Stuck between a rock and a hard place – Tech company CEO slammed for standing with the bullies
The Federal Court has awarded a payout of more than $5.2 million to a sacked senior manager of a publicly listed tech company, including a penalty of $7,000 payable personally by the company’s CEO.
In the lead up to his summary dismissal in May 2016, Mr R, a successful and highly paid Regional Manager with almost ten years’ service under his belt, had made seven separate complaints about bullying by senior executives within the company. Mr R had also indicated he was considering legal action, as well as complaining that he had not received incentive payments he believed were due to him under his contract.
After his dismissal, Mr R claimed in the Federal Court that he had been dismissed for prohibited reasons, contrary to the general protections provisions of the Fair Work Act.
The company’s CEO and Executive Chairman, Adrian Di Marco, gave evidence that Mr R had “complained from the day he started with Technology One”. However, Mr Di Marco denied that he had dismissed Mr R because of his complaints.
Mr Di Marco instead said that his reasons for dismissal were that:
licence fees in Victoria for which Mr R was responsible were not growing;
concerns had been raised by Mr R’s sales team about Mr R’s management; and
Mr R had been unable to work with three direct managers within a two year period.
Although the Court found that concerns about Mr R had been embellished and exaggerated, and that a number of the issues relied on by Di Marco were objectively untrue, the Court accepted that it would still be the end of the matter if Di Marco and Technology One could persuade the Court that Di Marco had proceeded on an honest, if mistaken, view about the matters Di Marco claimed formed his reasons for dismissal.
However, in a lengthy judgment, the Court rejected evidence given by Di Marco and various other senior representatives of Technology One, ultimately finding that Di Marco’s claims about his reasons for dismissing Mr R were implausible, and that Mr R’s exercise of workplace rights was a “substantial and operative factor” in Di Marco’s reason for dismissing him.
The Court noted in its judgment that Mr Di Marco “might be seen to have been effectively manoeuvred into a position where he had no good choices” in circumstances where he was faced with a risk of either losing Mr R or losing other senior managers about whom Mr R has made complaints and “confronted by that raw binary choice…Di Marco chose as the lesser of two evils to prefer the interests of the alleged bullies over the interests of Mr R…”
In relation to one senior manager about whom Mr R had made complaints, the Court found that the man had “behaved in a boorish and abusive way” towards Mr R.
The Court also heard that Mr R had developed a depressive disorder years prior to his dismissal, as a result of severe guilt about putting his work before his family, following his daughter being diagnosed with a serious medical condition. His condition was unknown to his employer until after his dismissal. After his dismissal, Mr R suffered a profound mental breakdown, and experts agreed he would be incapable of ever working again.
In ordering penalties for contravention of the Fair Work Act to be paid personally by Di Marco, as well as by Technology One, the Court noted that Di Marco “twice rejected professional HR advice that it would be unfair to dismiss Mr R on the basis of mere allegations. In the end…his choice was to stand with the bullies rather than the bullied… CEO’s in like positions need to know that such temptations as he faced are to be resisted, and that there will be a not insubstantial price for failing to do so.”
The decision is expected to be the subject of an appeal.
For further information please contact:
Sonia McCabe
Senior Associate
T 03 5226 8558
E: smccabe@ha.legal
