Background
Alice Zhao worked for GHD Pty Ltd from March 2021 until her employment was terminated in May 2023. She had been absent on medical grounds from October 2021 and again from January 2022. GHD said it terminated her employment because she could not perform her role then or in the foreseeable future.
Ms Zhao brought general protections applications in the Fair Work Commission, including an application involving her dismissal. After a certificate issued, she commenced Federal Court proceedings in September 2025 against GHD and several current or former GHD employees, seeking compensation, civil penalties, and liability concerning alleged contraventions of ss 340 and 351 of the Fair Work Act 2009 (Cth).
The Court’s Holding
The Court declined to dismiss the proceeding immediately, despite finding that Ms Zhao was in default. She had failed to file a court-ordered statement of claim, evidence, or submissions, and had not attended hearings. The Court accepted there were genuine concerns about her mental health, but found there was insufficient admissible evidence about the extent of any current incapacity or whether she could prosecute the case in the foreseeable future.
Justice Kennett held that immediate dismissal was a drastic remedy and was not justified on the material before the Court. But the continuing delay prejudiced the respondents, particularly because any workplace events would be more than five years old by trial, and was inconsistent with the Court’s overarching purpose of resolving disputes justly, quickly, inexpensively and efficiently. The Court ordered Ms Zhao to file a statement of claim by 23 October 2026; otherwise, the proceeding would stand dismissed.
Key Takeaways
- Failure to comply with procedural orders can justify dismissal, even without intentional defiance.
- Medical incapacity may explain non-compliance, but a party seeking relief must provide admissible evidence of impairment and likely recovery.
- A self-executing “guillotine” order can be an appropriate alternative to immediate dismissal where default is serious but the circumstances remain uncertain.
Why It Matters
The decision illustrates the Federal Court’s balancing of access to justice against prejudice from delay and the efficient administration of proceedings. Litigants cannot indefinitely halt a case they commenced merely by asserting ill health without evidentiary support.
For employment respondents, the case confirms that stale workplace allegations and exposure to civil penalties are material considerations in case-management applications. For claimants, it underscores the importance of promptly pleading the case and substantiating any request for a stay.