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Category: Dismissal

  • Fair Work Commission – “bullying” was reasonable management action and rejected a long-serving employee’s bullying claim.

    The Fair Work Commission said, “bullying” was reasonable management action, and has rejected a long-serving employee’s bullying claim.  The Commission accepted that the employer, Salvation Army Employment Plus, took reasonable management action when it performance-managed its employee after she resisted changes to workplace practices.

    Commissioner Lee in a ruling issued 4 June 2015 said the issues raised by the Salvation Army Employment Plus job placement consultant in her bullying claim “are reasonable management action undertaken in a reasonable manner”.  The Commissioner said the consultant particularly objected to a change that involved her seeking to place in jobs clients from the full “rainbow” of applicants, rather than just the “generally job ready” clients she had dealt with in her 9 years with the organisation.

    The placement consultant told the Commission at the hearing in April that the change meant she was now required to deal with stream-4 clients who “may be somebody who is recently out of prison and they have drug issues, mental health issues, schizophrenia, they are considered not job-ready”.  The consultant refused to deal with the stream-4 clients claiming it was unsafe, but Commissioner Lee, after considering evidence including a recent Worksafe inspection, said he was satisfied there was no such risk.  Commissioner Lee said the change in client mix, alongside the employer’s new approach to performance management, “is a major driver” of the consultant making the bullying claim.

    The consultant claimed she was being unreasonably performance managed and micro-managed.

    The Commissioner said the consultant was “deeply distressed that her refusal to service ‘stream 4’ clients was the basis for the finding [in a performance assessment] that she was not meeting the values of the organisation”.  The employer gave her a score of 57 out of 100 in her most recent assessment, against an average across all employees of 62, marking her down for failing to service the stream 4 clients.

    Commissioner Lee said that it was “not unreasonable” for her refusal to “become a matter of note in her performance appraisal“, given that it was part of her position description.  The Commissioner said Employment Plus had in the past failed to assess individual performance but while its introduction had been “a significant change” for the consultant, “the manner in which it has been introduced or administered does not appear to be unreasonable.”

    Organisation shifting from “moribund” to “performance focussed“

    Commissioner Lee said the organisation had shifted from “a long period of moribund management to an environment where the organisation is performance focussed… However, while this represents a significant change in her working environment, the fact that it occurred and the method of its implementation did not amount to bullying”.

    Commissioner Lee said the change within Employment Plus was a response to the Salvation Army seeking to implement a “high performance culture” to turn around losses that meant the job agency was being subsidised.

    Commissioner Lee said “She was forced to adjust to a more active management after a lengthy period of the organisation managing her and her colleagues very poorly… However, while this was a change that had a personal impact on the [consultant], particularly with the high turnover, there is no evidence that the approach taken amounted to bullying behaviour directed at the [consultant], particularly given the evidence of the timely replacement of vacancies in the organisation.”

    [A. B. [2015] FWC 3353 (4 June 2015)]

  • The Fair Work Commission has knocked back a ‘trust and confidence’ submission made by an employer.

    The Fair Work Commission has knocked back a ‘trust and confidence’ submission made by an employer.

    workplace-safetyThe Fair Work Commission reinstated a portable toilet delivery driver who’s employment was terminated with Coates Hire Operations Pty Limited for a safety breach.  The Commission rejected the employer’s claims that the delivery driver should not be returned to the job because it no longer had ‘trust and confidence’ in him.

    Commissioner Booth said the driver’s behaviour did not constitute serious misconduct because there was no element of the conduct being “wilful or deliberate”.  Commissioner Booth said the driver’s error “was not a deliberate, wilful, reckless or even negligent breach of safety requirements“.

    Coates dismissed the driver after he stopped his truck on the then new 13km Gold Coast Light Rail line early in 2014.

    Commissioner Booth accepted that the driver genuinely believed the track and wires were not live and that it was safe to park his truck on the track while he picked up a damaged portable toilet.  The Commissioner noted that video evidence indicated “no visible hazard zone signs, tape, bunting or other indicia that would objectively give rise to concern that the site was live and dangerous”.

    The Commissioner took into account evidence from Coates’ northern region HR Manager that the dismissed driver’s group had not been “toolboxed” about the advice provided to Coates about when the line would go “live“.

