Once upon a time there was a cat called Smudge who wandered into a nursing home…  It started like a children’s bedtime story but ended in the Federal Court.

The aged care operator summarily terminated a registered nurse’s employment for serious misconduct when she administered medication to two residents without doctor’s orders.

She claimed that the termination of her employment constituted adverse action against her because she had exercised workplace rights relating to her allergy to the resident cat.  There was no dispute that the nurse had exercised workplace rights but the Federal Court disagreed that the termination was for a prohibited reason.

The story

The CEO gave approval for Smudge the cat to live permanently at the facility.  He saw that the residents had become very fond of the cat and the benefits of having it around.  However, the nurse developed allergy symptoms from the cat hair.

The nurse lodged a workers' compensation claim and reported the facility to SafeWork for investigation as an unsafe workplace.  The workers compensation claim was accepted but SafeWork investigated and no further action was taken.  The nurse later returned to work at the facility on the condition that the cat be excluded from her work station and be confined behind a closed door while she was at work.

Later on, the nurse was suspended after allegations that she had administered oxazepam to two residents without a doctor’s order.  During the investigation the nurse wrote to the doctor of one of the residents disputing that the drugs were not authorised and accusing him of defamation.

The facility operator found that the allegations against the nurse were substantiated, including concerns about the letter she wrote to the doctor, and her employment was summarily terminated for serious and wilful misconduct.

The Federal Court

The nurse brought a general protections claim under the Fair Work Act against her employer alleging that eleven individual actions taken by the CEO and the Manager of residential facilities constituted adverse action.  The alleged adverse action included routinely targeting the nurse for complaint and admonishment following her return to the workplace, instigating the disciplinary action and suspension, failing to ensure the investigation was undertaken independently and impartially, terminating the nurse's employment and reporting her conduct to the Australian Health Practitioner Regulation Agency.

In respect of the termination of her employment, the Court was satisfied that the facility operator had not terminated the nurse's employment because she had exercised workplace rights.  In reaching this view, the Court took into account the employer's course of conduct leading up to the suspension of the nurse's employment, including its response to her workers' compensation claim, the way in which the investigation was conducted and that there was a reasonable basis for the CEO to terminate the nurse's employment in view of her own conduct.

Lessons for employers

Aged care operators must often balance the rights of residents with those of their employees when making decisions.  In this case, the operator was reluctant to remove the cat from the facility because of the perceived benefits to residents.  SafeWork did not take the matter further and the Court rejected the nurse’s claim that the operator had failed to take any steps to minimize her exposure to cat allergy in the workplace.  However, care needs to be taken by operators to ensure that initiatives to improve the health and wellbeing of its residents do not result in creating an unsafe workplace for employees.

Further, in relation to potential adverse action claims:

  • Adverse action is not confined to dismissing an employee.  The prejudicial alteration of an employee's position covers not only legal injury, but "any adverse affection of, or deterioration in, the advantages enjoyed by the employee before the conduct in question".  This casts a wide net and exposes a range of employer actions to challenge if it is taken for an unlawful purpose.  
  • The facility operator was able to give evidence about the reasons it took certain action against the nurse by calling 7 of its employees including its CEO. The Courts have held that it would be extremely difficult for an employer to discharge its burden if no direct testimony is given by the decision-maker.  Employers such as aged care operators should ensure that any decision to take action adverse to the interests of an employee is for a lawful reason and that there is reliable evidence supporting the decision.    
  • Workplace rights include a "complaint or inquiry in relation to an employee's employment".  It would be prudent for employers to treat most complaints and inquiries relating to an employee's employment as being a protected workplace right, even where the complaint might not be genuinely held.   
  • In this case the nurse alleged that the CEO and the Manager of residential facilities were each involved in the alleged contravention.  If the Federal Court had found in favour of the nurse and that the CEO or the manager were involved in the contravention, they would each have been personally exposed to penalties.    

Reference:  Metcalfe v Clayton Church Homes Incorporated [2015] FCA 219 (16 March 2015)