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The onus and presumption in adverse action matters

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Under the general protections provisions in the Fair Work Act 2009 (Cth) (FW Act), it is unlawful for a person to take adverse action against another person for a proscribed reason. One of the features of the general protections provisions under the FW Act is the presumption that adverse action was taken for a proscribed reason unless it is proven that the adverse action was not taken for that reason.

Under the general protections provisions in the Fair Work Act 2009 (Cth) (FW Act), it is unlawful for a person to take adverse action against another person for a proscribed reason.

One of the features of the general protections provisions under the FW Act is the presumption that adverse action was taken for a proscribed reason unless it is proven that the adverse action was not taken for that reason.

This means that employers and other persons who are alleged to have taken adverse action bear the onus of establishing or disproving that the action was for an unlawful reason. The purpose of this rebuttable presumption is that it would otherwise be difficult for a person to prove that adverse action was taken against them for a proscribed reason.

The practical application of the reverse onus of proof means that evidence of the decision-maker will be needed in order to demonstrate that the action was not taken for an unlawful reason and to confirm what was in the decision-maker’s mind when making the decision.

In Roohizadegan v TechnologyOne Limited (No 2) [2020] FCA 1407 the Federal Court of Australia (FCA), awarded an employee $5,228,410.00 in compensation for breaches of the general protections provisions of the FW Act and a breach of contract by the employer and its Executive Chairman and Chief Executive Officer.

The employee had been employed from 2006 and held the position of Victoria Regional Manager until his summary dismissal in May 2016. The employee alleged that he was dismissed for a prohibited reason, which included because he exercised a workplace right to make a complaint that he was bullied. The employer and the CEO denied that the employee was dismissed because he had exercised a workplace right.

The CEO submitted that he was the sole decision-maker and that he terminated the employee’s employment for reasons relating to his performance and conduct, specifically that:

  • Victorian licences fees were not growing;
  • Concerns about the employee’s team which had been described as a “team in crisis”; and
  • The employee had not been able to work well with two managers in a two-year period.

The FCA found that it was the CEO who made the decision to terminate the employee’s employment. Having found this, the FCA noted that it was required to assess the “state of mind” of the CEO. 

The FCA did not accept the CEO’s evidence about his state of mind at the time he made the decision. Rather, the FCA was satisfied that the CEO was aware of the employee’s bullying complaints when he resolved to terminate the employee’s employment. Given this conclusion, the FCA did not accept that the employee was dismissed for the reasons claimed by the CEO.

The FCA found that the employee’s exercise of his workplace rights was a “substantial and operative factor” in the CEO’s reasons for taking adverse action against the employee.

Accordingly, the FCA held that the employer had not displaced the presumption and was satisfied that the employer took adverse action against the employee in contravention of the general protections provisions because he had exercised a workplace right and made seven complaints about bullying. The FCA also found that the CEO was accessorily liable for the contraventions.

The FCA ordered that penalties and compensation be paid to the employee as follows:

  • $40,000 as a pecuniary penalty to be paid by the employer;
  • $7,000 as a pecuniary penalty to be paid by the CEO;
  • $756,410 as compensation for forgone share options as a result of the summary dismissal;
  • $2,825,000 in future economic loss;
  • $10,000 as general damages; and
  • $1,590,0000 for breach of contract.

Lessons for employers

This case serves to remind employers about the presumption in adverse action matters under the FW Act. The onus is on the employer to provide evidence from a decision-maker that the decision to take adverse action against an employee was not because of a prohibited reason such as the exercise of a workplace right.

Significant penalties and compensation can arise if an employer fails to displace the reverse onus of proof and is found to have contravened the FW Act.

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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