Employers need to tread carefully not to breach the Fair Work General Protections.

Key learnings for employers:

• It doesn’t take much to trigger a General Protections claim but it can take a lot to defend it to prove your actions as the employer was legitimate.
• If prior incident final warnings are not valid then a later termination based on that final warning is on shaky ground.
• In this case senior management simply accepted middle management’s opinion of the employee. Unfortunately this was tainted with bullying and racism.
• An employer can take action against an employee who has made a complaint if it is based on legitimate grounds and supported by sufficient evidence.
• A triggering complaint can be many things including someone questioning their pay for that week.
• There is no upper ceiling on General Protections payments that can be awarded. This also includes non-economic loss for anxiety, depression etc which many people invariably suffer.
• This is an area where the prevalence of no-win no-fee lawyers with no/low ethics are expanding.

The Federal Court has awarded approximately $380,000 to a former employee following breaches of the Fair Work Act (2009) General Protections provisions. This amount included general damages, past and future economic loss and a civil penalty against the employer.

A long serving registered nurse, Ms Han, of Chinese extraction, was found to have been dismissed unlawfully after exercising a workplace right and making internal written complaints about bullying, racial discrimination, and patient care concerns.

The employer, St Basil’s Homes, an aged care provider in Lakemba in Sydney, based their defence on performance concerns and misconduct by Ms Han. However, they were unable to prove these reasons were legitimate to the satisfaction of the Court. In a General Protections application, the employee makes an assertion that the employer acted negatively towards them (i.e. a termination in this case) after they made a complaint. The employer must prove their decision to terminate was based on legitimate grounds. Failing to do so means the employee’s assertion takes precedence.

Ms Han’s initial complaints related to allegations of mistreatment of patients, unsafe staffing practices and racial discrimination.

Shortly after making those complaints Ms Han was alleged to have used inappropriate workplace language. Following a series of meetings concerning this issue Ms Han was issued with a ‘first and final warning’ for what appeared to be a relatively minor inappropriate language incident. The Court found a ‘first and final warning’ for this minor breach to be invalid particularly given Ms Han had an unblemished work record. In the absence of strong alternate evidence by the employer the issuing of the final warning was directly attributed to the complaints Ms Han had made.  

Later the same year, Ms Han made more detailed complaints about patient care concerning understaffing and increased responsibilities which she stated were untenable. She also complained she was being systematically bullied by a number of other staff who were Filipino. She asked for the complaints to be investigated. Several weeks later she raised a further complaint about elder abuse and included photographs of one of the patients.

While on several weeks annual leave Ms Han received a phone call suspending her and informing her that an investigation was taking place. She was not informed of the reason for the suspension or the nature of the investigation, other than ‘serious allegations” had been made against her.

She was asked to come to a meeting several days later but was not told details of the allegations to be discussed. At the meeting she was provided with information of a patient care incident a month earlier, where it was claimed that she had not afforded appropriate or adequate clinical care to a patient. At the same meeting her employment was terminated effective immediately. The above mentioned first and final warning was used as the basis for the decision to terminate Ms Han’s employment following this latest incident.

The employer immediately informed the NSW Nursing and Midwifery Council of the allegations and the reason for her termination. However, the same Council subsequently cleared Ms Han’s actions with the patient in question stating her actions did not raise significant concerns about her performance and did not warrant action against her.

In the General Protections proceedings Justice Rare found that no proper investigation had been carried out and that the process and procedure around the termination was flawed. The misconduct allegations leading to Ms Han’s termination were unsound and lacked objective foundation.

He was not satisfied with the employer witness testimonies provided by St Basil’s and that there was a lack of credible evidence supporting their defence. The Court also stated the complaints made by Ms Han had not been investigated and that the termination masked discriminatory and retaliatory motives. The termination therefore amounted to unlawful dismissal as it was motivated by Ms Han’s complaints and by her race.

Why did the Court award the large penalty against St Basil’s?

The penalty part of the decision covered some 40 pages and provided a very detailed analysis of the impact of the termination on Ms Han’s life and financial situation and the Judge’s thinking process behind the monetary decision.  

In relation to the Ms Han’s psychological injury Justice Rare preferred the opinion of Dr Sherman who had been engaged as an independent expert by St Basil’s to assess Ms Han. He stated that Ms Han was suffering from “Adjustment Disorder with Mixed Anxiety and Depressed Mood”. His opinion was that the condition was caused by several factors including a substantial increase in workload pressure, favouring of relatives by management including giving those persons her weekend shifts, false accusations of misconduct leading to her termination in an unjust manner and for illegal reasons (her complaints and racial treatment) and reporting her to the Nursing and Midwifery Council to harm her reputation.

Due to the psychological impact Ms Han suffered a greatly diminished ability to work. The Judge awarded her $175,000 for past economic loss – for loss of earnings since the date of termination.

He decided that following the proceedings it would take Ms Han another 18 months of regular treatment before she was able to return to work in a full capacity. He therefore award $61,559 for future economic loss.

For out-of-pocket expenses including general practitioner, psychologist and psychiatrist costs she was awarded a $10,000.

In relation to general damages for non-economic loss he awarded Ms Han $75,000 stating “I am comfortably satisfied that St Basil’s contraventions have caused Ms Han to suffer real harm of an emotional nature, which has caused her hurt and humiliation and to suffer from mental harm”.

He awarded a further $60,000 as a penalty payment stating, “The contraventions are objectively serious and I am satisfied that the primary purpose of promoting the public interest in compliance with the provisions of the FW Act by deterrence will not be secured unless a penalty is imposed.”

In addition to the $380,000 awarded to her, Ms Han is likely to make an application for costs (as in legal costs) – which would no doubt be substantial.  If this is successful the employer would have to pay her legal fees in addition to their own substantial defence legal costs. 

It is recommended that employers seek professional advice in relation to termination decisions to minimise the risk of large compensation payments for simple errors.

Kind Regards
Michael Schmidt
M 0438 129 728
[email protected]
www.hunteremployeerelations.com.au

Guiding senior managers through complex employee relations issues

 Sign up here to receive Hunter Employee Relations Update directly to your email inbox

Want to know more about our client services?