The facts

In July 2018, the employee of more than 25 years was informed that his permanent employment would be converted to a fixed-term contract. During the fixed term, the business wanted the employee to train someone to take over his position in the new year.

There had been previous discussion at a board level about when the employee would retire. The board was under the misunderstanding the employee must retire at 65 years of age. When this was put to the employee, he rightly corrected them and said he intended to retire the following year and would give three months’ notice.

After the discussion, the employee wrote to the business summarising the events, specifically noting the business’s plan for him to train his successor before terminating his employment the next year. The managing director responded simply saying the matter would be referred to the board.

The employee was dissatisfied with the situation. He took personal leave and consulted a psychiatrist. The employee subsequently resigned. He instructed lawyers, who wrote to the business alleging the employee had been constructively dismissed. A complaint of unlawful age discrimination was subsequently lodged with the Australian Human Rights Commission (AHRC). After failed attempts by the AHRC to settle the matter, the employee lodged a claim in the Federal Circuit and Family Court of Australia.

In his submissions, the employee said he intended to work until the age of 70 and was keen to work as long as possible. He also said the business never raised any performance issues before the change in contract and had rewarded the employee with annual bonuses since 2004.

The employee claimed no less than $300,000 in damages, as well as just over $142,000 compensation for economic loss up to the end of September, the date he intended to resign. The amount factored in lost salary, superannuation, statutory entitlements and bonus payments. The employee also claimed he was entitled to a redundancy payment and an apology.

The decision

The court acknowledged the business was able to take proactive steps and implement succession plans. However, the business was deemed to have treated the employee disrespectfully and less favourably than his intended replacement, which amounted to discrimination. The court accepted the employee was entitled to an apology and awarded $20,000 damages to compensate for a mild adjustment disorder.

The court was not satisfied the employee had suffered any economic loss after choosing to resign.

Learnings for Business

This case emphasises the importance of understanding your responsibilities around equal opportunity and what constitutes discriminatory practices. An employee can make an application to claim for General Protections within 21 days after the day on which the contravention occurred.

To increase knowledge of protected attributes and how to prevent unlawful discrimination in your workplace, attend our training on Successfully Managing EO, Bullying and Diversity in the Workplace: Manager Session.

How the Victorian Chamber can assist

For assistance on any aspect of your employment obligations, please call the Victorian Chamber Workplace Relations Advice Line on (03) 8662 5222. Complete members can receive unlimited general advice on a range of workplace issues including occupational health and safety, WorkCover, workplace policies, disciplinary procedures and more.

Workplace Relations Advice Line

Trying to deal with workplace issues alone but don’t know where to start? Before you take any action, call our Workplace Relations Advice Line.

Fair Work representation

Managing claims in the Fair Work Commission can be one of the most stressful and costly issues for your business. If you have received a claim, consider whether you need to engage a representative from the Victorian Chamber.

Wages and entitlements

Is your business paying its employees correctly? When it comes to wages, awards and entitlements, ensure your business complies with the law with professional support from our Workplace Relations Advice Line and consultants.

Health and safety compliance

Does your business understand and comply with its legal obligations for workplace health and safety? Would your business benefit from safety accreditation?

Raise the occupational health and safety (OHS) standards at your workplace to meet regulations with the expertise of our health, safety and wellbeing consultants.