The Effec­tive End of Pro­ba­tion­ary Periods?

Back­ground

Even though the recent Fed­er­al Court judg­ment of Jus­tice Nicholas in Dab­boussy v Aus­tralian Fed­er­a­tion of Islam­ic Coun­cils [2024] FCA 1074 was inter­locu­to­ry, it has nev­er­the­less attract­ed much inter­est. This inter­est is war­rant­ed. The employ­er in the case did what many employ­ers have done – ter­mi­nat­ed employ­ment just before the employ­ee would have had the right to bring unfair dis­missal pro­ceed­ings, usu­al­ly at the end of a con­trac­tu­al pro­ba­tion­ary peri­od. In this case the employ­ee was 7 hours short of serv­ing the min­i­mum employ­ment peri­od of 12 months required as the employ­ee of a small busi­ness employ­er to bring such a claim. (For employ­ees of non-small busi­ness employ­ers the applic­a­ble min­i­mum employ­ment peri­od is 6 months.)

The employ­ee sought inter­locu­to­ry orders pur­suant to the Fair Work Act 2009 (Cth) (FW Act) that he be rein­stat­ed, cit­ing breach­es of the gen­er­al pro­tec­tions provisions.

Jus­tice Nicholas held that the employ­ee estab­lished a pri­ma facie case that the tim­ing of his dis­missal had been influ­enced by a desire on the part of the employ­er to ensure he could not make a claim for unfair dis­missal, and that this was also a sub­stan­tial and oper­a­tive rea­son for his dismissal. 

His Hon­our made an inter­im order for the rein­state­ment of the employ­ee and an order the employ­er be restrained from ter­mi­nat­ing his employ­ment (with­out the leave of the court). 

The Judg­ment and Analysis

The rel­e­vant parts of the judg­ment are at para­graphs 26 to 29 inclusive.

After reject­ing cer­tain oth­er argu­ments in sup­port of the propo­si­tion the dis­missal had been for a pro­hib­it­ed rea­son under the FW Act, his Hon­our stat­ed (at 26):

“I take a dif­fer­ent view in rela­tion to Mr Dabboussy’s con­tention that one of the rea­sons for ter­mi­nat­ing his employ­ment on 3 Sep­tem­ber 2024 includ­ed the fact that he had an enti­tle­ment from 4 Sep­tem­ber 2024 to bring an unfair dis­missal claim under the FW Act. The Code pro­vides that “[s]mall busi­ness employ­ees can­not make a claim for unfair dis­missal in the first 12 months fol­low­ing their engage­ment”: see also s 382 and the def­i­n­i­tion of ​“min­i­mum employ­ment peri­od” in s 383(b) of the FW Act”

His Hon­our reached this view after analy­sis of the evi­dence as fol­lows (at 27):

“The evi­dence before me strong­ly sug­gests that the Exec­u­tive Com­mit­tee meet­ing was arranged with great haste at a time when Ms Croker’s report had not even been finalised, and after Mr Dab­boussy had already been stood down. There is no expla­na­tion on the evi­dence before me as to why it was nec­es­sary for the Exec­u­tive Com­mit­tee to meet for the pur­pose of con­sid­er­ing what were at that stage said to be ​“draft find­ings” or how it was that Dr Jneid (but not Mr Dab­boussy) came into pos­ses­sion of Ms Croker’s ​“draft find­ings”. In my view, there is a strong infer­ence avail­able that the Exec­u­tive Com­mit­tee was con­vened by Dr Jneid for the pur­pose of facil­i­tat­ing ter­mi­na­tion of Mr Dabboussy’s employ­ment before 4 Sep­tem­ber 2024, so as to deny him the oppor­tu­ni­ty to make a claim for unfair dis­missal under Part 3 – 2 of the FW Act.”

The recent sem­i­nal High Court author­i­ty in Qan­tas Air­ways Lim­it­ed v Trans­port Work­ers Union of Aus­tralia (2023) 412 ALR 134 had a sig­nif­i­cant role to play, as the rel­e­vant work­place right, which was the right to bring an unfair dis­missal claim, had not yet crys­tallised (as the min­i­mum peri­od had not been served). In this regard his Hon­our observed (at para­graph 28): 

“In Qan­tas Air­ways Lim­it­ed v Trans­port Work­ers Union of Aus­tralia (2023) 412 ALR 134 at [6], Kiefel CJ, Gagel­er, Glee­son and Jagot JJ con­clud­ed that:

… a per­son who takes adverse action against anoth­er per­son for a sub­stan­tial and oper­a­tive rea­son of pre­vent­ing the exer­cise of a work­place right by the oth­er per­son con­tra­venes s 340(1)(b), regard­less of whether that oth­er per­son has the rel­e­vant work­place right at the time the adverse action is tak­en. Qan­tas did not avoid the oper­a­tion of s 340(1)(b) in rela­tion to its adverse action by tak­ing the action pri­or to the exis­tence of the work­place rights the exer­cise of which Qan­tas sought to thwart.

In the present case it was sub­mit­ted by Mr Dab­boussy that his dis­missal on 3 Sep­tem­ber 2024 con­sti­tut­ed adverse action that was tak­en for a sub­stan­tial and oper­a­tive rea­son of depriv­ing him of the right to make a claim for unfair dismissal.”

