A Victorian State Manager for an ASX listed software company took his employer (as first respondent) and the Executive Chairman and CEO (as second respondent) to the Federal Court claiming his termination of employment was a direct result of him making complaints of bullying by senior executives.
The State Manager commenced his employment in 2006 and in the ten years of employment his remuneration consisting of incentive payments, had grown from approx. $209K to $845K. He had also received the Chairman’s Award in 4 of his 10 years of employment and was the only State Manager to have ever been granted share options.
The State Manager immersed himself in his work completing longer than his normally long hours as a way to ‘escape’ problems in his personal life from late 2010, it was from that time that he alleged experiencing bullying from senior executives. His allegations included having his position threatened, being undermined, and being verbally abused and sworn at in front of colleagues.
Seven complaints were made during a 4-month period between February and May in 2016 to four different people including the CEO.
Against professional HR Advice, the CEO summarily dismissed the State Manager on 18th May 2016 claiming that the State Manager was unable to get along with 3 previous managers, revenue had decreased in Victoria, and there were concerns raised by members of the State Manager’s team.
In considering the claim, the Court found that the company’s Open-Door Policy (where all managers are capable of hearing employee complaints), and the Workplace Bullying Policy both applied to the employment of the State Manager. They provided explicit basis for the State Manager to make complaint of bullying in relation to his employment.
The Court further found that the State Manager was protected from any adverse action resulting from making complaints and the CEO’s reasons and timing to terminate were substantially based on the State Manager making complaint.
As a result, the Court ordered penalties and damages in excess of $5,200,000 as follows: -
Penalties $ 47,000
Interest for share options $ 756,410
Future economic loss $ 2,825,000
Plus interest for breach of contract $ 1,590,000
General Damages $ 10,000
The CEO was personally ordered to pay $7,000.
This outcome may be a new record for the Fair Work Division of the Federal Court.
It is important to remember that termination decisions resulting from a protected reason will result in considerable damages.
An employee has a workplace right to raise complaints and an employer cannot act adversely due to this protected reason.
For assistance with managing complaints in your workplace, please contact us on 1300 720 004 or [email protected]
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