By
Mike Toten
Mike Toten is a freelance writer, editor and media commentator.
A managing director was penalised almost $125,000 after dismissing an employee in an abusive manner that included issuing threats and making false accusations of theft and alcohol/drug use.
The Federal Circuit and Family Court found that the employee of the company was unfairly dismissed.
This decision covered the penalties to be awarded against the managing director of the now-insolvent company. An earlier decision (Seyer v Gatwood Management Pty Ltd [2023] FedCFamC2G 345) covered the circumstances of the case, which are summarised below.
Facts of case
The employee, a project manager/plumber, was summarily dismissed. The dismissal arose from a dispute over overtime costs relating to a concrete pour on a customer’s site. The managing director texted the employee, telling him not to return to work and (in abusive language) to return his company vehicle immediately.
Assuming he was dismissed, the employee notified the business WhatsApp group members to that effect. This prompted the managing director to email him, copied to three other employees and headed “Company Thief”, claiming that the employee had resigned. The final sentence contained threats.
Soon after, he sent another employee to collect the vehicle and other work items and then called him and told him in an abusive matter to delete his WhatsApp message. When the employee replied that he couldn’t delete it, the managing director threatened to “destroy” him and his family, then told his wife that the employee had been using alcohol and cocaine on the job, and kept asking him for more money. When the employee denied it, the managing director issued further threats.
The employee then contacted the HR manager, who merely replied that his resignation was accepted.
The employee provided evidence that he had suffered from Post-Traumatic Stress Disorder and was receiving treatment.
Decision
Finding in favour of the employee, the court described the managing director’s conduct as “reprehensible in the extreme”, “vile” and “at the very high end of unreasonable conduct”. All breaches were deliberate and the managing director displayed no contrition at all and failed to cooperate with court proceedings.
In dismissing the employee, the employer failed to issue a written notice of termination of employment, pay him in lieu of notice, other employment entitlements, and issue him with pay slips.
Taking the gravity of misconduct into account, and the employee’s relative youth (aged 43) and long career potentially ahead of him, the court awarded damages equivalent to four months’ salary and damages for non-economic loss, plus penalties for specific deterrence. The amount totalled almost $125,000.
What this means for employers
The court made the obvious statement that employees should not be subjected to threats, abusive language, and false claims (in this case, alcohol/drug use) when disputes with management arise. If a court or tribunal finds that this occurred, the amount of damages awarded against the employer is likely to significantly increase.
The decision provides some insight into the factors courts and tribunals take into account when calculating damages and penalties awarded against employers.
Read the judgment
Seyer v Gatwood Management Pty Ltd (No 2) [2023] FedCFamC2G 484 (9 June 2023)
Mike Toten
Freelance Writer
Mike Toten is a freelance writer, editor and media commentator who specialises in research and writing about HR best practices, industrial relations, equal employment opportunity and related areas. Mike has over 30 years' writing experience, including writing and editing Human Resources Management
