Discipline and termination becoming more complex, risky: lawyer

Employment litigation has become much more complex over the past 10 to 20 years, thanks to the increasing compliance obligations on employers.

“That increases not only the complexity of litigation but also the potential damage awards,” Colin Biggers & Paisley partner Kristen Lopes told HRD. 

At the same time, societal values are finally shifting, especially with regards to the recognition of psychological injuries in employment.

“That’s having a significant impact on how judges are looking at these cases,” Lopes said. “There has been a decrease in the number of unfair dismissal cases being lodged, but an uptick in the number of general protection claims.”

Complexity in litigation

If a general protection claim doesn’t resolve at conciliation the applicant must go to the Federal Circuit and Family Court or the Federal Court to continue a claim, said Lopes, who will be speaking at HRD’s Employment Law Masterclass in Sydney on 19 November.

“The Fair Work Commission has limited jurisdiction to deal with certain areas of law,” she said. “However, the jurisdiction of the Federal Court or Federal Circuit court is much broader.”

Lopes has noticed general protection claims can be expanded upon by the time they go to the Federal Circuit or Federal Court.

“They might then add on an underpayment claim, along with other types of claims,” she said. “That’s one way these matters become increasingly more complex to litigate.”

It’s “more likely than not” a general protection claim will not go the applicant’s way if it goes to a hearing, she said, “but the flip side is that there have been some really significant damages.”

Sizeable judgements in termination cases

Lopes cited a judgement this year where an individual was awarded $2.8 million and a case two years ago where the applicant was awarded $2 million.

“It’s a reminder that employers really need to be considering the processes they follow when looking at managing performance or conduct in the workplace – certainly if they are contemplating termination,” she said.

Robust procedures include a hard rule to keep documented evidence in the event it is needed to defend against a claim.

“It’s very important with general protection claims, because there is a reverse onus on the employer,” Lopes said. “It is important to understand that process and where the burden of proof is before you embark upon a potential termination.”

HR managers must understand the risk to the organisation, to the individuals making the decision, to the board and to themselves. A general protection claim is a civil penalty provision, Lopes reminded HRD, which means someone involved in a decision-making process that will lead to an unlawful termination is personally exposed to a civil penalty.

“It’s their reputation on the line,” she said. “And it’s also making sure internal stakeholders understand the level of personal risks to them, both financially and reputationally.”

Employment Law Masterclass

At the Employment Law Masterclass in Sydney on 19 November, Lopes will discuss the topic: “Discipline and termination: Lessons from the court”. She will go over some of the key takeaways from the most influential cases of the last 12 months, looking at:

• how have judges been ruling on termination cases
• trends in employee compensation rulings
• lessons from the recent court decisions.