A recent Federal Court ruling underscores the risks employers face when multiple decision-makers are involved in dismissal processes.

The Federal Court of Australia recently delivered a judgment highlighting the challenges employers face when multiple decision-makers are involved in dismissal processes. This follows a similar Court ruling from May this year, discussed in this HRM article. 

The case was on appeal from the Federal Circuit and Family Court of Australia, which found that issuing a final written warning to an employee had been a contravention of the adverse action provisions of the Fair Work Act 2009 (Cth). This was because the employer could not identify which individual made the decision to issue the warning letter. As a result, they could not definitively prove the letter was issued for lawful reasons.

One aspect of the general protections provisions under the Fair Work Act outlines that if adverse action occurs, it’s presumed to have been for a prohibited reason unless the employer can prove otherwise.

On appeal, the Federal Court upheld the primary judge’s initial decision regarding the final written warning. The Court also decided there was a further contravention of the Act when the employer alleged serious misconduct against the employee. This contravention was due to the fact that the employer could not rebut the presumption that it made those allegations because the employee exercised a workplace right.

The outcome of this case highlights the issues that arise when employers fail to conduct a clear and detailed dismissal process and sheds light on the various complexities that can arise when multiple decision-makers are included in dismissal matters. 

A unified approach between all decision makers, or ideally a single impartial decision-maker, is preferable to avoid complexities in serious misconduct allegations, particularly given the reverse onus of proof in adverse action matters.  

The facts and background of the case

The employee was a lecturer at a leading university from 2010 until her dismissal, which was effective from 27 February 2020. She was engaged within the Faculty of Medicine, Dentistry and Health Sciences.  

Within the Faculty there were various schools, with each school comprising a series of departments.  The employee worked in the Department of Anatomy and Neuroscience, reporting to the Head of the Department, who reported to the Head of the School, who was accountable to the Dean of the Faculty.

The employee had made complaints about various issues related to her employment which, ultimately, resulted in the termination of her employment. 

These complaints began in 2018 after a review by the Faculty into the operations in the department where the employee worked. A change plan was prepared as part of this review, resulting in the employee’s role being made redundant.

Several events took place leading up to the employee being notified that her employment would terminate. These included:

• a meeting in August 2019 where the Head of the Department told the employee that the employer had “decided to make her position redundant in accordance with the change plan”;
• correspondence provided in September 2019 advising the employee that her employment would terminate and signed “on behalf of” the Dean of the Faculty (but was signed by an HR representative);
• a meeting in October 2019 where the employer’s HR representatives accused the employee of deleting a large number of files from the employer’s database; and
• correspondence provided in October 2019 to the employee notifying her in writing of the allegations that she had deleted a large number of files. 

The employee’s statement of claim pleaded that the employer’s decisions to make her role redundant,effect her dismissal and allege that she engaged in serious misconduct were motivated by her decision to exercise a workplace right in making a complaint in relation to her workplace.

The employee argued that these actions were attributable to the university, which was the sole respondent in her suit.

Need help brushing up on HR laws and compliance? AHRI’s short course will give you an understanding of the key elements of legislation, regulation and practices HR needs to be across.

Central issues that the courts considered

In the first hearing, the Federal Circuit and Family Court answered two questions: “Which decision-maker decided to take the adverse actions, and why did they do so?”  

On appeal, the Court held that this first question was the most significant to determine. 

The Court referred to part of the decision in the first hearing, which found “on the totality of the evidence” that the Head of the School, the Head of the Department, an Associate Professor of the Department, and two representatives of the employer’s HR team “each had a material effect on the decision to issue the serious misconduct allegations letter to [the employee]”.

The Federal Court also found that while the Federal Circuit and Family Court noted these people had “a material effect” on the decision-making, this didn’t actually identify who decided to make the serious misconduct allegations.

The Court highlighted that in cases like this, it’s essential to determine if someone was “sufficiently involved” in the adverse action.

Under the Fair Work Act, to overcome the assumption that adverse action was taken for a prohibited reason, an employer must present, and have the court accept, evidence explaining why the action was taken. In this case, that means the employer must show that the employee’s workplace rights did not play any role in the decision.

Since corporate employers act only through their agents and employees, they must demonstrate the identity of the person or people making the adverse action. They must have taken the adverse action with an “innocent state or states of mind”, and not in response to an employee exercising a workplace right.

The best way to fulfil these obligations is by using clear and credible testimony from those who made the decision on behalf of the employer. That way, the Court can produce a finding about who decided to make the allegations of serious misconduct and issue the final written warning to rebut the statutory presumption that it was done so in response to a workplace right being exercised.

What this decision means for employers

The Court’s decision in this case highlights several important reminders for HR and employers, most importantly the following:

• Employers must clearly identify who made the decision when defending a claim of adverse action against an employee. This allows a court to consider evidence about that person’s reasoning, especially in matters of performance or conduct. 
• Documenting the decision-making process is essential for managers involved in any employment-related decisions to explain why a choice was made. 
• If more than one person is involved in the decision, providing clear evidence of each person’s intent may become challenging. Employers may simplify this by appointing a single, neutral decision-maker in dismissal cases, focused only on the employee’s relevant performance, conduct, or behaviour, without regard to any workplace rights the employee may have. 
• Additionally, employers must be aware of employees’ workplace rights and understand that the reverse onus of proof applies when defending against general protections claims. 

This case serves as a critical reminder for employers to streamline their decision-making processes and maintain thorough documentation, ensuring compliance with the Fair Work Act and mitigating legal risks.

Aaron Goonrey is a Partner and leads the Australian and APAC Employment & Rewards practice at Pinsent Masons. Luke Scandrett is a Special Counsel and Camille Wright-Gray are Associates at Pinsent Masons.

 All information, content and materials available on this site are for general informational purposes only. The contents of this article do not constitute legal advice and should not be relied upon as such.