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Penalised for the best of intentions

October 05, 2017

Protect yourself from costly mistakes by getting professional advice

By Alex Millman and Justine Ansell, NRA Legal

A mistake in handling an employee’s redundancy around the same time as the commencement of her maternity leave has cost an employer $57,842.99 in compensation and penalties.

The court found that had the manager consulted with the company’s human resources specialists and legal team, he would have been advised against the course of action he ultimately took.

The manager preferred to affect the redundancy quickly rather than properly, and it had costly consequences for the company.

This case emphasises how vital it is for employers to get proper professional advice when navigating Australia’s network of workplace relations laws.

How did it come to this?

Readers will recall the case of Ms Power, whose date of redundancy was brought forward by a week so that she would be fully informed of her employment position before going on maternity leave. Judge Vasta of the Federal Circuit Court found this to be adverse action contrary to the Fair Work Act 2009.

Power v BOC Pty Ltd & Ors [2017] FCCA 1868 (9 August 2017)

See the full article here.

How much did it cost?

Judge Vasta ordered the company to pay the employee $57,842.99, identified as:

  • $20,000 pecuniary penalty for the breach of the Fair Work Act 2009; and
  • $37,842.99 by way of compensation for loss of income.

What can you do to avoid this?

Whilst Mr Newnham had the best of intentions, good intentions are no defence in an adverse action claim.

This has been an expensive learning experience for Mr Newnham and BOC, and one which could have been avoided if appropriate advice had been sought (and followed) before everything went wrong.

NRA Legal are specialists in employment law in the retail and related sectors and are well-placed to help you navigate your way through the complex layers of legislation that govern Australian workplaces. To find out how, call 1800 RETAIL (1800 738 245).

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