This is the damages bill that ASX-listed company, TechnologyOne, has been ordered to pay its former senior executive who was dismissed for having raised complaints of bullying.
It is understood to be a record compensation order in the Fair Work Division of the Federal Court, and an important reminder that adverse action claims give rise to uncapped compensation.
In Roohizadegan v TechnologyOne Limited (No 2)  FCA 1407, the Court was satisfied that TechnologyOne’s former Victorian State Manager, on seven separate occasions, exercised a workplace right by making complaints in relation to bullied by his superiors (in the form of, among other allegations, being sworn at and exclusion from management meetings).
Critically for the employer, it failed to conduct any investigation in relation these matters before dismissing him, leading the Court to give a rather a scathing portrayal of TechnologyOne’s CEO and ultimate decision maker concerning the employee’s dismissal:
“He twice rejected professional HR advice that it would be unfair to dismiss Mr Roohizadegan on the basis of mere allegations. In the end, his choice was to stand with the bullies rather than the bullied. To achieve effective deterrence, CEOs in like positions need to know that such temptations as he faced are to be resisted: and that there will be a not insubstantial price for failing to do so.”
TechnologyOne has indicated it will appeal the decision.
In most cases, former employees looking to challenge a dismissal will invariably have a choice as to one of the following avenues:
- The traditional ‘unfair dismissal’ claim (which focuses on broad principles of fairness and proportionality);
- A ‘discrimination’ or ‘general protections’ claim (which alleges broadly that an employee was dismissed for a prohibited reason); and
- A breach of contract claim.
Since the introduction of the general protections provisions in 2010, there has been a growing trend in ex-employees favouring adverse action claims at the expense of the unfair dismissal regime. We expect the trend to now continue in light of this judgement.
Roohizadegan demonstrates that the remedies for a successful adverse claim can be significant and seemingly limitless.
The $5.2 m order for damages was comprised of:
- $2,825,000 for future economic loss
- $756,410 to compensate forgone share options
- $1,590,000 in damages for breach of contract
- $10,000 in general damages, and
- $47,000 in penalties.
This is a stark contrast to claims in the unfair dismissal jurisdiction, whereby compensation is strictly capped by legislation at a maximum of six months’ lost wages (and is rarely more than 8 weeks’ lost wages).
How we can help
Given that the adverse action arena is becoming increasingly popular and heavily litigated, it’s important that employers understand their legal obligations and how to successfully navigate the legal landmines when responding to a complaint or claim.
- Be aware of the potential for adverse action claims to arise following termination of employment.
- Obtain advice before engaging in a disciplinary or dismissal process.
- Be transparent and identify the lawful reason for the dismissal – the decision maker will ultimately be cross examined on the reasons leading to termination of employment.
- Avoid multiple decision makers where possible, and remove those who are conflicted from the decision making process.
- Ensure workplace decisions are appropriately documented. Be aware that all documents will be discoverable.
For more information or guidance regarding your legal obligations, please do not hesitate to contact us.