The Federal Circuit and Family Court of Australia recently granted substantial compensation to a former manager who was summarily dismissed in 2020. This decision highlights crucial lessons for employers regarding dismissal practices. A former manager at a multinational construction company received over $1.5 million in compensation and damages following his dismissal, which significantly impacted his career trajectory. The plaintiff brought his case to the Federal Circuit and Family Court of Australia nearly four years after his dismissal, challenging the lack of notice given by his employer, which he claimed breached his employment contract. ”
This case underscores the importance of employers exercising caution when dismissing employees, particularly in cases of summary dismissal due to alleged misconduct, even when an investigation has been conducted,” said Lauren Brouwer-French, Senior Associate at Harmers Workplace Lawyers. “It illustrates the potentially substantial financial repercussions of mishandling dismissals.” Court findings emphasized procedural fairness issues. At the time of dismissal, the plaintiff, who had served 17 years with the company as a manager on a $400,000-per-year contract, was accused of misconduct during a bushfire recovery project. Allegedly, he used offensive language towards property owners, prompting the employer’s action. However, investigations revealed inconsistencies, including a lack of documented complaints despite claims of substantiated allegations.
The court noted deficiencies in the employer’s investigation process, such as unclear decision-making processes and inadequate opportunity for the plaintiff to respond to allegations. “A finding of serious misconduct does not automatically justify summary dismissal in all cases, nor does it absolve employers of potential risks,” noted Brouwer-French. “A flawed investigation undermines the validity of dismissal actions.” The court also highlighted the employer’s failure to engage a qualified, independent investigator, underscoring the importance of conducting thorough and impartial investigations. The damages awarded reflected the impact on the plaintiff’s career, including lost income, legal fees, relocation costs, and compensation for emotional distress. The court considered the plaintiff’s unblemished employment history and projected long-term career trajectory, which the dismissal abruptly altered. “This ruling serves as a cautionary tale for employers to adhere strictly to procedural fairness principles in dismissals,” advised Amy Zhang, Team Leader and Executive Counsel at Harmers Workplace Lawyers. “Employers should provide clear notices, fair opportunities to respond, and consider alternative dismissal methods where appropriate to mitigate adverse impacts.”
In conclusion, mishandled dismissals can have enduring repercussions for both employers and employees. Employers can safeguard against similar claims by prioritizing procedural fairness and documenting all aspects of the dismissal process.
