A recent unfair dismissal decision contains key lessons for employers when managing employee use (and abuse) of work-related devices. In this case the employer terminated the Applicant’s employment for failure to comply with a direction to repay a debt of $15,000 – being personal phone charges incurred on a work phone.
The employer issued the Applicant with a work mobile phone. In late 2014, the employer detected that the Applicant’s use of the mobile phone was excessive and notified him that this was the case. The Applicant admitted that his excessive use was due to a number of personal international calls made to his family in India. The Applicant apologised and offered to pay for the cost of the calls. The total cost of the calls was $22,630 (incurred over a six month period from May to September 2014). The Applicant repaid $7,500 towards the costs of the calls but refused to repay the remaining amount, claiming the amount was overly burdensome, and then claiming that he was not liable for the cost of the calls.
The employer issued the Applicant with a warning letter in relation to his conduct, in which the employer:
- claimed the Applicant’s excessive personal calls on his work mobile phone breached its IT Equipment Policy and their Acceptable Use Guidelines (the Policies); and
- issued the Applicant with a direction to repay the outstanding monies owing.
In response, the Applicant maintained his refusal to repay the outstanding phone bill and denied knowingly breaching the Policies. For several months, the employer issued repeated directions to the Applicant to repay the monies, all of which where ignored.
Eventually in June 2015, the employer issued a ‘show cause’ letter to the Applicant, proposing a repayment plan which would see the Applicant repay $200 per fortnight until the outstanding monies were repaid. The Applicant again failed to comply with the direction to accept a repayment plan and, as a consequence, the employer terminated the Applicant’s employment.
Deputy President Gooley found that the Applicant was aware of, and breached, the IT Equipment Policy but was unable to make similar findings in respect of the Acceptable Use Guidelines (which outlined acceptable use of work-related equipment). DP Gooley found it “surprising” that employees, including the Applicant, were not directed to the Guidelines during induction, at the commencement of employment. Notwithstanding, DP Gooley found that the Applicant did breach the IT Equipment Policy, and that the employer was entitled to issue him with a warning in relation to his conduct.
Importantly, the Applicant’s refusal to comply with the employer’s direction to enter into a repayment plan was a valid reason for termination. In considering validity, DP Gooley noted that “I do not consider that the mere existence of a debt provides an employer with a valid reason to terminate the employment of an employee. If there is a legitimate basis for the debt to be disputed then requiring the employee to repay the disputed amount on pain of dismissal may be unfair … however I find in this case that there was no reasonable basis for the Applicant to dispute the debt. As such it was unreasonable of him not to enter into an agreement to repay the monies.” [60 to 61]
Tips for Employers
This decisions highlights that employers should:
- Ensure employees are aware of, and acknowledge, policies and procedures regarding the appropriate use of work related equipment, in particular IT and telephone equipment;
- Implement processes which provide for monitoring of such equipment and highlight the consequences associated with breach of such policies;
- When managing an employee debt, be flexible and reasonable when negotiating options for repayment, having regard to the quantum of the debt, the employee’s personal financial position and their remuneration; and
- Consider a direction to an employee to enter into a repayment plan, when managing employee debts become protracted and difficult.