The ‘untouchable’ employee, and the danger of playing office politics


This case highlights why just because you let someone go years ago, that doesn’t mean they won’t come back and successfully get reinstated with compensation.

Imagine being forced to reinstate a senior employee you sacked three years ago, pay them $1.1 million in back pay, and not have the ability to take any action against them once they are back in the office.

This has become a reality for the power solutions company, Cummins Group, following a recent Federal Circuit Court decision where Judge Wilson warned that any inappropriate behaviour following the decision may have serious consequences.

This decision serves as a timely reminder for employers that taking unlawful action has significant consequences, with the court taking the very firm position that reinstatement is not impossible just because:

  • someone else has taken the employee’s position;
  • it is “embarrassing” for the company to reinstate the employee; or
  • there are “difficult relationships” that would need to be managed.

“Performance issues”

The reinstated employee (Keenan) was a senior leader in the Cummins Group, with 34 years of service and earning a significant salary.  During the course of his employment, Keenan made a number of complaints about the human resources leader, Ms Baldota. By way of example, one of the complaints was that Keenan was facing difficulties with Baldota as a consequence of her quality of  work and her interaction with and attitude towards other employees.  It is safe to say they had an untenable working relationship and Keenan got stuck in office politics.

As a result of the complaints, Keenan:

  • was placed on a Performance Improvement Plan (the PIP);
  • had an “ethics case” brought against him (the Ethics Case); and
  • was asked to show cause why his employment shouldn’t be terminated.

Inevitably, Keenan was terminated for “performance issues”, which resulted in him becoming an Uber driver for a mere $15,000 per annum.

The court found that the PIP, the Ethics Case and the termination of employment all constituted adverse action – and were unlawful pursuant to the Fair Work Act 2009 (Cth).

Penalties and remedies

Following the first case, there was a second case about penalties and remedies to be awarded to Keenan. The Cummins Group strongly argued against having Keenan reinstated (which is the primary remedy for an adverse action claim). In doing so, it argued, among other things, that:

  • subsequent to Keenan’s departure, someone else had taken over the role that he previously occupied and it would be unfair to require the Cummins Group to dismiss that other person;
  • no other vacancies existed within the Cummins Group for Kennan to be put into;
  • it would cause the Cummins Group disruption given that Keenan would likely retire in 4 years;
  • it would be “inappropriate and embarrassing” to reinstate Keenan to a leadership role because of unfavourable evidence in the trial on liability and because he has been out of leadership roles for three years; and
  • while there may have been limited publicity of the trial to date, the Court should be realistic about the prospect that, if Keenan is reinstated, the facts found in the judgment will come out.

All of these arguments were rejected. The court held that “it must not be overlooked that Mr Keenan’s loss of employment was the consequence of the respondent’s unlawful conduct. It ill behoves the respondent to mount an array of arguments to the effect that the respondent’s own internal organisation of its own staff is such as to prevent the court from reinstating Mr Keenan to the position he would still occupy had the respondent not engaged in the prohibited conduct”.

The protected species

Employers must be aware of the dangers of terminating an employee unlawfully, particularly given that the employee may be reinstated into their position should it be held that they suffered adverse action (just as Keenan did in this case). His Honour made it clear that, after Keenan is reinstated, “If she [being, HR] behaves inappropriately hereafter she may well expose herself to the consequences set out in the Fair Work Act”.

Practically speaking, Keenan is now untouchable – should any negative or adverse decision be made in relation to his employment, you can only imagine the avenues he may pursue.

This is why employers need to be aware of such consequences, and remember that a court can, and if necessary, will, order an employee to be reinstated following termination, among other things.

How to avoid this

To avoid getting stuck in a similar situation after trying to manage the office politics at work, we recommend:

  • dealing with grievances when they arise. A failure to do so will inevitably lead to a much bigger problem;
  • be aware of any bias you may have when addressing inquiries or complaints;
  • ensure you have a transparent and reasoned procedure for dealing with unsatisfactory or unreasonable performance; and
  • the performance being managed can objectively be determined to be unsatisfactory or unreasonable.

 Aaron is a partner, Justine is a lawyer and Matthew is a graduate in Lander & Rogers’ Workplace Relations & Safety practice.  Aaron can be contacted at agoonrey@landers.com.au


This AHRI short course will equip you with the knowledge and skills to help you manage the legal issues across the employment lifecycle.

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DoubtingThomas
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DoubtingThomas

Spoiler alert: the untouchable employee isn’t the one that got the boot here (Keenan). Once again, an overambitious but ultimately out of touch HR “leader” (Baldota) has tried to throw their weight around, acting like they’re Teflon-coated. She probably believed she was the one running the business too. Whoever gets offside with such HR “professionals” will be shown the door, one way or another. Sadly, I’ve seen this too often; it’s even going on in my present organisation. Yay for HR!

Tracey
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Tracey

“You can only imagine the avenues he may pursue”…you mean those he has a legal right to? If there are performance issues with Keenan and the correct procedures are followed and properly documented, there shouldn’t be a problem. The employer doesn’t have an ‘untouchable’ employee, just one who is fully aware of his rights and the avenues available to him. If he hadn’t been unfairly treated initially (the termination or possibly just the way it was done), it wouldn’t have been the case.

Joe
Guest
Joe

I was pretty much in the same circumstance except I was stood down on full pay while a list of bogus allegations were investigated. Total cost – over 300K for a 100 million business. HR wanted to get rid of me because I kept point out the unethical behaviour on my manager / organisation. They closed ranks and attack. Luck for me, I can read, unlike my boss / HR and pointed out that she and HR did not even follow their own performance management policies and state legislation on the matter. A new CEO intervened, but the damage had… Read more »

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The ‘untouchable’ employee, and the danger of playing office politics


This case highlights why just because you let someone go years ago, that doesn’t mean they won’t come back and successfully get reinstated with compensation.

