The court personally penalised the MD at 85% of the maximum penalty
A company with no HR manager fast-tracked a worker's redundancy while he was on workers' compensation leave. A court just tallied the damage.
On 17 April 2026, the Federal Circuit and Family Court of Australia delivered its ruling on compensation and penalties in Farragher v PBE Rutherford Mining Pty Ltd (No 2). Among the findings: the company had no senior HR professional when it carried out the restructure at the centre of the case.
Neal Farragher was the general manager at CouplerCo, a business operated under PBE Rutherford Mining. From late 2020, his working relationship with the office manager deteriorated. By October 2021 he had lodged a formal complaint about the working environment and been diagnosed with an adjustment disorder. In November 2021, he took personal leave for illness and filed a workers' compensation claim.
PBE Rutherford was already planning a restructure, with Farragher's role earmarked for redundancy by June 2022. But the court found that Managing Director David Meyn, upon and because of the complaint, began seeking to end Farragher's employment sooner. Meyn offered voluntary redundancy on 25 October 2021, the day Farragher returned from his first absence and the day before the board was due to discuss the restructure. When that offer was not accepted, an abandonment letter was issued during his subsequent absence and his server access was restricted. The court also found Meyn's stated reason for expediting the redundancy, a claimed sanction from iCare, was untrue.
On 8 November 2021, the decision to expedite the redundancy was formalised. Farragher was notified on 1 December 2021 that his employment would end on 5 January 2022, while he remained on workers' compensation leave.
In an earlier ruling on 2 August 2024, the court found PBE Rutherford had contravened the Fair Work Act 2009 by dismissing Farragher for making a workplace complaint, taking personal and temporary illness leave, and lodging a workers' compensation claim. Meyn was found personally involved in those contraventions.
The 17 April 2026 decision addressed compensation, general damages, and penalties. The court awarded Farragher $34,724.44 in past economic loss and $50,000 in general damages for emotional harm. His claim for $256,334.38 in future economic loss was rejected. The court found his role was already planned for legitimate redundancy in June 2022, meaning any loss after that date could not be attributed to the adverse action. The evidence also did not sufficiently link his ongoing psychological condition to the termination itself, and the court doubted he would have sought employment after June 2022, noting he had previously considered himself retired following a redundancy in 2016.
Civil penalties were imposed on both respondents and ordered to be paid directly to Farragher under s 546(3) of the Fair Work Act. PBE Rutherford was ordered to pay $39,960, set at 60% of the maximum. Meyn was personally penalised $11,322, set at 85% of his maximum, with the court finding the contravention was deliberate and the need for specific deterrence strong, including if he is no longer employed by PBE Rutherford.
The finding most relevant to HR professionals sits in the court's reasoning on how the conduct went unchecked. PBE Rutherford had no HR Manager at the time. The court found this "undoubtedly allowed Mr Meyn to conduct himself, and therefore the employment obligations of the first respondent, without proper scrutiny." The company also failed to follow its own complaints handling procedures, and Meyn declined to facilitate mediation.
The HR Manager position was not filled until October 2023. The court noted the person hired "remains in her role to this day, reinforcing that the role was necessary."
Meyn offered an apology by affidavit. The court accepted it was made but found it lacked personal reflection and any evidence he had sought to change his own behaviour, as distinct from organisational changes at PBE Rutherford.
The case raises practical questions about what safeguards exist when a restructure intersects with a workplace complaint and a workers' compensation claim, and what happens when no one in the organisation is positioned to ensure complaint handling procedures are followed.