    The HR Manager also admitted in evidence to the Commission that the work order given to the driver did not contain a safety warning, whereas work orders issued after the driver’s incident incorporated such a warning.

    Commissioner Booth rejected Coates’ argument that the driver should not be reinstated because it had lost ‘trust and confidence’ in him.  The Commissioner said the driver “struck me as an honest and very willing worker, albeit one who had, in his own words and with hindsight, done the wrong thing, an admission against interest that reinforces my conclusion” and if reinstated there is no reason why “he would not perform his duties in a satisfactory manner and in the best interests of Coates”.

    The Commissioner noted that the driver had served the Company for almost 12 years without any criticism of his work performance.

    Commissioner Booth has requested Coates and the former employee provide further submissions on compensation for lost earnings.

    [Harrington v Coates Hire Operations Pty Limited [2015] FWC 2598 (6 May 2015)]

  • Duty of care, bullying and harassment, and unfair dismissal: Court decision

    It was held that Curtin University did not breach a lecturer’s employment contract or its duty of care by failing to make progress with complaints he lodged against his superiors under the University’s grievance policy.

    The lecturer activated Curtin University of Technology’s Grievance Policy in May 2002 when he made a formal complaint that he was being marginalised and humiliated by his department and school heads.

    GrievancesIn line with the policy, the University’s Grievance Resolution Officer (GRO) forwarded the complaint to the lecturer’s Executive Dean, who said he would take it up with the alleged perpetrators.

    But the Dean did not raise the matter with them, and little progress was made with the grievance by September 2002 when a number of students lodged complaints about the lecturer’s teaching methods.

    The University stood the lecturer down while it investigated the students’ complaints, and in November he went on extended sick leave for a stress-related condition.

    The University ultimately rejected most of the students’ complaints.  From the start of 2003, the lecturer took a mixture of long service leave, annual leave and sick leave, and never effectively returned to work.

    He was certified totally unfit for work in February 2003, and his condition did not improve.

    Progress on the lecturer’s grievance stalled in 2003, with the University initially concerned that it could not proceed while he was on sick leave, followed by disagreement over who would conduct the investigation and the need for him to provide a coherent summary of his concerns, which had expanded since the initial complaint.

    In September 2004 the University sacked the lecturer after it found pornographic material and illegally downloaded music on his work laptop.

    The lecturer filed an unfair dismissal as a result of his sacking.

    The Australian Industrial Relations Commission (AIRC) rejected his unfair dismissal claim in a decision handed down in March 2006.

    A full bench refused the lecturer leave to appeal the AIRC decision, later that year.

    Following a deterioration in his psychiatric condition, the lecturer sued the University in the WA Supreme Court in February 2009, claiming that it had breached its duty of care to him by failing to deal with the alleged bullying and harassment, and not resolving his formal grievance.

    He also argued that the grievance process breached his contract of employment.

    images-2Drawing on the definition of ‘bullying’ adopted by the Federal Court in last year’s Farstad case, his Honour Justice McKechnie said that assessing “unreasonable behaviour” required an objective test, not a subjective one, “this must plainly be right as it accords with the general law of negligence“.

    Justice McKechnie held that none of the University’s employees bullied, harassed or victimised the lecturer, finding their “predominant motive” was his welfare, given they knew he was stressed and fragile.

    Policy contractually binding, but no breach

    Following the Farstad ruling, Justice McKechnie found that the University’s Grievance Policy imposed “mutually binding obligations” on the lecturer and the University.

    But he said any inaction by the University before February 2003 was statute-barred by section 38 of the Western Australian Limitation Act.

    The judge said the Executive Dean had breached “the protocol” in not raising the grievance with the department and school heads. And he said that while “in retrospect” the decision to suspend the process pending the lecturer’s return to work might have been wrong, “not every wrong decision is a negligent decision”.

    Justice McKechnie said the University’s failure to deal with the grievance while he was on leave was not a breach of its duty of care nor a breach of any implied condition of employment.  He said, “The correspondence and emails flowing between the [lecturer] and Curtin tell a story of a [lecturer] who kept expanding his grievances and adding persons each time he disagreed with them… The Curtin responses and communications between staff show an organisation concerned about the plaintiff’s fragile state and wanting to resolve outstanding issues if possible.”

