03 Oct HR Law Newsletter – October 2014

A CASE HIGHLIGHTING THE IMPORTANCE OF NOTIFYING A “SUPPORT PERSON” TO MAINTAIN CONFIDENTIALITY

Construction, Forestry, Mining and Energy Union v MSS Strategic Medical and Rescue [2014] FWC 4336

It’s common practice to notify employee X, who is the subject of an investigation or disciplinary process, that the process is to remain confidential, but do you also inform employee Y, who is acting as employee X’s “support person” that they are also obligated to keep the process confidential?

On 5 September 2014, the Fair Work Commission found that MSS Strategic Medical and Rescue (“the Employer”) acted harshly when it gave Mr Brett Leighton (“the Employee”) a final written warning for circulating a copy of a letter he received while acting as a “support person” for his colleague.

THE FACTS

• The Employee has been employed at the Loy Yang Power Station for over 14 years. The Employer took over that Power Station two years ago and the Employee has been employed by the Employer since that time.
• The Employee is a member of the CFMEU and the site delegate.
• In February 2014, the Employee was given a final written warning by the Employer for a breach of confidentiality arising from him forwarding correspondence to the CFMEU and members of his work group in December 2013.
• The circumstances of the correspondence forwarded by the Employee are as follows:
• In December 2013, the Employee was asked by a colleague of his to attend a meeting he had scheduled with management of the Employer, as his support person. The meeting was in respect of the colleague’s conduct.
• The Employee agreed to act as the colleague’s support person and the colleague gave him a copy of the letter he had received from the Employer.  That letter was marked “confidential”.
• The Employee sent a response to that letter to the Employer and also provided a copy of that letter and his response to the CFMEU and other members of his workgroup.
• The Employer alleged that the Employee had breached his confidentiality obligations when he forwarded the letter. The Employee responded by stating firstly, that the content of the letter was not material that can be said to contain confidential matters (particularly as the workgroup was aware that the colleague was facing disciplinary action) and secondly, that he was not personally instructed to keep the correspondence confidential.
• The CFMEU lodged a dispute with the Fair Work Commission on the Employee’s behalf claiming that the Employer issuing a final written warning was “harsh and disproportionate” and should be removed from the Employee’s file.

THE DECISION

The Commissioner held that the behaviour of the Employee was “inappropriate” but that the “final” warning letter was harsh and unwarranted in the circumstances. The Commissioner took into consideration the Employee’s unblemished work history in reaching this decision. The Commissioner ultimately found that a written warning dealing specifically with the Employee’s behaviour was warranted.

THE IMPLICATIONS

This case highlights the importance of ensuring that not only is the employee the subject of an investigation or disciplinary process aware that they must keep that process confidential, employers should also ensure that the support person is aware that the obligation to keep matters confidential extends to them. In addition, employers should ensure that the support person understands the nature of their role and particularly, that it is not the role of an advocate.

HR Law is able to assist with any questions you may have about this decision or the support person role generally.

FWC WARNS AGAINST “SCATTERGUN” APPROACH BY HR

Mr Francesco Gaglioti v Pilbara Mining Alliance Pty Ltd [2014] FWC 6439

On 17 September 2014, Commissioner Cloghan upheld the Employer, Pilbara Mining Alliance Pty Ltd’s decision, to terminate its Employee, Mr Francesco Gaglioti, after he failed to follow a lawful direction to inspect and replace, if necessary, an isolator on a dump truck.

In dismissing the Employee, the Employer stated in its letter of termination that the Employee’s conduct was in breach of various internal documents and his contract of employment. At the hearing, the Employer admitted that the Employee had not breached each and every document which the Employer had claimed.

Commissioner Cloghan ultimately found that the Employer had a valid reason to dismiss the Employee, stating that the Employee’s failure to follow the Employer’s direction was “in the first instance careless, if not wilful”. The Commissioner went further to say that once the Employee became aware that his colleagues were working on the dump truck, that the Commissioner considered the Employee’s “inaction serious, reckless and improvident”.

In considering the remaining factors in section 387 of the Fair Work Act 2009, which the Commission is required to take into account, the Commissioner made the observation that the Employer “is not an ‘orphan’ when it comes to allegations of misconduct and that there is a tendency for Human Resources personnel to ‘throw the book’ at employees and list a number of alleged breaches of ‘this or that’ document”. Commissioner Cloghan said that “rather than focus on quantity, it is preferable, to set out the key documents which have been breached and not adopt a ‘scattergun approach’”. Despite the fact that the Employer admitted that the Employee was not in breach of each document alleged, the Commissioner stated that “this action by the Employer is not detrimental to [the] overall conclusion as to the [Employee’s] conduct in the employment relationship”.

