Money

Unlawful Termination

The Federal Magistrates Court has ruled that an accountancy firm breached various sections of the Fair Work Act 2009 when it dismissed a 68 year old accountant due to his physical disability.

In this case, the Employee had been employed by the firm for over 5 years when he developed a heart condition requiring him to undergo surgery. Following the surgery, the Employee could not attend work for just over 3 months, when he finally received a doctor’s clearance to return to work.

Upon advising the Employer of his doctor’s clearance the Employee was advised verbally that there was no longer a job for him.

Around 4 weeks later the Employee was provided with a written notice of termination that stated the termination was due to, “economic circumstances and health related issues”.

The Employee commenced unlawful termination proceedings, claiming the Employer contravened the “General Protections” provisions of the Act that prevent an employer from taking adverse action against an employee for a discriminatory reason.

Due to the reverse onus of proof requirements under the Act, the Employer was required to prove that the Employee was not dismissed for a discriminatory reason. It failed to do so.

The Employee also claimed that he did not receive notice of termination entitlements as required by the National Employment Standards.

The Employer argued that the Employee received the proper notice because the notice period commenced when the employee was verbally advised of the termination of his employment.

However the Act requires an employer to provide written notice of termination to an employee, and consequently the Court ruled that the notice period did not commence until the date that the written notice was given to the Employee, some 4 weeks after the Employee received verbal notice.

This resulted in the Employee not receiving his proper notice period entitlement of 5 week’s pay, and that also caused the Employer to contravene the NES.

The Court ordered the Employer to pay penalties, compensation and interest of over $26,000.

What Employers need to do in order to avoid Unlawful Termination

In summary, when terminating a person’s employment, this case reinforces the need for employers to:

a) have a valid reason for termination;
b) correctly calculate the period of notice required;
c) clearly establish the effective date of the termination;
d) provide a written notice of termination to the employee which includes details of a), b), and c) above plus whether the person is required to work out the notice period or receive a payment in lieu thereof.


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