By Brad Petley

Acumen Lawyers Workplace relations and safety law specialists

The background

At the time of her dismissal, the employee (Ms Ward) had worked as an Advertising Sales Coordinator in her employer’s Agency Division. Each sales coordinator had a client list to sell advertising to and service.

The employer had an account management system on its computer network which provided a complete billing history of the advertising relationship with clients. Sales coordinators entered ‘notes’ about client-related matters into the account management system.

The employer decided to restructure. Clients previously serviced by the agency sales team (including by the employee) were internally allocated to other teams.

The employee didn’t take kindly to the restructure. ‘In a fit of pique’ she deleted notes that she had made about clients on the account management system to make it difficult for anyone who took over the employee’s client accounts.

Whilst voicing her unhappiness about the reallocation decision with her manager, the employee informed him of the deletion of her client notes from the account management system.

The investigation

The employer initiated a workplace investigation following the employee’s disclosure. An examination of the employer’s computer system confirmed that notes had been deleted by the employee.

Some three days after the employee’s disclosure, an 8 am meeting was held by management. The employer’s Sales Director, who had initiated the investigation, directed a human resources officer to arrange a meeting with the employee. At the time, the matter was considered ‘serious’ and the Sales Director was considering the employee’s dismissal.

Within two hours, the employee was summoned to a meeting with the human resources officer and management representatives.

Following the misconduct meeting, the employer decided to summarily dismiss the employee with four weeks pay in lieu of notice (due to her near 20 years of service) the next day.

The employee subsequently filed an unfair dismissal claim Sandra Ward v West Australian Newspaper Limited [2010] FWA 1785 (8 March 2010).

Unfair dismissal hearing – the important points

Fair Work Australia was critical of the employer’s workplace investigation.

FWA rejected the employer’s attempted characterisation of what was in reality a serious meeting about alleged misconduct as a merely a ‘conversation’ or ‘discussion’.

FWA observed that:

• the employee’s ongoing employment was in jeopardy prior to her attending the meeting;
• the employee was called to the meeting without any notice or knowledge of its purpose;
• the employee had no idea of the meeting’s seriousness;
• the meeting, whether deliberate or not, was set in the employer’s boardroom, which one of the manager’s present described as making him uncomfortable;
• Ms Ward was interviewed by two senior members of management and the HR Officer;
• the interview was not conducted with clarity, mainly due to the HR Officer leading the interview with less than 48 hours knowledge of the account management system; and
• this lack of clarity and lack of notice led to the employee being confused, hesitant in her answers and the employer (incorrectly) forming the view that the employee lacked openness and she was untruthful.

FWA held that:

• the employee was not treated fairly nor was there was a valid reason for her dismissal;
• at the misconduct meeting, the particulars of the allegations and surrounding circumstances were not put to the employee in a fair and straightforward way enabling her to respond appropriately;
• the meeting was arranged in such a way – in terms of location, timing and lack of knowledge of its purpose – that the employee could not access a support person;
• the employee was not untruthful in her answers; and
• the dismissal was unfair.

FWA overturned the dismissal and reinstated the employee to her original position.

Lessons for employers

When conducting a workplace investigation into workplace misconduct, employers need to be able to demonstrate a fair procedure was adopted. In particular:

• avoid any actions which could be perceived as trickery;
• be clear with an alleged wrongdoer about the purpose of a meeting – including the nature and seriousness of the allegations being investigated.
• avoid using vague statements or descriptions which play down the seriousness of the meeting (e.g. ‘having a chat about something’);
• provide sufficient notice of the meeting to enable the alleged wrongdoer to seek advice and/or arrange a support person; and
• not have made any predetermination about the outcome of the investigation.

By Brad Petley

Acumen Lawyers Workplace relations and safety law specialists

The work Christmas party season is in full swing by now. If your organisation has already had its Christmas party, hopefully everything went well and from a workplace law standpoint there were no issues that arose.

If your organisation is yet to have its annual gathering, hopefully all the risk management HR ‘boxes have been ticked’.

