Conduct and Performance

COVID-19, Working from Home, Mental Health Challenges and the Office Christmas Party!

As we have covered in previous client alerts, the COVID-19 pandemic has created a raft of unique challenges for employers striving to maintain safety, efficiency and productivity, and employees who, perhaps for the first time in their working lives, are now consistently working from home. For many of these employees, feelings of social isolation have led to reports of anxiety and depression, and with the Silly Season just around the corner, this means some serious red flags for employers. In this client alert we examine some of the current difficulties, and projected difficulties that COVID-19, will have on employees, and how best employers might deal with them.

Social Isolation

According to a recent survey conducted by the Royal Melbourne Hospital, half the healthcare workers surveyed are feeling “burnt out” and wanting to leave their profession due to the overwhelming volume of issues they are being called on to deal with due to community mental health complaints caused by COVID-19 and from workers working from home. Remote working, whilst it might at first have sounded convenient insofar as employees could ‘pop a load of washing in the machine’ or ‘run the kids up and back from school with minimal disruption to their work day’, are now experiencing a raft of new and unique difficulties.

For example, employees are reporting:

· feeling isolated, lonely, or disconnected from their colleagues;

· being unable to ‘switch off from work’;

· reduced boundaries between work and personal life;

· having difficulty staying motivated;

· having difficulty prioritising workload;

· feeling uncertain about personal productivity and whether they are performing according to expectations;

· feeling guilty about not performing work or family duties as effectively; and

· insomnia and sleeping problems.

These issues can manifest for simple reasons such as a misunderstood email communications or exclusion from a particular virtual meeting. These difficulties are exacerbated by the inability for employees to readily discuss their grievances with their colleagues, so they end up ‘stewing in their own juices’. In turn, this can lead to claims of workplace bullying, taking time off on account of feeling stress and anxiety and general performance issues, all of which combine to reduce an employer’s overall productivity. More concerning however is the very real effect this may be having on the mental health of employees.

Employers have a duty to ensure that they provide a safe system of work and that employees are not subjected to the risk of mental health concerns because of the way they work. On top of this obligation, employers need to be cognisant that most people are struggling in some way with the consequences of the pandemic. As such, it is reasonable to expect that the level of underlying mental health issues is far greater now and can easily be exacerbated by a poor work environment or other work stressors. Employers really need to be taking careful consideration of these unseen matters and at least making reasonable efforts to ensure they have considered the matters that may increase the risk of mental health concerns for their employees and put in place mechanisms to address this if possible.

It is fairly assured that we will see a dramatic increase in litigation by employees against their employers both in the workers compensation arena and for breach of employers’ work health and safety obligations as a result of mental health claims. Responsible employers who wish to ensure they do not have to deal

with such litigation and want to ensure increased sustained productivity are well advised to pay special attention to their employees emotional and mental wellbeing.

Given the current time of year, most organisations would historically have been planning Christmas functions. These functions were an important part of the employer’s ability to say thank you to its employees and give employees a social environment to enjoy themselves and interact with colleagues in a far more relaxed context. It was an opportunity to increase company moral and reinforce the organisations culture. However, for the most part, this year these types of gatherings will not be possible. So how can businesses address this gap, given the ever-increasing need for this type of social interaction?

Virtual Christmas Parties

In years gone by, the office Christmas party was a welcome opportunity for employees to let off steam and celebrate the end of the year in the company of their colleagues. Of course, that set the scene for overindulgence and inappropriate workplace behaviour which, for some employers and employees, made for some very difficult conversations upon returning to work.

This year, due to restrictions on numbers at various venues and some offices still not catering for a full return of their employees, virtual Christmas parties will become a new norm whereby work colleagues will get together through the use of technology such as Zoom. Rather than supplying a controlled amount of alcohol at a planned and regulated office function, employers may send a small selection of alcoholic beverages to their employees by mail/courier.

Whilst it is highly impractical to send an excessive amount of alcohol by courier to be enjoyed by employees at the virtual office party, employers have no means of controlling the quantity of alcohol consumed by individuals, as they may well ‘stock up’ in their homes. This may result in some employees, within an employer sponsored virtual party environment, becoming heavily intoxicated. Not only does this create an unsafe situation, but, when coupled with some employees’ enduring feelings of anxiety, social isolation, disconnection and, in some cases, feeling as though they have been the subject of bullying, intoxication could result in serious inappropriate workplace behaviour. Where an employee has felt disenfranchised for an extended period, is in the comfort of their own home and whose normal inhibitions are depressed by alcohol, the potential for outbursts of offensive and unacceptable behaviour is omnipresent.

To mitigate this risk, it behoves employers to educate staff as to what constitutes acceptable behaviour, and what kinds of conduct may give rise to disciplinary action. To this end, it is important that employers implement control measures, so their staff understand what behaviours are acceptable in the context of an event organised by the company, even if it is being conducted virtually and not during ordinary business hours.

Examples of recommended control measures include:

1. developing and implementing policies around appropriate workplace behaviours, and refreshing these expectations with your employees regularly and in particular before virtual Christmas parties;

2. consulting with staff in relation to your expectations of their behaviour at virtual Christmas parties;

3. providing training to employees on their obligations under various legislation, including in respect of work, health and safety; and

4. providing access to counselling and an EAP services provider.

Furthermore, it should be agreed prior to the commencement of the virtual event that an ‘event moderator’ will be in place and, at the first sign of inappropriate comments or behaviour, employees will be dismissed from the virtual event (by being disconnected from the Zoom meeting).

Finally, as is the case at in-person functions, employers should be cognisant of employees looking to ‘kick-on’ at the conclusion of the virtual event. Whilst this is less likely where employees commenced the function from the comfort and safety of their own homes, the potential exists that some employees, who may have overindulged, see fit to want to meet with some of their colleagues at a venue and continue the festivities.

It is almost impossible for an employer to prevent this if an employee, or group of employees, are so inclined; however, to mitigate the risk, an employer should seek to have pre-emptive conversations with their employees prior to the virtual function, including the risks to their employment should they engage in drink driving, let alone theirs and others’ safety, and that any unsavoury incidents that might occur between work colleagues, even after the conclusion of the virtual event, may have ramifications when they return to work.

Whilst work functions are a great opportunity to have fun with colleagues, our recommendation to surviving the silly season is to be honest with yourself as to whether everything reasonably practicable has been done to ensure all employees are safe and without risk of being subjected to offensive behaviour. This is particularly poignant this year for employees who might be suffering from mental health issues caused by prolonged COVID-19 isolation. A ‘steady hand’ is required.

If any further information in relation to any aspect of this alert is required, please do not hesitate to contact us. Otherwise, we are available and ready to assist should you require any advice or legal support this silly season.

This alert is not intended to constitute, and should not be treated as, legal advice.

Working From Home: Some Insightful FWC Decisions

For many of us, working from home at least some of the time this year has become the norm. For quite a significant number of employees, working from home has become a regular and permanent (or at least current) way of working. We have written previous client alerts regarding the steps employers should take to ensure they are meeting their legal obligations if they have employees working from home. In this client alert, we examine some recent cases in the Fair Work Commission (FWC) which have had to deal with the legal implications when working from home, is not all its cracked up to be.

In a recent decision of the FWC, Deputy President Coleman was required to decide whether the employer, Red Energy Pty Ltd, who had encouraged its employees to work from home during COVID, and then required them to do so due to the lockdown in Victoria, had a positive obligation to provide its employees, and more particularly the applicant, with a desk from which he could work at home. The company had provided its employees with laptops, headsets, adjustable chairs, ergonomic assessments, and access to occupational therapists, but refused to provide the applicant with a desk. The Applicant argued that he had recently moved house, did not have a desk and was not in a financial position to buy one.

The Applicant argued that he had no choice but to resign given he could not work as the company had refused to buy him a desk. The Applicant then commenced an unfair dismissal claim. The Deputy President however found that the Applicant did not have to resign but chose to do so. The FWC found that the Applicant could have remained employed and bought himself a desk.

The decision is illustrative of a pattern we are seeing emerge, where employees now feel that they have the “right” to work from home and can demand that the employer facilitate that this occur. This is not in fact the case, unless you as an employee are unable to attend for work (for example because of a lockdown or requirement to isolate), you do not have any “right” to work from home. In fact, even in those circumstances, it is open to the employer to require the employee to take paid or unpaid leave. If an employer however directs employees to work from home, it does have certain obligations to ensure the employees are able to work from home. It may be that if the employee cannot purchase or acquire the necessary equipment to enable the employee to perform his or her duties, the employee can refuse to do so, but this is not the same as terminating the employment, and nor does it mean the employee is forced to resign as is demonstrated by the Red Energy decision.

What about the difficulties of managing behaviour and performance of employees working remotely? This issue was front and centre in another recent FWC decision. In this recent decision by the FWC, the FWC has found in favour of an employee who had commenced unfair dismissal proceedings as a result of her summary dismissal.

The company argued that the employee, who was a sales representative who worked remotely, failed to provide weekly sales reports for which she had been previously warned, had several customer complaints and had a poor attitude and lack of respect for management. The final straw for the Company was the fact that it appeared from the employee’s Instagram account that she had conducted personal activities during working hours.

The FWC found that the company had conflicting and competing expectations for its employee including requiring daily sales reports, service all customers, comply with new reporting obligations and do so for less pay in the COVID-19 climate. Although the FWC found that the reporting failures warranted formal performance counselling they were not sufficiently serious to amount to a valid reason for termination. The same conclusion was reached in relation to the other grounds of dismissal sought to be relied upon by the employer, with the FWC finding that:

“When COVID-19 hit, the combination of reduced hours to do the job, demotivation arising from reduced hours and pay and an additional reporting obligation combined to create a set of circumstances in which an objective assessment of performance was fraught.

“Yet in that very context untested assumptions about conduct from social media posts led to an unfair conclusion that [the salesperson] had fooled the business.”

It is evident that in the context of COVID-19 and the fact that the employee was working remotely, objective assessments of her performance became difficult. Ultimately the decision to terminate her employment was found to be unfair.

