When you can’t dismiss a probationary employee

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By William Ash, Senior Associate

A recent decision of the Federal Circuit Court of Australia in Pacheco-Hernandez v Duty Free Stores Gold Coast Pty Ltd [2018] FCCA 3734 (‘Duty Free Stores’) shows that an employer is not free to dismiss an employee during their probationary period without providing reasons for the dismissal, if a reason was that the employee has made complaints in relation to their employment or had assisted another employee in relation to their Workers’ Compensation claim. Employers also need call evidence from the actual decision-maker.

Section 361 of the Fair Work Act 2009 (‘the Act’) reverses the onus of proof in general protections dispute matters. Often, that reversal of onus has been seen as a benefit to an employer as the decision-maker need only give evidence that their subjective reason for dismissing the employee did not include a reason prohibited by section 340 of the Act to make good their defence.

In Duty Free Stores the Court started by identifying who made the decision to dismiss the applicant former employee. The Judge questioned the human resources officer at length in relation to whether it was her decision to dismiss the applicant (which she initially said it was) or whether it was the decision of the applicant’s manager who was not called to give evidence.

As the Judge did not accept the evidence of the human resources officer that she made the decision to dismiss the applicant, there was no direct evidence to rebut the presumption that the applicant was dismissed because she made complaints and supported another employee is her Workers’ Compensation claim. The Judge drew an adverse inference from the decision-maker not being called to give evidence. The Judge also suggest that, even if he had accepted that the human resources officer made the decision to dismiss the applicant, the reasons she referred to in her evidence were considered so brief and general so as not to exclude a reason was one of the prohibited reasons.

Lessons for employers

  1. HR Managers should be extremely cautious about giving evidence. It is generally preferable that operational managers, to whom HR is giving advice, give evidence.
  2. Even when dismissing employees during their probationary period, reasons should be provided. The reasons should have some substance to them and not include any prohibited reason.
  3. If you have to defend a general protections dispute you must identify who the actual decision maker was and call evidence from them.
  4. Beware also the little known or used provisions in Part 6 of the model WHS Acts. That gives an eligible person the ability to seek relief from the Magistrates Court up to 12 months after the date of the complained about conduct, where that conduct is alleged to be discriminatory conduct (dismissals of employees, termination of contractors, detrimental treatment, altering a position, failing to engage or less favorable treatment) for a prohibited reason (being a HSR, exercised a power under a WHS Act, has or proposes to raise a concern about WHS). A reverse onus also applies.

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