Important Employment Law Decisions That Will Affect Your Business (Part 1)

In this and our next client alert, we will be examining two important decisions that illustrate the importance of ensuring that termination procedures are robust and accord with the law.

The Federal Court orders re-instatement of dismissed employee on working visa

Toppo v P & Harris & Sons (A Partnership) [2024] FCA 257

In a pivotal Federal Court ruling, Justice Perram has spotlighted the intricacies of employment law, particularly concerning the legality of termination practices and the protections afforded to visa-sponsored employees. This case, involving Mr. Toppo and P & J Harris & Sons, deals with the complex terrain of whether an employee’s termination was a direct result of their inquiries about unpaid bonuses, which, if substantiated, could constitute an unlawful dismissal giving rise to a claim for breach of the General Protection provisions of the Fair Work Act 2009 (Cth) (“FW Act”).

It also demonstrates when a Court may rely on the powers afforded to it in section 545 of the FW Act and make an order to reinstate a visa holder’s employment, post termination.

Facts

The Applicant, Mr Toppo, a French and Irish dual citizen held a Temporary Skills Shortage (subclass 482) visa. Mr Toppo began his employment with the Respondent, P & Harris & Sons (“Harris”), in early 2021 as a cotton trader.

On 30 January 2024, Harris terminated Mr Toppo’s employment pursuant to an express contractual entitlement to do so, without cause, on the payment of two weeks’ salary in lieu. Mr Toppo’s employment was terminated by a member of the Harris family during a car ride just moments after Mr Toppo enquired about his bonus entitlements. In accordance with Mr Toppo’s visa requirements, he only had 60 days to find new employment, or his visa would be cancelled, and he would be required to leave Australia.

Mr Toppo claimed that his dismissal was unlawful and was triggered by his inquiry about his bonus, whilst Harris claims that it was not the inquiry but rather the manner in which the inquiry occurred. The dispute in relation to the unlawful termination claims arises from conflicting accounts of discussions about how Mr Toppo’s bonus would be calculated.

Mr Toppo applied for an interim reinstatement order against Harris on the basis that the termination was unlawful, as it offended the General Protection provisions of the FW Act, and constitutes an unlawful adverse action taken as a result of his inquiry regarding his bonus.

Central to Mr Toppo’s claim was the assertion that his termination was a retaliatory measure by Mr Harris for questioning the non-payment of his bonus.

Mr Harris argued that the dismissal was not because Mr Toppo inquired about his bonus but was due to the manner in which he pursued these inquiries. Specifically, Mr Harris took issue with Mr Toppo’s insistence on using spreadsheet calculations for the bonus calculation, rather than the audited profit and loss statements agreed upon during a conversation said to have occurred in March 2022.

Outcome

Justice Perram’s analysis ventured into the heart of employment law, examining the legitimacy of dismissing an employee for inquiring about or complaining over contractual entitlements. The Court highlighted the distinction between the content of an inquiry (the what) and the manner of that inquiry (the how), suggesting that while the latter could be a valid consideration for disciplinary action, it should not detract from the lawful right of an employee to seek clarity in respect of their entitlements.

The Court ruled in favour of Mr Toppo and ordered his reinstatement and restrained Harris from withdrawing the sponsorship of his visa.

The Court was satisfied that the balance of convenience favoured the order being granted because:

1. If the dismissal was a result of Mr Toppo’s inquiries, it was unlawful;
2. Mr Toppo was a migrant status and Harris the nominated sponsor;
3. Mr Toppo’s visa required him to find new employment within 60 days of termination in the same industry which he was struggling to secure;
4. Mr Toppo was in Australia with his wife and child who were also French citizens; and
5. If not reinstated, Mr Toppo and his family would likely need to relocate overseas, or face deportation.

Learnings

This decision serves as a stark reminder to employers of the legal protections afforded to employees who raise questions or concerns regarding their employment rights. Employers must tread carefully, ensuring that any disciplinary actions or terminations are not only justified within contractual bounds but also do not infringe upon the statutory rights of employees to inquire about their entitlements without fear of reprisal.

In Australia, it is not uncommon for employers to employ and sponsor someone who is on a visa and this case demonstrates the Court’s far reaching powers that may see a terminated employee reinstated.

If you wish to discuss any aspect of this client alert, pr require specialist employment advice or assistance, please do not hesitate to contact us.

This alert is not intended to constitute, and should not be treated as, legal advice.