What these two recent decisions illustrate, is the complexity that working remotely (and especially from home) brings to the employment relationship. Appropriate performance management and maintaining employee morale and a positive and cohesive culture is an enormous challenge for most employers most of the time. This task has been exacerbated by the increase in the number of employees working from home. Employers and employees alike need to adjust to this “new normal’ by being more mindful of the challenges faced by remote working.

It is illustrative of the complexity of the issues surrounding working from home, that the ACTU’s national executive is currently debating a Working from Home Charter of Rights, which will amongst other things seek to address the issue of “turning off” as well as privacy and data protection.

We are Here to Help

Working from home can create a number of complex and competing challenges for employers and employees. We are here to assist our clients ensure they are compliant with all their legal obligations including ensuring that if employees are working from home, they remain a vital and connected part of the team.

If you require further information in relation to any aspect of this client alert or assistance in dealing with an employment law related issue, please feel free to contact us.

This alert is not intended to constitute, and should not be treated as, legal advice.

The Reasonable Notice Trap – The Importance of Written Contracts

As the nation begins to emerge from the COVID pandemic and businesses slowly recommence their ‘as usual’ activities, employers are understandably keen to return to commerce as soon as possible. No doubt, many sectors of industry were hit hard by the pandemic; industries such as hospitality, retail, travel and tourism, professional sports and the arts, and despite the welcome assistance of the Federal Government’s JobKeeper programme, in its various forms, redundancies were inevitable.

Employees at all levels were either subject to modification in their job role and/or remuneration, or lost their positions entirely and now that it appears that there is some light at the end of a long and dark tunnel, those positions need to be refilled.

Employers who are now able are looking for employees. However, it behoves the responsible employer to maintain discipline with respect to industrial rules and regulations and such discipline begins with an agreement between employer and employee on appropriate and lawful work conditions under a written contract of employment.

Notice Provisions within a Contract

A written contract of employment signed by the parties serves a number of very important functions, chief among which is to set out in writing the terms on which the relationship is based so there is no uncertainty. However, too often we are informed that no relevant written contract exists, or it cannot be found. This leaves the door open for a Court to imply terms into the contract.

One of the most litigated areas of contract law in the employment arena, is the issue of the implied term of reasonable notice. This implied term is only enlivened where there is no current enforceable written contract of employment providing for the relevant notice to terminate the contract.

The national employment standards (“NES”) provides only minimum notice periods, and at least for employees not covered by an enterprise agreement or modern award, these notice periods are merely that, minimums. The NES does not proscribe the required contractual notice required to terminate an employment contract. The minimum notice in the NES provides for:

1.    1  weeks’ notice for 1 year or less of continuous service;

2.    2  weeks’ notice for more than 1 but less than 3 years continuous service;

3.    3  weeks’ notice for more than 3 but less than 5 years continuous service; and

4.    4  weeks’ notice for more than 5 years continuous service.

Furthermore, should an employee be over the age of 45 years and have served more than 2 years’ continuous service, they are entitled to an additional week’s notice.

Notwithstanding, what prevails where there is no written contract of employment, or no operative contractual notice period? Under such circumstances, it is left up to the Court to make the determination as to what “reasonable notice” would be in the relevant circumstances.

What is Reasonable Notice?

Without a written contract of employment, agreed on by both parties, reasonable notice will depend on a raft of factors. For examples, seniority of the role, length of service, difficulty in finding alternative employment at a congruent level, age of the employee etc.

The New South Wales Supreme Court was recently required to make such a determination in the matter of Roderick v Washington H Soul Pattinson Co Ltd (No 2) [2020] NSWSC 1224 (“Roderick”). In this case, the employee, was employed by the employer as a senior executive from 2006 to 2018 in various roles in finance. Without notice, and for subjective reasons, the employee’s employment as Finance Director was terminated.

Current Case Law

By way of background, Ms Roderick (“Plaintiff”) was employed by Washington H Soul Pattinson & Company Limited (“Defendant”) from the period 26 June 2006 to 12 April 2018. The Plaintiff was initially employed as Chief Financial Officer however in 2014 she was promoted to Finance Director, appointed to the Board and made a director of the Company. In January 2015, the Plaintiff was provided a draft employment contract upon appointment as Finance Director. This new contract was not signed. During the period December 2015 to December 2017, the Defendant invited the Plaintiff to participate in both the Long-Term Incentive (“LTI”) plan and Short-Term Incentive (“STI”) scheme. On 12 April 2018, the Plaintiff’s employment was terminated without notice on the basis that “she was not the right fit” and a new CFO was appointed the next day.

At the same time as the promotion, the employee was provided with a draft executive director employment contract. The employee attempted to discuss the draft employment contract with the remuneration committee, but a meeting never took place. The contract remained unsigned.

Ms Roderick commenced proceedings for notice of 24 months and payment of long terms and short-term incentives. At trial, the employer’s evidence was that the employee was ‘failing’ as finance director or otherwise not performing. The Court determined that such evidence was insufficient and in Ms Roderick had never been informed of any performance concerns. As such the Court, turned itself to the question of the notice required to be provided to the Plaintiff.

Irrespective of previous signed contracts, the employee was promoted to an entirely new role, with greater responsibilities. The Court found that the provision of the new unsigned contract to the Plaintiff was demonstrative of the parties’ intention that the original contract would not continue to apply to the new role. The Defendant had argued that in the absence of the Plaintiff signing the new contract her old employment contract continued to apply. In addition, the Court found that the new role was entirely different from the old role and together with the clear intention to create a new contract, it could not be concluded that the old employment contract continued.

In then determining the issue of “reasonable notice” that should be implied in the contract of employment, the Court found that, due to her length of service, her age, being 49 at the time of termination, the senior positions she held, and her failure to find appropriate alternate employment since her termination, 12 months’ notice of termination was an appropriate period of reasonable notice. The Court also then examined her claims for an award of a short-term and long-term incentive, and in both cases found in favour of the employee, despite the Defendant’s argument that she had performed poorly. The Court held that the Defendant’s failure to assess the Plaintiff’s performance and entitlement against agreed KPI’s was itself a breach of her contractual entitlements. The final award in favour of the Plaintiff meant that the Defendant was required to pay Ms Robinson in excess of $1 million in damages.

Advice to Employers

This case is illustrative in two important respects:

1. Employers ought to always ensure they have a valid, relevant signed employment contract in respect of their employees that is securely stored; and

2. Employers should have appropriate performance management structures in place to ensure that if there are performance issues that they are identified and dealt with appropriately, so they can be relied on if the employer wishes to take action.

Irrespective of the seniority of an employee, their length of service, the roles they previously fulfilled, or their otherwise recognised previous successes and competency, it is vital to ensure the foundational employment documents and procedures are appropriately followed. Employers should ensure they have unambiguous and clearly defined contracts of employment signed to by the employee, no matter what position the employee holds.

Given the enormous change COVID-19 has brought to many businesses, if this has caused changes in the way you engage with your staff, their positions, duties, remuneration or any other crucial element of their employment, these changes should be reflected in a revised employment agreement, signed by the employee. As the Roderick decision demonstrates, failure to do so can be very costly.

We are Here to Help

Contracts of employment can be complicated and, depending on the role and industry, may involve a raft of industrial instruments, including modern awards and enterprise bargaining agreements. We are here to assist in unpacking these complicated yet vital documents. If you require further information in relation to any aspect of this client alert or assistance in dealing with an employment law related issue, please feel free to contact us.

This alert is not intended to constitute, and should not be treated as, legal advice.

Sexual Harassment in the Workplace: A Timely Reminder for Business

Under the backdrop of the #MeToo movement surrounding actors and celebrities, along with recent allegations against former High Court Judge Dyson Heydon, now presents a timely reminder that sexual harassment, particularly in the course of one’s employment, is entirely unacceptable.

The Sex Discrimination Commissioner, Kate Jenkins has recently handed down the Sexual Harassment National Inquiry Report into Sexual Harassment in Australian Workplaces (“the Report”) and it serves as an excellent resource for employers to ensure that their workplaces are free of sexual harassment. It provides a framework for maintaining a safe workplace, key indicators with respect to which employers must remain vigilant, and methods to deal with potential sexual harassment before it becomes costly to both personnel and business.

What is Sexual Harassment in the Workplace?

As well as having a devastating impact on affected individuals’ health, wellbeing, career and finances, sexual harassment represents a cost to Australian employers through:

  • lost productivity;
  • staff turnover;
  • negative impact on workplace culture;
  • responding to complaints, litigation and workers’ compensation; and
  • reputational damage.

Under the Sex Discrimination Act 1984 (Cth) (“SDA”), sexual harassment is defined as:

  • any unwelcome sexual advance;
  • unwelcome request for sexual favours; or
  • other unwelcome conduct of a sexual nature in relation to the person harassed

in circumstances where a reasonable person, having regard to all the circumstances, would have anticipated the possibility that the person harassed would be offended, humiliated or intimidated.

However, these definitions take a broad view of what constitutes sexual harassment and fail to address the most typical examples of sexual harassment in the workplace which cause the most problems for employers and employees alike. The 2018 National Survey conducted by the Australian Human Rights Commission (“AHRC”) identified a number of different types of sexually harassing behaviours including:

  • verbal forms of sexual harassment, such as sexually suggestive comments or jokes and intrusive questions about private life or physical appearance;
  • sexually explicit pictures, posters or gifts;
  • intimidating or threatening behaviours such as inappropriate staring or leering, sexual gestures, indecent exposure, or being followed, watched or someone loitering nearby;
  • inappropriate physical contact, such as unwelcome touching, hugging, cornering or kissing; and
  • sexual harassment involving the use of technology, including sexually explicit emails, SMS or social media, indecent phone calls, repeated or inappropriate advances online, or sharing or threatening to share intimate images or film without consent.

The two most common types of behaviour reported to the AHRC are sexually suggestive comments or jokes and intrusive questions about private life or physical appearance. In many cases brought before the AHRC and the Fair Work Commission (“FWC”) complaints by employees, the subject of sexually harassing ‘jokes’, were originally met with surprise by the harasser when their attempts at humour were met with offence or insult.

Quite often, incidences of the ‘sharing of jokes’ or unnecessary familiarity evolve into incidences of sexual harassment. In the recent case of Emmanuel Montes v The Star Casino [2020] FWC 874, an employee was dismissed by The Star Casino for serious misconduct where what began as a joke between a male server and his female colleague culminated in him smacking her on the backside with a serving tray and sending her “creepy, unwanted, disgusting and inappropriate” text messages.

