Businesses have once again been warned to be aware of the importance and risk of adverse action claims against them, following a decision in which a locomotive driver successfully sued his employer for $95,000 after firing him based on a mental and physical disability.
The company has also been fined $5000 out of a possible $6600, with the case yet another example of how businesses of all sizes need to ensure protection against these types of claims.
“This case demonstrates the significance of the adverse action provisions for employees and is a further warning to employers to approach termination of employment with a high degree of care,” Holding Redlich partner Alistair Salmon told SmartCompany this morning.
Get business news first
Sign up to SmartCompany’s daily newsletter
Adverse action claims have grown in popularity under the Fair Work Act. They offer legal recourse for employees who cannot make an unfair dismissal claim, and are notoriously difficult to defend – businesses carry the burden of proof, not the applicant.
In this particular case, an employee, Colin Flavel, was employed as a train driver for Railpro Services, heading up long-haul shipments of bulky goods, mostly mining materials.
However, in 2011 he was found to be at fault for an accident involving another train. No one was killed or injured, but the collision caused $5 million worth of damage. Flavel was given a final warning and was told he would need to conduct another test to make sure he was competent.
The company’s training supervisor told Flavel that given he was in such a serious crash, he could expect to experience some aspects of post-traumatic stress, including sleeplessness and anxiety.
When Flavel conducted the competency test under supervision, he suddenly felt ill. He requested to stop the training, and a supervisor took over.
Flavel was subsequently terminated from his job.
In its ruling, the Federal Court said Flavel was right to step down from his duties during the test, as he recognised he would have been putting others at risk.
“It would clearly have been unsafe for a train driver to operate a train whilst being violently ill. It was proper therefore for Mr Flavel to have declined to drive the train and thereby not take the test,” it found.
Additionally, the court found the company didn’t even discuss the illness when deciding to terminate Flavel’s employment.
“In my opinion, the decision-maker’s reason for Mr Flavel’s dismissal was because Mr Flavel’s health at that point in time prevented him from undertaking his duties. The respondent was requiring Mr Flavel to undertake duties that they knew, or at least suspected, he would be unable to perform,” Judge Simpson found.
As a result, this meant the company terminated Flavel’s employment not because of any performance issues, but because of his illness or disability – in direct contravention of workplace laws.
“I find that the respondent’s termination of Mr Flavel’s employment was because of Mr Flavel’s mental and physical disability, which as a reason for dismissal is unlawful,” Simpson found.
The case is a solid warning for other businesses, not only to follow the letter of the law but to ensure they have practices which protect themselves from adverse action liabilities.
As Alistair Salmon says, the court took into account whether the action to terminate the employee was deliberate.
“Aggravating factors such as the employer’s actions being clearly deliberate with no evidence of contrition added weight to the court’s order of a high-end penalty,” he says.
Salmon points to a quote in the decision, which states the case is a “clear message to this employer and others”, that employees should only be terminated for “proper and lawful reasons”.
“If the employer does not have a proper reason, the employer should expect an appropriate penalty for this unlawful conduct.”