The Case

The Railway and Transport Health Fund Ltd (the Fund) employed Dr Avenia as its principal dentist. On 25 January 2017, a grievance was raised concerning Dr Avenia’s workplace behaviour and conduct. The Fund suspended Dr Avenia on full pay pending him providing a response in a meeting scheduled in a couple of days’ time. Dr Avenia refused to attend any of the three meetings proposed by the Fund. As a result of this and the fact Dr Avenia had attempted to redirect postal mail away from the Fund to his own address, the Fund provided Dr Avenia with a letter asking him to show cause as to why his employment should not be terminated.

On 10 March 2017, Dr Avenia sought and obtained an ex parte interim injunction from the Federal Court. The injunction prevented the Fund from terminating Dr Avenia’s employment, on the basis the Fund was about to subject Dr Avenia to adverse action in contravention of the Fair Work Act 2009 (Cth) (FW Act). Thereafter the general protection claim was set down for hearing before Justice Lee.

The Verdict

Justice Lee of the Federal Circuit Court found that the evidence disclosed some very problematic issues with Dr Avenia’s behaviour towards other employees. On 5 May 2017, Justice Lee discharged the injunction and the Fund thereafter terminated Dr Avenia’s employment for serious misconduct. The Fund indicated the serious misconduct was Dr Avenia’s failure to comply with the lawful direction to attend meetings and his attempt to redirect postal mail away from the Fund without its authority.

Justice Lee held that the termination and the suspension of Dr Avenia’s employment was not motivated by any complaints or enquiries made by Dr Avenia, and the Fund had not taken adverse action in breach of the FW Act. Justice Lee noted that Dr Avenia was still in his probation so it would have been very easy for the Fund to have terminated Dr Avenia’s employment without cause.

Dr Avenia’s written employment contract did not contain any provision for paid suspension. As such, Justice Lee had to decide whether at common law the Fund had the ability to suspend Dr Avenia. Justice Lee held an employer does have the right under the common law to suspend an employee who fails to comply with lawful and reasonable directions. Given the nature of the grievance and health and safety obligations, it was reasonable in the circumstances to suspend Dr Avenia while the Fund investigated the matter.

Justice Lee found that Dr Avenia’s refusal to comply with the lawful and reasonable direction to attend meetings to discuss the allegations meant Dr Avenia had repudiated his employment contract.

The Fund is seeking damages from Mr Avenia in relation to an undertaking he provided to the Court when the injunction was issued.

The Lessons

This case demonstrates:

• that you can lawfully terminate the employment of employees provided you do not engage in adverse action;
• you may be able to suspend an employee despite the absence of any written contractual term in the employee’s contract; and
• while an injunction can be obtained to stall a termination of employment, there are hefty consequences when an injunction is used to try to secure a tactical advantage, but is otherwise inappropriate in the circumstances.

Please note: Case law is reported as correct and current at time of publishing. Be aware that cases in lower courts may be appealed and decisions subsequently overturned.