Two key decisions in the last year should make employers wary of how far the general protections regime can be stretched. In Qantas Airways Limited v Transport Workers Union of Australia [2023] HCA 27 (Qantas), the High Court found that adverse action taken to prevent a person from exercising a future workplace right was unlawful. In Dabboussy v Australian Federation of Islamic Councils [2024] FCA 1074 (Dabboussy), the Federal Court of Australia has drawn attention to whether the dismissal of an employee a matter of hours before they met the service requirement to make an unfair dismissal claim could be a breach of the general protections regime under the Fair Work Act 2009 (Cth) (FW Act). This article explores the implications of these cases for employers.
Workplace rights and adverse action
It has always been accepted that under the FW Act, a worker is protected from adverse action taken because they exercised a workplace right, propose to exercise a workplace right, or is able to exercise a workplace right. Two key decisions in the last year however have brought into the spotlight the need to be mindful of a fourth scenario; taking adverse action to prevent a person from exercising a future workplace right.
In the most recent of those two cases, the Federal Court has taken the interim view that adverse action taken to preclude a worker from meeting the service threshold to bring an unfair dismissal claim may breach the general protections provisions under the FW Act.
Case Summary: Dabboussy v Australian Federation of Islamic Councils [2024] FCA 1074
In Dabboussy, Mr Dabboussy was nearing the end of his first 12 months of employment with his employer, AFIC. AFIC was a small business employer with fewer than 15 employees, and therefore Mr Dabboussy would only become eligible to make an unfair dismissal claim upon 12 months of employment.
During the last few months of Mr Dabboussy’s employment, AFIC launched an investigation into allegations of serious misconduct against Mr Dabboussy. On 3 September 2024 at 4.40pm, and just 7 hours short of Mr Dabboussy’s 12-month milestone, AFIC terminated his employment effective immediately on the basis that the investigation determined that Mr Dabboussy was guilty of the misconduct, leaving Mr Dabboussy unable to bring an unfair dismissal claim.
The problem? While Mr Dabboussy was jurisdictionally barred from bringing an unfair dismissal claim, he was not so prevented from arguing that his dismissal was effected to prevent him from becoming eligible to bring such a claim (i.e. adverse action for a protected reason). On the basis of the evidence before the Court (which we note was limited because Mr Dabboussy brought proceedings seeking an interim order), the Court agreed with Mr Dabboussy and cited the following reasons for their view:
- The investigator’s report was not finished and was still in “draft”, before being relied on to make the decision to terminate Mr Dabboussy’s employment.
- An emergency meeting of the Executive Committee was called to discuss Mr Dabboussy’s employment. There was no reasonable explanation for this considering Mr Dabboussy had been stood down pending the investigation, and as cited above, had only delivered draft findings.
The Court determined that there was a strong inference available that the Executive Committee meeting was convened with such haste, and relied upon what were only draft findings, to facilitate the termination of Mr Dabboussy’s employment before 4 September 2024, so as to deny him the opportunity to make a claim for unfair dismissal. The court reasoned that while AFIC had reasonable grounds for summarily terminating Mr Dabboussy’s employment, the timing of his dismissal was influenced by a desire to ensure that he could not make a claim for unfair dismissal.
The Court issued an interim order reinstating Mr Dabboussy to his position and restraining AFIC from terminating his employment without leave of the Court. At the time of writing this article, the Court has ordered Mr Dabboussy and AFIC to file further documents relating to the full hearing of Mr Dabboussy’s general protections claim.
What does this mean for employers?
Although this was an interim judgment and the Court will hear further from the parties in a full hearing, it is a foreseeable result of the High Court’s ruling in Qantas Airways Limited v Transport Workers Union of Australia [2023] HCA 27. In that decision, the High Court held that it will be unlawful for an employer to take adverse action to prevent employees from exercising a workplace right they will acquire in the future – even if that right is not presently held when the adverse action occurs.
This is exactly what happened in Dabboussy. The decision highlights that employers could face some risk if they dismiss an employee without reservation before they reach the unfair dismissal eligibility threshold (12 months for small businesses and 6 months for others). If an employer terminates the employment of an employee for the substantial and operative reason of depriving the employee of the right to make an unfair dismissal claim, there is a risk that the employer will be found to have breached the general protections provisions of the Fair Work Act 2009 (Cth).
This decision does not mean that employers cannot terminate an employee’s employment during or at the end of a probation period. Rather, it suggests that employers may need to take additional steps during an employee’s probationary period to reduce the risks associated with terminating employment at the end of that period, or close to the end of it. This may involve implementing a probationary period shorter than the unfair eligibility threshold (provided this is compatible with an applicable industrial instrument), actively managing the probationary period from commencement of employment, and clearly documenting steps taken to manage unsatisfactory performance or other concerns well in advance of the probation period ending.
Examples of unlawful adverse actions that may be used to prevent the exercise of future workplace rights
More broadly, the Dabboussy and Qantas decisions emphasise the need for employers to exercise caution when dealing with employees on the verge of acquiring workplace rights. These decisions focus on unlawful adverse action designed to prevent access to the unfair dismissal regime and the ability to engage in protected industrial action. However, we can think of other examples where unlawful adverse action may be used to prevent the exercise of a future workplace right. Those examples include, but are not limited to, the following:
1) Not engaging employees in a transfer of business scenario, because those employees would be subject to a different industrial instrument.
Example: An employee works at Company X, which is being acquired by Company Y (an associated entity). Company X and the employee are covered by an enterprise agreement (EA) which contains terms which are more favourable than the terms under the modern award which applies to Company Y. The transfer of business provisions under the Fair Work Act 2009 (Cth) mean that the employee is entitled to have the EA continue to apply to them at Company Y. If Company Y does not hire this employee because they do not want the EA to transfer and the employee be covered by its terms, it may be in breach the general protections regime. The employer has not hired the employee (adverse action) because of the employee’s entitlement to be covered by an industrial instrument upon a transfer of business (a future workplace right).
2) Parental Leave
Example: An employee has worked at Company X for 11 months. Under section 67 of the Fair Work Act 2009 (Cth) an employee must have completed at least 12 months service to access unpaid parental leave. Company X terminates the employee and a substantial or operative reason for the termination is to prevent that employee from gaining access to unpaid parental leave.
How we can help
Our Workplace Relations team are here to help you navigate the complexities of the general protections regime and to ensure you are meeting your obligations under the Fair Work Act. We can provide practical advice and guidance, assist with decision-making processes that may adversely affect employees and help employers respond to general protections claims.
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Disclaimer: This article provides general information only and is not intended to constitute legal advice. You should seek legal advice regarding the application of the law to you or your organisation.