• All reasonable steps have been taken to prevent unacceptable behaviours from occurring at the work Christmas party;
• Managers are aware of their responsibility to monitor and supervise at the function;
• Employees have been reminded of applicable policies and behavioural standards (for example; sexual harassment, bullying and OHS);
• Light alcohol and no alcohol options are available;
• In keeping with the lighthearted spirit of the festive season let’s visit three work Christmas party disasters.

Top 3 Work Christmas Party Disasters

Number 1

Coming in at number one would have to be the 2007 “party to end all parties” involving employees of a Sydney Telstra retail store. What started out as a work dinner function later that evening went awry at a nearby motel with a store employee having sexual intercourse with another employee within the view and/or earshot of the three other employees. The employee responsible was ultimately dismissed but in order for Telstra to successfully defend its actions, the ensuing litigation went as far as the Full Bench of the then Australian Industrial Relations Commission: Telstra v Streeter [2008] AIRCFB 15 (24 February 2008)

Number 2

In the “what were they thinking” category is a 2002 work Christmas party at which a waitress served food and drinks to clients and other employees at a party held on work premises – while topless and in lingerie. A female employee was not invited to the party and was told, “It’s a party for the boys…you don’t need to worry about it.” Upon finding out about the presence of the topless waitress, the employee resigned from her employment and ultimately sought counselling in relation to the distress she felt at the time. Although the woman gave evidence that she would not have wanted to attend the party if she had known a topless waitress was going to be there, her complaint of sex discrimination against her former employer was successful on the basis of her not being made to feel welcome to attend the Christmas party because of her gender: Carter v Linuki Pty Ltd trading as Aussie Hire & Fitzgerald (EOD) [2005] NSWADTAP 40 (22 August 2005).

Number 3

Perhaps in the “why bother” category is the 1999 case in which a male employee was dismissed after he exposed himself twice before approximately 50 company employees plus partners at a Christmas function, when performing what he considered to be a ‘party trick’ called the “Pelican”. Not surprisingly the Australian Industrial Relations Commission did not see any humour in the employee’s actions and dismissed his legal claim: S. Mason v Boyne Smelters Limited – 880/99 B Print R7701 [1999] AIRC 934 (20 August 1999).

By Brad Petley

Acumen Lawyers Workplace relations and safety law specialists

In brief

In Part 2 of our discussion about the recent Patrick Stevedores case (Tony Carrick v Patrick Stevedores Holdings Pty Limited [2012] FWA 4480), we consider whether the actions of an employer over a prior disciplinary warning can be called into question in a later dismissal case by Fair Work Australia (FWA).

Your latest ‘HR headache’

Picture this situation…You’re a senior HR (human resources) practitioner within a large company. One of your subordinates, ‘Melanie’, dutifully reports the outcome of a recent HR investigation into alleged employee misconduct. You note that the severity of the misconduct would have justified dismissal if the allegation were substantiated. Melanie reports that she ‘believed’ the employee had committed misconduct but due to some unfortunate circumstances there was not sufficient evidence. Melanie took the ‘safe route’ and, rather than dismissing the employee, she issued the employee with a formal warning.

You feel relieved that Melanie did not dismiss the employee because of the evidentiary issues but are nevertheless troubled by the outcome. You remember ‘someone’ telling you once that an incorrectly issued warning is never capable of external review. You are wondering whether that view is correct.

Warning misconceptions

Misconceptions about when a disciplinary warning may be issued are not uncommon. Some employers consider that if there is not sufficient evidence to substantiate misconduct (which would have justified dismissal) as an alternative, they may issue a formal warning. Some also believe that a flawed disciplinary warning can somehow be ‘swept under the carpet’ and is never capable of review. The Patrick Stevedores case shows both beliefs to be incorrect.

Patrick Stevedores case

In this case, the employee was dismissed for a serious safety breach which caused a collision between forklifts at the Fishermans Island Brisbane terminal. Some months prior to that incident, the employee had received a final warning for another safety breach. The employee had other instances of unsatisfactory performance or conduct on his disciplinary record.

