The Federal Court refused to accept the CEO’s evidence finding it was “deceptive and self-serving”.
News 2 December 2020

Bullying victim awarded $5.2 million by Federal Court

With no compensation cap on general protection claims, a software company has been ordered to pay a record $5.2 million in damages to an employee who made complaints about his colleagues.

A senior employee (the “Employee”) commenced employment at a software company (the “Company”) as the State Manager for Victoria in July 2006. Over the next nine years, the Employee accumulated an impressive track record and managed to play an integral role in growing income within the business. In 2015, the Employee was promoted to Regional General Manager.

After promoting the employee, the company began receiving complaints from other sales staff who were concerned with the employees conduct and approach.

In February 2016, the Employee made a complaint about a colleague alleging he was being undermined and marginalised. After no response from the Company, a further email was sent from the Employee to the Chief Executive Officer (“CEO”) on 24 April 2016 where the Employee indicated he was considering submitting an official bullying claim and taking legal action.

Based on the second email sent by the Employee, the CEO resolved to dismiss him. Notwithstanding the HR Director’s caution, not to take disciplinary action without first investigating the complaint, the CEO choose not to and instead invited him to a meeting in which he was summarily dismissed.

The Employee issued proceedings against the Company and its CEO alleging he was dismissed because he exercised a workplace right when he made complaints about the behaviour of colleagues and indicated his intention to take legal action. The Company and CEO sought to defend the claim maintaining the Employee was dismissed because of the complaint made by other colleagues against him and a decline in licence fees.

The decision

The Federal Court refused to accept the CEO’s evidence finding it was “deceptive and self-serving”. Whilst acknowledging the Employee became a serial complainer the Federal Court concluded he was dismissed for complaining and threatening to take legal action. The Federal Court considered the Company’s response to the Employee’s complaints was inadequate remarking it stood “with the bullies rather than the bullied”.

In assessing the amount of damages to be awarded the Federal Court accepted the Company’s failure to address complaints of bullying left the Employee “incapable of ever working again”. The Employee also pursued contractual claims concerning entitlements to share options and bonus payments.

The Employee was awarded a total of $5,228,410. The damages included an order that the CEO was personally liable and ordered to pay $7000.

The Federal Court has invited the parties to file submissions on costs.

Learnings for business

This case highlights how vital it is to deal with all complaints. In this case the business ignored some complaints whilst relying on others to dismiss employee’s without first conducting an investigation. Had the business conducted an investigation it would have been informed of the facts and been able to make a fair and informed decision about potential disciplinary action.

There is no compensation cap on general protection claims which means businesses must take complaints seriously and be mindful that if an employee is dismissed after making a complaint, there is a considerable risk of a claim.

Finally, those involved in the decision-making process need to be confident in their decisions and aware of workplace laws. As was the case here, the CEO was personally liable for not acting in a fair manner and in doing so exposed the business to the claim.

How we can assist

The Victorian Chamber Workplace Relations Advice Line is on hand to provide support and to help businesses understand how to manage complaint and disciplinary processes. In addition, our Workplace Relations Consultants have a wealth of experience conducting workplace investigations and providing advice and support to business considering disciplinary outcomes.

Received a general protections or unfair dismissal claim? Our Workplace Relations Consultants are on hand to help to explain the processes, draft responses and submissions, and represent you in the Fair Work Commission.

For assistance on any aspect of your employment obligations, please call the Victorian Chamber Workplace Relations Advice Line on (03) 8662 5222.

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Media Contact

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