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Employer fined over $75,000 for adverse action taken against employee

Earlier this year the Federal Circuit and Family Court of Australia in Ruttley v Willis Brothers Installation (Qld) Pty Ltd [2022] FedCFamC2G 430 found that an employer breached the Fair Work Act 2009 (Cth) by taking adverse action against an employee who had been diagnosed with silicosis.

Earlier this year the Federal Circuit and Family Court of Australia (the Court) in Ruttley v Willis Brothers Installation (Qld) Pty Ltd [2022] FedCFamC2G 430 found that an employer breached the Fair Work Act 2009 (Cth) (FW Act) by taking adverse action against an employee who had been diagnosed with silicosis.

In “Stone Cold: Court Finds That Adverse Action Was Taken Against Employee Due to his Silica Disease Diagnosis” we reported that the Court found that the employer took adverse action against an employee when:

  1. it terminated the employee’s employment because of his disability, being his silicosis;
  2. it failed to pay personal leave entitlements and other allowances because he exercised his workplace right by making a workers compensation claim; and
  3. it terminated his employment because he exercised his workplace right to make an enquiry in relation to his employment, being his accrued leave entitlements.  

In Ruttley v Willis Brothers Installation (Qld) Pty Ltd [2022] FedCFamC2G 919 the Court was required to determine the penalty to be imposed on the employer.

The employee argued that the nature of the breaches warranted a high penalty because the of the circumstances of the contravention and the deliberate nature of the contraventions. In particular, the employee argued that the failure to record his leave entitlements meant that the Court was not able to calculate his exact outstanding leave entitlements and it was likely that he was not fully compensated.  

The employer argued that the contraventions resulted from the one course of conduct and involved the same conduct. It also submitted that in setting the penalty, the Court should also have regard to the financial position of the company and noted that the employee suffered minimal loss because he had his portable long service leave entitlements and was now employed.

The Court considered the employer’s conduct toward the employee was “both egregious and unjust” and had little regard to the employee’s silicosis diagnosis caused from working in the employer’s business over 20 years. The Court also noted that the employer’s conduct was not accidental and there was no contrition or remorse shown during the proceedings by the employer because it maintained that the termination of the employee’s employment was justified because he had exhausted his leave entitlements.

In relation to the third contravention, the Court held that the employer’s failure to maintain leave records meant that the employee’s entitlements could not be calculated accurately. Further it considered that there was a need for both specific and general deterrence as the employer continued to employee employees and there was a need to ensure that it did not ignore its statutory obligations to maintain employee records and unlawfully terminate an employee’s employment.

Accordingly, the Court ordered the employer to pay $44,100 for the first and second contraventions and $31,500 for the third contravention in penalties. The Court considered it was appropriate that the total $75,600 be paid directly to the employee for pursuing the matter, without which the employer would have escaped penalty for deliberate contraventions and the employee would not have received the entitlements he was due after 20 years of service.

Lessons for employers

The general protections provisions under the Fair Work Act 2009 (Cth) are civil remedy provisions. Rather than a “carrot”, the Court’s “stick” is the power to issue pecuniary penalties if it is satisfied that there has been a contravention of a civil remedy provision. The maximum penalty that the Courts can impose is $66,600 for a body corporate and $13,320 for an individual for each contravention.

Information provided in this blog is not legal advice and should not be relied upon as such. Workplace Law does not accept liability for any loss or damage arising from reliance on the content of this blog, or from links on this website to any external website. Where applicable, liability is limited by a scheme approved under Professional Standards Legislation.

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