Increasingly, the misuse of social media has given rise to claims of sexual harassment of colleagues, albeit outside the confines of the workplace. Employees have often been under the mistaken impression that ‘friending’ a work colleague on platforms such as Facebook or Instagram and then either sending inappropriate material or making inappropriate comments cannot be adjudicated as harassment by their employer. In the matter of Little v Credit Corp Group Limited t/as Credit Corp Group [2013] FWC 9642, an employee used his Facebook account to make sexually suggestive comments to a new employee that he ‘friended’ and was terminated as a result. However, sexual harassment over social media need not be as overt as in the matter of Little. By ‘friending’ a colleague on Instagram and routinely commenting on their personal photos can be interpreted as stalking behaviour that ultimately gives rise to claims of harassment.

The Report highlights the pervasive nature of the conduct described above and its damaging effects on workplace participants, especially young women. It is no surprise therefore that many capable intelligent employees leave their employer without ever raising the reasons for departure. This only exacerbates the issue and the undercurrent of harassment that may exist in the workplace. It is our view that failure by organisations to take matters of sexual harassment seriously in all its forms, leads to the belief by men in positions of power that they are immune and can do as they wish. This is clearly evident from the recent exposure of Justice Heydon’s conduct.

Mechanisms to Remedy Incidents of Sexual Harassment.

Federal and State anti-discrimination legislation make sexual harassment in the workplace unlawful. The SDA confers additional powers to the AHRC to conciliate sexual harassment complaints and refer matters to the Federal Circuit Court or Federal Court; however, pursuing a claim in the Federal Courts is a complicated and invariably expensive means of seeking remedy. There have been calls to increase the scope for victims of sexual harassment to seek appropriate redress. The Fair Work Act 2009 (Cth) (“FW Act”) does not expressly prohibit sexual harassment however, it can be raised indirectly in matters brought to the FWC through:

  • the general protections against ‘adverse action’ on the basis of a workplace right;
  • the general protections against ‘adverse action’ on the basis of sex;
  • the anti-bullying jurisdiction;
  • unfair dismissal proceedings; and
  • unlawful termination on the ground of sex.

The Report recommends that the FW Act be amended to:

  • establish a sexual harassment jurisdiction in the FWC similar to the anti-bullying jurisdiction (whereby the FWC can conciliate between the victim and perpetrator of sexual harassment and issue a ‘stop sexual harassment order’);
  • clarify that sexual harassment can be conduct amounting to a valid reason for dismissal; and
  • updating the definition of “serious misconduct” to include sexual harassment.

Widening the scope of the Fair Work system to better, or more directly, deal with claims of sexual harassment does provide a relatively low cost means for victims to seek remedy and/or allow employers to deal with perpetrators more efficiently.

Where incidents of sexual harassment are so egregious, claimants may rely on work, health and safety laws and the criminal law for remedy. These include:

  • the imposition of a positive duty on employers to prevent sexual harassment by eliminating or managing hazards and risks to an employee’s health and wellbeing;
  • claims for workers’ compensation;
  • the imposition of penalties on employers who fail to abide by their duty of care to provide a safe work environment;
  • the awarding of compensation to victims; and
  • criminal prosecution for rape or physical assault.

Finally, the Report has made recommendations to protect sexual harassment victims from defamation laws and media exposure which has traditionally discouraged victims from making a complaint. These include cases where private complaints have been made public by the media or where there is a lack of protection for alleged victims of sexual harassment where they are witnesses in civil proceedings or where their allegations are raised in circumstances where they have not made a formal complaint or given permission for the complaint to be made public. Protections being considered include a standard direction, or presumption in favour of, suppression of witness details in civil proceedings.

Prevention and Response to Sexual Harassment in the Workplace.

Considering the tremendous personal and financial costs that sexual harassment claims can cause victim employees and their respective employers, employers of all sizes have sought guidance on what ‘best practice’ for addressing, and ultimately preventing, workplace sexual harassment looks like. To better prevent sexual harassment, the Report recommends action in the following areas:

  • Leadership – developing leaders within the business that set standards that make it clear sexual harassment will not be tolerated;
  • Risk Assessment and Transparency – identifying and assessing risk by learning from internal and external past experiences;
  • Culture – creating a culture of trust and respect that minimise the risk of sexual harassment occurring ; and
  • Knowledge – ongoing practical workplace education and training to ensure a collective understanding of expected workplace behaviours.

Where sexual harassment has occurred, the Report recommends that employers take the following action:

  • Support – prioritising employee wellbeing and provision of support, including before they make a report, and during any formal processes;
  • Reporting – availing employees of greater options to make a report and instituting processes that allow employers to address sexual harassment other than launching a formal investigation (as employees can be discouraged from reporting if the matter becomes too regimented); and
  • Measuring – the data at an industry-level, to help improve understanding of the scope and nature of the problem posed by sexual harassment.

In summary, it has become apparent that it is insufficient for employers to simply compile an ‘anti-harassment’ policy, file it along with a suite of other HR related documentation that may or may not be studied by employees and assume that a business is compliant. As sexual harassment can cause tremendous harm to the victim and become a financial disaster for inattentive employers, it is essential that business of all sizes takes a pro-active approach to preventing sexual harassment where it can and respond appropriately in the event that it does.

In addition to the above steps we recommend that responsible employers implement robust workplace training on appropriate workplace behaviours. The training should be designed to educate all workplace participants on what is and is not acceptable workplace behaviour and how failure to comply will not be tolerated.

We are Here to Help

We regularly advice clients regarding the implementation of robust workplace policies and training including in the areas of appropriate workplace conduct. If you require further information in relation to any aspect of this client alert or assistance in dealing with an employment law related issue, please feel free to contact us.

This alert is not intended to constitute, and should not be treated as, legal advice.

Managing the End of Year Christmas Party – and The Aftermath Pt2

Oh my gosh – that could not have happened! We hope this is not something the business is saying after the end of year celebrations. Unfortunately, all too often a form of this reaction is all too common. In our last article, we looked at various control measures an employer can put in place to minimise the risk of inappropriate behaviour of employees at end of year or Christmas events which, in turn, minimise an employer’s exposure to subsequent legal claims and possible litigation.  In this, our Part 2, we look at management of the aftermath of the event and what practical steps can be taken to minimise an employer’s exposure where an incident has occurred.

Quite often, incidents occur when the employer-controlled event is over.  At the conclusion of the event at the controlled venue, employees will often continue the festivities at other venues where they can become quite intoxicated and unsavoury incidents result.  In our previous article we gave some guidance on the steps that responsible employers should take to minimise their risk for incidents to occur at the company organised event. As it is often tempting for employees who are enjoying themselves to ‘kick on’, employers should also ensure the policy is broad enough to cover conduct that may bring the Company into disrepute even if it occurs outside of work, or work events. In addition, employees should be encouraged to leave the venue for home once the event is over. Or, if a more carrot than stick approach is favoured, providing the employees cab vouchers to ensure they have a safe means of transport home, can be an enticement to depart before an unsavoury incident occurs.

In the event that a complaint or inappropriate workplace matter is raised about alleged misconduct at a work Christmas event, it is of vital importance that responsive action is taken quickly by employers. Leaving it to mid-January to start an investigation or take action is often too late and lacks the procedural fairness required to be given to an employee. Such measure that ought to be considered, depending on the sensitivity of the issue, include:

  1. providing counselling and support services to the complainant;
  2. keeping the complainant informed as to the steps being taken to respond to the matter;
  3. cooperating with Police and notifying the relevant safety regulators (if warranted);
  4. investigating the matter fully either internally or via a third-party investigation service;
  5. notifying the employee against whom an allegation has been made and requesting their response; and
  6. suspending the accused employee until all the facts have been gathered and a course of action has been decided upon.

In approaching these matters, practical strategies employers should otherwise bear in mind when responding to workplace complaints include:

  1. avoid delaying the response time to allegations;
  2. never assume an allegation is frivolous or vexatious without making inquiries;
  3. consider all the evidence and then determine an appropriate disciplinary response;
  4. document clearly and comprehensively your records at each step of the response process;
  5. provide employees with counselling or an EAP services provider; and
  6. communicate effectively and appropriate when dealing with sensitive workplace matters.

It is also appropriate to have a clear social media policy in place as photographs or video taken ‘in the moment’ and posted to online social media platforms can embarrass or damage the reputation of employees and the employer alike.  It is advisable that employers implement a policy that no images or video from the party are to be posted online by anyone other than the employer.

Finally, whilst inappropriate workplace conduct should be dealt with and punished accordingly, employers need to ask themselves whether the punishment fits the crime. It is therefore not only relevant to act in circumstances where a complaint of inappropriate behaviour is received, but to ensure the ensuing response is proportionate, fair and reasonable.

A common occurrence after the workplace Christmas party can be employees calling in sick the next day.

While employees are entitled to take sick leave if they are not fit for work because of a personal illness or injury, over-indulging to the point where they are unable to attend for work the next day may be a valid reason for disciplinary action.

In Avril Chapman v Tassal Group Limited T/A Tassal Operations Pty Ltd [2017] FWC 4630, Ms Chapman was dismissed after leaving a voicemail for her employer admitting she had over-indulged at the Christmas party and was subsequently unfit for work the following day.

The Commission found that there was a valid reason for dismissal and held that Ms Chapman chose to ‘over-indulge’ the day before she was due at work to such an extent as to be unable to fulfil her obligations to attend for work the next day. However, the Commission ultimately held that the dismissal was unfair considering that this was the first time Ms Chapman had conducted herself in this manner during her 5 years of service with the employer.

We recommend any employer wishing to obtain advice in relation to an incident or complaint arising from an end of year event or Christmas party, takes appropriate and prompt steps to seek legal advice and assistance.

As this article will be our last publication for 2019 and we will resume our alerts from February 2020, we wish all of our clients and readers a wonderful Christmas/Holiday period and a happy New Year!

We trust that, within reasonable parameters, this season of Christmas and end of year functions will be well attended and thoroughly enjoyed!

If any further information in relation to any aspect of this alert is required, please do not hesitate to contact us. Otherwise, we are available and ready to assist should you require any advice or legal support this silly season.