    His Honour said the lecturer “blew hot and cold” about the grievance process, at times being unwilling to proceed and at other times wanting it expedited.  He said, “The actions taken by Curtin over the relevant period were reasonable responses. For most of the period, the [lecturer] was certified as unfit for work and Curtin reasonably exercised its duty of care by not permitting [him] to work during the periods he was so certified.”

    Justice McKechnie said the inquiries the University made of him from time to time did not breach its duty of care “nor did they demonstrate bullying“.

    His Honour found that the lecturer’s suspension following the student complaints caused his adjustment disorder, rather than the University’s failure to resolve his bullying grievance.

    [Please refer to Christos v Curtin University of Technology [No 2] [2015] WASC 72 (27 February 2015)]

  • Redundancy and Offers of Alternative Employment: Fair Work Commission decision

    A recent decision of the Fair Work Commission may be of some assistance to your business when considering redundancies and offers of alternative employment.

    On 27 February 2015, the Fair Work Commission awarded full redundancy pay to a general manager who lost his position after his company acquired another, with a ruling that an offer of a different senior role at the same salary level was not acceptable alternative employment.

    Senior Deputy President Richards held that the employer’s offer (Datamars (Australia) Pty Ltd) of a Business Development Manager (or BDM) position in the expanded post-merger organisation did not meet the requirements of section 120 of the Fair Work Act.

    SDP Richards found that he had no scope to vary the amount owed to the general manager on redundancy, despite the employer wanting to reduce the payout to zero.

    It was observed by SDP Richards that the employer’s offer had a number of characteristics that would ordinarily appear to be an acceptable alternative position.  The former general manager’s pay, job security, and hours would have remained the same, and the offer preserved his continuity of employment.  Furthermore, the BDM position was “within a much larger organisation which presumably afforded a wide range of opportunities compared to the narrower base in the pre-acquisition period”, with no concern that the prospect of “underperformance or incapacity” would have undermined his employment security.

    However, SDP Richards found that beyond those listed points “doubts emerge” in relation to the offer.   Importantly, he said that while it was not necessary for the employer’s offer to “replicate the various functions of the original position” in order to be acceptable, “it is a salient consideration as to whether or not the alternative position manifests the same degree of seniority and executive status within the employer’s business“.

    Furthermore, he said the BDM position “does not provide compensatory executive level functions sufficient to retain the same degree of seniority within the employer’s business as did the role of General Manager“.

    Importantly, SDP Richards said it was necessary to give “considerable weight” to issues of seniority and status.  The former employee, “after all, was the General Manager for the business in Australia and reported only to the Chief Operating Officer in Switzerland prior to the acquisition“.

    He said the alternative position suggested that the former general manager would have a role in securing corporate business in Australia and through that, “in growing the business… but the offer of employment stated that he would be working with the national sales manager in that respect (or independently as appropriate) and would be required to achieve revenue and margin levels in line with budget expectations… This appears to be more of an operational level sales oriented function than the largely executive level function undertaken previously by [the general manager].”

    SDP Richards also noted that the employer “was not able to identify over whom [the general manager] would exercise. . . managerial control” and it “does not appear to me that there was any clarity around the precise role envisaged“.

    SDP Richards said the proposal had “all the appearance of a ‘work in progress’” and that while “quite a number of indicia” supported the employer’s case, “I consider that absence of any definable and substantial executive/strategic function and a very different measure of seniority and status in the new position inhibits a determination that the alternative position was acceptable“.

    Request to Reduce Obligation To Pay Redundancy

    Datamars had argued as a fallback position from its application to seek to pay zero to the general manager, there “should at least be an appropriate reduction for the role that was offered to him“.

    But SDP Richards noted that the scope to vary the redundancy pay obligation where an employer found acceptable alternative employment “may be limited, or problematic, given the 2004 Redundancy Case Full Bench commentary at least… Such exemptions from the obligation to pay redundancy pay (which arise in instances in which an employer has not obtained acceptable alternative employment and must otherwise pay the full amount of redundancy pay) do not form part of the National Employment Standards and are not able to be relied upon any longer by employers.”

