Employers often try to “do the right thing” by employees. However, in doing so, they can also create unintended consequences. The Federal Circuit and Family Court of Australia (the “Court”) handed down a decision where an employer’s well‑intentioned delay in communicating the termination of an employee’s employment ultimately created a legal exposure.

Factual background

The employee commenced employment in early 2024. After approximately six months a number of performance concerns arose. These concerns ultimately led to the eventual decision to terminate the employee’s employment. Although the termination decision was made in December 2024, the employer chose to delay communicating the termination to the employee until January 2025 due to the approaching Christmas period.

However, before the termination decision was communicated to the employee in January, the employee informed the employer of her intention to make a workers’ compensation claim and also commenced paid personal leave. When the termination of employment was subsequently communicated to the employee she claimed that the real reason for the termination of her employment was not her performance, but rather because she had raised workers’ compensation issues and taken of personal leave (which she claimed were workplace rights). Accordingly, the employee commenced an adverse action claim.

Findings 

The Court found that the decision to terminate the employee’s employment was made in December 2024 for legitimate performance concerns. Importantly, the delay in communicating the termination decision until January 2025 did not change the underlying reason for termination of employment. The Court was satisfied that the employer had not terminated the employee’s employment because of her taking personal leave or any potential workers’ compensation claim. The adverse action claim was dismissed.

Critical in the Court forming this view was clear evidence that the decision to terminate the employee’s employment had been made in December 2024. There was evidence of discussions with the employee’s direct supervisor and another employee which supported the employer’s case that they would delay communicating the termination decision.

Why this matters for employers 

Making presumptions about what is in the best interests of an employee can create risks for an employer. There is always a place for compassion in termination decisions, and there are options available to employees to provide this. There is also a place for careful process and timely communication.

While the employer was ultimately successful, the case highlights the risks associated with delaying the communication of a termination decision. It is a good reminder for employers to document termination decisions and to not unnecessarily delay communication. This enables an employer to clearly demonstrate that the genuine reason for dismissal predated any later issues that arose. Consistent internal records and corroborating evidence will assist employers, as it did in this case.