Earlier this month, the Full Federal Court quashed a decision handed down in October 2020 by Judge Kerr of the Federal Court to award a senior employee $5.2 million in compensation, damages and penalties after it was found he was dismissed for making bullying complaints.
Our previous article here reported on the initial decision. At the time, this was a landmark judgement in a general protections claim and highlighted the risks for employers in not properly addressing bullying complaints, particularly when terminating an employee with a history of making bullying complaints.
Original decision
Mr Roohizadegan was a former State Manager for TechnologyOne Limited, who was dismissed from his employment due to reasons which TechnologyOne asserted including stagnant profits in his region, and failing to work well with different managers and his team over a two year period.
During the course of his employment, Mr Roohizadegan had raised seven bullying complaints about different managers. The Federal Court found that the employer had taken adverse action against Mr Roohizadegan for a prohibited reason, in that the CEO terminated Mr Roohizadegan’s employment because he had made these bullying complaints in breach of the Fair Work Act 2009 (Cth).
Mr Roohizadegan was awarded $5.2 million representing future economic loss and damages for both breach of contract and pain and suffering. The Court also fined the CEO personally (who made the decision to terminate) in the sum of $7,000 and $40,000 for TechnologyOne for their conduct and both fines were paid directly to Mr Roohizadegan.
Appeal
TechnologyOne subsequently appealed this decision to the full Federal Court which quashed the original decision. The basis of TechnologyOne’s appeal was that Mr Roohizadegan’s complaints of bullying were not connected to the CEO’s decision to terminate him. Rather, they asserted that there were genuine grounds for dismissal, including poor performance which had led to a significant decline in revenue, Mr Roohizadegan’s team being a “team in crisis”, and Mr Roohizadegan’s poor relationships with his direct managers.
TechnologyOne submitted that the seven complaints were “totally irrelevant” to the CEO’s decision to terminate and that the Court had erred in its previous decision that the reason for the termination was because the CEO knew that Mr Roohizadegan had made bullying complaints. Instead, the Court should have considered whether one or more of the complaints were a “substantial and operative factor” in the CEO’s decision to terminate. As such, TechnologyOne successfully argued that the previous Court failed to evaluate the nature of the complaints and the circumstances in which they were made and the substantial and operative reasons for the dismissal.
The full Federal Court has now ordered a retrial.
Lessons for employers
This case highlights the importance of establishing the rationale for termination of employment, particularly where there have been bullying complaints.
Where the decision-maker for termination is a senior executive, including a CEO, the valid reason for dismissal (such as performance or behavioural concerns) should be communicated clearly, with examples provided, to avoid any misinterpretation or assumption of an ulterior reason for dismissal.
The appeal findings also reinforce that large awards like the $5.2 million originally ordered are rare, but nevertheless liability in general protections complaints can extend to executives in their personal capacity, and most notably, CEOs when they are the decision-maker.
TechnologyOne Limited v Roohizadegan [2021] FCAFC 137 (5 August 2021)
