11 Aug Newsletter: Flawed Workplace Investigation

Flawed Workplace Investigation Leads To Compensation For HR Consultant 

A recent decision of the Fair Work Commission is a reminder that flawed investigations can damage an employer’s defence of an unfair dismissal application.

A human resources consultant at a HR consultancy company was dismissed after she was found copying her employer’s entire hard drive onto a personal hard drive, which included intellectual property and confidential information.  Whilst an investigation was conducted by the employer, the Commission found that it was flawed.

In the lead up to Christmas break, it was brought to the employer’s attention that documents were being copied onto a hard drive from the employee’s laptop.  The employer’s IT consultants determined that the employee was copying the employer’s entire hard drive onto this hard drive, and had previously done so in September.  The employee was contacted and questioned about this, but ultimately was advised that her employment was terminated.

The employer asserted that this investigation determined that misconduct was occurring and that this justified dismissal.  Later it asserted that the documents had been copied to help the employee start her own business.  The employee asserted that she was copying the information in order to work over the break but admitted that it was a “silly thing to do”.

The Commission first determined whether the Small Business Fair Dismissal Code (“Code”) had been complied with.  This requires, inter alia, a belief that “the employee’s conduct was sufficiently serious to justify immediate dismissal” and that this was based on reasonable grounds, including consideration of whether the employer carried out a reasonable investigation into the matter (Pinawin T/A RoseVi.Hair.Face.Body v Domingo (2012) 219 IR 128).  The Commission found that

whilst some inappropriate behaviour had occurred, the employer did not have a “reasonable basis” to assume that the employee had seriously breached her obligations or put the employer at risk.  As such, the Code had not been complied with.

The Commission then determined whether the dismissal was otherwise unfair.  It found that whilst there was a valid reason for the employee’s dismissal (relating to the downloading of the entire hard drive and some other matters), the misconduct did not warrant summary dismissal.  Additionally, the Commission found that the dismissal was procedurally deficient as the employee was not given a genuine opportunity to explain her actions.  The Commission determined that reinstatement was inappropriate and awarded the employee five weeks’ compensation ($11,505.00 plus superannuation) on the basis that she would not have stayed in employment any longer than her notice period.

Investigations are an important tool in protecting your business’s risk, particularly in the case of small businesses that can rely on compliance with the Code to protect themselves from unfair dismissal applications.  If an appropriate investigation had been undertaken, the employer may have been able to rely on it to terminate the employee’s employment.

Not only are investigations relevant for employee misconduct matters, but they can be necessary to examine bullying, culture and work health and safety issues, amongst many other workplace issues.  HR Law conducts impartial and confidential investigations for a number of employers and would be happy to assist you.  Please contact us to discuss your investigation needs.

The content of this article is intended to provide a general guide to the subject matter.  Specialist advice should be sought about your specific circumstances.