The Federal Magistrates Court of Australia fined a company
$20,000 and ordered that they pay in compensation $37,000 plus
interest to an ex-employee as well as in excess of $57,000 in costs
for dismissing her due to sick leave.
Ms Kavassilas was a General Manager of a company, Migration
Training Australia ('MTA'). She fell ill during her
employment and took sick leave. Her sister notified MTA that Ms
Kavassilas was unwell on both her first and second day of absence
by telephone. She also informed the MTA that Ms Kavassilas would
provide a medical certificate on her return.
Ms Kavassilas was sacked on her second day of absence. She was
notified of her termination by way of letter delivered to her home.
The dismissal took place before she had even had time to produce
her medical certificate.
The Court found that the letter of termination was 'a cloak
for [the] unexpressed true reasons' of the dismissal. The
termination letter outlined reasons for the dismissal such as:
A failure to carry out duties in a manner satisfactory which
has caused the MTA to incur a loss of income
Failure to keep directors (of MTA) aware of your absences
Failure to apply yourself diligently and consistently to your
The Court found that the reasons given in the letter were
lacking in substance, in circumstances where MTA provided no
reliable or clear evidence to support them.
The Court ruled that the real reason Ms Kavassilas'
employment had been terminated was because of her temporary absence
and that this was unlawful.
The Court noted that MTA had failed to satisfy that 'her
temporary absence did not 'actuate' nor was it
'disassociated' from their decision to summarily
dismiss her while she was absent from work.''
The MTA was found liable of contravening the provision of the
Fair Work Act 2009 ('FWA') that an employer
must not dismiss an employee because he / she is temporarily absent
from work because of illness or injury.
The maximum penalty for this contravention is $33,000. His
Honour imposed a penalty of $20,000 and said that 'when
assessing the appropriate penalty – the amount arrived
must be proportionate to the gravity of the unlawful
The following factors are some amongst those his Honour
considered when deciding the penalty included:
Nature and extent of conduct leading to the breaches
Nature and extent of any loss or damage sustained as a result
Whether or not the breaches were deliberated.
The Court ordered that MTA pay the penalty to Ms Kavassilas and
noted 'the fact that [Ms Kavassilas ] was a senior manager does
not alter the seriousness of a failure to ensure that the dismissal
did not contravene an important statutory protection for all
employees while on sick leave.'
The Court also awarded Ms Kavassilas compensation for the loss
she suffered as a result of MTA's contravention. The amount
awarded was $33,706.21 plus interest of $4,605.74. His Honour
calculated the amount payable by calculating Ms Kavassilas
' full amount of lost wages plus superannuation
entitlements from the date she was terminated to the date she
commenced her new employment (this also included the lost one month
notice entitlement). He then discounted that figure by 20% for
'uncertain but real contingencies that her employment may
not have lasted that long.'
MTA were also ordered to pay half Ms Kavassilas' costs in
the amount of about $57,351.96. His Honour was satisfied that MTA
made a number of 'baseless assertions' which
Ms Kavassilas was required to answer causing her to incur
unnecessary legal costs.
This case demonstrates that the courts are willing to strictly
enforce the provisions of the FWA. The courts are not reluctant to
impose heavy penalties and award compensation where they are
satisfied that employers have acted in breach of the FWA. It is
also clear that, whilst unfair dismissal proceedings are a 'no
costs jurisdiction' (costs are generally not awarded
against unsuccessful parties), the Court will exercise it's
discretion to order costs in circumstances where the Court is
satisfied that the proceedings have been instituted vexatiously or
without reasonable cause, there has been an unreasonable act or
omission by one party which has caused the other party to incur
costs or where a party unreasonably refused to participate in a
matter before the Court.
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Long experience representing many of Australia's leading employers has taught us that in employment litigation the identity of an employee's representative is a major factor in how employee litigation runs.
Australian employees receive certain entitlements (such as annual leave and superannuation) where contractors do not.
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