By Mike Toten Freelance Writer

A 66 year-old employee who was invited outside by his manager for a coffee and then told in a public setting that he would be retrenched has successfully claimed compensation for a psychological injury resulting from the incident. The employer claimed that it had handled the matter in a sensitive way, but the NSW Personal Injury Commission disagreed.

 

Facts of case

The employee and his manager often went out to an on-street cafe, but the manager did not tell him the reason for the invitation this time. The employee had been employed for 27 years and had previously told his manager that he intended to remain working until the age of 73. After getting their coffees, the manager told him that his last day of work would be the following 31 December (six months later). The manager refused to say whether he was being replaced or retrenched. With other people nearby, the employee struggled to control his emotions and began feeling ill. Next day he was too ill to attend work, never returned to work and claimed workers’ compensation. 

The employer claimed it had decided to retrench the employee and the manager believed that telling him informally over coffee would be a more sensitive way to do it than taking a “clinical” approach. However, the employee claimed that his age was the reason for the employer’s decision, and the coffee meeting amounted to unlawful termination of his employment, not a “discussion” about his future. He was not told in advance what the meeting was about, and did not have the opportunity to have a support person. 

The employer intended to restructure its business and did not believe the employee could “fit in” with its plans. It claimed that its actions amounted to reasonable management action, and that it had tried to handle the matter in a sensitive way. It also claimed that the employee’s job performance had declined in recent years, but did not mention this when the conversation took place. In any case, the employer had offered him some casual “consultancy” work post-redundancy.

 

Decision

The Commission found that the employer’s treatment of the employee was unreasonable, and breached its own employment policies (in respect of how to handle redundancies). The manager did not tell the employee the purpose of their meeting, did not consider whether or not he might be suitable for continued employment, did not allow him a support person, and told him suddenly and in a very public setting. 

The Commission found that the employee’s age was the reason for termination of employment. The test of “reasonableness” of the employer’s actions did not require a perfect approach, but this employer’s actions fell well short of what was reasonable. 

The Commissioner ordered the employer to pay the employee weekly payments for the claimed time period of eight months, plus the cost of his medical treatment.

 

What this means for employers

A proposed redundancy or termination of employment should not be handled in an “informal” manner. It should be done in private, with the employee notified in advance of the purpose of the meeting and allowed to have a support person present. A decision of redundancy should not be made until AFTER such a meeting, as the meeting 

 

Read the judgment

Khan v Hitachi Energy Australia Pty Ltd [2025] NSWPIC 22 (28 January 2025)