This alert is not intended to constitute, and should not be treated as, legal advice


The explosion of social media use over the years presents many challenges to the employment relationship. The use of social media has blurred the boundaries between work and non-work life. This has led to many employers having to deal with situations where employees have posted something in their private capacity on their own social media accounts, which has (or is likely to have) a negative impact on the employer.

In a recent article by Louise Thornthwaite,[i] published in the Journal of Industrial Relations, Ms Thornthwaite argues that historically the Fair Work Commission (“FWC”) took the view that posts on social media were public and as such were fair game for employers, in determining whether to terminate the employee’s employment. However, she now posits that it appears the FWC has moved away from this view and have increasingly recognised that employees are entitled to an expectation of privacy and not all social media activity is open to employer scrutiny and nor can it be relied upon to validate a termination.

The question of whether a dismissal is justified depends on a number of factors including both the nature of the conduct and the subsequent actions of the employer. In this article, we will examine the proposition expounded by Ms Thornthwaite and the approach the FWC takes on the issue of social media and misconduct.

There is no doubt that the explosion of social media and its use has now become part and parcel of our every day lives including our working lives. The implications for employers are significant and as such the manner in which employers’ deal with this issue is vital to ensuring that they are able to properly protect business interests without alienating a workforce for whom social media is as important as the mobile devices they use to access social media. To this extent, most employers have introduced policies dealing with the issue. How then do these policies interact with the freedom of an employee, and how far can they go to protect an employer from conduct that occurs outside the workplace in the employee’s personal time?

This is the very question with which the FWC and other courts and tribunals have been grappling for some time. Although, earlier cases did seem to suggest that social media posts on facebook were akin to public comments and therefore there could be no expectation of privacy and as such regardless of when and where they occurred, were matters that could give rise to a valid reason for termination, it is my view that a careful reading of the facts of those cases will show that regardless of these sentiments, the reason the FWC found the posts could be relied upon was really a result of the nature of the posts and the conduct more generally. There is no doubt that more recent decisions of the tribunal have appeared to accept that not all social media posts are public and that depending on the context, including the privacy settings applied, there may in fact be a reasonable expectation of privacy by the employee, in circumstances were the post regardless of this expectation gives rise to real concerns regarding the ability of the employee to continue in employment, the FWC has found the posts may give rise to a valid reason for termination.

Notably, in circumstances where an employee’s alleged misconduct on social media occurs outside of work, the Commission has tended to apply the following principles enunciated in the 1998 decision in Rose v Telstra Corporation Limited:

It is clear that in certain circumstances an employee’s employment may be validly terminated because of out of hours conduct. But such circumstances are limited:

  • the conduct must be such that, viewed objectively, it is likely to cause serious damage to the relationship between the employer and employee; or
  • the conduct damages the employer’s interests; or
  • the conduct is incompatible with the employee’s duty as an employee.

This reasoning still appears to be apposite and applicable. By way of example, in Singh v Aerocare Flight Support Pty Ltd [2016] FWC 6186, Mr Singh was a baggage handler employed as a casual employee on a regular and systematic basis by Aerocare Flight Support, an aviation ground handling and services company. Mr Singh held an airport security identification card and was authorised to work within restricted security sensitive areas of Perth Airport. Mr Singh was dismissed by his employer after he had authored Facebook posts allegedly supporting ISIS and Islamic extremism including sharing a post from an Australian Islamic Group and included his own commentary, being the words “We all support ISIS”. Aerocare was then informed about the posts by two other workers who were friends with Mr Singh on Facebook. As a result, Aerocare undertook an investigation and met with Mr Singh to discuss with him that the Facebook posts were contrary to their social media policy and given the nature of his job, represented a security risk. Mr Singh proclaimed that the posts had been sarcastic, he was opposed to ISIS and extremism.

In its decision, the FWC accepted that the ISIS post in particular did breach the social media policy and Mr Singh had participated in relevant training in relation to the policy. However, the FWC found that the dismissal was unjust, harsh and unreasonable because Aerocare:

  • failed to thoroughly review Mr Singh’s complete Facebook newsfeed which would have led to the conclusion that he did not truly support ISIS;
  • spent only 10 minutes deliberately his response to the allegations put to him, suggesting that the decision-makers did not properly consider his responses and the dismissal was premeditated; and
  • did not consider any other alternative form of disciplinary action other than dismissal.

The FWC did not however, refuse to take account of the posts because they were made in Mr Singh’s private time, with the protections of privacy settings. By way of contrast, in Luke Colwell v Sydney International Container Terminals Pty Limited [2018] FWC 174, a more recent decision dealing with the use of social media, the FWC upheld the dismissal of an employee who sent a pornographic video to colleagues outside of work hours despite no formal complaint being lodged by the employees who received the video. The decision to dismiss the employee arose when Mr Colwell had been drinking on his day off and sent a pornographic video via Facebook Messenger to his Facebook friends which included 16 male and 3 female work colleagues. One particular female responded to him with “Are you serious? Mate don’t send me that shit”. The worker posted an apology on his Facebook page the following day.

In support of his unfair dismissal claim, Mr Colwell argued that there was no reason to dismiss him because there was an insufficient connection between the conduct and his employment. In particular, the employee relied on the fact that the video was sent outside of work hours and did not involve any work-related IT equipment. Furthermore, he argued that communications between friends was not a matter for his employer, any communication which some friends may find offensive are matters for resolution between those friends and not a matter that the employer may regulate.

Notably, over the years, Sydney International had taken steps to encourage more women to work in the stevedoring industry and as a result, introduced workplace policies addressing bullying, harassment and misconduct of a sexualised nature. Mr Colwell had received training in relation to these policies, however Sydney International did not have a social media policy in place. Despite not receiving any formal complaint from the recipients of the message, the message came to the attention of Sydney International who subsequently conducted an investigation and terminated Mr Colwell’s employment due to a finding of serious and wilful misconduct including breach of company policy.

In its decision, the FWC disagreed with Mr Colwell, stating that “if an employee engages in conduct outside of the physical workplace towards another employee that materially affects or has the potential to materially affect a person’s employment that is a matter which legitimately may attract the employer’s attention and intervention”. In this regard, the FWC found that Mr Colwell was Facebook friends with colleagues only because of their work relationship and therefore there was a relevant nexus or connection to his employment. Interestingly, the FWC also noted that it was not satisfied that the conduct constituted a breach of the policies as the policies did not include out of hours conduct or conduct via social media.

Relevantly, in relation to the fact no actual complaint was made by any of the recipients of the video, the FWC also took the opportunity to state the following:

it is the situation that employers may fall into the error of thinking that a formal complaint or allegation is required before making an enquiry into an issue of conduct such as bullying or harassment – but this is not the case and a failure to act may present risks that might otherwise have been avoided.”

Lesson for Employers

Although there certainly does appear to be more recognition by the FWC and other courts and tribunals of a reasonable expectation of privacy by employees regarding private social media posts, this does not mean that conduct by employees on social media is beyond the reach of employers. Rather, it is apparent that the FWC will apply the test as expounded in Rose v Telstra Corporation and take into account all the relevant facts, including the fact that an employee has as a reasonable expectation of privacy, in deciding that notwithstanding this expectation their activities on social media are sufficient in all the circumstances to give rise to a valid reason for termination. As is clear from the competing outcomes in the cases discussed in this article, cases involving the dismissal of employees on the basis of social media misuse are varied. It is clear, however, whether conduct on social media justifies termination remains an area of contention and will depend on the facts and circumstances of each case, including the extent to which the employer is infringing upon the privacy of its employees when taking action over unsavoury social media conduct; the manner in which the employer became aware of the conduct and the seriousness of the conduct itself. There will always need to be a sufficient nexus between the conduct and the employment relationship to justify a dismissal.

It is therefore critical employers have a robust social media policy that covers conduct that occurs outside of the workplace and outside of working hours, or that may impact upon other persons connected to the workplace. It is also important to have detailed workplace policies that deal with harassment, bullying and discrimination. Importantly, workplace policies should provide the employer flexibility in how it deals with these matters. Any policy however, will need to balance the interests of the employer in protecting the business with the real and proper expectation of its employees to privacy.

Other strategies to manage the risk of social media misuse includes providing staff appropriate training and implementing software to monitor or limit excessive or objectionable use of social media by employees during work hours.

If you have concerns about social media use in your workplace, or wish to further discuss the steps that can be taken to mitigate the risks in this area, please do not hesitate to contact us for specialist advice or assistance.

This alert is not intended to constitute, and should not be treated as, legal advice.

[i] Social Media and dismissal: Toward a reasonable expectation of privacy? Journal of Industrial relations 2108, Vol. 60(1) 119-136

Performance Management – Why it is a Misnomer

Phew – annual Performance Reviews done! This is an often heard at this time of year. Unfortunately, performance management and annual or bi-annual reviews instill dread in both the employee and managers tasked with conducting performance reviews. However, despite the angst and stress that accompanies performance reviews, not much else is achieved as a result of the review, other than to tick the relevant box stating they have been done. This surely cannot be the purpose of performance reviews. It certainly does not constitute appropriate performance management.

So then what is performance management and how should it be done? Firstly, let me say that performance management, if done properly and appropriately can be a very powerful tool to ensure sustained growth, profitability and a stable and happy workforce. The positive results from proper performance management are numerous and far reaching, so why then do so few organisations get it right, and far too often get it horribly wrong?

The simple answer to this issue, is that just like anything done well, it needs a modicum of time and effort, two commodities that when it comes to soft skills and expertise, are all too frequently overlooked. It is also assumed by most organisations and certainly small to medium sized businesses, that just because an employee has a title of “Manager”, they actually know how to “manage” other staff. This is often the not the case. In this article, we set out what we consider the essence of proper performance management and what should be done by all organisations that wish to get the best out of their employees, as well as explain what should not be done, but all too often is what passes for “performance management”.

What is performance management?

Proper performance management is the appropriate and constructive provision of feedback and guidance to employees for the purpose of ensuring employees are meeting the expected requirements of the role for which they were employed. Implicit in this statement is the very need to ensure that the following criteria are met prior to the employment of the relevant employee:

• The manager actually knows what the position requirements are and the necessary skills and competencies essential for the proper performance of the role; and

• The manager hires a candidate that has the relevant skills and competencies to suit the position.

