In a significant general protections decision, the Federal Court has ordered a software company to pay more than $5.2 million in future economic loss, compensation, general damages and penalties to a senior employee who was fired after he made bullying complaints.

Background

The Applicant was employed by the company in 2006 as State Manager for Victoria. For the majority of his service he was an outstanding performer, and as such, he was rewarded with income increases and granted share options in addition to his contractual remuneration. He was described by the company’s CEO as being “really hardworking, committed and loyal to the business”.

During his employment, the Applicant suffered a personal crisis and depression from his daughter becoming ill and being diagnosed with Kawasaki disease. His mental health was aggravated when he was subject to bullying. His condition worsened once he was summarily dismissed on 2016 and became incapable of ever working again.

The Applicant filed a general protections application against the company and the CEO after making complaints of being bullied by at least two senior executives. He also claimed that at the time he was dismissed he had not been paid incentives due to him since 2009.

Outcome

Justice Duncan Kerr found that the company took adverse action against the Applicant because he exercised a workplace right when he complained various times about being bullied and found the CEO accessorily liable.

Some employees with whom the Applicant had worked made complaints against him. However, the CEO refused to conduct an investigation into these complaints and used them as another reason to dismiss the Applicant without putting the allegations to him or giving him a chance to respond to them.

Justice Kerr ordered the company to pay the Applicant $2,825,000.00 for his future economic loss, $756,410 to compensate his forgone share options, $1,590,000 in damages for breach of contract, $10,000 in general damages for hurt and humiliation and $47,000 in penalties.

In calculating the compensation for the Applicant’s future economic loss, Justice Kerr said that there was psychiatric evidence that established the Respondents’ conduct caused a significant aggravation of the Applicant’s pre-existing depressive disorder, which resulted in the Applicant losing capacity to work and established a poor prognosis for the Applicant ever being able to work in roles for which he would otherwise be qualified.

Takeaways

It is vital for employers to manage proactively the reputational damage which can accompany allegations of bullying, and not to be seen to be tolerating or turning a blind eye.

Dealing with the issues and discontent resulting from bullying, internally and before they escalate is crucial in avoiding a situation such as this one. The best practice is to have very clear policies prohibiting bullying as well as accessible and confidential procedures for handling complaints and managing investigations.

Read the full decision here.

People + Culture Strategies