Dear Employer – The law is not your friend. Beware.

Five days casual employment stopped after 3 days. $75,000 compensation paid to the former casual employee. $150,000 penalty for breach of S772(1) of the Fair Work Act. $2m in legal fees paid by the employer to defend the action.

Is that a fair result?

This can happen to any employer.

One Minute Summary

The recent Lattouf v ABC Federal Court follow up decision issued the ABC with a penalty of $150,000 for breaching the Fair Work Act 2009.
The ABC had breached Section 772(1) of the Fair Work Act by terminating Ms Lattouf 3 days into a 5-day casual engagement for having and expressing political views. The original decision required the ABC to pay Ms Lattouf $75,000 compensation for cutting short her assignment to 3 days. (The ABC had paid her the full 5 days as agreed)
Section 772(1) of the Act lists out a large number of specific prohibited reasons for terminations.
Where an employee believes their termination was for one of those reasons listed they can initiate proceedings in the Federal Court. The onus of proof is on the employer to disprove the allegation made by the employee.
Where there are more than one reason for a termination the employer may still trigger S772(1) if one of those reasons is listed or alleged.
Employers must be able to prove the real reason(s) they decided to terminate an employee.

About a week ago the Federal Court decided the Australian Broadcasting Commission was required to pay $150,000 in penalties for a breach of Section 772(1) of the Fair Work Act.

This Employee Relations Update is focussed on Section 772 but to give you context following is a summary of the key points in the Lattouf & ABC case.

Ms Antoinette Lattouf was engaged by the ABC on a 5 day casual engagement in December 2023.

Due to expressing her political views on the Gaza war (through a re-post) on her social media account she was taken off air after 3 days. She was paid the remaining two days until her 5 day contract naturally expired.

The Federal Court found that she had been unlawfully terminated by the ABC after 3 days for reasons including that she held (and expressed) a political opinion. The Court also decided the ABC had breached the Enterprise Agreement which concerned how allegations were dealt with including allowing employees the opportunity to respond.

Ms Lattouf also claimed that she had been taken off air because of her race or national extraction but this was rejected by the Court.

The Federal Court made Orders that the ABC pay Ms Lattouf compensation for non-economic loss of $70,000 due to her termination.

Breach of the Fair Work Act - penalty $150,000

In follow-up the Federal Court recently decided that the ABC should pay an additional penalty of $150,000 for the illegal termination over the political social media post made by Ms Lattouf. Ms Lattouf’s lawyers had sought a penalty of $350,000.

The ABC has been reported to have spent $2 million dollars to defend the case. FYI – they are taxpayer funded. (It is unclear whether they may also be liable for a portion of Lattouf’s legal costs.)

It needs to be remembered this resulted from a single decision to cut short the 5-day casual engagement. The ABC had reacted to external lobbying pressure to have her removed from the air early due to her expressing her opinion on Gaza.

Section 772 of the Fair Work Act

The following is the plain English list of reasons an employer must not terminate an employee’s employment under Section 772(1)

Be aware there could be several reasons for any termination – if one of those several reasons falls under this list below S772(1) is activated.

Where an employee is absent on extended personal leave due to illness or injury – as prescribed in the Fair Work Regulations.
Trade union membership or participation in trade union activities (this has limitations) or for not being a member of a union.
Seeking office as (or acting as) an employee representative (not necessarily as a union member).
Making a complaint (or participating in proceedings) against an employer involving violation of laws or regulations. This would include, but appears broader than, being a whistleblower.
A termination based on race, colour, sex, sexual orientation, breastfeeding, gender identity (what gender a person identifies as), intersex status (physical, hormonal, or genetic traits that do not fit typical definitions of male or female bodies), age, physical or mental disability, marital status, family or carer’s responsibilities, being the subject of family or domestic violence, pregnancy, religion, political opinion, national extraction (coming from another country but different to ‘race’) or social origin (this is very wide and could include the social class a person originates from).
Being absent from work during parental leave. This also captures redundancies initiated due to a person being absent from their position on parental leave - S772(3).
Temporary absence engaging in voluntary emergency management activity.

Employer onus of proof and multiple reasons for termination

As noted above where there are more than one reason for a termination but one of those reasons is for an item noted above then the termination triggers S772(1).

Under S772(1) an employee may allege the employer initiated the termination for one of the reasons stated above and initiate Fair Work proceedings. The employer is assumed to have done so unless they can prove they did not.

Ever heard of ‘no win – no fee’ solicitors? It’s easy to make an allegation and then force a substantial financial settlement from an employer where they cannot disprove the allegation.

Inherent requirements of the position

There is one escape hatch for employers. This is if the termination is based on the inherent requirement of the position. This provides some limited scope however in most cases the employer would have satisfied the inherent requirements when originally employing the person. If a particular religion was essential to undertaking the role this would have been evident and been a pre-requisite on employment – unless the employee had misrepresented this during the recruitment process.

There are several exceptions where the inherent requirements could change during employment, but they would need to be carefully assessed on a case-by-case basis.

There is an argument the ABC could have run being that an inherent requirement of Lattouf’s role was to be seen to be impartial and therefore not express any political views. For reasons unknown the ABC did not run this argument in its defence. It would have been an interesting test.

Commentary

This case baffles me in relation to proportionality. A key aspect the Commission looks at in unfair dismissals is whether the ‘punishment fits the crime’ commonly referred to as ‘proportionality’. In other words, was a termination the appropriate response to a particular performance or attitude problem displayed by the employee. Here we have a person on a 5-day casual engagement paid $75,000 compensation and the employer also liable for $150,000 penalty. I have to seriously question whether proportionality has gone out the window here in relation to employers. This kind of compensation and penalty could shut down a small or medium sized employer.

While the standard unfair dismissal provisions are capped at 6 months wages (and/or reinstatement) actions under S772(1) provides for much more substantive penalties.

Employers bear the onus of proof – meaning they will need to disprove any allegation made by an employee in relation to the above-named reasons. (Guilty until they can prove themselves innocent.)

Employers are advised to have a sufficient paper trail to confirm the genuine reason for a termination – not being related to the above reasons. In some cases, there may be several reasons for a termination, and it is possible some of the reasons listed above may overlap with other events at work that could be interpreted against the employer.

It is important to consider the above listed items in relation to a genuine redundancy to ensure the redundant employee does not claim reasons stated under 772(1) as being the reason for the termination.

It’s becoming apparent that some employers are avoiding dealing with problem employees for fear of unfair dismissal or general protection actions. Ultimately, this could make a termination riskier due to the employer accepting such behaviours or performance and allowing it to be ‘normal’. It’s not impossible to terminate a difficult employee, employers just need to be more structured about it.

Where employers are concerned about a difficult termination or where the employee could allege the termination was for a prohibited reason, they should seek professional assistance.

Michael Schmidt

Kind Regards

M 0438 129 728
[email protected]
www.hunteremployeerelations.com.au