Employee who was dismissed for complaining about CEO successful in adverse action case

In a recent decision by the Federal Circuit Court of Australia, an employer has been required to pay $93,500 in compensation to a former employee whose employment was terminated as a result of a complaint he made against the CEO of the company.

The employee, Joseph Noonan, successfully argued that his former employer, Advent Security Services (Advent) contravened section 340 of the Fair Work Act 2009 (Cth) (Act) by taking adverse action against him by dismissing him from his employment because he had made a complaint in relation to his employment.

Background

Mr Noonan commenced employment with Advent on 4 September 2017. In mid-April 2018, Mr Noonan made a complaint alleging that the CEO called him an offensive name in the presence of other staff. Mr Noonan wrote to the CEO by email the next day and requested that he not do that again.

The CEO called Mr Noonan shortly after his email and Mr Noonan again reiterated the complaint and informed the CEO that he wished to work in a professional environment. From that point forward, it was alleged that the CEO ceased all morning meetings with Mr Noonan and stopped calling to speak with him. Mr Noonan remained employed for several months with limited to no contact with the CEO, despite frequent contact in the months prior to the complaint. Mr Noonan was subsequently terminated in September 2018 due to alleged poor performance.

The evidence

The court was asked to decide whether the adverse action (the dismissal) was taken against Mr Noonan because of the exercise of his workplace right to make a complaint relating to his employment. As the CEO was the decision maker for the termination, he provided evidence to rebut the presumption that Mr Noonan’s complaint was an operative reason for his dismissal.

The CEO disputed the complaint made by Mr Noonan, remarking that any swearing was used in a “jocular or mateship tone of voice and never as a term of abuse or in a threatening manner”. Mr Noonan led evidence that this was not the case, and provided examples where the CEO made racist and highly offensive remarks in his presence which contradicted the CEO’s evidence.

The CEO’s evidence was that Mr Noonan was terminated because of underperformance, with particular emphasis on Mr Noonan’s inability to secure any new security contracts in the twelve months he was employed. The CEO led evidence that he conducted a review of Mr Noonan’s work in progress in late August 2018 and determined that Mr Noonan had bought in no new contracts and had only recorded two deals as the primary salesperson for the business’ established clients.

The court accepted that the CEO’s views about Mr Noonan’s poor performance were based on evidence collected and that performance was an operative reason for the dismissal.

However, the court also found that the lack of forewarning and opportunity to comment afforded to Mr Noonan on the CEO’s performance concerns gave the inference that the real reason for the dismissal was Mr Noonan’s complaint. Further, the court considered that the lack of evidence demonstrating that the CEO had consulted with others in the business about Mr Noonan’s performance was illustrative of performance not being the true reason for the dismissal. In making this finding, the court noted that the CEO provided evidence that he had stepped back from working with Mr Noonan after the complaint was made, and it considered that this would have made it difficult for the CEO to demonstrate an understanding of Mr Noonan’s performance in the role.

Temporal link between the complaint and the adverse action

The court acknowledged that it was a hurdle for Mr Noonan to demonstrate a temporal connection between the complaint and the dismissal due to the five-month period of time that had lapsed between the two events, but confirmed that this did not prevent a finding that the complaint was an operative reason for the dismissal.

The court ultimately accepted Mr Noonan’s evidence (based on phone records and evidence provided by other colleagues) that prior to the compliant, he had interacted with the CEO on a daily basis in meetings, over coffee or on the phone, but that this communication ceased as a result of the complaint.

Importantly, the CEO did not deny or present evidence which demonstrated that his behaviour towards Mr Noonan had not changed, maintaining the position that there had been no deterioration in the working relationship, rather, an acceptance of Mr Noonan’s ‘professional boundaries’. This view was not accepted by the court.

Result

The court was ultimately satisfied that the totality of the evidence meant that Advent did not rebut the presumption that the operative reasons for Mr Noonan’s dismissal included that he had made the complaint about the CEO’s behaviour.

Advent was ultimately ordered to pay $93,500 in compensation to the Mr Noonan. This payment represented an award of damages which represented six months’ lost income totalling $83,500, as well as an award for non-economic damages for pain and suffering totalling $10,000.

This decision serves as a reminder to employers of several key aspects of the general protections regime, including:

• there is an automatic presumption that adverse action is taken for the unlawful reason(s) alleged;
• when defending an adverse action claim, a reverse onus applies so that it is the responsibility of the respondent to rebut the legislative presumption that the operative reason for the dismissal included the unlawful reason(s) alleged; and
• there can be more than one operative reason for adverse action.

Evidence that supports the employer’s rebuttal is crucial to successfully defending an adverse action case, meaning that employers should carefully consider adverse action risks before any dismissal.

Had Advent been able to provide evidence to show that the CEO consulted with other employees about Mr Noonan’s performance, or if it had been able to show that it engaged in a more fulsome and procedurally fair process leading to Mr Noonan’s termination (whether or not procedural fairness was required at law), it may have been in a better position to defend Mr Noonan’s claim.

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Authored by:

George Haros, Partner
Jessica Smith, Lawyer