It is almost impossible to ensure an employee will be successful in a role if they are not the appropriate person for the role because they lack the essential skills needed to be successful in the position. Such competencies should include soft skills such as interpersonal skills, confidence, presentation skills, cultural fit and the like.

Unfortunately, all too often the actual requirements of the position are not clearly defined or understood and it is inevitable that there will be a level of frustration when the employee then does not meet the managers internal expectations. Therein lies the key to appropriate performance management – ensuring both employee and manager are aligned as to the requirements of the role, the performance expectations and the deliverables. How best then to make this happen?

Appropriate Performance Management Steps

1. Know what the duties, skills and expectations, the position requires;

2. Ensure the employee hired is the right person to fulfil the requirements for the role;

3. On commencement of employment, ensure that the employee is made aware of the expectations, requirements and duties he or she is expected to fulfil. This means that the employee and manager should formally meet in the first days of employment to discuss this and set the ground rules, targets and expectations of the position and the manager.

4. To ensure that the employee remains on task, the manager and employee should meet on a regular basis and at least fortnightly to discuss how the employee is travelling, to discuss any issues and to ensure that both employee and employer remain on the “same page”. These regular meetings should be conducted in a collegiate and non-threatening manner with the express purpose of providing the employee guidance and an opportunity to raise matters of concern. Likewise, it should be an opportunity for the manager to raise issues early so they can be addressed with a minimum of fuss or anxiety.

5. If the manager notices a recurring issue, it is appropriate for this to be addressed in these regular meetings. In this way, it is likely the employee will either address the issue or explain why he or she is having difficulty with meeting the requirement, and this can then be addressed.

6. If it becomes apparent that despite these regular meetings, the employee is not performing, or there is an ongoing conduct issue, then it is appropriate to move into a more formal warning procedure, during which the employee is informed that their performance or conduct is unsatisfactory and despite the numerous attempts to address it informally, this has not occurred. The employee should be provided a written warning as a result of this meeting.

7. Depending on the company’s performance management procedures, if there is still no improvement in the performance or conduct of the employee despite the formal warning, then a further formal meeting should be held with the employee to provide the employee with a further warning and depending on the circumstances a final warning.

8. These formal meetings should not replace the regular fortnightly meetings. However, the regular meetings should re-enforce the formal warning and be an opportunity for the manage and employee to discuss how to assist the employee to meet the relevant performance requirements.

9. If the employee continues to fail to perform, it is at this point that the company may move to termination.

10. Half yearly and annual performance reviews should be used to reset the benchmark for the coming year. It is an opportunity to assess whether the employee has met the targets and goals set in the previous performance review. It also should be the opportunity for the manager to set the expectations, targets and goals required of the employee as well as form the basis for the regular fortnightly meetings, such that the both manager and employee are aligned as to what is required to achieve the goals set in the review. It should not be the occasion during which issues with the employee’s performance or conduct are raised for the first time.

However, if an organisation adopts the approach set out above it is extremely unlikely that they will need to exit an employee for poor performance. It is far more likely that the employee will rectify any deficiencies if given the appropriate support and guidance. If it is apparent however that the employee lacks the necessary skills and competencies, they will usually make the decision to leave long before the need for formal warnings. In any event, if the Company does need to move to termination, if the manager has adopted this approach (and kept a file note of any issues they have raised during the informal meetings) the company will be able to defend any potential proceedings brought by the employee after termination.

What proper performance management is not

Appropriate and constructive performance management does not include:
• Withdrawing opportunities from an employee;
• Restricting what tasks are given to an employee for fear they may not perform them adequately;
• Belittling employees in front of others, or berating them for failing to perform;
• Providing subtle references to concerns regarding performance;
• Giving feedback over a coffee in circumstances where the employee is not aware that the discussions are meant to constitute a warning;
• Placing additional pressure on an employee to perform without a clear understanding of the barriers (if any) to performance;
• Requiring an employee to meet unexplained or inappropriate expectations without support or appropriate guidance;
• Informing an employee that they are not performing but without providing specific examples or constructive assistance as to the manner in which the employee can improve.

The benefits of proper performance management

It stands to reason that if an employee knows what is expected of them, is capable of achieving those expectations and receives the support and guidance of their manager, they are far more likely to be engaged and actually achieve the goals and requirements of their role. In turn, it is self-evident that this will result in a high performance culture which will drive profitability. The corollary of course is that an environment of high levels of stress, a passive aggressive management style and no clear direction will result in high levels of turnover, low engagement and significant wasted management time. It is also in these environments that bullying claims and stress related personal leave are the norm.

If managers spend a small amount of regular time meeting and talking with their subordinates in a constructive and collegiate environment, they will by default be performing appropriate performance management. The real benefit however, is that they will not even realise that this is what is occurring and in the process, they may in fact become your organisation’s most valuable asset.

A recent decision of Robert Etienne v FMG Personnel Services Pty Ltd [2017] FWC 1637 has recognized that regular informal discussions regarding performance will suffice in meeting the procedural requirements to defend an unfair dismissal claim.

For your organisation’s bottom line, proper performance management makes good business sense.

If you wish to discuss any aspect of this article or require specialist advice or assistance in relation to your employment relations framework, please do not hesitate to contact us.

This alert is not intended to constitute, and should not be treated as, legal advice.

The Carrot and the Stick: The Tricky Issue of Appropriate Disciplinary Action by Employers

Disciplinary action for poor or inappropriate performance is all too often seen in very one-dimensional terms. Often, it can be a fantastic opportunity for the business to address difficult issues in a constructive and ultimately extremely cost effective way. However, in most circumstances the use of warnings serves only to alienate and disincentivise employees, to the extent that they either leave the business or the business terminates the employment. When it comes to disciplinary action in the workplace, it is our experience that many employers seem to limit themselves to the use of only warnings or dismissal even though there may be a range of other options available to employers. This was recently highlighted by Commissioner Williams in a recent Fair Work Commission decision where he encouraged employers to introduce a greater range of disciplinary options to avoid inappropriately lenient or inappropriately harsh responses to misconduct.

Disciplinary action will most commonly occur when there is a history of unacceptable performance; or unacceptable conduct. In addition, it may be necessary for an employer to address performance or conduct that is serious or inappropriate even if it is just a single occasion. As such, a one size fits all approach disciplinary outcomes may not be the most effective solution, and more often than not does not address the issue. In this regard, it is important for employers to have in place an arsenal of suitable disciplinary procedures and policies to ensure fair and equitable processes when addressing employee issues.

Disciplinary action may take many forms, and it may be formal or informal. Disciplinary action may include:

  • verbal or written warnings;
  • suspension;
  • supervision
  • training/upskilling;
  • demotion;
  • removal of discretionary bonuses;
  • reduction in salary or wages
  • not offering overtime or other opportunities;
  • dismissal.


Warnings may be in written or verbal form. Warnings are a necessary part of any disciplinary procedure and are important in informing the employee of the gravity of the concern and the need for improvement. However, often warnings alone are insufficient to change employee behavior, or are all too often ignored. The aim of a warning should be to alert the employee to the issues of concern and to encourage the employee to improve the performance or conduct. The matters that may result in a warning alone are usually of a less serious nature.

Warnings play a critical role in the context of whether a dismissal was fair. If there is a prospect that a repeat of the employee’s conduct or unsatisfactory behavoiur could lead to a dismissal, then this needs to be clearly expressed in the warning given to the employee. The Courts have looked negatively at employers who fail to warn employees that their conduct could result in dismissal, and an accurate paper trail is always imperative.


Suspension can be a useful disciplinary tool when there is serious misconduct on part of the employee and the employer requires time to conduct a thorough investigation and decide the appropriate next steps and disciplinary action.

However, suspension alone may itself be a useful disciplinary tool, if employers are able to suspend an employee without pay. Employers may lawfully suspend an employee without pay if there is a contractual, award or statutory right available to suspend an employee. However, in the absence of such a provision, there is no general common law right to suspend an employee without pay due to their misconduct, even where their misconduct would justify instant dismissal.

Employers may in some cases choose to suspend a worker on full pay, though this is in an expensive option. This practice is usually reserved for workers who are temporarily removed from duties, while under investigation for misconduct rather than a disciplinary tool. Employers should consider whether the introduction of suspension without pay as a form or discipline may be of use, and as such take steps to ensure they can lawfully do so.


When it comes to performance based problems, a supportive and open approach may be beneficial in gaining the most out of your employee. An employer may consider the use of coaching, training or upskilling an employee who demonstrates deficiencies in performing the functions or meeting the goals of their position. In these instances, we recommend discussing and acknowledging the employee’s lack of ability early on and provide consistent and regular performance assistance, evaluation, coaching and training.

Training may also be used as part of the disciplinary process where the employer may request the employee to undertake specific training that relates to the misconduct or inappropriate behaviour by the employee. For instance, an employer may require an employee to undertake training regarding appropriate behaviour in the workplace following a finding that the employee behaved inappropriately. Training, coaching and mentoring may assist in circumstances of bullying, interpersonal conflict and the like. This option gives the employee an opportunity to improve their skills in a supportive environment and is often far more effective than a warning.


A demotion occurs when an employer offers, and the employee accepts, a lower graded position with the common consequence of a reduced wage or salary in the alternative to other disciplinary action (most commonly termination). In certain circumstances demotion may be useful as a form of disciplinary action rather than dismissal. However, an employer should not unilaterally demote an employee without their direct consent or without an express term which allows for such action within the employment contract. In circumstances where dismissal may be overly harsh, demotion may be a very useful alternative. However, even if there is an express power to allow for demotion in the employment contract, employers should take care when demoting an employee and ensure that the reasons for doing so do not include a prohibited reason and that the demotion is reasonable disciplinary action for the misconduct or underperformance of the employee.

Payment of discretionary bonus

Payments to employees which are purely discretionary may be withheld as part of disciplinary action. However, it is important employers determine whether any bonuses paid to employees are truly discretionary. Interpretation of the terms of an employee’s entitlement to a bonus is subject to common law principles. The courts have found that even though the contract may stipulate the entitlement to a bonus is discretionary, there is an implied obligation not to exercise the discretion capriciously or arbitrarily. However, the threat of the removal or reduction of discretionary payments may constitute an effective deterrent when coupled with an effective an appropriate warning.

