He assaulted a coworker during training. A court called the firing discrimination
Services Australia fired a worker for punching a colleague. A court said that was unlawful. Now the Federal Court is not so sure.
The agency - which delivers Centrelink and Medicare on behalf of the Australian Government - was granted leave to appeal on September 29, 2026, after a Federal Court judge found "sufficient doubt" about the lower court's reasoning in a general protections case under the Fair Work Act 2009 (Cth).
The worker started at Services Australia on November 13, 2023. Within days, he lodged four written complaints - on November 16, 17 and 22 - alleging a colleague had made derogatory comments about his sexuality and his race. The worker is an Indigenous man.
An internal investigation followed. The investigator concluded the complaints had not been substantiated, finding it was "unable to find any evidence that the allegations did occur." The worker was invited to a meeting to discuss the outcome. He did not attend.
Then came December 5.
During a staff training session, the worker punched another employee twice to the head. That employee had nothing to do with the earlier complaints.
Services Australia suspended the worker the next day and launched a detailed investigation. On December 15, 2023, it terminated his employment for serious misconduct.
The worker filed his own claim under the Fair Work Act. He argued on two fronts: first, that the agency retaliated against him for exercising a workplace right - lodging discrimination complaints - contrary to s 340. Second, that the suspension and dismissal amounted to unlawful discrimination because of his race, sexuality, or both, contrary to s 351.
Under s 361 of the Act, general protections claims carry what is known as a reverse onus. Once the worker establishes the basic elements of the claim, the burden flips: the employer must prove its actions were not motivated by a prohibited reason. It is one of the more powerful tools in Australian employment law, and it puts employers on the back foot from the start.
The case was heard in the Federal Circuit and Family Court in April and June 2025. On June 22, 2026, the lower court found the worker had triggered the reverse onus - and from there, things turned on who made the call to suspend and fire him.
The lower court identified a particular employee as a relevant decision-maker. That employee did not give evidence. The court treated her absence as decisive: without hearing from her, the agency had not proved its reasons were legitimate. Services Australia was found to have breached both s 340 and s 351.
The agency applied for leave to appeal on July 6, 2026. Its grounds zeroed in on the decision-maker question.
Services Australia argued the lower court got it wrong by treating the identified employee as a decision-maker at all - let alone one whose state of mind needed examining. It said the court failed to adequately explain how it reached that conclusion, and that the finding was not supported by the evidence. Then came the procedural fairness point: the agency had defended the entire case on the basis that there was one decision-maker for each of the suspension and dismissal. The worker himself had never alleged the identified employee was involved. The issue was raised by the court for the first time at trial, after all evidence had been filed.
Services Australia also challenged the discrimination finding under s 351, arguing the court had not found - and could not have found - that race was a "substantial and operative reason" for the decisions. It pointed to the two employees it said actually made the calls, arguing neither had acted for a prohibited reason.
The Federal Court acknowledged that granting leave mid-case - before the question of remedy had been decided - fragments proceedings and increases costs. Courts ordinarily resist that. The judge's initial view was to refuse.
On reflection, though, the judge was satisfied this case warranted it.
There was, the court found, "a real question" as to how the lower court reached its conclusions about the identified employee's contribution to the decisions, the factual basis for finding she was "a central actor," and why the agency's evidence that there was only one decision-maker was rejected. There was also a question about whether the lower court's broad findings were actually supported by its own earlier factual findings.
On the substantial injustice question, the court noted that if the lower court had erred, pressing ahead with a remedy hearing would expose Services Australia to civil penalties and significant additional costs. The finding itself carries weight - that a government agency with numerous non-discrimination policies bears responsibility for racial and sexual discrimination against an Indigenous employee. That is a serious finding for any employer, let alone a Commonwealth agency.
Leave to appeal was granted. The appeal will be heard by a single judge and is expected to be listed quickly, with a case management hearing set for October 16, 2026.
For HR teams running misconduct processes alongside active discrimination complaints, the case puts a fine point on something easy to overlook: in a general protections claim, who the employer identifies as the decision-maker - and whether that person is available to give evidence - can determine the outcome, no matter how strong the misconduct case looks on paper.
The lower court's liability finding remains in place but is subject to appeal. Relief has been stayed pending the outcome. No final determination has been made on remedy.
