Australia: Workplace liability in unexpected places


In this article we look at two recent cases where employers face penalties in circumstances which highlight the need for employers and managers to be vigilant in the workplace.

In the first case, a company was held liable for the actions of one of its employees who racially abused a co-worker. In the second case, an HR manager was ordered to pay a penalty when she was personally held responsible for an employee not being given the correct notice payment.

Murugesu v Australian Postal Corporation & Anor [2015] FCCA 2852

The applicant in this matter (Mr Murugesu) brought a claim against Australia Post and one of its employees (Mr Boyle) under the Racial Discrimination Act 1975 and the Australian Human Rights Commission Act 1986.

The claim against Mr Boyle was that he had subjected the applicant to various forms of racial abuse (mainly name calling).

The claim against Australia Post included a claim that it should be held vicariously liable for the actions of Mr Boyle, as provided for under s 18A of the Racial Discrimination Act 1975.

Australia Post defended this aspect of the claim on the basis it took all reasonable steps to prevent Mr Boyle from doing any act that might amount to unlawful discrimination (a defence under s.18A(2) of the Racial Discrimination Act 1975).

In particular, Australia Post asserted that it implemented for all staff, including Mr Boyle, frequent training in relation to its detailed harassment and discrimination policies.

However, although the Court found that Australia Post's actions in respect of training staff were "exemplary", its failure to adequately investigate Mr Murugesu's complaints rendered it liable for Mr Boyle's actions. In this regard Judge Burchardt said this:

"258. The training regimes set up by the first respondent appear to me to be exemplary. There is a process whereby leaflets are sent in payslips (as Mr Murugesu himself acknowledged) and are followed up by what are called toolbox talks. These talks are not brief; they go for about 20 minutes to half an hour.
259. The official position taken by Australia Post is wholly exemplary. The code of conduct and other documents exhibited to the Court show that, on its face, the first respondent is wholly opposed to any form of racial or other unlawful harassment in employment.
260. The difficulty, however, is that it is one thing to have these policies, no doubt sincerely embraced by the management of the first respondent, but it is another to enforce them.
261. While the training and educational side of things cannot in my view on the evidence be the subject of criticism, what is starkly lacking is an effective response on the occasions when allegations of racist conduct were raised."

The remedy the Court may order will be the subject of a further hearing and could involve a compensation order. The case is a useful reminder that although it is important to have harassment and discrimination policies in the workplace and to appropriately train staff, this alone will not be enough to protect employers against claims resulting from a failure to properly investigate and address complaints of harassment or discrimination. In other words, employers must ensure they follow their own harassment and discrimination policies!

Cerin v ACI Operations Pty LTd & Ors [2015] FCCA 2762

The second case is noteworthy as it involved an HR manager being held personally liable when an incorrect notice payment was made to a staff member.

The case involved the termination of employment of a staff member following a period where he had been provided with modified duties after sustaining a workplace injury.

Section 58B(1) of Workers Rehabilitation and Compensation Act 1986 (SA) imposes a duty on employers to provide "suitable employment" for injured workers (ie modified duties), but there is an exception to the duty where it is "not reasonably practicable" to do so.

The worker was injured at work in 2009 following which he was given various modified duties. In 2011 he was given a new written employment contract which altered his original role, taking into account his reduced capacity to perform duties. He verbally accepted the new contract.

In October 2012, after receiving advice from WorkCover SA that it was no longer obliged to provide the employee with work under the Workers Rehabilitation and Compensation Act 1986 (SA), the employer wrote to the worker advising that his employment would terminate on 12 November 2012. In effect this provided him with 4 weeks and 3 days' notice.

The Workers Rehabilitation and Compensation Act 1986 (SA) provides that "if a worker has suffered a compensable injury, the employer...must not terminate the worker's employment without first giving the Corporation and the worker at least 28 days' notice of the proposed termination" (our emphasis).

However, the Fair Work Act 2009 provides that an employee with the worker's length of service and age should be given 5 weeks' notice.