Not offering opportunities

If an employer wants to send a very strong message to an employee that their conduct or performance is unsatisfactory, other than warnings and dismissal, employers may wish to consider withholding opportunities to an employee. For example, employee may be prevented from progressing unless they show improvement or prevented from working additional shifts or overtime. The manner in which this type of disciplinary action is taken will largely depend on the organization, the nature of the employee’s role and whether there are opportunities that can be withheld, delayed or denied.


As a last resort and depending on the circumstances, employers may need to consider dismissal. Dismissal may be entirely appropriate in circumstances of serious misconduct, or where other disciplinary action has previously been taken to no avail. However, dismissal should not be the first option considered but rather the last. In our experience, sometimes even the most serious cases of poor performance, if given the correct encouragement, assistance and disciplinary steps an employee can become a valuable asset rather than a legal liability.

In all instances where any form of disciplinary action is considered, it is important that the employer must provide the employee with an opportunity to respond to the concerns raised by the employer before any action is taken. It is important that the employer follow a fair and reasonable procedure and in particular follow any of its written policies.

Lessons for employers

Clear expectations, appropriate supervision and regular feedback are the best ways to avoid the necessity of implementing a discipline process or action. However, when problems with behaviour or performance occur, disciplinary action may be necessary. A business’ approach to an appropriate disciplinary procedure and action should be determined on a case by case basis. The disciplinary action should be assessed with a view to rectifying the conduct and creating a sufficient deterrent, but not such that would effectively destroy the employee’s motivation to improve. It should also be commensurate to the problematic conduct or performance it is attempting to address. In most circumstances dismissal should be the last resort.

It is also vital for employers to review current employment contracts to ensure the organization has express power to undertake and utilize some of the disciplinary options discuss above. Without express terms within the employment contract the business may be left exposed when attempting to undertake appropriate disciplinary action. Employers should also ensure accurate records of all discipline related discussions are kept. These records can be particularly useful if an employee lodges an adverse action or unfair dismissal claim.

Romance in the Workplace

People spend a significant amount of time with each other at work, it is therefore perhaps unsurprising that workplace relationships are common with which many employers need to deal. Most employers are often mortified at the prospect of having to discuss intimate or personal details with their employees and usually adopt the “don’t ask, don’t tell” approach. However, not only can a workplace romance impact on other employees, if such relationships sour, they can develop into bullying and sexual harassment claims, leaving the business and human resource professionals left to pick up the pieces. It is thus important for employers to know how to effectively manage these situations and ensure reasonable measures are in place so the business is not adversely affected.

For the avoidance of doubt, nothing at law prevents two employees from engaging in a genuine and consensual relationship, provided such relationship does not otherwise infringe upon either employee’s ability to discharge their duties to the employer. Treating employees unfavourably because of a genuine workplace romance can amount to unlawful discrimination. However, although this is the starting point, there are a series of important considerations both employees and an employer ought to keep in mind. In order to assess these matters, it is fundamental to examine how the Courts deal with this issue.

For example, in a Fair Work Commission (“FWC”) decision handed down last year, the very issue of a workplace relationship was considered to be a potential conflict of interest. In Mihalopoulos v Westpac Banking Corporation t/a Westpac Retail and Business Banking [2015] FWC 2087, the FWC rejected an unfair dismissal application by a Westpac manager who failed to disclose an office affair with his subordinate employee. The Applicant in this case, Mr Mihalopoulos, was employed at Westpac as a Bank Manager of its Wollongong Branch and had been employed for over 16 years. In February 2014, he commenced a romantic relationship with a colleague, “Ms A” who directly reported to him. Mr Mihalopoulos’ superior heard rumours about the pair being in a relationship and asked Mr Mihalopoulos on two separate occasions whether he was in fact in a relationship with Ms A. On both occasions, Mr Mihalopoulos denied the relationship. Ms A was a high performing employee. However, during the relationship Mr Mihalopoulos took steps to aid Ms A’s career development by positively advocating a promotion for Ms A outside Westpac’s usual recruitment process. He also visited a Westpac branch for the first time in which Ms A had been seconded, to speak to a specific employee and then spent most of his day performing small tasks for Ms A such as photocopying.

After approximately six months, the relationship soured and Mr Mihalopoulos and Ms A became the subject of an interim apprehended violence order (“AVO”). Mr Mihalopoulos then informed his supervisor of the romantic relationship and the consequential AVO to which he was subject. Furthermore, Mr Mihalopoulos then took it upon himself to inform some of the staff at Westpac of the relationship with Ms A and the subsequent Police involvement. On 1 September 2014, Mr Mihalopoulos again contacted his supervisor to disclose that he had now breached the AVO and was subject to related charges. Westpac then suspended Mr Mihalopoulos on full pay and proceeded to investigate the matter.

The allegations put to Mr Mihalopoulos by Westpac included:

  • being dishonest about his relationship with Ms A when asked as he did not disclose that there might be a real or perceived conflict of interest;
  • breaching the AVO and in doing so exposing Westpac to reputational damage; and
  • inappropriately disclosing details of the relationship to his subordinates.

Ultimately, his supervisor having considered Mr Mihalopoulos’ responses to the allegations, formed the view that they had irretrievably lost trust and confidence in Mr Mihalopoulos and terminated his employment with four weeks’ pay in lieu of notice. In the proceedings, Senior Deputy President Hamberger held that even though Westpac relied on several reasons for dismissal, Mr Mihalopoulos’ failure to disclose his relationship with Ms A in combination with repeated dishonesty when asked about the relationship by his supervisor amounted to a valid reason for his dismissal. Senior Deputy President Hamberger explained that even though employers cannot stop their employees forming romantic relationships, the potential for conflict of interest was significant. As such, employers have a reasonable expectation that employees will disclose any potential conflict of interest so it may be appropriately managed. In addition, His Honour found that Mr Mihalopoulos should have disclosed the relationship and that his employer was entitled to expect that he would do so pursuant to the obligations contained in his employment contract and the bank’s conflict of interest policy. Finally, Senior Deputy President Hamberger acknowledged that Mr Mihalopoulos held a senior position which required a high degree of honesty and personal integrity. Against that background, his dishonesty fundamentally undermined the trust and confidence which is at the heart of the employer-employee relationship.

This decision reaffirms that employers are entitled to know about romantic relationships between employees where this creates a real or perceived conflict of interest. Employers should ensure employees are clear about the obligation to disclose and to protect the interests of the business. If employers or management suspect a romantic relationship exists in the workplace, then it should be addressed and employers should have proper policies and procedures dealing with this issue. In light of this particular decision, it is recommended that employers should also include conflict of interest clauses in their employees’ employment contracts imposing positive disclosure obligations on their employees in such circumstances.

The other significant issue for employers, insofar as workplace relationships are concerned, is how to respond (and to what extent) in circumstances where the relationship breaks down. When romantic relationships are formed in the workplace and then unfortunately deteriorate they may evolve into a more serious concern triggering a raft of obligations under applicable employment and human rights legislation, the work health and safety regime and potentially aspects of criminal law. In this regard, it is not beyond the realm of possibility that employers may need to respond (including by investigation), and sometimes with Police involvement, to the side-effects of a workplace relationship gone bad. For example, there have been instances where once the relationships sours, one party then continues to pursue the other developing into both criminal and civil claims, such as bullying, sexual harassment and even criminal charges.

In order to deflect the risk of being vicariously liable to an employee the subject of a soured workplace romance, it is vital that employers “take all steps reasonably practicable” to prevent such acts occurring in the workplace. In order to satisfy this legal requirement, employers should ensure they:

  • have clear guidelines regarding appropriate behaviour at work including dealing with behaviour between employees who may be in a romantic relationship;
  • have a requirement that employees in senior or managerial roles who have relationships with subordinates disclose this to the employer;
  • provide regular training to managers and staff regarding acceptable workplace behaviours;
  • implement policies around appropriate workplace behaviours (specifically with respect to sexual harassment, bullying and discrimination) and set formal procedures to deal with such grievances; and
  • take appropriate remedial and disciplinary action if warranted including by responding to employee concerns in a timely fashion by way of a neutral investigation process.

If employers fail to take reasonable steps, they can be held legally responsible for unwelcome acts committed by an employee, and often this can present a very challenging issue for an employer where one participant to a workplace romance acts inappropriately at work once the relationship has ended. Employers can also be liable when computers, phones or other electronic devices are used to harass a person, for example by sending unwelcome sexualised text messages, emails or posting offensive material on social media sites.In addition, employers need to be cognisant that the workplace extends beyond the realms of the physical surroundings in which work is performed. For example, in the case of Leslie v Graham [2002] FCA, an employer was found to be vicariously liable for sexual harassment in a context where the harassment occurred between two employees in the early hours of the morning in a serviced apartment they were sharing, while attending a work related conference.

Although everyone deserves to find love, doing so in the workplace can create a number of complex issues for employers. If you wish to discuss any aspect of this article or require specialist advice or assistance in relation to this topic, please do not hesitate to contact us.

This alert is not intended to constitute, and should not be treated as, legal advice.

The Boss is Out – Let’s Chat: Mobile Phones in the Workplace

The mobile phone is now ubiquitous and almost everyone has one. Like parents with teenagers, who struggle to engage with their children who are constantly on the phone, how do employers ensure that employees are not placing themselves and the business in danger by using their mobile devices?

Many employers struggle with employees who use their mobile phones excessively during work hours or employees making excessive personal calls on their mobile phones while at work. Employers should also consider the safety implications of employees who are required to drive as part of their duties, and the use of mobile devises.

While a mobile phone may be of significant benefit to organisations by providing greater access to employees, it isn’t always ideal. There are number of legitimate business reasons any employer may want to restrict the use and even the possession of mobile devices in the workplace. These may include:

–          The safety of employees when driving or operating vehicles;

–          The safety of employees when operating equipment and machinery;

–          Promoting productivity, quality and efficiency;

–          Preventing inappropriate behaviour;

–          Maintaining confidentiality and protecting important business information; and

–          Ensuring privacy of employees and others.

