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2020 Employer Takeaways

Following the unpredictable and complex nature of the 2020 employment landscape, our office has compiled some ‘best practice tips’ to help employers venture into the new year with confidence and understanding.

TIP 1: Save money in the long run by investigating employee concerns

Failing to investigate employee concerns can be costly. One employer learned this lesson the hard way after being ordered to pay an employee $40,940 in compensation for failing to investigate allegations which formed the basis of her forced resignation. [1]

How does this affect you?

Employers are at risk of significant monetary awards being made against them for constructive dismissals. As in this case, an employees’ resignation will not in itself, protect a business from an unfair dismissal claim. Where the circumstances include instances of coercion, ultimatum, or force whereby the employee had no reasonable alternative, a resignation may amount instead to a constructive dismissal.

Relevant Facts:

In this case, an employee was accused of spreading rumours about her employer’s alleged unprofessional involvement with another colleague who received unfair preferential treatment. The accused employee was not provided with any kind of formal investigation, rather, the employer called an office meeting and held a secret ballot vote to ascertain how many people in the office believed she was responsible. This is a case which exemplifies how employers should not approach allegations of employee misconduct; informal or “secret” ballot voting to reach a decision, ultimately, will not end well. Instead, a formal process must be adopted and consistently utilised to ensure fair and reasonable investigations and (if necessary) dismissals are effected.

The employee was eventually confronted by her employer in relation to the allegations and secret ballot outcome. The employee responded emotionally to the situation verbally resigned as a result then later was provided with a formal resignation letter which had been prepared in advance by her employer.

Outcome:

The Commission concluded, on all the available evidence, that Ms Yang’s employer had intended to terminate her employment prior to the confrontation and had in actual fact, engineered the situation to facilitate her resignation. The employers’ conduct left Ms Yang with no realistic alternative to resignation and accordingly was found to constitute constructive dismissal. Importantly, the Commission noted that there may have been a valid basis for dismissal where a formal investigation was undertaken, and the allegations were substantiated.

In cases where employers do not undergo formal investigations to substantiate or justify a reasonable termination or resignation of an employee, a court’s outcome may favour that of the employee. Even when there may be reasonable grounds for action to be taken by an employer, without proper investigation, such action should not be taken. As a pointer, without proper investigation, compensation pay outs the employer’s expense often ensues.

TIP 2: Disingenuous redundancies do not pay

Employers risk facing significant penalties where the termination process is implemented in response to genuine workplace rights being exercised or in the prevention of such rights being exercised at all. This risk was realised this year when an employer was subjected to $60,000 in penalties for implementing a contrived appraisal process with the intention of making an employee redundant for raising workplace health and safety concerns.[2]

The employee, in addition to being reinstated, was also awarded a further $10,000 in compensation for the distress and humiliation associated with his termination.

How does this affect you?

Employers must be aware of their employees’ entitlements and legal protections ensuring their ability to exercise workplace rights. Such entitlements and rights include asking relevant questions, raising genuine concerns, and addressing perceived health and safety hazards in the workplace.

Relevant Facts:

The employee was elected in 2016 by his co-workers to act as their Health and Safety Representative (“HSR”) in accordance with the Occupational Health and Safety Act 2004.[3] Following his promotion to Production Manager of the yard, the employee ceased his role as the HSR until he was re-elected in February 2020.

Subject to agreed conditions of an employee’s tenure, an employer should refrain from interfering from the general queries and concerns of an employee. Especially after the decision of the above case, employers should remain vigilant in responding to such queries or concerns if they are at all concerned with the risk of paying for hefty penalties and compensation.

The role of an employee is also crucial as to whether complaints or concerns are raised to an employer. Whether an employee plays a role closely tied to the safe operation of a workplace (for example, Human Resources or Inspection Officers) can determine the gravity of the concerns raised and how likely these concerns, if not addressed, could amount to an unfavourable outcome for the employer.

In the above case, the employee worked as a Health and Safety Representative. The court found that one reason for the employee’s dismissal was his intention to supress further health and safety-based work enquiries. Being dismissed on such grounds is not a good look for the employer. At the very least, employers should consider the risks raised by health and safety officers employed for the purpose of maintaining legally compliant workplaces.

Outcome:

The employers were ordered to pay a total sum of $60,000 in pecuniary penalties for their contravention. Such a contravention was easily avoidable had the employers listened and assessed the risks raised by their employee and not dismissed him instead – a dismissal which was far more costly to the employer than had been anticipated.

TIP 3: Persistent breaches of professional standards can warrant a dismissal[4]

A termination will likely be considered valid where previous warnings have been provided and the problematic conduct of an employee persists. The Federal Court of Australia this year affirmed the dismissal of a Doctor on this basis notwithstanding the series of appeals lodged claiming unfair dismissal.

How does this affect you?

Where you have an employee who consistently breaches professional standards or Code of Conduct you may be able to terminate their employment on such basis. The courts have supported employers in terminating employees who consistently breach professional standards, particularly after they have been consulted about the conduct and it does not change.

Relevant Facts:

For the above case, in July 2017 the employee was terminated for the following reasons:

  • She failed to follow instructions and observe professional boundaries which presented a serious clinical risk to patients and their care;
  • She disregarded confidentiality contrary to previous instructions which demonstrated a pattern of behaviour inconsistent with her continued employment; and
  • She ignored warnings and consultations about her behaviour in respect to professional boundaries.

The employee argued that she had been terminated as a result of exercising her workplace rights by raising various issues regarding her employment. The point of contention for the Court’s consideration was whether the Hospitals’ reasons outlined in the 2017 termination letter were the real and operative reasons for her dismissal. 

Outcome:

Both the Federal Circuit Court and the Federal Court found in favour of the employer where the employee had continually breached professional standards and been subsequently dismissed. The courts have affirmed the principle that a bad employee can be dismissed if it can be shown that any action (or inaction) taken by that employee is contrary to professional standards, codes of conduct or other employment conditions. If an employee can prove such contrary behaviour with supporting evidence, lawful dismissal can ensue.

Need help?

This year has been a complex year for employers navigating and balancing their various obligations and legal responsibilities to employees amidst a global pandemic.

If you would like guidance in respect to any of the matters raised or other employment issues, contact our offices. Our team would be happy to help you navigate your next season.

For more information on employment-related topics, feel free to visit our website.

This article was written by Brittany Everett and Kerry Copley.


[1] Yang v FCS Business Service Pty Ltd [2020] FWC 4560

[2] Construction, Forestry, Maritime, Mining and Energy Union v Melbourne Precast Concrete Nominees Pty Ltd (No 3) [2020] FCA 1309

[3] Replaced in Qld by Work Health and Safety Act 2011 (Qld)

[4] Rudakova v Congregation of Religious Sisters of Charity of Australia t/as St Vincent’s Private Hospital [2020] FCA 1222

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