After persistent requests for more support and benefits, and working restricted hours after an accident, this employee was accused of being a malingerer and dismissed.

An employer and four company directors are on the hook for nearly $880,000 after the Federal Circuit Court found they unlawfully dismissed a 60-year-old engineering and operations manager for a series of reasons that amounted in the them being fed up with him.

Following his dismissal, the employee, who had held his role since June 2015, made a general protections claim which very much ended up working in his favour.

Dismissed for asking for too much?

After being involved in a car accident in 2016, the employee, under medical advice, requested the ability to work between 9am and 3pm solely on weekdays, to enable regular hospital visits. Also pertinent to the case was that after the accident, the employee had two requests for a pay raise – first for $30,000 and then $20,000 – denied.

The employee also claimed he wasn’t receiving adequate support from the organisation and that it went against its promise to offer him a board position. The court record outlined nine official complaints/inquiries made by the employee over 2017.

During a board meeting on the 17th of November, it was decided that the employee would be dismissed. The managing director of the company told the court this decision was made due to performance issues, recent financial losses for the business (which the employee took responsibility for) and questions around the business’ profitability. The employee was not given the chance to respond to these allegations prior to his dismissal.

In the hearing, the court referred to a diary note from a board meeting held on the 17th of November 2017 which said, ‘Remove [the employee] at Board meeting after lunch. We need his key, car, etc. today. Mobile phone’, but no official board minutes were produced in the court case. The employee was officially dismissed a few days later.

Broken promises

The souring of the relationship between the employer and employee seems to have stemmed from promises that were made in a letter sent to the employee by the managing director in November 2016, and later apparently broken. 

In it, the company expressed an interest in appointing the employee to the board, offering both a raise and a 10 per cent profit-share option.

The employee swore he accepted this offer at the time and recalled shaking the hands of the board members and the managing director. He also remembers the managing director saying something along the lines of, “We are so relieved to have you on board and for you to run the business.”

During cross examination, the employee was unable to provide concrete evidence that he had actually accepted the offer. The employee said it was an act of good faith, something they shook hands on and would be subject to future conversation, but that’s all he was able to say on the matter.

However, when the employee felt these promises weren’t followed through, he began making complaints.

Inconsistent evidence 

The employer’s argument – that poor performance was a main factor in the dismissal – didn’t gel with the content of another letter sent to the employee in 2017, just two months prior to his dismissal. The letter, which was in response to some of the complaints made by the employee, read:

“The Board wishes you to know that it is very grateful for the efforts and contributions you have made… since you have become involved with the business. In recent times, you have been successful in navigating some difficult business and market conditions. The Board remains of the view that the business has a strong future under your guidance.”

The letter went on to offer him a $20,000 salary increase and a 10 per cent profit share in the business, but did not mention a board role.

While this new offer addressed some of the employee’s requests, it came with conditions that required him to take on further responsibilities in his role, which the employee said would have been “impossible” to perform because:

• He was recovering from a significant medical condition which required him to attend to extensive rehabilitation therapy and regular medical appointments;
• The employer had not provided him with additional support and administrative assistance that he had been requesting; and
• He had not received adequate training in relation to new software and instruments he would be required to use as part of his expanded role.

In response to the letter of offer, the employee wrote back, “I would like to express my significant disappointment with the letters of offer and the reviews that you have provided to me. Not only have you dishonoured the original offer, however, [sic] this current letter of offer is discriminatory in both effect and requirement expectations of your employees.”

The employee stated he was the victim of favouritism, stating that other employees who were more junior to him had been offered pay raises “without any additional KPI’s, business development requirements, forecasting or any other additions to their current workloads or conditions.”

The employee requested amendments be made to his offer, but this request appears to have been the final nail in the coffin. Both parties were unable to come to an agreement and he was subsequently dismissed.

The employee would later claim to the court he was being discriminated against due to his age and ill health. On this claim though, the court sided with the employer, stating that medically the employee wouldn’t have been able to fulfil the inherent requirements of a full time director (partly because he was unable to work on weekends) and therefore the employer’s behaviour was not discriminatory. 

The final word

Federal court Judge Greg Egan said he thought the dismissal was calculated, stating that the contraventions were deliberately made by senior management who had “become increasingly frustrated by the [employee’s] pleaded complaints and inquiries, and had decided to be rid of him for that proscribed reason.”

Egan made special mention of the employer’s claim that the employee failing to hand back a company car and company credit cards in a timely manner (the credit cards were in the employee’s name, and were returned cut up due to safety concerns, just two days after his dismissal) was tantamount to theft.

“The stealing allegations made against the applicant were unjustified and crudely vindictive… The directors were fed up with the applicant – he being someone who just wouldn’t toe the line – and they opted to be rid of him. The termination of the applicant’s employment was not for any lawful reason,” said Egan.

“The [directors] have shown no remorse for their unlawful conduct. Indeed, throughout the trial, the [employee] was sought to be portrayed as a lying malingerer, a course which the court finds was unwarranted,” said Egan in his ruling.

The employee described experiencing symptoms of depression and anxiety as a result of believing that his employment was unlawfully terminated. These claims were backed up by a medical professional who said, “Since his termination of employment, [the employee] stated that he felt ashamed, less masculine and believed he was a burden on his family. He said he felt useless as he was no longer the sole provider.

“It was reported that he had more arguments with his wife and was irritable with his family. As a result, this was reported to be the first time in their 32 year marriage that his wife was no longer wearing her wedding ring and they slept in separate rooms. He noticed that he struggled with memory and concentration now. Thus, he stated he found it difficult reading and watching television.”

Compensation

Not only did the court find the reason for dismissal to be unlawful, it also ruled on a breach of section 44 of the Fair Work Act – withholding an employee’s annual leave entitlements.

At the date of his termination, the employee was owed nearly $15,000 in accrued annual leave. This wasn’t paid until 18 months after the termination, which meant the organisation had to cough up hefty fines for withholding payments. The employer says the delayed payments were due to the employee not having provided his timesheets, but, as this wasn’t a requirement outlined in his initial employment agreement, the court didn’t give this argument any weight.

The court ordered the organisation to pay fines totalling $275,940 for failing to pay unused annual leave when his employment ended, and ordered compensation of $589,439 (plus $13,925 in interest) based on a calculation that the employee would have worked with the company for another three years had he not been dismissed, bringing the grand total to nearly $880,000. 

As we have seen time and again in dismissal cases, if you’re going to fire an employee you need to make sure it’s for a legitimate reason, and that appropriate evidence is collected that backs up that reason. Claiming that an employee you just offered a pay raise was actually underperforming is not going to cut it.

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