A judgment against TechnologyOne (ASX: TNE) over its handling of a dismissed employee who had made multiple bullying complaints has today been overturned by the Full Federal Court.
The decision from the court pertaining to the TechnologyOne vs Roohizadegan case means the matter will now proceed to a retrial, and sees $5.2 million in damages against the Brisbane-based tech company set aside.
The original judgment in question was about an employee of TechnologyOne called Behnam Roohizadegan, who was dismissed from the company on 18 May 2017.
During his employment Roohizadegan made a range of complaints to his employer, and was described in the original judgement by Justice Kerr as a "serial complainer from the moment of his appointment in respect of his remuneration and his entitlements".
The employee also made seven complaints against a number of senior employees including allegations of bullying, being asked to not attend a meeting with a client that he believed he should attend, decisions he said were made "behind his back", and that he was allegedly sworn at during discussions.
However, Roohizadegan himself was the subject of a number of complaints of bullying too, resulting in TechnologyOne CEO Adrian Di Marco to remark at one point that he "had to go".
It was found that no investigation into the complaints against Roohizadegan took place before his dismissal from the company.
Post-dismissal Roohizadegan had a mental breakdown. Unknown to TechnologyOne, the employee had pre-existing mental illness since 2010 which was unrelated to his work, but resulted in him being incapable of working again.
The initial judge Justice Kerr ultimately decided that TechnologyOne did not discharge its presumption onus that Roohizadegan's dismissal was done because he complained on seven occasions.
Further, given the evidence of Roohizadegan's mental health, TechnologyOne was hit with the largest order in Australian legal history for adverse action - a $5.2 million penalty.
Clayton Utz described the initial Federal Court decision as a "sobering reminder" for companies.
"The case reinforces engaging in adverse action can be very costly, not only in compensation damages and penalties that may be ordered, but also the cost and time involved in the proceedings, which took some four years, but also the impact on reputation," Clayton Utz said.
"The case also valuably highlights the impact of serial complainants and cross-claims, namely where there are entrenched or toxic issues in a workplace where factions each make complaints against each other."
TechnologyOne's successful overturning of the decision
Today the Full Federal Court decided the judgment should be dismissed and the matter sent to retrial because the primary judge failed to provide "adequate reasons" for his conclusion that Roohizadegan was dismissed for a prohibited reason under the Fair Work Act.
"Senior counsel for the appellants (TechnologyOne) maintained in oral address that his clients' formal position was that they sought an order allowing the appeal and dismissing the adverse action claim, but it is fair to say that counsel recognised that such an outcome was an ambitious one. And so it is," Justices Rangiah, White and O'Callaghan said in a joint judgement.
"We cannot possibly arrive at a final result without full and clear factual findings, including as to credit, by a trial court."
TechnologyOne today stood by its dismissal of Roohizadegan.
"We are pleased that the original judgment in this case has been overturned," the company said in an ASX statement.
"As has been previously reported in the press, this was a senior executive earning close to $1 million per year, who no longer had the confidence of the board and his fellow executives and against whom serious allegations had been raised b staff, and we took action to address in 2016."
Shares in TNE are down 0.32 per cent to $9.56 per share at 3.29pm AEST.
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