Intriguing General Protections argument challenges last-minute probationary dismissal

The Chief Executive of a small non-profit organization who was summarily dismissed hours before he would have completed his minimum employment period – allegedly for sexually harassing a new assistant – has been temporarily reinstated into his role, and won the right to challenge his termination via the general protections jurisdiction, with Judge Nicholas of the Federal Court finding he established “a prima facie case” that the timing of his dismissal was influenced by a desire to ensure he could not make a claim for unfair dismissal.

The employee was terminated by his small business employer on 3 September, a half-day before he completed one year’s continuous service and still within the minimum employment period (aka: probationary period). Despite not being obliged to afford the worker due process prior to dismissal, the employer had engaged an independent party to investigate complaints made by the Chief Executive’s assistant that he had told her several times that “the camera really doesn’t do you justice” during the course of a meeting in late-July, and that he engaged in “unnecessary and prolonged eye contact” which made her feel extremely awkward and uneasy.

The Chief Executive responded to the investigator on the morning of 3 September, confirming acceptance of his statement in response, and his employment was terminated at 4.40pm that afternoon, with the termination letter advising, “the Investigator has finalised the investigation and found that the allegations made by the Complainant about your conduct was substantiated on the balance of probabilities”. He was summarily dismissed for engaging in conduct amounting to sexual harassment. 

Whilst not being eligible to pursue an unfair dismissal claim, the Chief Executive lodged a general protections dismissal claim, citing several prohibited grounds he believed his termination breached, including that he was dismissed because he had complained about being stood down on pay in mid-August in order for the investigation to be conducted. Judge Nicholas generally regarded the Chief Executive’s claims in these respects to be “weak”, but he took “a different view” on the contention that “one of the reasons for terminating [the Chief Executive’s] employment on 3 September 2024 included the fact that he had an entitlement from 4 September 2024 to bring an unfair dismissal claim under the FW Act”. His Honour went on to observe:

“It may be assumed for present purposes that [the Investigator’s] investigation and findings provided [the employer] with reasonable grounds for summarily terminating [the Chief Executive’s] employment and that [the] conclusion that the various allegations made against him were substantiated was the principal reason for the dismissal.  However, in my view, [the Chief Executive] has established a prima facie case that the timing of his dismissal was influenced by a desire to ensure that he could not make a claim for unfair dismissal and that this was also a substantial and operative reason for his dismissal on 3 September 2024.  I am therefore persuaded that he has established a prima facie case for relief in respect of [the employer’s] contravention of s 340(1) of the FW Act”.

In an extraordinary turn of events, Judge Nicholas reinstated the Chief Executive, pending an expedited Hearing of his general protections application. Reinstatement was ordered despite the fact the employer is little more than a micro business and maintains its position that the employee was validly dismissed for serious misconduct which was substantiated by an independent investigation. His Honour acknowledged that the investigator’s findings constituted a “significant consideration” and conceded the Chief Executive’s case in terms of prolonged employment was not strong, but still ordered the Chief Executive be returned to his position subject to an interim order restraining the employer from terminating his employment without leave of the Court.

Judge Nicholas assessed that when the matter is heard, in order to overcome the Chief Executive’s claim that he was dismissed in contravention of s 340 of the FW Act (to prevent him deriving a workplace right to pursue unfair dismissal), the employer will be required “to prove that [the Chief Executive] was in fact guilty of the conduct alleged in order to justify its right to summarily dismiss him”.

Incredibly, had the employer opted to dismiss the Chief Executive when the assistant’s complaints were first raised in late-July, and not bothered with the time or expense of engaging an external investigator or giving the Chief Executive a right of reply (which they were not obliged to do), the small non-profit organisation would likely not have found themselves in this unprecedented situation.

We await a further decision with much interest.

Dabboussy v Australian Federation of Islamic Councils [2024] FCA 1074 (17 September 2024)