A new decision sheds light on how HR should approach dismissing employees during the probationary period. Including the risk of adverse action if a reason is not given and documented.
An employee who hasn’t worked for the statutory minimum period of employment (generally six months) cannot bring an unfair dismissal claim onto an organisation. So when dismissing a new hire in their probation period, many employers take the view that they don’t need to document their reasons. But caution should be observed because staff terminated during this period can bring general protections/adverse action claims.
The relevant issues were considered in the recent decision of Pacheco-Hernandez v Duty Free Stores Gold Coast Pty Ltd.
During the first six months of her employment, Escarle Pacheco-Hernandez provided a statement to Duty Free Stores in support of another employee’s workers compensation claim and made a number of complaints about her working conditions during her employment. These complaints were recorded in three emails sent to senior officers, and related to allegations she was being requested to perform jobs not in her job description, was being bullied, and that the rotating roster left her exhausted and created work health and safety concerns.
Less than one month after she made the third of her complaints (and during the first six months of her employment), senior Duty Free employees met with Padecho-Hernandez to inform her she was being dismissed.
Federal Magistrates’ found that in the termination meeting, Pacheco-Hernandez asked why her employment was being terminated and Duty Free Stores refused to provide reasons, stating, “we are not legally obligated”. The termination letter she received later that day also did not contain reasons.
Following her dismissal, Pacheco-Hernandez lodged a general protections application, alleging that she was dismissed by Duty Free Stores because she exercised workplace rights.
Section 340 of the Fair Work Act prescribes what constitutes unlawful adverse action. A reverse onus of proof applies in proceedings brought under this section. So if adverse action and the exercise of a workplace right is established, it is presumed adverse action was taken, unless the respondent proves otherwise.
Duty Free Stores argued that Pacheco-Hernandez was dismissed because “she was not the right fit for our business”. However, the court found Duty Free Stores did not satisfy the onus of proof. It noted the high level of ‘generality’ of the evidence of Duty Free Stores regarding its stated reasons, and found it may have determined Pacheco-Hernandez was not the right “fit” because she made the complaints. Duty Free Stores provided insufficient evidence to show the behaviour of Pacheco-Hernandez which led it to determine she did not “fit within the team”.
The court was satisfied that Pacheco-Hernandez had established that Duty Free Stores contravened the general protections provisions by dismissing her “because” she exercised workplace rights. She was awarded $8,263 in compensation.
The inference from the court’s reasoning is that the failure to provide a reason to Pacheco-Hernandez gave her leeway to assert that the reason must have been unlawful.
The takeaway is that although employees terminated during the statutory minimum period of employment (or probationary periods) do not have unfair dismissal access regardless of the reasons for termination, the court’s reasoning demonstrates the risk for employers not providing a reason, even if the reason might be unpalatable to the employee.
If an employer does not provide clear lawful reasons for the dismissal at the time, it may be difficult as a matter of evidence to displace the onus of proof where it is alleged the termination was taken for unlawful reasons.
If exceptional circumstances exist that make it desirable not to give reasons, it will likely be best to keep contemporaneous notes recording the lawful reasons for the dismissal, as these notes may form evidence if adverse action proceedings are commenced.
So, if there is a risk of an adverse action/general protections claim, termination letters (even during a probationary period) should, in most cases, articulate the lawful reasons for an employee’s dismissal.
This article originally appeared in the March 2019 edition of HRM magazine. Abraham Ash is a parter at Clayton Utz. This article was written in collaboration with Timothy Grellman, lawyer, and Nadine Holterman, law clerk.
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