Seven Hours Short – CEO reinstated following hasty dismissal
Many employers have terminated an employee’s employment just before the end of the probationary period to avoid the risk of unfair dismissal claim, but a recent decision of the Federal Court of Australia (the Court) suggests this approach may be in breach of employees’ general protections.
In the recent decision of Dabboussy v Australian Federation of Islamic Councils [2024] FCA 1074, the Court found there was a prima facie case that the summary termination of its Chief Executive Officer (CEO) merely 7 hours short of him being entitled to bring an unfair dismissal claim was an adverse action in breach of section 340(1) of the Fair Work Act 2009 (Cth) (FW Act).
Facts
Mr Dabboussy was employed as the CEO of the Australian Federation of Islamic Councils (AFIC) from 4 September 2023 until his dismissal on 3 September 2024. In the lead up to his dismissal, Mr Dabboussy was the subject of an investigation after it was alleged that he made an inappropriate comment to another employee. Mr Dabboussy made a complaint on 12 August 2024 regarding the investigation process.
At 7.10am on 2 September 2024, the external investigator, Ms Croker provided Mr Dabboussy a copy of the transcript of interview and invited him to provide any additional comments by 3 September 2024. Accordingly, at approximately 8:45am on 3 September, Mr Dabboussy responded that he was agreeable to the transcript being used as his statement.
At 8:30pm on 2 September 2024, AFIC’s Executive Council held an emergency meeting noting that based on the draft findings from the investigation, the allegations were “substantiated on the balance of probabilities”. However, the meeting minutes did not indicate any draft report was tabled or made available to the Executive Committee members prior to the meeting. Nevertheless, the Executive Council voted unanimously to terminate Mr Dabboussy’s employment summarily. A termination letter was sent to Mr Dabboussy at 4:40pm on 3 September 2024.
Mr Dabboussy subsequently sought an interim order for reinstatement pursuant to section 545 of the FW Act on the basis that he had a prima facie case that he was dismissed to prevent him from being able to access the unfair dismissal provisions of the FW Act, in breach of his general protections under section 340 of the FW Act.
Decision
In determining whether to grant the interim order, the Court had to consider whether Mr Dabboussy had a prima facie case that his dismissal constituted an adverse action on the basis that he had a workplace right. While the Court considered many of his arguments to be weak, the Court found that there was a strong prima facie case that the timing of his dismissal was designed to deny him the opportunity to make a claim for unfair dismissal, and that this was a ‘substantial and operative reason’ for his dismissal.
Notably, the Court found that the evidence strongly suggested that AFIC had convened an emergency meeting and acted in haste to terminate Mr Dabboussy’s employment, without even being in possession of the external investigators final report. The Court then found that there was a strong inference available that the Executive Committee meeting had been convened to facilitate the termination of Mr Dabboussy’s employment before 4 September 2024, on which date Mr Dabboussy would have been entitled to protection from unfair dismissal under the FW Act.
Importantly, the Court noted that adverse action can be taken against to prevent the exercise of a workplace right even where the person does not have the workplace right at the time at which the adverse action is taken, as was recently held in Qantas Airways Limited v Transport Workers Union of Australia (2023) 412 ALR 134 (which we discussed here). Therefore, the fact that Mr Dabboussy did not have the right to protection from unfair dismissal at the time of his dismissal does not necessarily prevent AFIC’s conduct from constituting adverse action.
In assessing the balance of convenience for an interim order for his reinstatement, the Court placed significant weight on the financial and personal impact of his dismissal, particularly since he was not paid any amount on termination and may be forced to sell his family home.
Further, having regard to the nature of allegations against Mr Dabboussy, his age and employment history in non-for-profit organisations, the Court deemed it would be very difficult for him to seek alternative employment.
Whilst the Court did acknowledge AFIC’s concerns of discomfort amongst other employees should reinstatement be ordered, it was held that these issues could be mitigated if Mr Dabboussy were stood down or allowed to work from home during the interim period. Accordingly, Mr Dabboussy was granted reinstatement and the Court ordered AFIC to not terminate his employment without leave of the Court.
Importantly, Mr Dabboussy has only established that he has a prima facie case. The Court will now consider the substantive merits of his general protections claim in a separate hearing.
Take Home Messages
This decision could mark the start of a significant change to the way in which employers manage the probationary period or minimum employment period. There is clearly now risk in terminating an employee’s employment during this period, if one of the operative reasons for the termination of employment is the desire to prevent the employee from being protected against unfair dismissal.
To reduce this risk, employers should ensure that they are proactively monitoring employee performance throughout the probationary period rather than waiting until the final days of minimum employment period to take action. Further, where practical, the reasons for dismissing an employee should always be clearly documented so that employers can defend any subsequent general protections claims.
Should you have any questions in relation to this article, please contact Lincoln Smith on +61 8 8210 1203 or lsmith@normans.com.au or Annabelle Narayan on +61 8 8210 1292 or anarayan@normans.com.au.
