Co-Authored by Bailey Fraser
The recent Federal Court decision of Dabboussy v Australian Federation of Islamic Councils is a warning to employers to consider the importance of timing if dismissing an employee during probation.
If that dismissal is close to the end of the minimum employment period for the purposes of unfair dismissal (generally six-months, or 12-months for small business), the decision will be subject to scrutiny. The Court may presume the decision was undertaken to prevent the employee from exercising a workplace right. If so, the dismissal will contravene the general protections regime in the Fair Work Act (FW Act).
By way of background, in Qantas Airways Ltd v Transport Workers Union of Australia, the High Court considered whether future workplace rights were protected by the general protections provisions of the FW Act. The Court referred to a dismissal which prevented an employee from meeting the minimum employment period as a potential contravention of the general protections provisions. Such circumstances could constitute adverse action based on the existence of future workplace right. It was therefore only a matter of time before we had specific case law on this point.
On to Mr Dabboussy…
Mr Dabboussy was employed as CEO of the Australian Federation of Islamic Councils (AFIC) in September 2023. AFIC, a small business employer, dismissed him on 3 September 2024, following allegations of sexual harassment made by a female colleague. He was alleged to have made inappropriate comments and maintained prolonged, unnecessary eye contact that made her uncomfortable.
Mr Dabboussy denied the allegations of sexual harassment but admitted to complimenting the complainant’s appearance. He added that the comment was made in the context of having only met her prior on a zoom call. Mr Dabboussy was stood down and AFIC commenced an investigation. The investigator hadn’t finalised the report but indicated the allegations were substantiated on the balance of probabilities.
On 2 September, AFIC’s executive committee arranged a meeting and decided to terminate Mr Dabboussy’s employment on 3 September 2024. Importantly, the decision to dismiss was made seven hours before he would have completed 12-months of continuous service, at which time he would have been eligible to lodge an unfair dismissal case, given AFIC was a small business employer.
The Court found there was no reasonable explanation for the meeting on 2 September 2024 and there was a strong inference that a decision was made to dismiss Mr Dabboussy before 4 September at which time he would have been eligible to lodge an unfair dismissal claim.
Justice Nicholas recognised there was a ‘prima facie case’ for AFIC taking unlawful adverse action to prevent Dabboussy’s exercise of this future workplace right. He granted interim relief reinstating Mr Dabboussy to his former position.
Justice Nicholas didn’t characterise Mr Dabboussy’s case, particularly for reinstatement, as ‘strong’. His Honour recognised that the timing of AFIC’s decision deprived Mr Dabboussy of a future right to contend his unfair dismissal and defend the allegations of sexual harassment.
It is unclear whether the Court will order reinstatement on a final basis. AFIC will rely upon the investigator’s findings of sexual harassment and contend that those findings led to the decision to dismiss rather than preventing him from lodging an unfair dismissal claim. Many employment lawyers are following the case with interest.
Implications for employers
Despite only being an interim decision, this case is a valuable reminder for employers who are considering dismissing an employee before they complete their minimum employment period – whether that be six-months or 12-months (for small businesses).
The Court held adverse action undertaken to prevent an employee from exercising a future workplace right is unlawful and contravenes the general protections in the FW Act. Dismissing an employee within the probationary period is unlawful if a substantial and operative reason for doing so is to prevent them becoming eligible to lodge an unfair dismissal claim.
Probationary periods are a useful tool for employers and employees alike to test whether each party is a ‘good fit’ for the other. In many cases, terminating the employment during the probationary period is a straightforward exercise and relatively low risk. However, this case provides a warning to employers that termination during the probationary period – particularly if the termination occurs close to the minimum employment period – can have significant legal risks which need to be managed appropriately.
If you need advice on termination of employment, please contact Coleman Greig’s Employment Law team.
