VIC Can An Employee Be Sued By Ex-employer For Consequential Damages?

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LawTap Verified
27 May 2014
Hi guys,

Question: Can an ex-employer sue an employee for consequential damages as a result of accusing an employee of theft?

Background: Ex-employer is saying that he lost a contract worth $100K as a result of a theft of an item worth less $1k from a work site. He wants out of a settlement agreement and is trying to use this claim as a lever to avoid paying unpaid wages worth $30k. Employee denies theft but was charged and is considering entering the Vic police diversion program just to avoid the hassle of court.


Well-Known Member
12 August 2014
Yes, the measure of damages for conversion includes consequential losses (General and Finance Facilities Ltd v Cooks Cars (Romford) Ltd [1963] 2 All ER 314). However this will not extend to remote or unforeseeable losses.

Note that this does not allow the employer to keep your unpaid salary. The employer would have to sue for damages and the employee does not owe anything until there is a damages award or settlement. Contact Fair Work Australia for assistance.