In a recent general protections' case (Heriot v Sayfa
Systems), an employee's dismissal by way of a mutual
termination was held to be adverse action against the employee.
The employee fell ill at work, due to an undisclosed heart
condition. He was absent from his workplace for nine days whilst he
received medical treatment. On his immediate return to work, two
managers of the employer met with the employee and terminated the
employee's employment by way of a letter offering a payment and
an opportunity to resign. It was described as a mutual termination
of the employment relationship.
The employee signed his acceptance of the proposal put to him in
the letter and subsequently commenced a general protection's
claim against the employer.
The employee argued that he had no choice other than to accept
this proposal. He was handed a letter confirming the terms during
the meeting to sign. He believed that if he did not sign the
letter, he would receive no payment.
The employer argued that the employment came to an end by mutual
agreement and therefore no adverse action took place against the
The Judge found that the conclusion of the employee's
employment was in fact a fait accompli. He accepted that the
employee believed that if he did not sign the already prepared
letter, he would receive nothing by way of payment from the
The content of the letter makes it clear that the employer had
formed a view to terminate the employment prior to the employee
finding out from a medical specialist the nature and possible
impact of his heart condition upon his ability to fulfil the
inherent requirements of his job.
The crucial part of the Judge's decision was that
"terminating an employee's employment, whether by mutual
agreement or not, is the taking of adverse action against the
employee". Having decided this, the Judge found that the
termination of employment was in fact a dismissal at the
employer's initiative for the purposes of a general
The employee then argued that the basis of the adverse action
taken against him was his physical disability. The Judge found that
the termination of his employment was directly as a result of his
physical disability, namely, the heart condition that led to his
hospitalisation and the content of the letter supported this
What lessons can be learned?
The way the termination was conducted was poor. Moreover, the
appropriate medical evidence on which to base such a decision had
not been obtained and consequently no reasonable adjustments to
either the position or the way the work is performed could be
considered without this information.
When seeking to terminate employment great care should be taken
to ensure you are not exposing your company inadvertently to
expensive court proceedings. Your employment lawyers should be
consulted prior to any termination of employment. The old adage of
prevention being better than cure is never truer than in a
termination of employment situation.
In this instance, simply attempting to mask a dismissal as a
mutual termination did nothing to insulate the company concerned
from a general protection's claim. Getting the process right is
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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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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