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HR Manager’s conduct results in summary dismissal

This is an interesting and instructive decision of the Fair Work Commission.

In this matter the Commission has upheld the summary dismissal of a HR Manager, otherwise highly regarded by the Employer, following an interesting series of events in the workplace.

Background

The HR Manager (‘Applicant’), who also held additional roles in the business, had been involved in a meeting with a number of other managers where discussion took place on a decision to write off stock in excess of $65,000.  It was clearly a decision the Applicant did not agree with.

Following that meeting, one of the Applicant’s colleagues sent an email to the Applicant criticising parts of her participation in the meeting, included an allegation that she had perhaps acted improperly in the meeting.

The Applicant was rankled by the suggestion of impropriety, and sought an apology from her colleague.  When this was not forthcoming the Applicant lodged a formal complaint about the email.

The Employer took an appropriate course and appointed an independent investigator to the complaint – the employment law firm advising the Employer.  The law firm conducted the investigation and completed a report, with the outcome that the complaint had not been substantiated.  The Report also detailed that the Applicant’s conduct at the meeting had not been appropriate.  The Report recommended that she be stood down from any advisory HR function in the business and undertake coaching with respect to her communication skills.

The Applicant was informed as to the report recommendations.  She was told that she would not be provided with a formal apology, and that she should move on and take no further action, including that she should not pursue an apology.  She was reminded that she was a valued staff member.

About a month after she was advised as to the outcome of the investigation, the colleague who had sent the email attended the Applicant’s office.  The Applicant then spoke to her colleague about the investigation and asked him why he would not apologise about the email.  The employee subsequently complained about the Applicant.  The Applicant was subsequently called into a meeting to discuss the complaint.

Stand-down

At that meeting, the Applicant was placed on special leave with pay so that the allegations against her could be reduced to writing and so that she could respond.  The Applicant “did not react well” to being informed of her stand down, with meeting becoming “difficult and strained”, and she was advised during the meeting that she would have to take an independent medical examination during the period of the stand down.

HR Manager engages in further misconduct

The Applicant requested, she said to save embarrassment, that she not be escorted from the meeting, and this was permitted.  Unbeknownst to the Employer’s legal representative who conducted the meeting, whilst returning to her desk to collect some personal belongings, the Applicant also collected her original personnel file and took that home with her (leaving no record in the workplace).

The Applicant subsequently appointed legal representatives, and there was a flurry of communications between the Applicant’s legal representatives and the Employer’s representatives.  The Applicant, through the legal correspondence, made a number of accusations against the employer, including:

  • that her “rights to procedural fairness had been “trashed”.
  • that the conduct of the Employer and the legal representative “amounted to, (a) bulling of the applicant… and (b) mistreatment of the applicant involving potential for charges pursuant to section 60 of the Crimes Act 1900.”
  • it also questioned the authenticity of the medical appointment arranged by the Employer.

The Employer, through its lawyer, responded denying the allegations.  Importantly it also noted that the Applicant’s HR file was missing and asked whether it was in the Applicant’s possession.  The Employer indicated that if the Applicant had the file and did not return it then she would be in breach of her duties to the Employer.

Further correspondence ensued, and despite two further requests (to the Applicant through her lawyer) for the Applicant to return the HR file, including a warning that should no response be received, the Employer would consider taking disciplinary action including summary dismissal, the Employer’s legal representative received no response from the Applicant’s legal representatives on that issue.

HR Manager is terminated

Accordingly, the Employer, through its legal representatives, sent a letter to the Applicant’s representatives which confirmed the summary dismissal of the Applicant as a result of her failure to comply with a lawful and reasonable direction regarding the HR file.  This conduct was classified by the Employer as wilful misconduct.

The Applicant subsequently made an unfair dismissal claim.

The Decision

Commissioner Cambridge found that the Applicant knew that she was taking a ‘significant risk’ when she removed the HR file from the premises.  The Commissioner heard that the Applicant had taken “the file for her protection because she feared that her personal HR file would be altered”.  Commissioner Cambridge noted in his decision that the same result could have been achieved if the Applicant had photocopied the file and then returned it to the Employer.  It was noted she actually retained the file until very shortly before the hearing.

The Commissioner noted that the Applicant’s evidence at the hearing confirmed that she knew she was committing an act of misconduct when she took the file.  Her conduct was then made more serious by failing to acknowledge or respond to the requests of the Employer for the file to be returned.  It was acknowledged by the Commissioner that the Applicant was not made aware of the 2 later letters, of the 4 sent addressing the issue, from the Employer’s representatives, as her own representatives had failed to pass on that correspondence.

Further, even after an investigation had been completed into a complaint she made to the Employer’s USA entity, the Applicant still did not relinquish the file to the Employer.  The Commissioner subsequently found that the Applicant’s conduct constituted a valid reason for dismissal and justified summary dismissal.

Exemplary work history not a mitigating factor in this circumstance

The Commissioner did note that the Applicant had an exemplary work record, and that she had been held in high regard by her colleagues, and that in that respect the events that occurred, and her taking the HR file, constituted a ‘tragedy’.  The Commissioner contemplated that whilst her outstanding record may have assisted to mitigate a singular act of misconduct, it could not mitigate the removal of the HR file together with “unauthorised retention” of the file up until shortly before the hearing.

No contractual right to termination without notice

The Commissioner did make an interesting comment about the employee’s employment contract, noting that the termination clause in that contract did not contemplate termination without notice for serious misconduct.  The Commissioner stated on this issue:

“Strictly speaking, it appeared that there was no contractual basis for the applicant to be dismissed without notice as occurred…”.

The Commissioner noted that there was uncertainty about the contract that was signed by the employee in this case, and consequently found that the failure to provide notice in this instance was not unjust.  However, he did make it clear that the document, if it had been determined to be legitimate, would have resulted in the Employer relinquishing its common law right to dismiss without notice.

Conclusion

Whilst the Commissioner also noted that there were some procedural errors in relation to the dismissal, he found that they did not mitigate the “wilful and persistent misconduct of the applicant.”  The Commissioner consequently found that the dismissal was not harsh, unjust or unreasonable and the application was dismissed.

Lessons learned for Employers

This case contains an obvious example of extremely inappropriate conduct by a human resources employee, and the outcome is somewhat unsurprising.  However, there are some important lessons to be learned by Employers:

  1. Whilst the Commissioner did not deal with this issue directly, Aitken Legal would recommend that in situations where there has been no response from legal representatives on important matters, such as the return of the personnel file in this case, then an Employer should consider making direct contact with the employee – through correspondence to both the lawyer and the employee.
  2. Further in circumstances where an employee is being advised of his/her termination, then again the correspondence should be provided directly to the employee and a copy to the lawyer (it is to be noted there may be some formalities of process being undertaken between the lawyers in any event).
  3. This case contains another example of the Fair Work Commission’s empathy towards an employee with a favourable work record, as the HR Manager’s work record is the subject of specific mention in this case. However, in this case, the extent of the HR Manager’s misconduct, in first taking but then unlawfully retaining the file, outweighed any mitigating factors supporting a decision in her favour.
  4. It also follows from this case that it is absolutely essential for Employers to ensure that their contracts of employment contain an express contractual right to terminate an employee without notice for serious misconduct, as not having that contractual right, or having a contract that only refers to the ability to terminate with notice, could lead to a scenario of serious questions on the Employer’s right to dismiss summarily without notice.
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