Imagine being forced to reinstate a senior employee you sacked three years ago, pay them $1.1 million in back pay, and not have the ability to take any action against them once they are back in the office.

This has become a reality for the power solutions company, Cummins Group, following a recent Federal Circuit Court decision where Judge Wilson warned that any inappropriate behaviour following the decision may have serious consequences.

This decision serves as a timely reminder for employers that taking unlawful action has significant consequences, with the court taking the very firm position that reinstatement is not impossible just because:

  • someone else has taken the employee’s position;
  • it is “embarrassing” for the company to reinstate the employee; or
  • there are “difficult relationships” that would need to be managed.

“Performance issues”

The reinstated employee (Keenan) was a senior leader in the Cummins Group, with 34 years of service and earning a significant salary.  During the course of his employment, Keenan made a number of complaints about the human resources leader, Ms Baldota. By way of example, one of the complaints was that Keenan was facing difficulties with Baldota as a consequence of her quality of  work and her interaction with and attitude towards other employees.  It is safe to say they had an untenable working relationship and Keenan got stuck in office politics.

As a result of the complaints, Keenan:

  • was placed on a Performance Improvement Plan (the PIP);
  • had an “ethics case” brought against him (the Ethics Case); and
  • was asked to show cause why his employment shouldn’t be terminated.

Inevitably, Keenan was terminated for “performance issues”, which resulted in him becoming an Uber driver for a mere $15,000 per annum.

The court found that the PIP, the Ethics Case and the termination of employment all constituted adverse action – and were unlawful pursuant to the Fair Work Act 2009 (Cth).

Penalties and remedies

Following the first case, there was a second case about penalties and remedies to be awarded to Keenan. The Cummins Group strongly argued against having Keenan reinstated (which is the primary remedy for an adverse action claim). In doing so, it argued, among other things, that:

  • subsequent to Keenan’s departure, someone else had taken over the role that he previously occupied and it would be unfair to require the Cummins Group to dismiss that other person;
  • no other vacancies existed within the Cummins Group for Kennan to be put into;
  • it would cause the Cummins Group disruption given that Keenan would likely retire in 4 years;
  • it would be “inappropriate and embarrassing” to reinstate Keenan to a leadership role because of unfavourable evidence in the trial on liability and because he has been out of leadership roles for three years; and
  • while there may have been limited publicity of the trial to date, the Court should be realistic about the prospect that, if Keenan is reinstated, the facts found in the judgment will come out.

All of these arguments were rejected. The court held that “it must not be overlooked that Mr Keenan’s loss of employment was the consequence of the respondent’s unlawful conduct. It ill behoves the respondent to mount an array of arguments to the effect that the respondent’s own internal organisation of its own staff is such as to prevent the court from reinstating Mr Keenan to the position he would still occupy had the respondent not engaged in the prohibited conduct”.

The protected species

Employers must be aware of the dangers of terminating an employee unlawfully, particularly given that the employee may be reinstated into their position should it be held that they suffered adverse action (just as Keenan did in this case). His Honour made it clear that, after Keenan is reinstated, “If she [being, HR] behaves inappropriately hereafter she may well expose herself to the consequences set out in the Fair Work Act”.

Practically speaking, Keenan is now untouchable – should any negative or adverse decision be made in relation to his employment, you can only imagine the avenues he may pursue.

This is why employers need to be aware of such consequences, and remember that a court can, and if necessary, will, order an employee to be reinstated following termination, among other things.

How to avoid this

To avoid getting stuck in a similar situation after trying to manage the office politics at work, we recommend:

  • dealing with grievances when they arise. A failure to do so will inevitably lead to a much bigger problem;
  • be aware of any bias you may have when addressing inquiries or complaints;
  • ensure you have a transparent and reasoned procedure for dealing with unsatisfactory or unreasonable performance; and
  • the performance being managed can objectively be determined to be unsatisfactory or unreasonable.

 Aaron is a partner, Justine is a lawyer and Matthew is a graduate in Lander & Rogers’ Workplace Relations & Safety practice.  Aaron can be contacted at agoonrey@landers.com.au


This AHRI short course will equip you with the knowledge and skills to help you manage the legal issues across the employment lifecycle.

3
Leave a reply

avatar
100000
  Subscribe to receive comments  
Notify me of
DoubtingThomas
Guest
DoubtingThomas

Spoiler alert: the untouchable employee isn’t the one that got the boot here (Keenan). Once again, an overambitious but ultimately out of touch HR “leader” (Baldota) has tried to throw their weight around, acting like they’re Teflon-coated. She probably believed she was the one running the business too. Whoever gets offside with such HR “professionals” will be shown the door, one way or another. Sadly, I’ve seen this too often; it’s even going on in my present organisation. Yay for HR!

Tracey
Guest
Tracey

“You can only imagine the avenues he may pursue”…you mean those he has a legal right to? If there are performance issues with Keenan and the correct procedures are followed and properly documented, there shouldn’t be a problem. The employer doesn’t have an ‘untouchable’ employee, just one who is fully aware of his rights and the avenues available to him. If he hadn’t been unfairly treated initially (the termination or possibly just the way it was done), it wouldn’t have been the case.

Joe
Guest
Joe

I was pretty much in the same circumstance except I was stood down on full pay while a list of bogus allegations were investigated. Total cost – over 300K for a 100 million business. HR wanted to get rid of me because I kept point out the unethical behaviour on my manager / organisation. They closed ranks and attack. Luck for me, I can read, unlike my boss / HR and pointed out that she and HR did not even follow their own performance management policies and state legislation on the matter. A new CEO intervened, but the damage had… Read more »

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