    SDP Richards said that, given his finding on the offer, there was “no scope for me to vary the amount the Company must pay as redundancy pay as a consequence (notwithstanding that the alternative position maintained a number of key conditions of the original position)”.

    Please refer to: Section 120 Application to vary Redundancy Pay, Datamars (Australia Pty Ltd T/A Datamars [2015] FWC 1269 (27 February 2015).

  • What is a Reasonable & Lawful Direction? Fair Work Commission Recent decision

    The Fair Work Commission has upheld the dismissal of a BHP Billiton underground mineworker sacked after repeatedly refusing to shave off his beard for the purposes of  ensuring his respirator operated effectively. Cut Your Beard in WorkplaceCommissioner Hampton found the company’s instructions to the uranium mine employee at Olympic Dam to comply with its Clean-Shaven Policy were lawful and reasonable, and the policy itself a “reasonable and appropriate one given the circumstances of the operations of BHP Billiton and the potential hazards in the mine“. The Commissioner said BHPB had “significant WHS obligations upon it as the employer” and, given technical advice about the hazards workers were exposed to and relevant safety regulations, “the instruction (and the policy) was an objectively reasonable and proportionate response to the circumstances“. Commissioner Hampton acknowledged a clean-shaven policy, such as the company’s policy, affected individual rights and preferences.  He said, however, “in light of the actual hazards, the nature and size of the mine and its workforce, and the impact of the relevant WHS obligations, the interests of the protection of safety and health become more important than personal preference and a desire to obtain an appearance, even one held so strongly by [the employee]“. The Commission heard the employee, an underground truck-driver, had a goatee beard about 100mm long and a moustache since he was 19 years old, including for his 6 years at the mine.  In a letter to the company after being asked to show cause why he should not be dismissed, he said, “My facial hair is my personal attribute, it is who I am and my liberty of right.” The company’s long-standing clean-shaven policy became an issue for the employee when it began rolling it out across all operational areas last year, after a review of its respirator protective equipment (RPE) policy, sparked by information that diesel particulate matter (DPM), emitted by its diesel trucks, had been categorised as a human carcinogen. The mine leadership team decided that by the end of the year, the entire mining and processing workforce was to be clean-shaven for respiratory fit-testing and, once fit-tested, to carry the RPE the company supplied and maintained. The employee to be sacked was the only 1 of 900 underground workers who refused to comply. He argued before the tribunal that the clean-shaven policy and related directions were not valid, as BHPB had failed to meet its consultation requirements under the state WHS Act.  He also said there was no causal connection between the policy and the alleged work, health and safety risk given his offer to purchase an alternative Airstream helmut, which he had worn in the past and allowed him to roll up his goatee inside it. However, Commissioner Hampton said he did not have to rule on compliance with the WHS Act, for reasons including that it was fundamentally a matter for a court of competent jurisdiction and it was possible to determine the unfair dismissal claim without doing so. In rejecting the employee’s argument that his offer to purchase an alternative device made his dismissal unfair, the commissioner said it was evident that “there are real hazards in this workplace, including potential exposure to DPM, and other issues arising from the fact that (amongst other minerals) the BHP Billiton mine at Olympic Dam is a uranium mine… It is also evident that the clean-shaven policy is in general terms, an appropriate control strategy and is directed at genuine WHS issues in this workplace… As a general rule, the capacity for employees to supply their own PPE is not a workable and appropriate approach in a workplace of the kind conducted by BHP Billiton at Olympic Dam..It is a large and complex workplace with genuine hazards and the approach contended by [the employee] had the real capacity to undermine the integrity of the policy… If BHP Billiton were to permit an employee to avoid the clean-shaven policy based upon personal appearance preference, then in my view, this is likely to lead to flow-on issues and claims for other ‘exemptions’.” The Commissioner noted that using the Airstream helmet with any “significant” facial hair was of itself “problematic and would require regular testing”. [James Felton v BHP Billiton Pty Ltd [2015] FWC 1838 (30 April 2015)]

  • Redundancy and Other Acceptable Alternative Employment – Is Redundancy Payable?

