The Full Federal Court decision in State of Victoria (The Office of Public Prosecutions) v Grant [2014] FCAFC 184 has unanimously held that the Office of Public Prosecutions (OPP) did not take adverse action against a former employee because of his mental illness. The decision overturns the first instance Federal Circuit Court decision which suggested that it may be difficult for an employer to separate misconduct from mental health conditions possibly related to the misconduct when considering dismissal of an employee.

FIRST INSTANCE DECISION (GRANT V STATE OF VICTORIA (THE OFFICE OF PUBLIC PROSECUTIONS)[2014] FCCA 17)

At first instance, the Circuit Court held that in breach of the general protections provisions of the Fair Work Act2009, the OPP had terminated the employment of Mr Grant because of his mental illness and not because of the stated reason, being his misconduct.

The Circuit Court  held that Mr Grant’s misconduct occurred as a result of his medical condition (depression) and the manager who had made the decision to dismiss Mr Grant (decision-maker) knew of that condition. Therefore, there was a relationship of ’cause and effect’ between the medical condition and the dismissal. It also held that while the decision-maker had been honest when giving evidence of the reasons for his decision, his evidence that his decision was solely a result of Mr Grant’s misconduct was ultimately ‘unreliable’.

The Circuit Court ordered that Mr Grant be reinstated, receive compensation of $93,750 and payment of $10,000 in the form of a penalty on the OPP.

THE DECISION OF THE FULL FEDERAL COURT

On appeal, the Full Federal Court considered the leading authorities on the operation of the general protections provisions and specifically how an employer can displace the reverse onus of proof which arises under the provisions. Significantly, the Court held that these authorities demonstrated that:

  • the key issue to determine is the actual reason (or reasons) which motivated the decision-maker – whether or not some proscribed reason subconsciously influenced the decision-maker is irrelevant
  • if the decision-maker’s testimony is accepted as reliable and honest it will discharge the onus imposed on the employer
  • a court is not bound to accept the decision-maker’s evidence; it may consider it unreliable ‘because of other contradictory evidence given by the decision-maker or because other objective facts are proven which contradict the decision-maker’s evidence’.

Applying these principles, the Court found that the evidence given by the decision-maker did not support the first instance decision because:

  • the decision-maker gave clear evidence that he had made the decision solely because of Mr Grant’s misconduct and for no other reason
  • there had been no contradictory evidence either within the decision-maker’s own evidence or as a result of an objective fact
  • the trial Judge had accepted that the decision-maker had given honest evidence.

LESSONS

This case reinforces that employers need to make thorough file notes about why a decision to dismiss is being made and be prepared to be tested on their reasons for the decision.

The strongest defence to a general protections claim remains the ability of the decision-maker to provide clear and unambiguous evidence of the reasons for the decision to dismiss an employee. It is difficult to do this if the employer does not have a clear understanding of the impact the employee’s illness or injury has on their ability to perform their position.

In cases such as this, employers should obtain a comprehensive medical report to understand the effect (if any) the employee’s illness or injury will have, or has had, on their work or conduct and what modifications or adjustments the employer should make to assist the employee.

If the medical report reveals no connection between the employee’s misconduct or poor performance and the employee’s medical condition, a decision to dismiss the employee due to misconduct or poor performance will be strongly defensible.

However, where there is a connection between the employee’s medical condition and the employee’s misconduct or poor performance, an employer should consider the issues carefully and consider getting legal advice before proceeding with a dismissal. The appropriate course of action will depend on the circumstances of each case. In some cases, where the medical evidence supports such a decision, it may mean that an employee is dismissed because they cannot perform the inherent requirements of their position.