Employee secures significant damages in adverse action claim

Employee secures significant damages in adverse action claim

A recent Federal Court decision highlights the care that employers need to take when confronted with claims from employees of harassment or bullying in the workplace; otherwise, they may find themselves subject to an adverse action claim that can result in damaging financial consequences. In recent years, courts have seen a significant increase in general protection claims from disgruntled employees who believe that their workplace rights have been impinged.

It is important to note that there are several unique aspects to general protection claims:

  • In contrast to unfair dismissal claims, general protections can be brought by current employees (as opposed to dismissed employees), and significantly, there is no exclusion for high-income earners;

  • As was evidenced by the Federal Court decision, there is no limit to the amount of compensation an employee can be awarded, as opposed to the statutory of a maximum of six months earnings in cases of dismissal;

  • Further, a reverse onus of proof applies. In other words, Courts will presume that the alleged unlawful action took place for the reasons alleged by the complainant, and the employer has to prove, on the balance of probabilities, that it did not.

The case involved a long-term female employee of the Hawkesbury Race Club Limited (the Club). The employee began working for the Club in January 1991, and at the time of her departure on 15 March 2017, she was employed as the Club’s sponsorship and marketing manager.

The employee ‘Mrs L’ claimed that her departure was due to ongoing bullying and harassment from ‘GR’, the Club’s CEO, who commenced in May 2016. She provided reports from her treating psychiatrists, who agreed that GR’s conduct towards her caused her to suffer a significant depressive disorder with anxiety that has left her unemployable since 10 October 2016 until the present day.

Mrs L claimed that the Club took adverse action against her because she complained to GR in an email sent on 9 October 2016 about his ongoing behaviour and the effect it was having on her and asked him to refer her complaint to the Club’s board of directors.

His response was to email her the following day requiring her to attend his office the next day “to discuss your work performance”. Later that day, Mrs L sent him a medical certificate to say that she was unfit for work “due to work stress”. GR forwarded the email to his father-in-law referring to Mrs L’s situation and commented, “Dropping like flies”.

Mrs L also sought damages claiming the Club had breached its obligations under her contract and had been negligent in taking all reasonable steps to provide a safe system of work and reasonable care to avoid a reasonably foreseeable risk of her suffering a psychiatric injury.

In evidence before Justice Rares, it was generally accepted that GR had acted inappropriately towards Mrs L, including making comments to various staff challenging the quantum of her salary, challenging the validity of her expense claims, and withholding her legitimate entitlements to sales commissions.

Further, the learned judge described GR’s behaviour towards her as displaying bullying, including being rude, speaking to her in harsh tones, failing to ask or wait for an explanation, and past instances of her feeling “downtrodden”. Ultimately, his behaviour excluded her and involved excessive questioning and unfairly challenging her for the very senior role she had performed successfully for the Club for 25 years.

As Justice Rares noted, in deeming the Club to be negligent in allowing her mistreatment,

“In my opinion, from and after late July 2016, the continuing of such conduct was calculated and, in any event, a reasonable person in GR’s position of CEO would have perceived that the conduct did, create a reasonably foreseeable risk that Mrs L, as the employee subjected to that treatment, would suffer serious psychiatric injury as a result. GR was attempting to strip Mrs L’s authority, senior status and autonomy from her … GR’s micromanagement of her and his attempts to restructure her job without his agreement by exerting his authority, that there was reasonable foreseeable risk that she would suffer psychiatric injury if GR’s bullying and behaviour towards her went unchecked”.

Justice Rares awarded Mrs L the significant amount of $2.8m in compensation.

L v Hawkesbury Race Club Limited (No 3) [2021] FCA 1658 (24 December 2021)

For queries about bullying claims, investigations, or other employment questions, please contact Dean Cameron at Workforce Advisory Lawyers – We Know Employment Law on 1300 925 529, 0417 622 178 or via email to dean.cameron@workforceadvisory.com.au

Disclaimer: This information is provided as general advice on workplace relations and employment law. It does not constitute legal advice, and it is always advisable to seek further information regarding specific workplace issues. Liability limited by a scheme approved under professional standards legislation.

Related Articles

Workforce Advisory Pty Ltd ACN 625359980 Phone 1300 925 529, 07 3607 3850 Email Office@workforceadvisory.com.au
Liability limited by a Scheme Approved under Professional Standards Legislation

@Copyright 2018 to 2023 Workforce Advisory Pty Ltd