    A recent case before the Fair Work Commission dealt with the issue of redundancy and suitable alternative employment.

    In Szanto v ISS Facility Services Pty Ltd the Commission clarified the application of sections 119 and 120 of the Fair Work Act 2009 (the Act) in deciding whether a redundancy payment must be made.

    The Act

    Section 119 of the Act provides that an employee is entitled to be paid redundancy pay if the employee’s employment is terminated either:

    • at the employer’s initiative because the employer no longer requires the job done by the employee to be done by anyone (except where this is due to the ordinary and customary turnover of labour); or

    • because of the insolvency or bankruptcy of the employer.

    Any genuine redundancy, pursuant to the Act, must be paid in accordance with the employee’s contract, employer redundancy policy, the NES or applicable industrial award /agreement entitlement.

    Under section 120 of the Act an employer is entitled to vary the sum of a redundancy payment if the employee has been made redundant and the employer has obtained other acceptable employment for the employee, or cannot pay the amount.

    Section 120(2) allows the employer to apply to the Commission for a determination of a reduction in severance amount in circumstances where suitable alternative employment has been found for the employee.

    Szanto v ISS Facility Services Pty Ltd

    Mr Szanto worked for over 11 years as a Security Officer at ISS Facility Services (ISS) and more recently in the position as concierge of Telstra House.  Due to the loss of a contract, ISS had to reassign Mr Szanto’s to another role at a new site which involved a mix of security guard duties and shift work.

    Mr Szanto refused the offer of alternative employment insisting that his role had been made redundant and that the new role was not suitable alternative employment due to his personal situation and the fact there was a change in his working hours. Mr Szanto demanded ISS make payment of his redundancy.

    In contrast, ISS maintained that the new role was suitable alternative employment and refused to pay Mr Szanto’s redundancy.  ISS terminated Mr Szanto after he failed to attend his rostered shift at the new site and Mr Szanto applied to the Commission to redress the non-payment of redundancy.

    At the Commission, Mr Szanto submitted that ISS owed him a redundancy payment as his position at Telstra House had been made redundant and that the offer of alternative employment was unsatisfactory.

    ISS submitted that Mr Szanto was not made redundant as his role was not linked to a specific site or location.

    Decision

    In deciding whether Mr Szanto was entitled to a redundancy payment the Commission considered the following:

    • was his role made redundant?; and
    • was the offer of a new position suitable alternative employment?

    The Commission concluded that as Mr Szanto was employed as a general security guard and had been placed as the Telstra House concierge, when ISS lost the contract for Telstra House and no longer required the role to be performed by anyone, Mr Szanto’s position was made redundant and he was entitled to redundancy pay.

    However, when considering the question of whether ISS had offered him suitable alternative employment, Commissioner Cambridge stated that it is simply not a matter of choice for the employee to either accept or reject alternative employment, but an objective test of comparison between the terms and conditions that applied to the previous job that became redundant and those applicable to the new alternative employment.

    In comparing Mr Szanto’s job at Telstra House with that of the alternative employment offered by ISS, the Commission found that although there were significant differences in hours of work and tasks to be performed the role clearly fell within the scope of the definition of security guards duties.  The updated and different terms of the new site were comprehended as being within the scope of the particular employment circumstances and the employer had offered suitable alternative employment to Mr Szanto.  Therefore, ISS was under no obligation to make payment of any redundancy payment because the new role fell within the scope of his duties as a security guard.

    In Sum

    Employers and employees should take note of the Szanto case as it supports the notion that just because an employer (or an employee for that matter) believes a similar role is available in another location to an employee who’s position has been made redundant, it will not guarantee that the Commission view it as suitable alternative employment.  However, so long as employers offer a substantially similar role, they may apply to the Commission to have the total sum of the severance payment they must pay assessed.

    Clearly where the position offered is in no way suitable alternative employment then full redundancy will be required to be paid to the employee.

  • High Income Threshold Rises to $133,000

    High Income Threshold Rises to $133,000

    The Fair Work Commission has increased the High Income Threshold to $133,000 effective 1 July 2014.

    The high income threshold affects how modern awards apply to employees and affects their ability to access unfair dismissal.

