The Federal Circuit Court has recently awarded a whopping $664,601.38 to a university employee due to breaches of the general protection provisions of the Fair Work Act 2009 (FW Act) and for failing its obligations under the Macquarie University Staff Enterprise Agreement 2015 (EA). The hearing to determine the appropriate remedy comes one year after the Federal Circuit Court established the liability of the employer in the decision of Tran v Macquarie University (No.2)  FCCA 2049 (Decision).
In the context of rising employment claims due to the COVID-19 pandemic and scrapping the JobKeeper scheme, the Decision is another reminder for employers of the importance of following procedure and undertaking due diligence when handling employee complaints or termination of employment. The significance of this Decision is demonstrated by more than $270K awarded for future economic loss taking into account the COVID-19 pandemic, the employee’s age, her overall health, time out of the workforce and wages to date.
The Applicant, Ms Tran, was employed as a systems accountant by Macquarie University (Macquarie) from 2007 up until Macquarie made her position redundant in July 2019. In about 2010, Ms Tran lodged a grievance against her direct supervisor due to concerns over her unreasonably demanding workload. This matter was dealt with by Macquarie via mediation and an amicable outcome was reached. In 2014 there was a change in upper management at Macquarie and it was during this period of transition that Ms Tran began to experience increased pressure from her direct supervisor in respect to her workload and work hours. After failed attempts to resolve the issue with her supervisor, Ms Tran made formal complaints through various channels within Macquarie however she was unable to procure an outcome satisfactory to her. From 2014 until her termination, Ms Tran made several more complaints that relating to alleged ill treatment she was experiencing by her direct supervisor including allegations of bullying. The evidence before the Federal Circuit Court indicated that Ms Tran’s complaints were poorly handled by Macquarie, including one instance where Ms Tran was encouraged by upper management to resign if she did not like her direct supervisor.
In 2017, Macquarie announced its proposal to restructure the workplace which essentially dissolved Ms Tran’s role (and that of another employee) and created two new roles of a higher level within the restructure. With a potential redundancy looming over her, Ms Tran expressed her interest to be redeployed within Macquarie. In accordance with the terms of the EA, Macquarie was required to give priority consideration for staff members seeking redeployment including a priority interview. Macquarie was also required to identify any position suited to Ms Tran’s skills and relevant experience or identify if retraining was possible. The Federal Circuit Court found that Macquarie had failed in its obligation to make a genuine attempt to assess Ms Tran’s skills in relation to the positions she applied for and failed to disclose the existence of available positions to which she was entitled to a priority interview.
Ms Tran commenced proceedings in the Federal Circuit Court claiming that the restructuring was targeted at her specifically, with Macquarie’s intention being to remove her from her role due to the complaints she had made.
General Protections Provisions Under the FW Act
The general protections found in Part 3-1 of the FW Act prohibit employers from taking adverse action against an employee because the employee has a workplace right or has exercised a workplace right by making a complaint or enquiry.
For industrial activities and protects against discriminatory treatment on the basis of protected attributes and sham arrangements.
In respect of prohibited actions by an employer against an employee, ‘adverse action’ means dismissing the employee, injuring them in their employment, altering their position to their prejudice, or discriminating against them by treating them less than favourable compared to other employees.
Under the FW Act, a person has a workplace right if they are entitled to the benefit of a workplace law or instrument, has a role or responsibility under a workplace law or instrument, is able to initiate or participate in a process or proceedings under a workplace law or instrument and is able to make a complaint or inquiry to seek compliance with a workplace law or instrument. Thus, an employee, like Ms Tran in this case, can make a complaint about bullying or unreasonable workloads, and the employer is prohibited from taking any adverse action, such as making their position redundant, because of their complaint.
The use of the word ‘because’ in these provisions is the central question in a General Protections dispute. The largest hurdle for any employee claiming an employer has acted adversely towards them is drawing the link between the exercise of a workplace right and the adverse action. Unless the adverse action was taken ‘because of’ the prohibited reason, there will be no breach of the General Protections provisions. If it is alleged that a person is taking action solely for a non-prohibited reason, such as serious misconduct or poor performance, then there will be no breach. If there are multiple reasons for the action, one of them being a prohibited reason, the prohibited reason must be a substantial and operative reason, even if it is not the sole or dominant reason, for a breach to be established.
In the case of Tran, The Federal Circuit Court considered the allegations made by Ms Tran in the context of the general protections provisions and based on the evidence presented it was satisfied that Ms Tran had exercised a workplace right within the meaning of s 341(1)(c) of the FW Act, by making formal complaints about the unreasonable hours and workload, including her treatment at the hands of her direct supervisor. The Federal Circuit Court also held that Macquarie’s proposed restructure that dissolved Ms Tran’s position, amounted to adverse action within the meaning of s 340 and s 342 of the FW Act, and accordingly the adverse action was taken for a prohibited reason, that being, the adverse action was taken in response to the complaints made by Ms Tran.
The Federal Circuit Court also considered contraventions of Macquarie’s Enterprise Agreement. Pursuant to s 50 of the FW Act, a person must not contravene a term of an enterprise agreement. In its Decision, the Federal Circuit Court held Macquarie’s failure to redeploy Ms Tran, or make sincere and genuine attempts to do so, was not in accordance with the terms of the EA and thus contravened the EA. The Federal Circuit Court held this was a breach of s 50 of the FW Act.
Macquarie’s obligations in respect to restructuring, redeployment, and redundancy under the EA were described by the Court as extensive and beyond the norm. That being said, the Federal Circuit Court held that employers should ensure they understand and comply with any consultation obligations arising from Modern Awards or enterprise agreements applicable.
What was Ms Tran awarded?
The Federal Circuit Court awarded compensation totalling $664,601.38 to Ms Tran. This compensation amount was made up of the following:
- $45,000 in pecuniary penalties paid directly to Ms Tran for Macquarie’s multiples contraventions of the FW Act;
- $271,163.19 in compensation due to the Court’s determination that reinstatement was not suitable in this instance;
- $55,156.19 in superannuation payments, which includes the amount Ms Tran would have accumulated had the payment been invested;
- $278,282 in compensation for future economic loss;
- $15,000 in non-economic loss due to the distress and humiliation experienced by Ms Tran due to being unlawfully made redundant.
The substantial sum awarded to Ms Tran is a win for employees everywhere. However, the facts of this case were unique and there is no guarantee that all general protections claims will be awarded this much. In addition, the entire court case took years and thousands of dollars in legal fees, which is an important consideration to take into account when lodging a claim in the Federal Circuit Court or the Federal Court.
An important aspect of this decision is the Federal Circuit Court’s consideration of the long-term effects of the COVID-19 pandemic on our economy and job prospects. This was a factor that was importantly considered when the Federal Circuit Court awarded damages to Ms Tran for future economic loss. However, there were several factors considered by the Federal Circuit Court in the Decision and the mention of the pandemic was very brief. Nevertheless, these brief comments may have wider implications on future court actions, specifically in regard to the dismissal of high wage earners during the pandemic who naturally may take longer to find a new role in the current climate.
The Decision demonstrates the importance of implementing thorough and consistent work practices in respect to dealing with employee complaints, to ensure a fair process is implemented and followed each time a complaint is made. The Decision also highlights the importance of complying with the terms of any applicable enterprise agreements or Modern Awards.
 Fair Work Act 2009 (Cth) s.342(1).