Paying the Price: Employee required to pay employer’s legal costs after losing unfair dismissal case

The Fair Work Commission has ordered a former cabin crew supervisor to pay his ex-employer’s legal costs after rejecting settlement offers and then losing his unfair dismissal claim. The case provides a useful illustration of an employer successfully recouping costs under Fair Work Act provisions where an employee has rejected a reasonable offer to settle. Continue reading

Significant and systematic micromanaging valid reason for dismissal

The Fair Work Commission has upheld an employer’s decision to dismiss an employee who engaged in “significant and systematic micromanaging” of his employees.  The employer dismissed the employee following a workplace investigation, on the basis that he had engaged in breaches of relevant workplace policies regarding bullying and harassment.

Complaints

Several employees working under the supervision of the employee made complaints. A number of complaints related to specific incidents, including that the employee had responded to an employee’s group email publicly with “why did you send this?” and had then spoken to the relevant employee about the email in an aggressive and threatening tone. Other aspects of the employee’s micromanaging included that he had limited employees’ contact with internal and external stakeholders by requiring permission to speak to stakeholders, started attending internal stakeholder meetings with employees (who had previously attended meetings alone), and required employees to complete onerous tracking and other administrative tasks.

Micromanagement had the effect of bullying

The employee did not dispute the contents of the complaints, but rather their characterisation as bullying behaviour.  The employee claimed that the relevant employees had not raised these issues with him directly prior to making a formal complaint and that he had been unaware that his behaviour had an adverse effect. 

The Commission found that despite the possibility of the employee being “well-intentioned”, the cumulative effect of his conduct and behaviour was one of significant and systematic micromanaging that breached the employer’s Code of Conduct, and bullying and work, health and safety policies. 

The decision indicates that an employee’s intention may not be relevant in considering whether conduct is bullying.  Rather, the Commission will consider the impact of the behaviour in question on affected employees. 

see Carroll v Karingal Inc [2016] FWC 3709

Costs awarded against drug-test employee who doctored doctor’s report

The Fair Work Commission has ordered an employee to pay his employer more than $18,000 in costs after ‘doing a runner’ from his own unfair dismissal hearing when it emerged that he had manipulated a doctor’s report to hide a positive drug test.

The employee was dismissed from his job as a truck driver after a routine workplace drug and alcohol test showed positive results for amphetamine and methamphetamine.

The employee brought an unfair dismissal claim in the Fair Work Commission. Whilst giving evidence under oath, he stated that he went to his doctor immediately after the workplace drug test and submitted a urine sample which tested negative. The employee attached to his witness statement a copy of what he claimed was his doctor’s report showing the negative result.

The doctor who collected the urine sample was called to give evidence before the Commission.

The doctor told the Commission that the test results attached to the employee’s witness statement were not those which the doctor had provided, and that the original document (which he produced) in fact showed a positive result.

The employee left the courtroom during the doctor’s evidence and did not return. The proceedings were discontinued.

The employer subsequently applied for costs. The Commission found that the employee’s case was premised on fabricated evidence and a lie given under oath, and noted that:

“The lie was so central to the unfair dismissal remedy application that when it was uncovered as a lie during the proceedings, the case crumbled and the [employee], to use the colloquial, “did a runner” leaving his representative to clean up the mess and discontinue the proceeding.”

The Commission ordered that the employee pay the employer’s full costs (i.e. ‘indemnity costs’) of $18,618.31.

Mr James Green v Toll Holdings Ltd [2016] FWC 2790

Good Faith Obligations In Exercising Termination Rights

An employee has successfully argued on appeal that his employer had an obligation to act reasonably in relying upon a right to summarily terminate his employment. The NSW Court of Appeal upheld the bank executive’s wrongful termination claim although, the executive received only a small fraction of the $9m plus damages claimed. The NSWCA found that, despite the wrongful termination, the employer bank would likely have terminated for convenience, with notice, in any event and that damages should be assessed on that basis.

In 2012, the executive was one of a handful of recipients of an internal email about changes to his bank’s policies. A couple of weeks later, a journalist contacted the bank to say that he had been posted (in a handwritten envelope) a copy of the email, which turned out to have been doctored.

The bank investigated the leak and engaged a handwriting expert who concluded that it was “highly probable” that the writing on the envelope belonged to the executive. The executive denied that the writing was his or that he had sent the doctored email. He asked for a full copy of the expert’s report and an opportunity to provide his own report in response. The bank declined and terminated his employment without notice for serious misconduct.

The executive brought proceedings seeking over $9m in damages. At first instance, the Supreme Court rejected the claim, finding that the executive was responsible for posting the email to the journalist, and that summary dismissal was permitted on the basis that, in the bank’s opinion, serious misconduct had occurred.

On appeal, the NSWCA  reached different conclusions both about the extent to which the decision to dismiss could be reviewed, and about the merits of that decision. The NSWCA found that:

  • Even though the executive’s employment contract allowed summary termination if “in the opinion of [the bank]” he engaged in “serious misconduct“, the contract required that misconduct had objectively taken place, and that the bank act reasonably in reaching its opinion.
  • The bank had been unreasonable in limiting its investigation to the recipients of the email  and refusing to provide the expert’s report or allowing the executive to get advice on it;
  • The bank’s handwriting expert had “misapplied principles of fundamental importance” in reaching her conclusions; and
  • Accordingly, the bank was not entitled  to summarily terminate the executive’s employment.

 

However, the NSWCA’s wrongful termination finding did not lead to the damages claimed by the employee. It was accepted that, whilst  the bank had no grounds to dismiss for serious misconduct, it was entitled to terminate on notice “for any reason” and would likely have done so in any event. Accordingly, the executive’s damages were limited to the value of his notice period, plus interest, being approximately $110,000 (as opposed to the over $9m sought).

Obligation to act reasonably in arriving at an opinion about misconduct

Whilst an employer may have a right to terminate summarily, this decision suggests that an employer must read into that right an obligation to act reasonably. Acting reasonably in arriving at a view about whether misconduct has occurred may include, for example, following internal investigation procedures (even where those procedures are not contractual). Acting reasonably will also extend to a reasonable assessment of available evidence, including where relevant expert evidence.