    The high income threshold affects 3 main entitlements:

    1. Employees who earn more than the high income threshold and who are not covered by a modern award or enterprise agreement, cannot make an unfair dismissal claim;
    2. Employees who are covered by a modern award and have agreed to a written guarantee of annual earnings that is more than the high income threshold, do not get modern award entitlements. However, they can make an unfair dismissal claim.
    3. The maximum amount of compensation payable for unfair dismissal is capped at either half the high income threshold, or 6 months of the dismissed employee’s wage – whichever is less.

    What’s counted under the high income threshold?

    An employee is affected by this if their ‘earnings’ are more than the high income threshold. To calculate ‘earnings’, include:

    • Wages
    • Money that is paid on their behalf (e.g. superannuation top-ups or salary sacrifice)
    • The agreed value of non-monetary benefits (e.g. laptops and mobile phones).

    An employee’s earnings do not include:

    • Payments that cannot be set in advance (e.g. commissions, bonuses or overtime)
    • Reimbursements
    • Superannuation contributions that the employer has to make.

    Lessons for employers

    The increase will enable more employees to access the unfair dismissal provisions. Employers should remain mindful that employees who cannot access the unfair dismissal provisions of the Fair Work Act may still have other legal options to challenge a dismissal. These other avenues include the general protections provisions of the Fair Work Act, anti-discrimination laws, and the common law for breach of contract claims.

  • General Protection Claim – Myer proves dismissal NOT linked to workplace right or to gender

    General Protection Claim – Myer proves dismissal NOT linked to workplace right or to gender

    General Protection Claim
    Sales Manager Dismissed

    In the decision of Vukovic v Myer Pty Ltd [2014] FCCA 985 (2 June 2014), a Myer sales manager, Vukovic, who did not disclose he had an anxiety condition to his employer, or make any plan to seek workers compensation, has failed to argue that these were the real reasons for his dismissal, rather than concerns with his performance.

    The sales manager, Vukovic, was employed at the North Ryde Myer’s store from April to June 2013.  Vulovic was advised that he was being dismissed within his three (3)- month probationary period because of his apparent disengagement at several internal staff events, unsatisfactory customer performance, and his failure to take notes and follow up concerns raised during regular inspections of his departments.

    Vukovic, however, alleged that Myer dismissed him because of ongoing panic attacks he had been experiencing at work, the physical symptoms of which, he believed, would have been apparent to his managers and colleagues.

    Vukovic argued in the Federal Circuit Court that, because his anxiety condition qualified as a disability and would have meant he had a workplace right to seek compensation, Myer had taken adverse action against him when it sacked him.

    Judge Cameron dismissed Vukovic’s General Protections claim, finding that Myer management had been able to show that the concerns which led to Vukovic’s dismissal related to “performance of his duties and were quite unrelated to any workers compensation rights he might have had“.

    Judge Cameron said that the script that his store manager read from when notifying Vukovic of his dismissal “recorded the bases” for the dismissal and that none of the issues raised reflected a concern that he suffered from an anxiety condition, which Vukovic conceded he had not disclosed.

    In addition, Judge Cameron found there was no evidence that Vukovic intended to pursue a workers compensation claim.

    His Honour also rejected a further allegation that Vukovic had been dismissed because he was male, and accepted Myer’s evidence that while some female employees had complained that he had been looking at their breasts, his explanation that he was checking their name tags to make sure he got the right names was “accepted as an adequate explanation and the issue did not arise again”.

    LESSONS FOR EMPLOYERS?

    It is apparent that an employee can raise virtually any issue of concern that has some loose and indirect connection with their employment, and rely on that as a workplace right in an adverse action claim under Part 3-1 the Fair Work Act.

    However, this does not mean that an employer cannot appropriately and fairly manage employees’ performance and conduct and make decisions to discipline or dismiss, when such complaints have arisen.

    The critical issue for an employer is being able to explain, justify and defend the decision making process through clear evidence.

    The employer should consider these issues:

    • What “paper trail” will exist about the reasons of the relevant decision makers, leading up to any decision to dismiss or discipline?
    • Are complaints properly investigated?
    • Who within the business will be involved in any decision?
    • Who makes the final decision?
    • Will they be available to give evidence?

