In the recent decision of Penglase v Allied Express
Transport Pty Ltd  FCCA 804, the Federal Circuit Court
ordered an employer pay a penalty for engaging in adverse action in
breach of section 351 of the Fair Work Act 2009 by
offering an employee a reduced role at work because the employee
was suffering from a mental disability and not because the employer
was concerned about the employee's health and welfare.
In late 2012, the employee returned to work after a week-long
absence. The employee provided the employer with a medical
certificate explaining that her absence was due to an anxiety
The employee subsequently requested further time off work due to
her being unfit to work as a result of anxiety. Upon the employee
returning to work on the second occasion, the employer requested
the employee to attend a medical examination with the company
doctor. The company doctor subsequently deemed the employee fit for
work despite clear evidence that the employee was experiencing
higher than normal levels of anxiety and stress.
On the basis of the findings of the doctor, the employer
allegedly determined that the employee could not sustain her level
of performance if she were to continue her usual duties. As a
result, the employer gave the employee three options to choose
between before the close of business that day:
perform a telephonist role with a greatly reduced salary;
move to the position of sales executive with a significant
increase in workload; or
The employer contended that these options were presented to the
employee 'solely by a desire to protect [her] health and
The employee complained to the company that she felt bullied and
believed she was being forced into resigning from her position,
which was placing her under intense stress. On account of her
stress and anxiety, the employee sought an extra month of leave by
way of a medical certificate citing her unfitness for work due to
an anxiety condition.
The employee returned to work in early 2013 after the month off.
However, on her return to work she was informed that her position
had been made redundant, due to a restructure of the business. She
was also informed that she was not considered a suitable candidate
for the new position.
In his decision, Judge Turner accepted that the decision to
restructure the workplace was a 'genuine' decision to
streamline the staff in the employee's workgroup. This, in his
Honour's opinion, was evidenced by the fact that the employee
was not being directly replaced. Rather, her position as account
manager had disappeared completely, and an entirely new position at
a much higher hierarchical level had been created and was being
advertised for a much larger salary.
However, his Honour noted the employer's recognition that
the employee had been suffering from higher levels of stress and
anxiety, and the employer's subsequent attempt to alter the
employee's employment status due to her being so unwell.
His Honour held that by forcing the employee to choose between
the three options, the employer had breached section 351 of the
Fair Work Act by taking steps that constituted
'adverse action'. His Honour expressed significant doubt at
the veracity of the employer's claim that the offering of the
three options to the employee was 'motivated solely by a desire
to protect the health and welfare' of the employee,
particularly given one option encompassed an increase in
What should employers take from this decision?
This case highlights the challenges employers face managing
employees suffering from legitimate mental disabilities at work.
Employers who find themselves in these types of situations should
carefully consider medical reports and other evidence to ensure
they engage in sound and lawful decision making concerning any
change that may adversely impact on the employee with a disability.
If you have any queries about this issue, please contact a member
of our team.
Winner – EOWA Employer of Choice for Women Citation 2009,
2010, 2011 and 2012
Winner – ALB Gold Employer of Choice 2011 and 2012
Finalist – ALB Australasian Law Awards 2008, 2010, 2011 and
2012 (Best Brisbane Firm)
Winner – BRW Client Choice Awards 2009 and 2010 - Best
Australian Law Firm (revenue less than $50m)
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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