In con­clu­sion, his Hon­our stat­ed (at 29):

“It may be assumed for present pur­pos­es that Ms Croker’s inves­ti­ga­tion and find­ings pro­vid­ed AFIC with rea­son­able grounds for sum­mar­i­ly ter­mi­nat­ing Mr Dabboussy’s employ­ment and that her con­clu­sion that the var­i­ous alle­ga­tions made against him were sub­stan­ti­at­ed was the prin­ci­pal rea­son for the dis­missal. How­ev­er, in my view, Mr Dab­boussy has estab­lished a pri­ma facie case that the tim­ing of his dis­missal was influ­enced by a desire to ensure that he could not make a claim for unfair dis­missal and that this was also a sub­stan­tial and oper­a­tive rea­son for his dis­missal on 3 Sep­tem­ber 2024. I am there­fore per­suad­ed that he has estab­lished a pri­ma facie case for relief in respect of AFIC’s con­tra­ven­tion of s 340(1) of the FW Act.”

Obser­va­tions

Some obser­va­tions:

1. This is an inter­locu­to­ry deci­sion with the case yet to be finalised before the courts and, as such, com­men­tary needs to be cir­cum­spect and respect­ful giv­en the mat­ter is ongoing.
2. The employ­ee in this case had been sub­ject to an ongo­ing inves­ti­ga­tion process in rela­tion to alle­ga­tions of mis­con­duct made against him. The ter­mi­na­tion of his employ­ment, around 7 hours before the employ­ee would have served the peri­od need­ed to be eli­gi­ble to bring any future unfair dis­missal pro­ceed­ings, and before final­i­sa­tion of the inves­ti­ga­tion and dis­ci­pli­nary process, seemed to be some­what abrupt.
3. While cau­tion needs to be tak­en in extrap­o­lat­ing broad­er con­se­quences from one deci­sion (par­tic­u­lar­ly an inter­locu­to­ry deci­sion), the notion that the gen­er­al pro­tec­tions pro­vi­sions of the FW Act might be breached by dis­miss­ing an employ­ee just before the min­i­mum employ­ment peri­od (whether it be 6 or 12 months) ends would come as a dis­con­cert­ing sur­prise to many employ­ers – dis­missal com­mon­ly occurs at the expi­ra­tion of con­trac­tu­al pro­ba­tion­ary peri­ods which often coin­cide with the min­i­mum peri­od of employ­ment under the FW Act.
4. It is inevitable some employ­ees will seek to rely upon the Qan­tas deci­sion as applied in this case to argue that a ter­mi­na­tion of employ­ment made just before the 6 (or 12 month) ser­vice peri­od in employ­ment (i.e. when the employ­ee can bring unfair dis­missal pro­ceed­ings) is a breach of the gen­er­al pro­tec­tions pro­vi­sions of the FW Act.
5. The min­i­mum peri­od of employ­ment in the FW Act for an employ­ee to be able to bring unfair dis­missal pro­ceed­ings must have work to do. Will a ter­mi­na­tion the day before eli­gi­bil­i­ty invite sus­pi­cion? A week before? Where is the tem­po­ral line drawn? On a super­fi­cial lev­el, it seems para­dox­i­cal for the gen­er­al pro­tec­tions pro­vi­sions of the FW Act to seem­ing­ly under­mine the oper­a­tion of the min­i­mum peri­od require­ment. This is par­tic­u­lar­ly so giv­en the immutabil­i­ty of the min­i­mum peri­od – it can­not be removed or var­ied in an award or enter­prise agree­ment or con­tract­ed out of or var­ied by contract.
6. Of course, ter­mi­na­tion dur­ing min­i­mum employ­ment peri­od has nev­er been a free-for-all; employ­ees have always been able to bring gen­er­al pro­tec­tions claims if dis­missed for a pro­hib­it­ed rea­son, irre­spec­tive of peri­od of ser­vice. This case, emerg­ing after the Qan­tas deci­sion in rela­tion to future work­place rights, is mere­ly anoth­er exam­ple of this.
7. It is for this rea­son that a con­trac­tu­al pro­ba­tion­ary peri­od, which states that ongo­ing employ­ment will be sub­ject to sat­is­fac­to­ry per­for­mance and con­duct of the employ­ee dur­ing that peri­od, may now have a more impor­tant role to play. A ter­mi­na­tion of employ­ment that occurs near the end of such a pro­ba­tion­ary peri­od can be argued to have been exe­cut­ed pur­suant to this process agreed at the com­mence­ment of employ­ment, rather than to pre­vent the employ­ee bring­ing unfair dis­missal pro­ceed­ings (even thought it would have this effect).
8. Fur­ther to this, there is a strength­en­ing of the argu­ment that a rea­son for a deci­sion to ter­mi­nate employ­ment dur­ing a pro­ba­tion­ary peri­od should be giv­en, specif­i­cal­ly whether dis­missal was for per­for­mance or con­duct rea­sons (or both). This offers fur­ther pro­tec­tion against a find­ing a dis­missal was moti­vat­ed by any pro­hib­it­ed rea­son (includ­ing, but not lim­it­ed to, denial of an oppor­tu­ni­ty to bring unfair dis­missal proceedings).

This case has giv­en rise to some inter­est­ing con­sid­er­a­tions in the inter­ac­tion between the gen­er­al pro­tec­tions and unfair dis­missal pro­ceed­ings of the FW Act. Any final judg­ment in this deci­sion, as well as any oth­er cas­es advanc­ing the same argu­ment, will be worth keep­ing an eye on.