  • Fair Work Act’s General Protections provisions covered a WIDE range of employment complaints

    Workplace Update – Fair Work Act’s General Protections provisions covered a WIDE range of employment complaints

    General ProtectionIn May, the Federal Court ruled that the Fair Work Act’s general protections provisions covered a wide range of employment complaints.

    However, it found that these were not the reason for a client services manager’s dismissal in the case at hand, Walsh v Greater Metropolitan Cemetries Trust (No 2) [2014] FCA 456 (9 May 2014).

    Justice Bromberg dismissed the client manager’s (“Walsh”) adverse action claim against the Greater Metropolitan Cemeteries Trust (“GMCT”), finding that she had been dismissed for poor performance and not because she made complaints about a linen supplier and its links to one of the trust’s employees.

    GMCT, which operates 19 cemeteries across metropolitan Melbourne, engaged Walsh on a three (3)-year contract on 24 September 2012, but stipulated that her employment was subject to a six (6)-month probation period.

    GMCT dismissed Walsh on 20 March 2013, four (4) days prior to the expiration of her probation period.

    Walsh told the Court she had made four (4) complaints to her Director on 7 March 2013, and repeated them in a meeting with GMCT’s Chief Executive five (5) days later.

    The complaints related to:

    • the shortage of GMCT staff at a Greek Orthodox memorial service, leading to workplace safety concerns and the unlawful consumption of alcohol by some of the attendees;
    • linen supplier, Alsco, providing sub-quality service;
    • Alsco’s employment of her Director’s Executive Assistant’s daughter, and probity issues arising from the Assistant dealing with her daughter in relation to the contract; and
    • the Executive Assistant undermining Walsh in discussions with other employees.

    GMCT argued to the Court that the complaint about the probity of the Alsco contract did not relate to Walsh’s employment under section 341(1)(c)(ii).

    Justice Bromberg said that the words “in relation to” in the section 341(1)(c)(ii) were of “wide import“, and the relationship could be direct or indirect.

    Relying on the Court’s CFMEU v Pilbara Iron decision, his Honour said the nexus would likely be satisfied “where the subject matter of the complaint raises an issue with potential implications for the complainant’s employment”.  His Honour said Walsh had raised a probity issue in relation to a contract with a supplier who provided services to an operation which she managed in the course of her employment, and Walsh’s “failure to report suspected wrong-doing had the potential to reflect badly upon her and cause prejudice to her in her employment“.

    His Honour said, “By reason of either of those two factors, the Alsco contract complaint made [by Walsh] raised an issue with potential implications for [her] employment and was ‘in relation to…her employment’ within the meaning of s 341(c)(ii) of the FW Act”.

    Justice Bromberg accepted evidence from GMCT’s Chief Executive, however, that the complaints had nothing to do with her decision to dismiss Walsh.  The Chief Executive told the Court that she had decided to dismiss Walsh after having discussions with the Director and GMCT’s HR Manager, and set up a meeting on 12 March 2013 with her to communicate her decision.

    When Walsh made the complaints at the meeting, the Chief Executive adjourned the meeting to investigate Walsh’s complaints, but ultimately concluded that they were without substance.

    The Chief Executive said that nothing Walsh had raised in the 12 March meeting concerned her enough to change her view that her employment should be ended, and that the reasons were that she was not a “good cultural fit for the organisation“, was not focused on the strategic aspects of her job, and had become involved in too many conflicts with other employees.

    LESSONS FOR EMPLOYERS?

    It is apparent that an employee can raise virtually any issue of concern that has some loose and indirect connection with their employment, and rely on that as a workplace right in an adverse action claim under Part 3-1 the Fair Work Act.

    However, this does not mean that an employer cannot appropriately and fairly manage employees’ performance and conduct and make decisions to discipline or dismiss, when such complaints have arisen.

    The critical issue for an employer is being able to explain, justify and defend the decision making process through clear evidence.

    The employer should consider these issues:

    • What “paper trail” will exist about the reasons of the relevant decision makers, leading up to any decision to dismiss or discipline?
    • Are complaints properly investigated?
    • Who within the business will be involved in any decision?
    • Who makes the final decision?
    • Will they be available to give evidence?

