The terminated employee has a variety of legal options open to them. They usually involve the employer having to explain and justify their reasons for termination, sometimes in court. This can be an uncomfortable experience and decisions which seemed clear at the time, or generally supported, can suddenly become questionable in hindsight. Who actually made the decision to terminate can become a game of musical chairs and difficulties arise where multiple decision makers are involved. Three problems commonly arise.
1. The person who signed the termination letter seeks to shift responsibility for the decision elsewhere
The starting point is that employees should know who is doing the terminating. The failure of an employer to disclose who made the decision to dismiss could constitute a denial of procedural fairness – see Alan Carmody v ISS Integrated Services [2019] FWC 6070. Failure to provide satisfactory evidence to the court about who made the decision to terminate may make it difficult to satisfy the employer’s reverse onus of proof in adverse action cases and lead to non acceptance of the reasons given for termination – see Laing O’Rourke Australia Management Services Pty Ltd v Haley [2024] FCA 1323. In Pilbrow v University of Melbourne [2024] FCA 1140, the court said that the respondent employer must give evidence to establish that the decision-maker(s) did not take the action in response to the employee exercising a workplace right. In these cases it is for the Court to assess the state of mind of the individuals involved in taking the action. The failure to identify a decision-maker (or decision-makers) within an employer when taking disciplinary action against an employee will generally be critical to defending a claim of adverse action.
These are commonly (but not exclusively) issues in larger organisations, particularly where a line manager is the theoretical decision maker but is guided by others (generally in the human resources or employment relations departments) and perhaps a more senior manager’s signature appears on the termination letter. The practical reality is that the decision maker will usually have to sit in the witness box at a hearing to justify their decision to terminate, whether it be an unfair dismissal or breach of general protections case. Managers sometimes shy away from this role or attempt to shift responsibility for the decision to someone else in the organisation when it comes time to put their name on an affidavit and possibly face cross examination. This is one reason why settlements often occur prior to hearing.
Human resources and employment relations advisors can advise and even make recommendations but responsibility for the decision to terminate and the reasons for termination should ideally rest with one person – see Serco Citizen Services Pty Ltd v Parsons [2025] FCAFC 83. It is common for a decision-maker to adopt a draft statement of reasons, which then becomes the decision-maker’s reasons for decision. In those circumstances, the decision-maker must do more than just ‘rubber stamp’ the draft reasons. The decision-maker must engage in an active intellectual process to adopt and make the decision, which is encapsulated in the draft reasons, as their own decision. However, employers should be careful not to orchestrate artificial reasons in writing. As QANTAS recently discovered in relation to outsourcing its baggage handling, this strategy usually comes apart in the cold light of cross examination.
2. Multiple persons are involved in the decision and it is not clear who the final decision maker/s were
Shared decision making often makes it difficult to discharge the onus of proof (practical or legal) and adds extra complication and cost to legal proceedings. An example is Guthrie v Mondiale VGL Pty Ltd [2024] FedCFamC2G 384. Despite there being five decision makers in that case, only two of these individuals provided evidence to the Court about the reasons for the dismissal of the former employee. The Court found the reverse onus imposed on the employer in the general protections case was not discharged.
Sometimes decisions will be made by a committee or board. Boards should carefully consider their decision and record their reasons for termination. If there is a split decision, then reasons should also be recorded by dissenting members. This is because it is open to courts to analyse the motives and roles of individual members. It may be necessary to call evidence from all or a majority of members of the committee or board. A failure to do so may result in adverse inferences being drawn by the court, as occurred in Greater Dandenong City Council v Australian Municipal, Clerical and Services Union [2001] FCA 349.
3. Decision makers or people involved in the decision have left (or been terminated from) the employer
Cases can take months and sometimes years to get to hearing. In the “churn and burn” dynamics of many modern workplaces, decision makers or people involved in the decision-making process sometimes move on to new employment before a hearing takes place. Ex employees (particularly if they have left under a cloud) may not be co operative or reliable witnesses. Employers should be very aware that the manager they terminate today may be the manager they want to rely as a witness in a court case in a few months time.
The message is that clarity will pay dividends. Clarity in who the decision maker is, clarity in the reasons for termination and clarity of communication of these things to the terminated employee. This will also help to minimise the prospect of litigation. The employee may not agree with the reasons given but at least they are not left in the dark to come up with their own theory of why they were terminated resulting in perhaps needless legal proceedings. This will also help to defend any legal claim, particularly where the employer has to discharge a reverse onus of proof.
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