LESSONS FOR EMPLOYERS  

While the urge may be to list each allegation of misconduct and every possible document which the employer says the employee’s conduct is in breach of, ultimately this may not be the best approach and as highlighted in this case, may potentially cause a valid decision to dismiss an employee to be considered harsh, unjust and/or unreasonable because of that approach taken. In addition, listing every possible document breached by the employee (or every allegation of inappropriate conduct or poor performance), may cause the actual or significant breaches (or serious misconduct or performance matters) to be diluted by the sheer quantity.

HR Law would be happy to answer any questions about this case or assist with disciplinary action to avoid a “scattergun” approach.

IT’S DECIDED … NO COMMON LAW TERM OF MUTUAL TRUST AND CONFIDENCE IMPLIED INTO EMPLOYMENT CONTRACTS IN AUSTRALIA!!

Commonwealth Bank of Australia v Barker [2014] HCA 32

On 10 September 2014, the High Court of Australia, in a majority decision (with three separate judgments) found that there is no common law term of mutual trust and confidence implied into employment contracts in Australia.

Justices French, Bell and Keane, found that the question raised in the appeal, “whether, under the common law of Australia, there is a term of mutual trust and confidence to be implied by the law in all employment contracts”, was “a step beyond the legitimate law-making function of the courts” and “should not be taken”.

Their Honours also considered the historical basis of the implied duty of mutual trust and confidence in the United Kingdom and found that no such development existed in Australia. Submissions to the Court focused on the questions “whether the proposed implied term of mutual trust and confidence was “necessary” in that without it, the rights conferred by the Agreement could or would be rendered nugatory or worthless, or seriously undermined.” Their Honours held that the term did not answer “the criterion of necessity required to support its implication in law in employment contracts generally”.

In a separate judgement, Justice Kiefel found that the implied term of mutual trust and confidence was overridden by an express term in the Agreement, stating “a term cannot be said to be necessary in this sense if the contract is effective without it. A contract clearly is effective where it already contains a term to the effect sought.”

Justice Gageler, in the final judgment, stated that “a court should not imply a new term other than by reference to considerations that are compelling”. His Honour, endorsed Federal Court Justice Jessup’s dissenting judgment, agreeing that the term was uncertain and had “the potential to act as a Trojan horse in the sense of revealing only after the event the specific prohibitions which it imports into the contract”.

The Commonwealth Bank’s appeal of the decision of the Full Court of the Federal Court was allowed.

THE HISTORY

• The employee, Stephen Barker, commenced employment with the Bank in 1981. Barker continued his employment with the Bank until 9 April 2009, where he was terminated by reason of redundancy.
• Clause 8 of Barker’s employment contract provided that he was entitled to compensation in the event that his position became redundant and he could not be redeployed.
• In February 2009, the Bank made a decision to make Barker’s position redundant. On 2 March 2009, the Bank informed Barker of its decision. Barker was informed that it was the Bank’s preference to redeploy him, but that if that could not occur, that his employment would come to an end in four weeks (the notice period). Barker was directed to clean out his desk on 2 March 2009 and not return. Barker’s access to his Bank email account, voicemail and intranet was terminated that day.
• An email was sent to Barker’s Bank email account on 20 March 2009, urging him, in conjunction with the Bank, to seek out redeployment opportunities. If a redeployment opportunity was not found, Barker’s employment with the Bank was to come to an end on 30 March 2014. Barker did not see this email until 23 March 2009, when it was sent to his personal email.
• On 26 March 2014, Barker received an email from a representative of the Bank’s Career Support Team, telling him that she had being trying to contact him for weeks to discuss redeployment opportunities. The representative seemed unaware of the fact that Barker’s access to his Bank email account had been severed.
• On 7 April 2014, Barker’s solicitor received notice that the exit date had been extended to 9 April 2014, “to give him every chance to participate in the redeployment process”.
• Barker’s employment was terminated on 9 April 2014, by reason of redundancy.
• Barker commenced proceedings in the Federal Court in November 2010, alleging that his employment contract incorporated the Bank’s redeployment policy and that it had failed to comply with that policy. Barker also claimed that there was an implied term of mutual trust and confidence which had also been breached by the Bank in it failing to actively explore redeployment opportunities with Barker.

The Federal Court found in favour of Barker and the implied term of mutual trust and confidence and awarded Barker $317,500.00 in damages.

• On appeal to the Full Court of the Federal Court, a majority of Justices also found in favour of the implied term of mutual trust and confidence.
• As discussed above, the High Court has now determined that no such implied term of mutual trust and confidence exists in Australia. Damages of $11,692.31 have been awarded to Barker for the Bank breaching clause 6 of Barker’s employment contract, in respect of notice. This breach of clause 6 of Barker’s employment contract was found by the primary judge.

WHAT DOES THIS MEAN?

Recently there has been a rise in employees (particularly those earning over the High Income Threshold, which is currently $133,000.00 per annum) claiming action taken to discipline or terminate their employment breached the implied duty of mutual trust and confidence. The High Court’s decision means that this cause of action will not be available, unless an express term exists in the employee’s contract stating that such a duty exists.

HR Law is able to assist with any questions you may have about the High Court’s decision.