EMPLOYEE BASED OVERSEAS WINS SIX FIGURE REDUNDANCY PAYOUT

On appeal, a Federal Court Full Bench has awarded an overseas-based IT developer almost $600,000 consisting of payment in lieu of six months’ notice of his redundancy, unpaid long service and annual leave and further salary entitlements.

The employee was employed overseas based on three consecutive contracts. The employer later decided to eliminate the employee’s position for “commercial reasons” making the employee redundant. The main controversy, which arose on appeal, was whether the employee had changed employers when he signed a new contract in 2008.

The judge at first instance was found on appeal to have wrongly treated each contract as separate employment agreements to find that the employee’s employment had moved to a Singaporean based employer. The Full Bench on appeal instead found that the subsequent contracts supplemented the existing employment contract as the employee’s employment did not end with each contract but instead continued in terms of his entitlements to long service and annual leave.

Consequently, the Full Bench allowed the employee’s appeal and ordered the employer to pay $516,830 plus $68,000 in interest and had costs of the appeal awarded against them.

Cohen v iSOFT Group Pty Limited [2013] FCAFC 49

 DID YOU KNOW?

According to statistics released by Fair Work Commission (FWC), the number of adverse action claims commenced were at a record high for the quarter ending in March this year. The FWC received a total of 740 general protections applications (compared to the last peak of 563 applications) to deal with a dismissal between January to March 2013. In addition, a further 148 applications were made to deal with a general protections dispute not involving a dismissal, taking the “adverse action” claims to a total of 888 claims to the FWC in the March quarter.

This escalation in adverse action complaints is consistent with our experience with more clients facing threats of such claims from disgruntled employees including potential and former employees. Care should be taken when making decisions that “adversely” affect a potential or current employee or contractor to ensure than none of the reasons for such action are prohibited by the general protections provisions. If you have any concerns about potential claims, we recommend seeking legal advice before making such decisions.