The employee argued that the final warning was not justified, and should not have been taken into account for the ultimate dismissal. Importantly, this caused Fair Work Australia to look into the circumstances of the issue of the formal warning.

Ultimately, FWA found that the final warning was justified, as was its use in the subsequent dismissal of the employee.

The point to note here is that the employer was put into a situation where it was forced to substantiate:

1. its issue of the prior warning; and
2. its use of the warning (with other disciplinary sanctions) as justification for the ultimate dismissal.

Lessons for employers

1. The circumstances behind a prior disciplinary warning can be questioned at a later dismissal hearing.
2. There are a number of disciplinary options open to employers, but whatever action is taken, the same standards of proof apply.
3. A formal warning should be approached in the same way that a dismissal would be approached – that is, where sufficient evidence does not exist for a dismissal, a formal warning is not an alternative.
4. If a disciplinary warning is wrongly issued, it should be withdrawn.

By Brad Petley

ACUMEN LAWYERS WORKPLACE RELATIONS AND SAFETY LAW SPECIALISTS

In brief

An employee owes a duty to their employer to be honest in their dealings with it. This is no more apparent than when the employee is the subject of an investigation into alleged misconduct.

A recent dismissal case before Fair Work Australia (FWA), Gunning v Cetnaj Queensland Pty Ltd [2012] FWA 6627 (3 August 2012), provides useful guidance for employers about the effect of an employee’s dishonesty during an HR (human resources) investigation.

The Gunning case

The dismissed employee, Gunning, had worked as a sales representative at the Burleigh Heads branch of the employer’s lighting products business. A customer’s attempt to return a product for a refund uncovered an apparently fraudulent scheme by Mr Gunning’s flatmate, who had formerly worked as a sales representative for the employer, involving a diversion of refund money to a joint bank account of Mr Gunning and his flatmate.

The employer conducted an investigation and subsequently dismissed Mr Gunning for ‘theft and misconduct’ over his alleged involvement in the fraud.

At the unfair dismissal hearing, FWA found that the evidence did not support a finding that Mr Gunning was involved in the fraud originally investigated. However, FWA went on to find that Mr Gunning was not honest with his employer when he was interviewed about his knowledge of the fraud concerns and that of itself formed a valid reason for his dismissal. Accordingly, the employee was found to have been validly dismissed.

FWA made the following important points about an employee’s duty during an HR investigation:

1. An employee owes a duty to his employer to be honest in his dealings with it.
2. To do otherwise is to compromise the necessary trust and confidence that is an integral part of the employment relationship.
3. This does not mean that an employee must answer any and all questions posed to him or her by his employer in an investigation or interview.
4. But it does mean that an employee must respond honestly to any genuine enquiry made of the employee that is relevant to the conduct or other issues in question or under investigation.

Points to take away

1. The existence of the relationship of trust and confidence is vital to an employment relationship.
2. During an investigation into employee misconduct, employers may uncover or be faced with misconduct outside of that which is being investigated.
3. A dishonest response to a genuine and relevant enquiry is destructive of the relationship of trust and confidence.
4. A failure to respond to questions honestly can form a stand-alone (valid) reason for an employee’s dismissal.
5. If in doubt, employers should seek advice.

By Brad Petley

Acumen Lawyers Workplace relations and safety law specialists

In brief

A recent dismissal case before Fair Work Australia (FWA) serves as a useful illustration of the issues facing employers when weighing up an employee’s poor disciplinary record and whether a dismissal would be justified.

Warning confusion

Picture this situation. You have an employee who has committed a breach of discipline in the workplace. For present purposes, we will refer to the employee as ‘Jim’. Let’s say that Jim is one hour late for work. You have interviewed him. He was unable to offer a reasonable excuse. You are wondering what to do with him. Jim is not the easiest of employees. He has received a number of warnings previously over conduct and/or performance issues. You are a tad fed up and are considering whether you can terminate Jim’s employment. You remember ‘someone’ telling you once that employers can only take account of ‘like for like’ past disciplinary issues when deciding if a justification exists for a termination of employment. None of Jim’s previous warnings have related to lateness for work. Jim is sitting outside your office. You are wondering what to do.