The worker brought a claim under the Fair Work Act 2009 on the basis that his notice period had been two days short (amounting to a shortfall of about $180). He also asked that penalties should be imposed against the employer and its HR Manager.

The Fair Work Act 2009 (section 550) provides that an individual can be penalised for being "involved" in a contravention of certain provisions of the Act.

The employer's defence to the claim was that it had not terminated the employee's contract itself, but rather it had been terminated at law under the doctrine of frustration. In other words because the employee could no longer carry out the requirements of his initial role with the company (due to his injury), his employment contract could no longer be performed and should be held to have been terminated under the doctrine of frustration. If the contract was terminated other than by the actions of the employer, there is no requirement for them to provide any notice. The claim should therefore be dismissed.

The court did not agree that the contract had been terminated under the doctrine of frustration. It found that the employer had entered into a new employment contract in 2011 that recognised the limitations of the worker's capacity to work, and "had been happy to recognise that contract as valid" for some 16 months prior to the termination of employment.

Furthermore, Judge Simpson found that:

"The very fact that ACI had [the HR manager] deliver the letter. . . advising the [employee] that his employment would be terminated. . . leads me to believe that ACI believed that there was a contract of employment in place.....If it had already been terminated by the doctrine of frustration, there would be no need for a letter advising of termination some time in the future."

Accordingly, as it had been the employer who had terminated the contract, the worker was entitled to notice in accordance with the Fair Work Act 2009.

The court made this decision in June 2015, but has only recently handed down its judgment in a separate hearing that dealt with the penalties to be imposed.

In this hearing the court found that both the employer and its HR Manager knew about the minimum notice provision in the Fair Work Act 2009 and that neither could provide any satisfactory explanation for the failure to provide the required notice. Regarding the actions of the employer it said:

"It would seem that the [employer] argues that the authority to terminate the [employee's] employment was given to them by the Workers Compensation Authority and that this authority somehow excused them from complying with the FW Act provisions. It did not. In its Outline of Submissions, the [employer] ignores the fact that it was obliged to comply with the provisions of the FW Act."

The court also took account of the fact that the employer was a large organisation and had been penalised for breaches of the Fair Work Act 2009 previously. Accordingly the court found that the contravention was in the "middle range of seriousness for contraventions of this kind" and ordered ACI to pay $20,400.00 in penalties to the employee (representing 40% of the maximum penalty it could order under the Fair Work Act 2009 with respect to corporations).

Whilst penalties against employers for breaches of the Fair Work Act 2009 are not uncommon, more interesting was the decision to personally fine the HR Manager. Under cross-examination, the HR Manager admitted to knowing about the notice requirements in the Fair Work Act 2009, and confirmed that she was given authority to decide notice payments on behalf of the employer. The court found that she could provide no satisfactory explanation for failing to provide the correct notice.

The Judge therefore found that the breach could not be described as a "procedural and not a deliberate failure". It was therefore appropriate that she be penalised. It ordered her to pay $1,020 representing 10% of the maximum penalty it could award with respect to individuals.

The decision is a useful reminder to employers and those in the HR profession of the need "to get things right" when it comes to paying employee entitlements, otherwise both the business and its decision-makers may be exposed to penalties. As the court said in this case: "The penalty that I propose to make will be a warning to employers of the need to comply with the legislation to the letter."

What is particularly interesting about this case is that the court was prepared to order the payment of significant penalties even though the loss the employee suffered was minimal (c. $180). The court also does not appear to have attached much weight to the interplay between the differing notice provisions under the Workers Compensation' and Fair Work legislation.

In Conclusion

The above two decisions include valuable lessons for employers including:

  • Employers may have the best workplace policies but if they do not actively follow them, those policies will be of little utility;
  • Employers can be held responsible for the discriminatory or harassing behaviour of their staff;
  • Individuals who make decisions affecting employee entitlements may be personally called to account where their decisions cannot be justified.

For more information, please contact:

Richard Ottley, Partner
Phone: +61 2 9233 5544

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.