August 2011 – Update

‘Initial appropriate action’ not ‘all reasonable steps’

A company has been held vicariously liable for the actions of an employee even though there is evidence to suggest they took some action to stop inappropriate conduct. When a female employee complained about sexually offensive comments, her employer took ‘initial appropriate action’ however the Federal Magistrates Court found the company had failed in their duty of care to take all reasonable steps to prevent sexual harassment.

Whilst this case was at the lower end of the severity scale in relation to the acts and compensation awarded ($2,000 for non-economic loss), it sends a message to employers that even infrequent acts that cause offence but not an on-going psychological injury can have serious consequences.

$85k compo awarded for adverse action

An aviation company was ordered to pay almost $85k to an aircraft maintenance engineer after it was found to have breached adverse action provisions of the Fair Work Act 2009 (Cth).

The employee was employed on a 457 Visa from Indonesia and was accredited to work on Garuda aircraft. There was a history of conflict between the parties with the employee being terminated in mid 2009 after a dispute relating to working arrangements and overtime however he was subsequently reinstated by the AIRC. Shortly after reinstatement, the company was required to participate in accreditation of its employees to work on Garuda aircrafts and based on the company’s unfavourable assessment of the employee, his re-accreditation was denied. The company terminated his employment on the grounds of redundancy in October 2009 because he did not hold the Garuda accreditation. After his termination, the employee could not find another employer to continue his sponsorship so he no longer held a valid visa to remain in Australia and was forced to return to Indonesia in January 2010.

The Union lodged a general protections claim under the Fair Work Act 2009 (Cth) alleging the company took adverse action against the employee because he exercised work rights and trade union membership. The union alleged that the employer “solicited, counselled, procured, induced or caused” the accreditation denial which instigated the termination. Justice Barker agreed and had little hesitation in ordering the employer to pay the employee a total of $84,492.58, including $7500 for non-economic loss (hurt and humiliation), $839 for economic loss, $76,553.58 for loss of pay, plus interest.

The lesson for employers is that whilst a termination may have valid reason at face-value, there are other legal avenues under the Fair Work Act for employees to pursue damages and unlike unfair dismissal, there is no cap to what can be awarded.


Contact Nicole or John at Industrial Relations Law for more information on these or any other employment matters.