissed him has been directed to pay $5 million damages, fines, and compensation. The judge decided the case was an example to deter other employers who may be tempted to dismiss someone for exercising their workplace rights.

The senior manager was employed by a software company, who’s gross income grew to $800,000 as regional general manager. His role was to build the business, manage and develop the market and manage the region’s sales staff. He was regarded as very hardworking committed and loyal.

However, from late 2010 he experienced personal distress as his daughter became ill. Despite his ability to maintain his work ethic he was brought into various conflicts with other staff and begun to feel he was being threatened bullied and undermined by other staff. Incidents included complaints and allegations made by sales staff which eventually led the CEO to terminate his employment in 2016.

As a result of the termination, the employee experienced depression and psychological issues that meant he was unfit to obtain other employment. The employee sued the company seeking compensation, damages and penalties due to his alleged summary dismissal for prohibited reasons.

The case was heard by the Federal Court of Australia. The employee argued his summary dismissal was for reasons prohibited by the Fair Work Act 2009 and the court heard the workplace culture involved fear, intimidation, bullying, and passive-aggressive behaviour. The employee had suffered a major loss financially and damage from the mental injury caused. The employer denied allegations and claimed the manager had been dismissed for the valid reason that sales staff had complained about him, his team was ‘in crisis’ and he has been unable to work well with three different managers in the last 2 years.

The court found the CEO had ignored professional HR advice that it would be unfair to dismiss the employee based on allegations. Therefore the CEO had taken adverse action against the employee. The judge decided to seriously reprimand the company so others would be deterred from doing the same.

In total the wrongful dismissal cost the company $5,228, 410 including $1.59 million for breach of contract, $2.825 million for future economic loss and $756,410 in compensation for forgone share options.

This case highlights the hefty costs employers can pay for not implementing HR advice and dismissing employees without a valid reason. For advice and guidance regarding dismissing employees contact ProcessWorx on (08) 9316 9896 or enquiries@processworx.com.au

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Written by Danielle McNamee

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Marisa Ross

HR Advisor

Marisa is an experienced and motivated HR professional with a strong HR generalist and business operations background with a focus on employee relations, performance management, leadership training & development, workers compensation & injury management, and employee retention. Marisa holds a Bachelor of Human Resource Management and a Bachelor of Behavioural Science with a minor in Counselling. Having worked in a variety of industries from SMEs to large blue-chip organisations, Marisa is passionate about enriching employee experience, employee retention, and building leadership capability in people management.

Aimee Grigson

Aimee Grigson

WHS Advisor

Aimee has a strong understanding of Workplace Health and Safety Legislation and standards and has extensive HSEQ experience in a number of industries. Aimee has a great ability to engage across all levels of organisation, including field teams, leadership and external stakeholders. Aimee ensures Health and Safety Management Systems are compliant to legislation, effectively implemented and understood by all. Aimee has a Certificate IV in Work Health and Safety and qualifications in auditing and incident investigations. Aimee is passionate about coaching and developing small businesses towards a positive safety culture.