Five legal questions about Jackie Henderson’s lawsuit against ARN answered
Michael Byrnes
This week, Jackie Henderson filed suit against ARN, alleging the termination of her contract was a breach of the Fair Work Act.
In summary, Henderson is claiming that prematurely ending her ten-year deal with ARN “constituted adverse action.”
Over the last few weeks, we asked lawyer Michael Byrnes five legal questions about Kyle Sandilands’ initial open letter, and another five regarding the legal arguments and potential financial implications for ARN after we got ahold of Sandilands’ court documents.
Today, we ask five more about Henderson’s case.
Byrnes is an experienced workplace relations lawyer and partner at Swaab. He is intimately familiar with Fair Work and the meanderings of the Supreme and Federal Courts, and has represented high profile media clients.
Could her case be rolled together with Kyle’s case? Sometimes they do this with similar cases, but her claim looks different.
While there is obviously considerable factual overlap, the nature of the claims are quite different. Kyle’s claim is more a conventional commercial contract claim whereas Jackie’s claim is in the Fair Work Division of the Federal Court asserting a breach of the general protections provisions of the Fair Work Act. The prospect of them being heard together is remote.
Looks like Jackie’s case is a classic “they terminated me because I was complaining” – a protected reason. Is that correct?
That is a central plank to her case. She is claiming that she was exercising workplace rights under the Fair Work Act by making complaints to ARN related to psychosocial safety allegedly arising from the conduct of Kyle and, because she made those complaints, her services agreement was terminated by ARN.
The termination in those circumstances was, she contends, an act of adverse action and a breach of the general protections provisions of the Fair Work Act. There also appears to be a wrongful termination aspect to her case – that ARN did not have a proper contractual basis upon which to terminate her services agreement and she should receive damages for the balance of the contract.
Isn’t there a maximum amount you can be awarded under Fair Work? I assume that doesn’t apply here.
There is a limit in unfair dismissal matters — compensation of six months’ pay and backpay — but there is no limit in general protections matters under the Fair Work Act. A recent general protections matter involved a claim for an estimated $58 million, although the applicant in that matter was ultimately unsuccessful.
Why would Jackie be entitled to pecuniary damages as well as the full contract amount? Aren’t we dealing with a contract between businesses here?
If there has been a breach of the general protections provisions of the Fair Work Act then that can lead to the imposition of a pecuniary penalty. In circumstances where that penalty is imposed because of litigation brought by a private party, that applicant can seek that the penalty be paid to them.
It is common to seek penalties in general protections matters in addition to compensation for economic loss and non-economic loss (such as hurt, distress and humiliation).
Can you explain the quantum of damages here? There is a claim for $82.25m plus damages, plus interest, plus cost … but in reality, would a plaintiff ever get the full amount? Wouldn’t there be a discount for being paid now?
It is likely that sum almost entirely comprises of economic loss, specifically the balance of the services agreement. In certain circumstances successful applicants have an obligation to mitigate, that is, to seek other reasonable, alternative work to earn an income and minimise their loss. This might substantially reduce the amount awarded (although, with no disrespect to Jackie, I query whether she would be able to secure anything like $10m per year again).
There might also be an argument that the services agreement would have ended earlier than its ten-year term by reason of other factors not related to a breach by ARN.
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A couple of questions:
1) Based on currently available information, who seems to have the strongest case against ARN and what is the primary basis for that?
2) In a worst-case scenario for ARN – and assuming that ARN has access to limited current and future resources (ie cash) – both Kyle and Jackie are successful in which case ARN may not, practically, be capable of paying both amounts. Since both applicants would know that, how will it influence any negotiations they may have with ARN, ie how will the importance of the timings of when these matters are concluded play a part? If Kyle wins (or even settles) first (and presumably the date on which he would receive his amount would also come before any amounts are payable to Jackie), how should Jackie conduct her case in light thereof, and vice versa?
3) Following on from (2), if both cases go all the way through court, which case would more likely conclude first?
4) Also following on from (2) and assuming again that both Kyle and Jackie are successful and that ARN has limited current and future resources, if ARN could not raise the additional capital needed, would most likely the business be placed in administration then? Are there any particular obligations for the ARN directors to consider here as well?
Thank you!
It is all very exciting but this looks like a settlement waiting to happen. Which silk is going to put their name down for a guaranteed outcome with these facts on either side.
Still if it costs ARN say $50m all in to settle both claims, its cheaper than being stuck with the contracts and both will walk away with a serious amount of money.
They may also be able to structure payment over 12-18 months as well to make it easier to come up with the dosh.