Safety and Productivity

The constant growth in technology, smartphones and highly addictive applications like Pokemon Go and various other social media crazes are increasingly impacting and affecting workplaces across Australia. Needless to say, while a few minutes won’t hurt, excessive mobile phone use can affect many people’s productivity and raises a number of WH&S concerns for organisations.

There have been numerous reports over the years indicating a steady increase in injuries and accidents in the workplace as a result of smartphone distractions. Employers should pay particular attention to workplace areas thought to be high risk due to traffic or machinery. Any employees operating equipment, machinery or any type of vehicle that are distracted by text messages, telephone calls and checking social media sites such as Facebook increases the risk to employees and the public generally. As a result, some organisations have gone as far as banning mobile phones during work time altogether.

Not only do employers need to consider the dangers of employees being distracted while in the workplace but in certain circumstances a worker does not need to be at work to suffer a work-related injury. In one interesting Queensland case, a trucking manager who was injured when he slipped getting out of a shower at home to answer his work phone won his appeal for workers’ compensation. Mr Ziebarth was showering when he heard his work mobile ringing on his bed side table. Mr Ziebarth moved out of the shower and slipped on wet bathroom tiles falling forward. He claimed he had previously been chastised by his employer for not answering his work phone and felt obliged to answer it as soon as it rang while on call. As a result of the fall Mr Ziebarth sustained a disc protrusion. The Queensland Industrial Relations Commissioner held that his injury was work-related, because he was on call and was expected to answer his work phone.

Confidentiality and Security

The issue of protecting an employer’s confidential information, client contacts and other valuable information becomes increasingly important with the introduction of mobile phones, ipads and computers. What happens if an employee has been with your business for a number of years and has developed long standing relationships with clientele who directly contact the employee by mobile phone. Most employees with smartphone capacity, also receive work emails on their personal phone as well as various other work-related confidential information. The security of this information is often overlooked by employers and very little is done to ensure that the confidentiality of such information is properly protected, other than relying on the smart phone’s limited security and the employee to implement such security features.

If the employee leaves the organisation these matters can create significant difficulty and risk for the employer. If the employee has been using their personal mobile phone and telephone number the employer has no rights over the mobile phone and little ability to stop clients from contacting that employee, other than ensuring the employee has enforceable post-employment obligations. In addition, there is little an employer can do to ensure confidential documents are deleted and email correspondence removed from the phone. In such circumstances, it would be advisable that before an employee is entitled to access work emails and the like on a personal mobile phone they acknowledge that at the conclusion of the employment, they will provide the phone to the employer to ensure all company information is removed.

One way to ensure that the employer has control over a mobile devise is to provide employees with company phones. The organisations would then have ownership of the mobile device and as such can make directions regarding the use of the device and also require its return on termination of employment. In addition, employers may, subject to notifying employees, then track the device and monitor all aspects of its usage.

The Mobile Phone Policy

It is imperative that employers are proactive in having appropriate IT and mobile phone usage policies implemented in the workplace. An appropriate policy should set clear guidelines on what is expected of employees. The key in dealing with these issues lies in communicating what the expectations are regarding mobile phone use, but also keeping in mind that for many employees, the mobile phone forms an integral part of their daily lives. A mobile phone policy should address the specific and unique nature of your workplace as well as the reasons for the restrictions on use and possession. The policy should also clearly address circumstances when an employee is required to use a mobile phone for work purposes and when it is appropriate to use mobile phones for personal use (i.e. during breaks and before and after work). Further, the policy should also indicate the business’ guidelines for employees that are engaged in driving company vehicles. Given the inherent risks associated with driving and mobile phone use, we recommend a policy that makes it a terminable offence to use a mobile devise while driving, regardless of hands free capability. Notably, policies will be less effective if change does not come from the top down, so a good place to start is to ensure management lead by example.

Recent Decisions

The importance of clear policies that are updated and provided to employees can be demonstrated through the following two cases:

In Applicant v NBN Co Ltd [2015] FWC 7412 an employee of NBN Co incurred $23,000 in charges on his employer-provided mobile phone by calling his family in India and then refused to agree to the company’s proposed repayment plan. Deputy President Gooley stated the mere existence of a debt does not provide an employer with a valid reason to dismiss an employee and requiring an employee to repay a debt could be ruled unfair if there is a legitimate basis for the debt to be disputed. Initially the worker repaid $7,500 but then refused to enter into any of the NBN repayment schedules offered to him. At first, the worker argued that he could not afford the repayments but he later challenged the requirement to pay the remaining amount because he said he had not been aware of NBN’s excessive use policy for mobile phones. Deputy President Gooley stated there was insufficient evidence to show that the worker had been aware of the policy, but he clearly had been aware of the IT equipment policy, which provided NBN with the right to recover call charges where blatant misuse was identified. She also stated that NBN had failed to abide by its own policy to notify employees if it detected more than $75 per month of non-work calls. The Deputy President stated that if the worker had been advised earlier he may not have accrued such a significant debt. However, the Commission ultimate observed that NBN had spent nine months trying to negotiate with the worker and had changed its position significantly in that time to allow the worker more time to repay the debt. It was further noted that had NBN not responded as it did she may have considered the termination harsh but NBN acted reasonably while unfortunately the employee’s position hardened.

Alternatively, in Perry v Hillsbus Co Pty Ltd [2016] FWC 1901 the employer dismissed a bus driver after receiving a complaint from a commuter alleging that the driver appeared to be looking at his phone while driving. Hillsbus confirmed the allegation when it reviewed CCTV footage. The company policy reflected the position that the use of mobile phones by drivers was illegal as per the NSW road rules. The policy specifically stated “under no circumstances are employees who are in control of a bus or maintaining buses permitted to use a mobile phone or similar devices (including the use of bluetooth earpieces, etc) for any function or purpose”. The driver, however, claimed he was using an old mobile phone as a music player and the phone had no sim card. Senior Deputy President Drake determined that despite being used as a music player, it was still a mobile phone and its use was prohibited by the regulation. She found that while Hillsbus had a valid reason for dismissing the driver, the conflicting policies and ambiguity arising from inadequate information and inadequate explanation by Hillsbus as to its policy on the use of music devices while driving made the dismissal harsh. Hillsbus was ordered to reinstate the driver and compensated him for lost wages.

Employers should carefully consider whether they provide mobile phones to employees, or allow employees to use their own devices for work purposes. In all circumstances, employers need to be clear and unambiguous regarding the appropriate use of mobile devices and the consequences for failing to adhere to these requirements.

In light of the above authorities, it is also essential for businesses to remember to review and consider whether their company policies create enforceable and clear obligations and consider to what extent their policies are binding on the company and the employee. It is recommended that employers seek advice on drafting and implementing appropriate policies specific to their workplace.

If you wish to discuss any aspect of this article or require specialist advice or assistance in relation to an employment law issue, please do not hesitate to contact us.

This alert is not intended to constitute, and should not be treated as, legal advice.

We Need to Talk – How to Handle Difficult Conversations in the Workplace

Most people love a chat. However, understandably, most managers and employers often avoid having difficult conversations with their employees because it can be awkward, confrontational and time consuming. Unfortunately, avoiding what needs to be said can grow into a major issue causing legal risks and reducing an employer’s ability to successfully defend legal claims should they arise.

We see a large number of conflicts at the workplace arise due to either an employer’s reluctance to have a tough conversation with an employee, or as a result of the inability to handle the particular situation correctly.

In this article, we look at some of the most common conversations often avoided or completely mismanaged and provide practical guidance to assist in having those tough conversations at the workplace.

Dealing with an underperforming employee

It is no surprise that employers benefit most from motivated staff that are performing at their best. Implementing effective performance management systems can have significant benefits for any organisation. Managers need clear procedures and organisational support to manage issues that arise. By providing a consistent approach to performance management, managers can more effectively create opportunities to resolve problems rather than perpetuate them.

As a general rule, prevention is better than dealing with an issue after it has arisen. The best manner in which to prevent performance issues from arising is to ensure that both the employee and manager are clear as to the performance and behaviour expectations. This discussion should occur on commencement of employment and should be revisited on a frequent basis informally. However, if a performance or behaviour matter does arise, it is best to deal with it immediately.

Some easy to follow steps include:

  • It is important to first identify and assess the issue(s) prior to meeting with the employee.
  • For example, it is vital the employer is clear as to whether the problems relate to behaviour or performance or both.
  • The employer must ensure they can properly articulate the issues and provide cogent and relevant examples. It is not helpful to be vague and non-specified.
  • The employer should then organise a meeting with the employee to discuss the problem.
  • The employer should advise the employee of the purpose of the meeting.
  • At the meeting the employee should clearly understand what the problem is, why it is a problem, the impact on the workplace and why there is a concern. In addition, it may be helpful to refer to positive things the employee has done to demonstrate you recognise their strengths. The meeting should be an open discussion where the employee has the opportunity to explain themselves or make comments.
  • A clear action plan should be developed with the employee which may include performance improvement milestones, clarifying responsibilities of the employee, further training and realistic timeframes to demonstrate improvement.
  • A further meeting should be arranged to review progress and discuss the employee’s performance.

An effective performance management process should be empowering and respectful while being delivered fairly with the necessary feedback. Employers should keep a written record of all discussions, feedback provided, and goals and achievements relating to underperformance in the event further action is required.

Further, employers should organise regular performance appraisals with all employees as a way to provide ongoing feedback. Regular informal catch-ups are more effective, honest and generate transparent communication about performance rather than bottling it up for a yearly performance appraisal.

Having the dismissal or restructure conversation

Delivering organisational change news which may result in redundancy or dismissing an employee is never easy. However, managing the process and providing clear and direct communication imperative both for the individual and the organisation.

Ensuring there is a clear and consistent message that provides the employee with clarity and understanding about the situation, and how it will affect them, is essential. In addition, employers need to be prepared to listen and answer questions and recognise that people will respond differently to these difficult conversations. Managers must show compassion and care while being respectful and supportive. This does not necessarily mean that they must agree with the employee’s point of view.

As a matter of best practice, employers should point individuals being made redundant or dismissed to support networks such as counselling services provided by the employer.

It is also important that employers brief their management team on how to maintain optimal performance and keep staff motivated during any change management process.