What does the Fair Work Act say?

Confusion over the prior warnings that may be taken into account is not uncommon amongst some employers.

In determining whether a dismissal was harsh, unjust or unreasonable, Fair Work Australia is required to take into account a number of factors. If the dismissal related to the unsatisfactory performance of an employee, FWA is required to take into account whether the person had been warned about that unsatisfactory performance before the dismissal.

In a previous edition of Workplace Acumen, we pointed out that the unfair dismissal laws in the Fair Work Act do not set out a minimum threshold (e.g. three warnings) before an employer is entitled to dismiss a misbehaving and/or underperforming employee. Depending on the circumstances of a matter there may be no necessity for a warning to have been issued before an employer is entitled to dismiss the employee. Much will depend on the facts and circumstances of the case.

Recent case

The recent Patrick Stevedores case (Tony Carrick v Patrick Stevedores Holdings Pty Limited [2012] FWA 4480) is a useful example of a dismissal involving an employee who had been issued with a number of prior warnings before he was ultimately dismissed.

In this case, the employee was dismissed in November 2011 for a serious safety breach causing a collision between forklifts at the Fishermans Island Brisbane terminal. Prior to that incident, the employee had received a final warning (in April 2011) for another safety breach. Both acts were serious breaches of Patrick’s Safety Cardinal Rules workplace safety policy.

The employee’s prior disciplinary record also included warnings for:

• sleeping during a shift sometime during late August 2010;
• failing to attend work on 23 December 2009;
• using his Maritime Security Identification Card to admit another employee to the Patrick site on 14 April 2009.

FWA took into account that the employee’s overall disciplinary record was poor and that he was the subject of a final warning at the time of the most recent breach. Not surprisingly, FWA ruled the employee’s dismissal was justified.

The point to note here is the combination of diverse disciplinary infractions that the employer took account of before deciding to dismiss.

Lessons for employers

Employers should:

1. Employers are not required to only take into account prior warnings for the same type of performance or conduct issue (i.e. ‘like-for-like’ issues).
2. The Patrick Stevedores case is an example of a situation where an employer justifiably took account of a series of prior warnings for a variety of workplace issues (i.e. breaches of workplace procedures, unsatisfactory performance and misconduct).
3. If an employer is in doubt about whether it is able to dismiss an employee based on the employee’s prior disciplinary record, always seek advice.

By Brad Petley

Acumen Lawyers Workplace relations and safety law specialists

In Brief

In the recent appeal case about a redundancy, Fair Work Australia (“FWA”) rejected an employer’s “assumption” that a manager would be insulted if offered redeployment to a more junior position following a restructure: Jenny Craig Weight Loss Centres Pty Ltd v Margolina [2011] FWAFB 9137.

What does the Fair Work Act say about redundancy?

The Fair Work Act sets out a number of requirements in order for a dismissal to be considered unfair. One such requirement is that the dismissal must not be a case of “genuine redundancy.”

If an unfair dismissal claim is lodged but FWA finds that the dismissal was because of a “genuine redundancy,” it will bring the claim to an end.

A dismissal will not have been a genuine redundancy, if it would have been “reasonable” in all the circumstances for the employee to have been redeployed within the employer’s enterprise (or an entity associated with the employer’s enterprise).

The Jenny Craig dismissal case

In 2011, Jenny Craig Weight Loss Centres (“Jenny Craig”) restructured its operations resulting in a female manager’s redundancy and dismissal.

Prior to the redundancy, the woman was employed as a Regional Manager. The employee’s position involved significant responsibility including hiring and firing staff, as well as the strategic direction and revenue growth of Jenny Craig centres within her region.

The employee challenged her dismissal by lodging an unfair dismissal claim with Fair Work Australia (FWA).

Under the Microscope – The Employer’s Actions

During the appeal hearing, it emerged that:

• The possibility of redeployment was never discussed with the employee
• There were a number of more junior management positions vacant at the time (although of lesser responsibility and pay) including that of “Centre Leader”
• The employee had the necessary skills, qualifications and experience for a Centre Leader position
• If offered, the employee would have accepted a Centre Leader position
• No alternative position was offered to the employee

An excuse put forward by the employer for failing to offer redeployment was that an offer of a lesser position, it had assumed, would be taken as a “complete insult” by the employee concerned.

