Remedial Damages in Adverse Action

Under the General Protection provisions in Australia, the court has wide discretion as to the type of remedial option it takes to redress loss and damage suffered by a successful applicant in a case. In the recent case of Storey v The Monitoring Centre Pty Ltd & Ors, the Federal Circuit Court found that a company took adverse action against a former general manager who complained about her employment and the maternity leave option available to her. The company took adverse action against the manager by way of engaging in, or directing other workers to provide her with poor and negative feedback about her skills and performance, which were later utilised as justification for termination, allegedly on performance basis.

In this case, it was the retaliation by the other workers of the company in response to the manager raising a formal complaint about her maternity leave option and family responsibility that satisfied the court that unlawful adverse action had taken place.

Interestingly, the court noted that the manger had not been adversely affected simply because she was pregnant or inquired about her right to parental leave, but rather because she made formal complaint about the way she was being treated by the company in general, which was responded to by a direction from the company for other workers and colleagues of the manager to provide unsolicited, negative performance feedback about her ability to perform the requirements of her role.

Damages for distress, humiliation, and pain and suffering in the Federal Circuit Court are often difficult to quantify by way of evidence, and the court in this case awarded the successful manager the amount of $10,000 for damages relating to distress, hurt and humiliation primarily because of the very brief notice given to her to respond to the company’s prior finding that she was inadequate for the requirements of her role on a performance basis and the decision to terminate her very shortly thereafter.

The Court also noticed and made reference to the causal factor of the stress and humiliation being caused by the very direct and calculated manner in which the company invited other workers to effectively “dob on” the applicant about her performance and about her in general, to the point where the head of damages relating to humiliation in this case could be more particularly quantified than otherwise could be had the company not actively demonstrated such prejudicial conduct by way of retaliation to the manager’s formal complaint.

The final remedy awarded to the manager was reduced and mitigated somewhat by the company’s effort to provide evidence by way of cross-examination that the manager had received certain overpayments which reduced the ultimate compensation awarded to her. The importance of the provision however, is that damages related to distress, hurt and humiliation are more likely to be awarded by the Federal Circuit Court in adverse action cases if the cause of distress, hurt and humiliation can be positively proven by way of documentary evidence.

The critical lesson for a company in such cases is to ensure that they do not, either directly or indirectly condone or authorise any action by their business or their workers to do anything that could be interpreted as retaliatory behaviour for the complaint or inquiry raised by another worker. If it can be proven that retaliatory behaviour was taken because a worker in question had a workplace right, or utilised their right to exercise a workplace right, the company stands at risk of a finding of adverse action being made against them. Companies should therefore inform, educate and train staff about avoiding creating unnecessary risks in this regard, as prevention is the best method of risk minimisation rather than rectification at a stage where it might often be too late to reduce a company’s overall risk any further than it has already done so.

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