Six months pay plus $1.4m payout for incorrectly dismissed employee

This month:

  • A dismissed executive is allowed to keep his pay-out, despite sexual harassment allegations.
  • We update you on developments in anti-bullying laws in the workplace.
  • The Federal Court clarifies when you can request a detailed medical certificate for a sick worker.
  • WA announces moves towards harmonised WHS legislation.

 

Six months pay plus $1.4m payout for incorrectly dismissed employee

A failure to follow contractual procedures can be costly. In a recent case against Bibby Financial Services the NSW Court of Appeal has upheld a contractual claim by an employee for six months salary, plus a special bonus of $1.4 million.

The case was brought by Mr Sharma, who was dismissed after allegations of sexual harassment were made against him by another employee at the company. Initially, Mr Sharma’s employment was terminated in accordance with a clause of his contract that entitled him to a payout at the election of the company, however this entitlement was later withdrawn and Mr Sharma was dismissed without payout.

Evidence submitted to the Court showed that two managers within the company had decided that Mr Sharma ‘had to go’. Mr Sharma challenged the termination on the basis that  he was not afforded his contractual right for an opportunity to address the claims made against him before any final decision to terminate his employment was made by the company.

The Court agreed with Mr Sharma and in its decision noted that contractual rights of appeal such as that included in Mr Sharma’s contract, were important protection mechanisms for senior executives like Mr Sharma and should be complied with.

The lesson to be learnt from this case is that even when managers have decided that an employee’s employment is no longer tenable, proper contractual procedures intended to protect employees must still be followed.

Although in this case efforts were made to avoid the ‘unpleasantness’, the consequence of this is that Bibby gave up the opportunity to legitimately terminate Mr Sharma’s employment.

 

Anti-Bullying

In its first report since the introduction of its anti-bullying jurisdiction, the Fair Work Commission (‘FWC’) has released the anti-bullying quarterly report.Of the 151 applications made to the FWC for orders to stop bullying at work, seven were dismissed and only one was successfully upheld.

What happened to the other 143 applications? Well apart from a few that were withdrawn for jurisdictional reasonS, the balance will have been resolved between the parties prior to hearing.

The FWC’s determination of the sole successful application revealed two important considerations that will be relevant to future applications. Firstly, an anti-bullying order can be made based on behaviour that occurred before 1 January 2014 (prior to the laws coming into effect). Secondly, anti-bullying orders can only be made in the case of ‘constitutionally-covered’ workplaces that fall under the federal workplace relations regime.

It is still early days for the anti-bullying scheme, but employers should remember that anti-bullying policies and procedures should form a part of all workplace regimes. Aside from existing liabilities under workplace health and safety laws, significant penalties can be imposed under the new anti-bullying legislation, up to $51,000 for organisations and $10,200 for individuals who breach an FWC order to stop the bullying.

 

Employers no longer have to accept a simple medical certificate

The Federal Court has upheld an employer’s right to request a detailed medical report for the purposes of determining when an employee on long-term sick leave will be able to return to work.

In a recent case, a pilot took leave and provided a doctor’s certificate stating that he was suffering from clinical depression, and unfit for work for four months. Towards the end of this period, Qantas requested the additional medical report, under the threat of possible disciplinary action. This request became the subject of the dispute.

The Court found in Qantas favour, and emphasised that Qantas implied right to request such a report arose from both its express rights under the employment contract, and its obligations under health and safety laws.

This decision provides employees with the guidance that where there are reasonable and legitimate reasons for requesting the details of an employee’s medical condition, an employer will be entitled to request those details.

 

WA moves toward WHS harmonisation (with a twist)

The WA government has announced that it will move towards harmonised work health and safety (‘WHS’) laws, but it will do so in the form of a separate legislative scheme for the resources sector, in addition to the general WHS scheme which will apply to other industries.

The two schemes will be administered by different departments, however, approximately 95% of the national harmonised laws will be adopted by the resources WHS laws.

 

How can CompliSpace help?

CompliSpace’s comprehensive range of cost effective human resources policies, procedures, training and testing modules, ensure that managers and staff know what is expected of them and have key tools and information at their fingertips at all times.

This enables a business to meet its workplace relations obligations while building a positive corporate culture, capturing knowledge and saving time. For more information, contact us on the details below:

P: 1300 132 090

E:  contactus@complispace.com.au

W:  www.complispace.com.au

This blog is a guide to keep readers updated with the latest information. It is not intended as legal advice or as advice that should be relied on by readers. The information contained in this blog may have been updated since its posting, or it may not apply in all circumstances. If you require specific or legal advice, please contact us on (02) 9299 6105 and we will be happy to assist.