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Roohizadegan v TechnologyOne Limited (No 2)  FCA 1407
The applicant, Mr Roohizadegan, commenced employment with TechnologyOne as State Manager for Victoria on 3 July 2006. By 2016, TechnologyOne had grown significantly in size and revenue, including in Victoria. The applicant’s gross income increased from $208,932 in the 2006/07 financial year to $845,128 in the 2015/16 financial year, mostly due to incentive payments.
The applicant was a well regarded employee. He was granted share options in 2013, 2014 and 2015 in addition to his contracted remuneration, a benefit not granted to any other State Manager. He received the Chairman’s Award in 2010, 2012, 2013 and 2014, an award given to only four to six of up to 1,000 employees.
Mr Adrian Di Marco, the second respondent, was Executive Chairman and Chief Executive Officer of TechnologyOne. He gave evidence that the applicant was loyal and hardworking, although from 2014, he had begun to question whether the applicant was the right person to take the Victorian business forward. Until the events of 2016, the second respondent had intended to ensure the applicant had support from a new National Operating Officer as direct report.
From late 2010, the applicant was experiencing personal difficulties due to a sick child, and guilt with reference to his work commitments in that context. His response was to escape in further work, which led to issues with his marriage and thoughts of suicide. The respondents were not informed of the applicant’s depressive disorder. The applicant was careful not to reveal to anyone at TechnologyOne the depth of his private turmoil.
The applicant’s case was that he was dismissed for prohibited reasons, contrary to s340 of the Fair Work Act 2009 (Cth) (FW Act), being:
The applicant’s evidence was that as a result of his dismissal on 18 May 2016, he suffered a profound mental breakdown. Whether his dismissal caused that breakdown, or whether it was a manifestation of his earlier depressive disorder arising after his daughter’s illness, was the subject of contested expert evidence.
After he was dismissed the applicant became permanently incapable of ever working again.
Kerr J held that TechnologyOne’s ‘Open Door Policy’ and its ‘Workplace Bullying Policy’ as referred to in the applicant’s contract of employment meant that he had a workplace right to make the bullying complaints. He was accordingly protected by s341(1)(c)(ii) against adverse action being taken against him for the reason that he had made the complaints. The same applied with respect to the complaint made in good faith regarding his contractual entitlements.
It was in dispute as to whether the applicant had made the bullying complaints. The Court heard from various witnesses and concluded that he had.
Kerr J confirmed that an employer will not be liable simply because he or she has dismissed an employee in awareness that that employee has exercised a protected workplace right. An employer contravenes the FW Act only if their employee’s exercise of that right was the reason or part of the reason for their having taken that adverse action. The Court is therefore required to make findings regarding the decision maker’s actual reasons. What those reasons were is to be determined from all of the facts established in the proceedings, and inferences properly drawn from them.
TechnologyOne had the burden of displacing the statutory presumption provided for by s361(1) that the applicant was dismissed for the reason that, or reasons including that, he had exercised his workplace rights. The required standard of proof in that regard is on the balance of probabilities.
It was accepted that the second respondent was the sole decision-maker with respect to the applicant’s dismissal. The respondents contended that the dismissal was for different reasons and had nothing to do with the exercise of any workplace rights. The second respondent’s evidence was that he dismissed the applicant because:
Kerr J was not persuaded that the applicant’s complaints about having been bullied by his two most recent direct reports were not a substantial and operative reason for the second respondent’s decision to terminate his employment.
The applicant also succeeded in his contractual claim against the first respondent.
Kerr J rejected the proposition that the second respondent’s credit was enhanced by the fact that he chose to give his evidence without first reviewing any of the relevant documents, stating that ‘it might equally reflect complacency, arrogance or indifference to the accuracy of his testimony’. His evidence was described as tortured and evasive. There were issues with disentangling the matters of which he asserted he had personal knowledge from those which he might have been told.
Penalties and damages awarded exceeded $5,200,000. This included $47,000 in penalties, $756,410 plus interest for forgone share options, $2,825,000 for future economic loss, $1,590,000 plus interest for breach of contract and $10,000 for general damages. There were no orders as to costs, including with reference to s570 of the FW Act.
The decision is reflective of the difficulty in the context of a clear enforcement of a workplace right in rebutting the statutory presumption that the reasons for adverse action include a prohibited reason. Direct evidence from the decision maker will be persuasive, if that evidence is accepted by the Court. If the evidence from the decision maker is successfully challenged, the outcome for the employer can be significant, particularly with high income earners and permanent incapacity for alternative work.
It has been indicated in the media that TechnologyOne intend to appeal the decision.
For further information / assistance regarding next steps and the issues raised in this article, please contact the authors, Emma Reilly – Partner or your usual contact at Moray & Agnew.