The Decision

FWA held that the dismissal was not a case of a “genuine redundancy” because redeployment to a Centre Leader position would have been reasonable in all the circumstances.

Factors taken into account by FWA included that:

• There had been an option of redeployment to a centre leader position
• The employee had the necessary skills, qualifications and experience for that position
• There was no reason to disbelieve the employee’s evidence that she would have accepted the position if it were offered

Lessons for Employers

Employers should:

• If considering a restructure, be mindful of the Fair Work Act’s “genuine redundancy” requirement
• If redeployment is available but to a lesser position – never assume that an employee will reject redeployment
• Whether an employee may be “insulted” by a particular offer of redeployment is not a valid reason for failing to discuss redeployment with the employee
• If in doubt about whether an employee has the relevant skills, qualifications and experience for a particular vacancy – discuss those concerns with the employee and seek his/her feedback.

By Brad Petley

Acumen Lawyers Workplace relations and safety law specialists

Even though the Fair Work Act 2009 has been in full operation for just over 2 years, we are continually surprised by the amount of outdated employment contracts and workplace policies still in use. The Fair Work Act introduced the National Employment Standards (NES) and Modern Awards. The NES brought about changes to a number of minimum terms and conditions, which necessitated amendment to many existing employment contracts and workplace policies in order to bring them in line with the NES.

The risk to employers who fail to rectify non-compliant contracts is legal action by the Fair Work Ombudsman for a breach of the NES and/or a relevant Modern Award and the prospect of a civil penalty of up to $6,600 for an individual employer and $33,000 for a corporate employer.

The solution for remedying non-compliant employment contracts is relatively simple – re-issue new compliant agreements. If changes to existing agreements were merely a restatement of applicable Fair Work Act provisions, the consent of affected employees would not be needed. That is because the revised employment contract would be merely recognising the changes automatically brought about by the commencement of the Fair Work Act. Of course, if an employer wished to introduce other terms into a revised contract (unrelated to the Fair Work Act’s changes), those terms would require the agreement of the employee affected.

Ensure Workplace Policies and Employment Contracts are workable.

In the 2011 case of Tara Davies v Hip Hop Pty Ltd T/A Hippity Hop Child Care (an unfair dismissal case) Fair Work Australia considered an employer’s policy so poorly worded that a breach of the policy could not constitute a valid reason for a dismissal. Thus, the employer’s dismissal action was found to be unfair.

A mistake that employers sometimes make is to create unnecessary disciplinary restrictions in their workplace policies. The “3 warnings before dismissal stipulation” is somewhat of an HR myth. Some employers mistakenly include such a precondition in workplace policies as well-intentioned guidance for their managers to follow. In reality, however, such restriction would leave a manager without the necessary discretion to take dismissal action when faced with serious misbehavior, if the requisite amount of prior warnings had not been issued.

Industrial tribunals often take a dim view of an employer’s failure to follow its own procedure, if it resulted in an employee’s dismissal. Where an employee’s dismissal is found to be unfair, an order for reinstatement of the employee or the payment of monetary compensation could follow.

How many warnings are necessary?

The Fair Work Act does not set out any minimum amount of warnings that must be issued in order for a dismissal to be considered fair. Whether none, one or more prior warnings are appropriate before an employer may dismiss a misbehaving or underperforming employee, it will depend on the facts and circumstances of each case.

If an employer is unsure of its rights or obligations, advice is always recommended.

Lessons to take-away

Employers should:

1. Audit their business’s employment contracts and policies to ensure compliance with the National Employment Standards and modern awards.
2. If necessary – reissue new (compliant) employment contracts
3. Amend workplace policies that are found to be non-compliant with workplace laws and/or containing flawed or overly prescriptive provisions.
4. If there are none in place – implement written employment contracts and written workplace policies as soon as possible.
5. Seek advice and assistance, if in doubt.