In circumstances of dismissal, it is important that the employee is informed before the meeting of the purpose of the meeting and asked to bring a support person to the meeting. The employee should be given an opportunity to comprehend and process the information provided to them during the meeting and it is best practice to then have a further meeting to actually finalise the dismissal. All the necessary paperwork, including the letter of termination must be given to the employee at the time of dismissal.

Dealing with investigations

Conducting a workplace investigation into an employee’s behaviour can be daunting. As is often the case, an investigation may sometimes lead to employees adopting an adversarial attitude. One of the most obvious procedures commonly not followed is an employer’s own investigation policy. Employers should also consider whether it is more appropriate to outsource an investigation to an external party to ensure the process is independent. Regardless of the subject-matter of any investigation, it is always recommended that employers seek professional advice prior to commencing such processes.

Having the hygiene and grooming conversation

What if your employee has bad body odour or is wearing inappropriate attire to work? Is it appropriate to make subtle cues like leaving a bottle of deodorant on their desk? Many managers, especially male ones, are afraid to confront female employees about their clothes, makeup or hair. The best approach is to address the issue directly by meeting with the employee concerned. In this meeting, the manager should be direct, discreet and non-judgmental in the conversation. The conversation should be professional, in a private setting and the employee should be given a chance to respond. Poor hygiene can be the result of health and disability issues and/or age. Generally, employers should ensure there are clear policies and standards for dress and presentation in the workplace from the commencement of employment to guarantee employees always know what is expected.

What legal risks can arise from avoiding difficult conversations?

Unfair dismissal claims

It can be difficult when defending an unfair dismissal claim to rely on an employee’s previous unsatisfactory performance merely because a manager failed to have a difficult conversation with the employee regarding their performance at the appropriate time. Addressing such issues with employees early and giving them a genuine opportunity to respond or improve, is a key element to procedural fairness. Without providing this significant opportunity a dismissal maybe found to be unfair by the Fair Work Commission notwithstanding that an employer may have had legitimate grounds for the dismissal.

In addition, an employer must demonstrate they have met any obligations under the applicable Modern Award to consult with the employee and/or assist in finding alternative employment in the case of redundancy. Failure to do so may result in the employee being reinstated or the employer being ordered to pay compensation for unfair dismissal.

Anti-bullying claims

Anti-bullying laws came into effect on 1 January 2014 which have given workers experiencing bullying a certain level of protection. Therefore, by having an effective performance management process and raising issues of underperformance or misconduct in the early stages with employees, may reduce accusations of bullying at a later stage where the employer now wishes to implement a performance improvement plan or similar performance monitoring. It is vital that employers, for this reason, introduce appropriate workplace policies for performance management.

Adverse action claims

Clear communication with employees about their underperformance or misconduct can help an employee understand the reasons for decisions that may adversely affect them. This will assist in reducing the risk that employees are likely to suspect and assert that the decision which adversely affects their employment was taken for a prohibited reason (such as discrimination).

Relevant Case Law

In Fichera v Thomas Warburton Pty Ltd [2012] FWA 4382 an employee who held the position of Branch Manager had low sales and was underperforming. It was found that the employee was incapable of providing the necessary leadership to improve the performance of the branch and this was found to be a valid reason for dismissal. Unfortunately, the employer failed to follow its own performance management process and warn the employee that his employment was at risk. This resulted in the dismissal being unfair.

In Clarke v Formfile Infosoft Pty Ltd [2003] 123 IR 222 employees were made redundant due to a downturn in business. The employees were notified that they were being dismissed due to redundancy but were not notified of the reason as to why their positions were selected for redundancy. It was held that the employees were not properly notified of the reason for termination before the redundancy took effect.

In Krygsman-Yeates v State of Victoria [2011] VMC 57 a teacher alleged that she sustained an adjustment disorder with mixed anxiety and depressed mood as a result of having her performance subjected to monitoring and mentoring, and being bullied and harassed by the school principal. The Court found that the action taken was ‘management action’ based on reasonable grounds. However, the management action was not taken in a reasonable manner because:

  • A three-page letter detailing performance related issues was provided to the employee on her first day returning from long service leave;
  • Guidelines on monitoring and mentoring were not followed;
  • Feedback was not provided to the worker during monitoring and mentoring processes; and
  • Insensitive and unreasonable action was taken by continuing to provide comment by way of letters to the employee despite her previous emotional response and reaction to receiving such letters.

What can employers do?

To ensure employers are protecting their businesses, they ought to ensure managers and supervisors:

  • Are educated and trained in accordance with the company’s management processes and policies. This should be done through practical workplace training on the importance of open communication and encouragement to have difficult conversations.
  • Are informed of the importance of keeping detailed written records of conversations and following company processes.
  • Invest in developing emotional intelligence and people skills so they possess the relevant and necessary skills to communicate effectively with employees, understand the underlying causes of performance issues and can respond appropriately.
  • Put in place proper workplace policies and ensure all employees are aware of the policies and how to follow them.

We often advise companies and directors in relation to their employment obligations, and have worked closely with organisations to ensure they protect themselves from any potential conflicts that may arise in the workplace. We provide a range of workplace training options for both managers and employees. We can also work with your organisation to develop and refine existing policies for your workplace and assist in the implementation of any new procedures.

If you wish to discuss any aspect of this article or require specialist advice or assistance in relation to an employment law issue, please do not hesitate to contact us.

This alert is not intended to constitute, and should not be treated as, legal advice.

What is a “Warning” Worth?

There is a common misconception amongst employers that the dismissal of a troublesome employee can only occur once the employer has followed the “three strikes and you’re out” rule – in other words, the employer must give the employee three official warnings before they can terminate the employment relationship. There is a broad management philosophy that three warnings prior to termination is best practice, and this may well be true, however, there is no legal requirement to provide a specified number of formal warnings. In this way, the notion of “three strikes” simply does not feature anywhere in Australia’s employment law landscape.

In some circumstances, a warning may not even be appropriate such as where an employee has been grossly negligent in the performance of their duties, committed serious misconduct, or failed to comply with a lawful direction of the employer and thereby placing themselves or others in potentially danger.

A warning may also be required however to address less serious misconduct, poor performance and other areas of concerns to ensure an unsatisfactory situation does not becomes worse. In most if not all circumstances where a warning is advisable, the warning should also be provided in written form. Warning letters, are crucial in circumstances where the employee later seeks to bring a claim against the employer. However, to have any real utility they need to properly address the matter in issue. Unfortunately, we often hear the refrain that there have been previous warnings provided, when in reality all that has occurred is a very general discussion about matters or a comment has been made in passing. This will not be sufficient to constitute a warning.

Before creating the content of a warning letter, it is important that employers consider a few practical steps. Firstly, there is a significant difference between an ordinary warning letter and a final warning letter. Final warning letters should only be used when the conduct or performance is such that they failure by the employee to address the matters will result in the termination of employment. We set out below the matters relevant to the issue of a warning letter, but note that this will need to be modified to the extent it is intended to be a final warning letter. In most circumstances, a final warning letter should not be issued unless there have been previous warnings (preferably in writing) regarding the relevant conduct or performance issue. However, it is not required that in order to issue a final warning letter there must have been prior warnings. This will very much depend on the issue at hand.

The relevant matters that should be considered are as follows:

  1. Identify and consider the problem – employers should clearly identify the issue in respect of which the warning letter is designed to address, and whether that issue is performance or conduct based. It is also essential to think about the seriousness of the problem, how long it has existed and what actions are required to address it.
  1. Meet with the employee – meeting the employee prior to issuing a warning letter is important for identifying the relevant issues, clarifying expectations of the employer and agreeing on solutions to address the issue, and establish a constructive path forward. It is also best practice to inform an employee about the purpose of the meeting and agenda in advance so they can adequately prepare and arrange a support person to attend the meeting.
  1. Create the warning letter – when creating a warning letter, it is fundamental to include and set out:
    • detailed examples of the performance or conduct issue of concern;
    • the matters discussed with the employee about the issue (with as much specificity as possible);
    • what the employer will do to assist and support the employee through the process;
    • the action points and steps the employee needs to take to address the issue;
    • a reasonable timeframe in which the changes or improvements will to need to occur;
    • whom will be responsible for reviewing and assessing progress; and
    • what disciplinary outcomes may apply if the issue is not rectified.
  1. Delivery of the warning letter – it is critical to ensure the employee receives the warning letter and acknowledges receipt. If the employee fails to acknowledge receipt, a prudent employer will document the details of having provided the letter and this may include preparing an internal file note of the time, date, individuals present and what was said when the warning letter was provided.
  1. If it is a Final warning Letter – the letter should set out the history of the performance or conduct issue, the previous warnings provided, and the most recent evidence of problematic behaviour or performance giving rise to the final warning. The letter must specify that it is a final warning and that any further problematic behaviour performance will result in the termination of employment.

It is always best practice to ensure that an employee reads a warning letter, understands its legal effect or has an opportunity to clarify the letter. Depending on the circumstances, it may be appropriate to ask an employee to sign a counterpart of the letter and return it to you. Please note however if the employee refuses to do so, it will not have any impact on the fact that the employer has provided the letter.

Notably, even where an employer follows the above steps, a disgruntled employee may nonetheless choose to submit a complaint or claim against their employer, for example, an unfair dismissal or discrimination complaint. In order to dispose of such claims, the issue of evidence and especially documentary evidence becomes extremely important. In that connection, it is essential that an employer can rely on any carefully crafted warning letters provided to the employee as part of defending legal proceedings.

As noted above, there is no legal requirement to give an employee three official warnings prior to termination of employment. In some situations, it may even be appropriate to bring the employment to an end immediately. The process that ought to be followed will necessarily depend on the nature of the issue, the seniority of the employee concerned, and the extent of damage to the employer (if any) as a result of the issue. Whilst the response of an employer to performance or conduct issues should be approached and judged on a case-by-case basis, it may be entirely reasonable to issue a first and final warning if the circumstances so require.

We regularly advise employers in relation to performance management procedures and misconduct issues including by assisting to draft appropriate workplace policies and of course warning letters. If you wish to discuss any aspect of this article or require specialist advice or assistance in relation to an employment law matter, please do not hesitate to contact us.

This alert is not intended to constitute, and should not be treated as, legal advice.


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