FCW Lawyers

Record $5.2 million order against employer for adverse action

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Record $5.2 million order against employer for adverse action

5 October 2020 by Nes Demir

Mr Roohizadegan was summarily dismissed by his employer, TechnologyOne, after making various complaints of bullying and the non-payment of incentives due to him under his employment contract.

During his employment, he suffered personal crisis and ongoing depression after prioritising work over his teenage daughter, who was diagnosed with Kawasaki disease. He used work as an escape and unsurprisingly, his condition worsened once he was summarily dismissed.

He brought action against TechnologyOne and the decision-maker, Mr Di Marco, for taking adverse action against him. He also brought action against TechnologyOne for breaching his employment contract.

TechnologyOne and Mr Di Marco were unable to discharge the presumption that the bullying complaints were not reasons for Mr Roohizadegan’s dismissal.

His original employment contract, which was varied throughout the years, had a clear Incentive Bonus Scheme set out under which Mr Roohizadegan was entitled to a set percentage based on Regional Profit. The variations involved changes to the percentages and wording of the relevant clause, but his entitlement remained.

TechnologyOne was ordered to pay a total of $5,221,410, consisting of a $40,000 pecuniary penalty, $756,410 in damages to account for foregone share options on dismissal, $2,825,000 for future economic loss, $10,000 in general damages for hurt and humiliation and $1,590,000 for breach of contract.

Mr Di Marco was ordered to pay a $7,000 pecuniary penalty.

See Roohizadegan v TechnologyOne Limited (No 2) [2020] FCA 1407

Lessons

  1. Section 340(1)(a)(ii) of the FW Act prohibits a person taking adverse action against another person because the other person has exercised a workplace right.  Section 360 makes it clear that a person takes action for a particular reason if his or her reasons for the action include that reason. Where this is alleged, it is presumed under section 361 that the action taken was adverse. The employer has the burden of displacing this presumption by proving, on the balance of probabilities, that the prohibited reasons for the action claimed by the employee were not substantial and operative reasons behind the action.
  2. Contemporaneous evidence is always preferred by the Courts. In this case, Mr Roohizadegan had a practice of making brief notes of significant conversations shortly after they had taken place, which the FCA accepted.
  3. Under section 545 of the FW Act, the Court may make an order compensating an employee for economic loss suffered because of the employer’s contravention. In this case,  Mr Roohizadegan was unable to find employment in the four years following his dismissal, largely due to his depression. The FCA found Mr Roohizadegan’s inability to find employment was not unreasonable and confirmed that compensation would not be discounted where the employee has a pre-existing condition which the dismissal aggravated.
  4. Incentive Bonus Scheme’s should not be spelt out in an employment contract. They should be a stand-alone document, akin to a policy, which is referred to but not incorporated in the employment contract. The employer should have the right to vary that policy from time to time.

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