Federal Court orders retrial of TechnologyOne's AU$5.2m Fair Work case

The court order for TechnologyOne to pay damages to a former employee was set aside after the Federal appellate court found the reasons for awarding the damages were inadequate.

TechnologyOne has announced the Federal Court of Australia has overturned the original decision that the company acted in contravention of the Fair Work Act 2009, with the case now set to undergo a retrial.

In October last year, the Australian cloud services company was ordered to pay AU$5.2 million to former employee Behnam Roohizadegan in an employment lawsuit that was originally filed to the Federal Court five years ago. Roohizadegan was formerly an executive that was responsible for TechnologyOne's Victorian business. He was employed by the company from July 2006 through May 2016.

However, in a judgment filed on Thursday, the Federal court noted the primary judge of the original trial, Justice Duncan Kerr, misconstrued how the terms of Roohizadegan's employment contract operated. Due to this, the Federal court ordered the damages that were set to be awarded to Roohizadegan to be set aside.

The judgment added that Justice Kerr also made errors in assessing Roohizadegan's future economic loss and the amount he was entitled to in respect of interests and costs.

"Because the learned judge failed to evaluate the nature of the complaints and the circumstances in which they were made and the process of fact finding thus miscarried, there must be a new trial of the adverse action claim so that such an evaluation can be carried out," the full court said in its judgement.

"We are pleased that the original judgement in this case has been overturned ... as has been previously reported in the press, this was a senior executive earning close to AU$1 million per year, who no longer had the confidence of the board and his fellow executives and against whom serious allegations had been raised by staff, and we took action to address in 2016," the company said in a statement.

In announcing the retrial, TechnologyOne reconfirmed its full-year guidance of before-tax profit of AU$94.3 million to AU$98.6 million.

For the first half of the 2021 financial year, TechnologyOne reported 48% year-on-year growth in after-tax profit of AU$28 million, and total revenue grew by 5% from AU$138 million to AU$144.3 million. 

The company attributed the positive results to the 21% uplift in the number of large enterprise Software-as-a-Service (SaaS) customers to 576. Some major wins during the first-half included contracts with the Australian Department of Agriculture, Water and the Environment, and the New Zealand Ministry of Business Innovation and Employments.

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