Damages can be awarded for adverse action taken by an employer in response to bullying complaints
The case of Han v St Basil’s Homes serves as a timely reminder for employers to exercise caution when making decisions to terminate employment, particularly where workplace rights and protected attributes are involved. In this case the Federal Court held that a nursing home employer:
- took unlawful adverse action against an employee when they dismissed her for exercising her workplace right to make various complaints relating to her employment
- unlawfully discriminated against the employee by reason of her race.
The case reinforces the critical importance of procedural fairness and of understanding protected attributes and workplace rights during disciplinary and termination processes.
The case also highlights the risk that damages awards including damage for mental harm and civil penalty orders can flow from adverse action taken against an employee.
Facts
The employee was employed by St Basil’s Homes as a part-time registered nurse at an aged care facility. In January 2020, after over nine years of service, her employment was terminated for professional misconduct due to concerns about her clinical management of residents and inappropriate communication towards colleagues.
In September 2019, following a formal investigation, the employee had been issued a first and final warning after it was substantiated that she had called a colleague a ‘bitch’. Subsequently, in January 2020, the employee was dismissed after instructing an unqualified staff member to administer oxygen to a resident. Her employer regarded this as a serious breach of her contractual duties and as a failure to provide appropriate care.
Complaints
Prior to her dismissal, the employee made formal complaints to her employer alleging that she had been bullied, discriminated against and subjected to unfair treatment by a group of co-workers. The substance of these allegations included claims that:
- the employee was overworked and that her manager had denied her requests for appropriate breaks and pay for extra hours
- management had favoured other staff over the employee in shift and work duty allocations
- the employee was subjected to bullying and exclusion by a ‘clique’ of colleagues who ‘ganged up’ on her because she was Chinese.
The employee also made several complaints to her employer that other staff had engaged in improper care of residents and breached various workplace policies. It was in reliance on these complaints that the employee commenced proceedings in the Federal Court arguing that her employer subjected her to adverse action by terminating her employment because she had exercised workplace rights and because of her race, in contravention of sections 340(1) and 351(1) of the Fair Work Act 2009 (Cth).
Federal court’s decision
Section 361(1) of the Act provides that, where an employee brings a general protections application alleging adverse action, there is a rebuttable presumption that such action was taken by the employer for a proscribed reason. The onus is on the employer to prove otherwise.
The Court found the employer failed to sufficiently discharge this onus of rebutting the presumption that it had engaged in the alleged adverse action. Rather, the Court was of the view that the employer had taken unlawful action for the substantial and operative reasons alleged by the employee.
In justifying this position, the Court rejected the employer’s defence that the dismissal was based on legitimate performance concerns, finding that the misconduct allegations were ‘based on flimsy foundations’, ‘unsound’, and used to mask discriminatory motives. The Court also observed that, had the employer conducted a fair and impartial investigation into the employee’s complaints and afforded her procedural fairness before taking any disciplinary action, this would have avoided any doubt as to whether its termination decision was discriminatory or retaliatory.
The employee was awarded significant compensation for economic loss and general damages in the amount of $346,000. The Federal Court also imposed a pecuniary penalty of $60,000 on the employer as a deterrent to breaches of the general protections regime under the FW Act.
Takeaways for employers
This case highlights the importance of employers ensuring that all disciplinary and termination decisions are conducted fairly, transparently and without discrimination.
When employees raise genuine complaints or exercise their workplace rights with respect to their employment, employers must take care not to retaliate against them. Any adverse action taken in response to such complaints (including dismissal) can expose employers to liability under the general protections provisions of the FW Act, including potential civil penalties and significant compensation orders.
Where an employer has legitimate concerns about an employee’s performance or conduct, particularly if the employee has exercised workplace rights, it is essential that any decision to terminate employment is supported by a robust and well-documented performance management process or investigation.