    Does the employer want the most senior people in the business to be directly involved in any decision making process?  If they are involved, given the nature of the evidentiary burden on the employer, their evidence will be needed. Does the business want its CEO or Managing Director to be in the witness box? If not, then query whether they should be directly involved in any decision making process, and consider delegating the authority to make such decisions to others such as the Human Resources department and direct managers.

  • Court confirms implied term of ‘confidence and trust’ as part of Australian law

    A significant decision was handed down on Tuesday, 6 August 2013, by the full court of the Federal Court, on Australian employment contract law: Commonwealth Bank of Australia –v- Barker [2013] FCAFC 83 (6 August 2013)

    The Full Court has found that the Commonwealth Bank breached an implied term of ‘confidence and trust’ when it failed to consider redeployment opportunities for one of its executive managers, shortly prior to dismissing him.

    In their majority judgment, Justices Jacobson and Lander said the implied contractual term had, “obtained a sufficient degree of recognition, both in England and Australia, that it ought to be accepted by an intermediate court of appeal“.  Justice Jessup dissented, saying the implied term had not made its way into Australian law, and the Bank would not have breached it in any event.

    This is the first major case in which an appeal court in Australia has supported the existence of the implied duty and found that it has been breached.

    Adelaide University’s Professor Andrew Stewart said it was highly likely that the decision would be challenged in the High Court and he hoped that the Court would grant leave to appeal “so that we can get some certainty” about the law.

    The Full Court was dealing with the Bank’s appeal from the decision of Justice Besanko in September last year. The decision that the Bank had contravened the implied term when it committed a serious breach of the redeployment policy in its HR manual.

    Justice Besanko ruled that there was an “an implied term of mutual trust and confidence in the contract of employment” between the executive and the Bank.  The Bank dismissed the manager on 9 April 2009, after notifying him on 2 March 2009 that his position had become redundant.

    Justices Jacobson and Lander said the implied term “which had been stated in most of the authorities, is that the employer will not, without reasonable cause, conduct itself in a manner likely to destroy or seriously damage the relationship of confidence and trust between employer and employee“, citing the House of Lords decision in Malik v Bank of Credit and Commerce International SA (in liq).

    The majority judges said relevant circumstances informing the operation of the implied term in this case were the fact that the manager was a long-term employee of a large corporate employer and a clause in his contract of employment that said his employment may be terminated if the Bank were unable to place him in an alternative position. 

 The majority judges said, “It seems to us that in these circumstances the implied term required the Bank to take positive steps as from 2 March 2009 to consult with [the manager] about the possibility of redeployment and to provide him with the opportunity to apply for alternative positions within the Bank“. 

Instead, they noted that the Bank had withdrawn the manager’s email and mobile phone facilities without telling the redeployment officer.

    The majority judges said the circumstances required the Bank to take positive steps to consult with the manager and inform him of suitable employment options, “In our opinion, these obligations fell within the content of the implied term.”

    The judges noted the manager had been employed by the Bank for approximately 23 years when the contract was entered into. 

The contract “contemplated the possibility of redundancy and redeployment within the Bank, as an alternative to termination…The Bank is a very large corporation with a huge workforce and many and varied positions within the Bank at various locations throughout Australia,” the judges noted.

    They said the Bank’s actions from 2 to 26 March 2009 (when the manager’s email and phone were cut off) were sufficient to amount to a breach of its duty not to engage in conduct likely to destroy or seriously damage the relationship of confidence that existed between it and the manager.

    The judges said damages were recoverable for breach of the implied term, “at least where the breach is anterior to and independent of termination“. 

They increased the damages awarded by $18,000, bringing the total to $335,623.

    ACTU Assistant Secretary, Tim Lyons welcomed the decision.
”There have been plenty of examples where employers have simply walked away from what are expressed as their obligations in policy documents, from what they express to be their culture or from what on any view any reasonable person would say is the decent and respectful way to behave in given circumstances…While each case will turn on specific facts, the Court finding that there is a duty on employers not to unreasonably destroy or damage the relationship of trust and confidence is a very important one,” Lyons said.