In a recent case before the court, a HR Manager was fined for breaching the general protections provisions of the Fair Work Act 2009 (Cth) (‘FW Act’) following a mishandled resignation of an employee.
The case is a useful reminded that individuals – such as HR Managers, directors and other senior figures – can be held personally liable for breaches of the FW Act and is one reason why we would encourage all such persons to seek professional advice when dealing with any complex employment law issue, particularly those involving termination of employment.
What is accessorial liability?
Accessorial liability is the concept that an individual involved in a contravention of a law can be personally liable for the contravention as an accessory, in this case, alongside the entity that employed (and dismissed) the employee. In the FW Act this is dealt with in section 550 which states that a person is involved in a contravention of the Act if, the person:
- has aided, abetted, counselled or procured the contravention; or
- has induced the contravention, whether by threats or promises or otherwise; or
- has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention; or
- has conspired with others to effect the contravention
What happened in this case?
United Workers’ Union v Bervar Pty Ltd  FedCFamC2G 418 and United Workers’ Union v Bervar Pty Ltd (No 2)  FedCFamC2G 251 involved the following circumstances:
- Ms. Talwinder Kaur had been employed by Bervar Pty Ltd, (the Company) for nearly five years.
- During her tenure, she steadily advanced through the ranks via a series of promotions. However, conflicts arose between Ms Kaur and the HR manager, Mr Cameron Blewett, as well as with her colleagues, regarding changes in her responsibilities and working overtime.
- The Company therefore organised a performance management meeting with Ms Kaur and several senior managers. Ms Kaur was not given prior notice of the meeting or provided with an opportunity to have a support person present, despite English being her second language.
- Ms Kaur was left deeply distressed after the meeting and left work early without clocking out.
- Later that day, the HR Manager called Ms Kaur’s mobile to conduct what he termed was a “welfare check.”
- Ms Kaur’’s husband answered the phone and spoke to the HR Manager, and (according to the HR Manager) informed him that Ms Kaur would not be returning to work due to bullying and harassment and would be filing a claim with “Fair Work.”
- The HR Manager decided after this one brief conversation that he would consider Ms Kaur to have resigned, without any further communication with Ms Kaur.
The court found that by choosing to treat the communication from Ms Kaur’s husband as a resignation, the Company had taken adverse action against Ms Kaur (in effect dismissing her) because she intended to exercise a workplace right (to make a claim against the Company).
This breached the general protections provisions of the FW Act, in particular section 340 of the FW Act, which prohibits taking adverse action against someone in connection with a workplace right.
Furthermore, the court held the HR Manager personally liable under section 550 of the FW Act because he was the only other participant in the phone call with the Applicant’s husband and was the person who decided to terminate the Applicant’s employment with the Company.
The Court ordered the Company to compensate Ms Kaur with a payment of $47,834.26 for economic loss (i.e. loss of wages) and $9,000.00 for general damages for pain and suffering.
Additionally, the Court imposed a penalty of $37,800.00 on the Company.
When determining the penalty for the HR Manager, the court took into account his failure to fulfill the basic requirements of someone in a HR management role in the way he mishandled Ms Kaur’s termination of employment.
The court also noted that the HR Manager declined to acknowledge his mistakes during the proceedings and showed no “contrition or remorse” for the manner in which he terminated the Applicant’s employment. The court therefore imposed a penalty of 60% of the maximum allowable penalty (up to $12,600.00 per contravention for an individual), resulting in a fine of $7,560.00 for the HR Manager.
Lessons to be learned
The case is a useful reminder of what not to do in potential abandonment of employment or resignation situation. It is sometimes tempting to communicate with other persons on an employee’s behalf when they cannot be reached (family members, partners, etc), but the case illustrates the importance of communicating directly with the employee, especially if it is a matter as important as a potential resignation.
The case also shows the risk of rushing a process, or being too quick to jump on what seems to be the easy way out (accepting a resignation), when really a methodical and restrained approach to perceived performance issues and dealing with employees experiencing high levels of stress should have been followed.
Lastly, the case illustrates the risk for HR Managers and other decision-makers in mishandling terminations (or otherwise breaching the provisions of the FW Act): the courts have issued fines under the accessorial liability provisions on a number of occasions, and given these cases attract a high amount of publicity, can be reputationally damaging for the individuals involved. We would always encourage businesses and the individuals involved in managing them to seek professional advice when dealing with complex issues, particularly those involving termination of employment.
Full copies of the judgments in this case can be read using the links below
- United Workers’ Union v Bervar Pty Ltd  FedCFamC2G 418 – where the liability of the company and the HR Manager was found is available here
- United Workers’ Union v Bervar Pty Ltd (No 2)  FedCFamC2G 251 – where the compensation and penalties were decided upon is available here