By Gaby Grammeno Contributor

The worker had exercised her workplace right by making three complaints in relation to her employment. The first related to the conduct of another employee; the second and third related to what the worker claimed were the unreasonable overtime hours the company required her to perform. All three complaints were made in emails to management in September, October and November 2019. 

The day after the third email was sent, the company terminated her employment, stating that it was because various aspects of her performance and suitability for the role were unsatisfactory.

The worker was then still within her six-month probationary period, during which her contract said either she or the company could terminate her employment.

The worker claimed her sacking was not due to any inadequate performance on her part, but rather because she'd exercised a workplace right by complaining, and the employer had unlawfully dismissed her as a result.

The finding that the employer had contravened s 340(1) of the Fair Work Act 2009 – which protects workers from adverse action due to their exercising a workplace right – was declared in March 2023. That judgment ordered the employer to pay the worker $24,200.98 in compensation under s 545(2)(b) of the Act for wrongly terminating her employment.

On that occasion, the judge also made orders for the filing of submissions and evidence on the question of a pecuniary penalty under s 546(1) of the Act. The parties subsequently filed submissions and the case was heard in the Fair Work division of the Federal Circuit and Family Court of Australia.

In Court

The focus of the case was the penalty the employer should pay after it was found that, in terminating her employment, it had taken adverse action against the worker for exercising her workplace right.

The Court’s task was essentially ‘to put a price on contravention that is sufficiently high to deter repetition by the contravenor and by others who might be tempted to contravene the Act’.

Judge Nicholas Manousaridis observed that an ‘appropriate’ penalty ‘is one that strikes a reasonable balance between oppressive severity and the need for deterrence in respect of the particular case’.

In setting appropriate penalty, the Court considers factors relevant to assessing what is necessary for deterrence in respect of the particular contravention in question, including:

  • the nature and extent of the contravening conduct, and of any loss or damage caused
  • the circumstances in which the conduct took place
  • whether the breaches were properly distinct or arose out of the one course of conduct
  • the size of the contravening company
  • the degree of power it has, as evidenced by its market share and ease of entry into the market
  • the deliberateness of the contravention and the period over which it extended
  • whether the contravention arose out of the conduct of senior management or at a lower level
  • whether the company has a corporate culture conducive to compliance with the FW Act, as evidenced by educational programs and disciplinary or other corrective measures in response to an acknowledged contravention
  • whether the company has taken corrective action, shown contrition and a disposition to co-operate with the authorities responsible for the enforcement of the Act in relation to the contravention, and
  • factors characterised as informing the assessment of a penalty of appropriate deterrent value under the Trade Practices Act 1974.

The Court must consider the need for specific and general deterrence.

The employer submitted that the worker made mistakes and the decision to dismiss her was made before they received her complaints, but Judge Manousaridis found she was entitled to protection against adverse action irrespective of when the decision to sack her was made.

Judge Manousaridis said the employer’s submissions did not address the circumstances in which the manager who approved the worker’s dismissal was approached to make a decision regarding her employment, or the information on which he relied, or his reasons for her sacking.

Though the employer had evidently not been aware it was contravening s 340(1) of the FW Act or any other law when it terminated her employment, the employer’s conduct was deliberate and occurred in circumstances which distressed, hurt and humiliated the worker. 

The employer had failed to prove the decision to dismiss her wasn’t taken for proscribed reasons, and the contravention was serious.

Given that the company had evidently made good the loss and damage its conduct caused the worker, and given the corrective action undertaken by the company and the fact that there was only a single contravention, the Judge was satisfied there was no need for any penalty to incorporate an element for specific deterrence.

However, because the contravention was serious, the penalty for general deterrence should be assessed at a level that would deter other employers from engaging in similar conduct and encourage employers to implement procedures to minimise the risk of similar contraventions of the FW Act.

The Court ordered the employer to pay the worker $18,000 for the employer’s contravention of s 340(1) of the FW Act.

What it means for employers

Employers would do well to implement procedures to minimise the risk of adverse action claims.

Read the judgment

Rizk v PVH Brands Australia Pty Ltd (No 2) [2024] FedCFamC2G 613 (12 July 2024)