Court Orders Reinstatement of Employee Terminated During Their Probationary Period

During late September 2024, the Federal Court handed down an interim order in the case of Dabboussy v Australian Federation of Islamic Councils [2024] FCA 1074, which granted an injunction requiring an employer to reinstate an employee following a summary dismissal which occurred one-day prior to the employee’s eligibility to make an application for unfair dismissal.

Background

Mr. Dabboussy was summarily dismissed by the Australian Federation of Islamic Councils (the Company) at 4:40pm on 3 September, the day before he would have become eligible for unfair dismissal (the Dismissal).

Preceding the Dismissal, an allegation of misconduct had been raised against Mr. Daboussy by an employee at the Company. Mr. Daboussy was stood down on 9 August 2024 whilst an investigation by an external investigator was conducted into the misconduct allegation against Mr. Dabboussy (the Investigation). On 3 September 2024, one day prior to Mr. Dabboussy’s eligibility to access unfair dismissal under the Fair Work Act 2009 (Cth) (the FW Act), the findings of the Investigation were not finalised. Following an ‘emergency’ meeting of the Company’s Executive Council on 3 September 2024, Mr. Dabboussy was summarily dismissed at 4:40pm that same afternoon.

Probationary Periods and Unfair Dismissal

A 6-month probationary period is commonly used by employers to assess a new employee’s suitability for ongoing employment. This 6-month period coincides with an employee’s eligibility to access unfair dismissal, except for small businesses where eligibility arises after a 12-month period.

Summary of the Decision

Mr. Dabboussy commenced proceedings in the Fair Work Commission, alleging that the dismissal constituted adverse action that was instigated for the ‘substantial and operative reason’ of depriving him the right to make a claim for unfair dismissal. Nicholas J of the Federal Court found that the decision to terminate Mr. Dabboussy’s employment occurred in haste. Referencing the Executive Council’s ‘emergency meeting’, the fact that Mr. Dabboussy had already been stood down, and the unfinalised status of the Investigation report, it was determined that there was no strong evidence indicating why this haste was necessary. As such, Nicholas J held that a ‘substantial and operative’ reason for terminating Mr. Dabboussy’s employment was to deny him the right to bring an unfair dismissal claim under the FW Act, which constituted unlawful adverse action.

In considering orders to be made, the Court considered the financial impact on Mr. Dabboussy and the impact of his return to work for other employees in light of the misconduct allegations. Ultimately, the Court made an interim order reinstating Mr. Dabboussy and preventing the Company from terminating his employment without leave of the Court.

Key Takeaway

A probation period of either 6-months or 12-months, coinciding with an employee’s eligibility to access unfair dismissal, is commonly utilised by employers. However, employers must be aware that terminating an employee immediately prior to the end of this period to deny the employee the right to make a claim for unfair dismissal may constitute adverse action.

If you have any questions about this case and how it may impact you as an employer or employee, please do not hesitate to contact Nick Stevens, Josh Hoggett, Evelyn Rivera or Ayla Hutchison.