Sydney law firm hit with $185,000 penalty over workplace breaches

Editor’s note: In a decision on October 31, 2024, the Full Court of the Federal Court set aside the orders made in this case in March 2022 and February 2023 and ordered a retrial.

A former manager at Sydney law firm Atanaskovic Hartnell is set to receive almost $185,000 after a judge ruled her former employer and a top partner should be hit with penalties for failing to pay her entitlements.

Lawyer John Atanaskovic in 2018.Credit: Photo: Peter Braig

Elizabeth Kelly resigned in late 2016 as general manager of Atanaskovic Hartnell Corporate Services, the company the law firm used to employ support staff. She launched proceedings in 2017 against both the company and the firm over unpaid entitlements and a failure to create a safe workplace.

Kelly won significant parts of her case in March last year. On Thursday, the Federal Circuit and Family Court handed down a decision on the civil penalties that should be imposed on the company and one of the firm’s founding partners, John Atanaskovic, for breaching the Fair Work Act by failing to pay Kelly her full entitlements including accrued annual leave. The entitlements totalled more than $130,000.

Judge Sophie Given ordered the company to pay Kelly $153,900 in penalties and Atanaskovic to pay her $30,780, totalling $184,680.

In a related decision last year, Federal Circuit and Family Court Judge Rolf Driver, who has since retired, said the company and Atanaskovic entered into a “scheme” to avoid paying Kelly’s entitlements, including by bringing a cross-claim against her.

The scheme was “the brainchild of Mr Atanaskovic”, Driver said.

A judge ruled Elizabeth Kelly’s former employer and a top partner should be hit with penalties for failing to pay her entitlements.

Driver ordered that Kelly be paid $130,427.84 in entitlements, plus interest, within 21 days of March 31 last year. She was not paid until October 21.

In her judgment on Thursday, Given said it would be “generous” to describe the timing of the payment of Kelly’s entitlements as “eleventh hour”. The judge noted the payment was made days before a hearing about whether civil penalties should be imposed on the company and Atanaskovic.

“From the liability judgment [of Judge Driver], it is difficult to discern any basis upon which [the company] ... instituted the cross-claims other than Mr Atanaskovic’s own personal animus towards Mrs Kelly,” Given said.

In his earlier judgment, Driver said: “Mrs Kelly resigned because she could no longer bear the continuing denigration of her by Mr Atanaskovic.”

He said that in “former times, Mr Atanaskovic would be described as a person who does not suffer fools gladly. In modern parlance, he would be described as a bully. That is the description which I prefer.”

Emails tendered in court show Atanaskovic called Kelly a “maliciously intermeddling fool” and a “lazy incompetent”, among other insults.

In an email to a partner, copied to Kelly, Atanaskovic referred to Kelly and “menstrual based cycles”.

“The barb was directed at Mrs Kelly as a woman,” Driver said, and “served to humiliate, bully, abuse, belittle and victimise” her.

Driver found Atanaskovic Hartnell Corporate Services, which employed Kelly between April 2004 and November 2016, breached “the employment contract by failing to protect Mrs Kelly from the harm inflicted upon her by Mr Atanaskovic”. “Further, I find that Mr Atanaskovic is liable for rendering the workplace unsafe and for the harm he caused,” he said.

He ordered last year that Kelly be paid $30,000 in compensation “for the hurt, humiliation and distress that Mr Atanaskovic caused her”, a sum for which Atanaskovic and the company were jointly liable.

The company and Atanaskovic are seeking to appeal against last year’s decision.

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