The general protections provisions under the Fair Work Act 2009 (Cth) (FW Act) provide protections against adverse action which is taken for a prohibited reason. Prohibited reasons for taking adverse action include situations where a person has a workplace right and exercises (or proposes to exercise) that right. Workplace rights include the right to utilise leave entitlements under the FW Act.
In Tapping v Empress Diamonds Pty Ltd ATF Empress Discretionary Trust [2021] FCCA 1335, the Federal Circuit Court of Australia (the Court) recently found that an employer contravened the FW Act by dismissing an employee who had been diagnosed with breast cancer and required treatment because she proposed to exercise workplace rights to take annual leave and personal leave. The Court was also satisfied that the owner was involved in the contravention by the employer and accessorially liable.
The employee was employed as a Sales Manager and provided administration and other assistance to the employer and in particular to the owner. In mid-April 2019 the employee was diagnosed with breast cancer and was advised that she would require surgery.
The employee claimed that on 8 May 2019 when she returned to work after attending a medical appointment, she advised the owner that she required immediate surgery and that she would be required to be absent from work for a period of time. The employee alleged that during this discussion she was dismissed from her employment.
In her claim, the employee made a number of allegations of adverse action by the employer and owner together with other claims of contraventions of the FW Act.
The employee gave evidence that in April 2019 when she advised the owner about her diagnosis, he responded “I can’t keep your job” and “oh yeah, but I run a business”. In relation to the discussion on 8 May 2019, the employee’s evidence was that after she advised the owner that she would need time off and suggested engaging a temporary employee to assist him before she returned, the owner said to her: “No, you don’t come back”. The employee further alleged that she asked the owner if he was sacking her, he responded: “Yes”. The employee also claimed that the owner denied that she had any entitlement to pay in lieu of notice or her accrued leave entitlements on termination.
The employer and the owner denied the allegations of adverse action and contraventions of the FW Act. In relation to the discussion in mid-April 2019, the employer and owner submitted that the employee’s account of the phone call should not be accepted. In relation to the discussion on 8 May 2019, the owner denied the employee’s account and denied that he dismissed her during the conversation.
The Court preferred the employee’s account of events after having regard to all of the evidence. In particular, the Court noted:
Having found that the employee’s employment was terminated by the employer, the Court went on to consider whether the termination was for a proscribed reason.
The Court noted that as a small business, the employer and the owner relied upon the employee and the owner was concerned about how his business could continue without the employee. The Court was of the view that when the employee notified the owner on short notice that she was required to take immediate leave for an extended period because she required surgery, his concerns about who would run his business materialised and he “likely panicked” and dismissed her from employment.
The Court stated at [100]:
I find that the Applicant’s employment was terminated because she proposed take a period of lengthy and indeterminate personal leave and annual leave. Clearly she was going to be absent from work. The Respondents did not know for how long that absence would last, nor did they know what capacity for work the Applicant would have when she returned to work. Those matters, in my view, led to the Respondents terminating the employment of the Applicant. Those actions by the First Respondent constituted a breach of section 340(1)(a)(iii) of the Act.
The Court found the owner, as sole director and shareholder, had directly engaged in the contraventions and was accessorially liable.
A separate hearing will be held for the Court to deal with the matters of compensation and penalties to be imposed.
Lessons for employers
Accessing leave under the National Employment Standards (NES) is a workplace right. Adverse action taken against an employee for a prohibited reason will contravene the general protections provisions under the FW Act and significant penalties may apply for contraventions.
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