A council CEO dismissed while on workers' compensation leave has been ordered reinstated by the Federal Court in a disability discrimination ruling.
On 23 March 2026, Justice Bromwich of the Federal Court of Australia handed down a decision in Stonhill v Katherine Town Council that will have HR professionals reaching for their termination checklists.
Ingrid Stonhill was Chief Executive Officer of Katherine Town Council in the Northern Territory from 7 February 2022, with her extended contract running until 7 February 2028. On 17 September 2025, she went on workers' compensation leave by reason of post-traumatic stress disorder, which she attributed to workplace bullying by a former councillor.
Things moved quickly from February 2026. On 13 February 2026, the Council issued Stonhill a show cause notice. Before that process could run its course, she lodged a complaint with the Australian Human Rights Commission (AHRC) on 20 February 2026, alleging disability discrimination. On 5 March 2026, the Council terminated her employment on the stated grounds of serious and wilful misconduct, citing her conduct during an industrial dispute with council employees and her handling of conflict of interest issues.
Notably, the Court took a close look at how the show cause process was handled. Rather than responding substantively to Stonhill's reply, the Council relied on her reference to the grounds of termination in her AHRC complaint as a substitute for engaging with the show cause...
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