The circumstances unique to each case must be considered in determining whether it is lawful to terminate an employee for conduct that contravenes company policy.
Generally, however, if a breach of policy results in unlawful conduct such as bullying, harassment or discrimination, then the decision to terminate the offending employee may be justified.
Having in place well-drafted policies and codes of conduct, and adopting a systematic and fair approach to investigating workplace complaints is essential for employers.
These were important factors in recent Fair Work Commission proceedings in the case of Peter Carroll v Karingal Inc (2016) FWC 3709 when a breach of workplace policy as grounds for termination was affirmed.
The facts of the case
Mr Carroll worked at Karingal as an audit and risk manager supervising several other employees, two of whom made complaints against him.
The allegations were that Mr Carroll was controlling, ‘micromanaged’ the workplace and belittled his employees (particularly with respect to the complainants’ inferior English skills). He was often aggressive towards his employees with a stifling approach to supervision.
Mr Carroll also introduced various spreadsheets requiring his employees to record detailed activities. These were considered excessive, unwarranted and encroached upon the employees’ already limited time to perform their duties.
Upon receiving the complaints, Karingal requested an independent enquiry and arranged for Mr Carroll to work from home whilst investigations took place. Throughout the course of investigations, Mr Carroll had the opportunity to read and comment in detail on the report presented by the investigator.
The report found that the cumulative effect of Mr Carroll’s behaviour towards the complainants constituted a breach of Karingal’s code of conduct, work, health and safety policies and bullying and harassment policy.
Mr Carroll was terminated and consequently made application to the Fair Work Commission for unfair dismissal.
Unfair dismissal claim
The employer / employee relationship is largely governed by the Fair Work Act 2009 (Cth) which sets out minimum standards of employment and, amongst other things, provides protection to employees against discrimination and unfair dismissal.
Section 385 of the Act provides that a dismissal is unfair if:
- the dismissal was harsh, unjust or unreasonable; and
- the dismissal was not consistent with the Small Business Fair Dismissal Code (if relevant); and
- the dismissal was not a case of genuine redundancy.
Significant to this case, was whether the dismissal was ‘harsh, unjust or unreasonable’. In such matters the Court will need to consider (amongst other things):
- whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees); and
- whether the person was notified of that reason; and
- whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and
- any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and
- if the dismissal related to unsatisfactory performance by the person – whether the person had been warned about that unsatisfactory performance before the dismissal…
As there was no argument about Mr Carroll’s performance, Karingal relied on Mr Carroll’s conduct as justifying the dismissal, claiming that he engaged in ‘serious and sustained bullying of staff under his management and supervision, which adversely affected their health, safety and welfare.’
This conduct was in breach of Karingal’s ‘Code of Conduct, its Work, Health and Safety Policy and its Bullying and Harassment Policy’.
The Code of Conduct was said to establish the required standards of its employees with an onus on ‘managers to ensure that they maintain a positive environment free of bullying, harassment and other forms of discrimination.’
Mr Carroll acknowledged that he was aware of these documents which provided that breaches would be ‘addressed either informally, through counselling methods, or formally’.
The Commission’s determination
The complainants provided evidence, and the Commission accepted, that Mr Carroll’s behaviour made them feel threatened and intimidated, causing stress and anxiety and having an effect on their safety and welfare.
The Commission found that the complainants and Mr Carroll were all credible witnesses and that Mr Carroll was ‘well-intentioned’ and believed ‘he was doing his best by his employer and his staff’. Notwithstanding, the Court found that Mr Carroll’s conduct did in fact constitute bullying in breach of Karingal’s Code of Conduct and, as a consequence, his termination was lawful.
Key take outs from the case
It is important for employers to have well-written policies which may be used as models for appropriate behaviour in the workplace. Codes of conduct and workplace safety policies (which include protocols for bullying and harassment) are important documents and may be critical in evidencing the required conduct of employees.
It is difficult to sustain the lawful termination of an employee for behaviour of which he or she was unaware. Accordingly, all policies and codes of conduct must be made available to employees. Ideally, this should occur on or before induction and whenever updates are made. Obtaining the employee’s acknowledgement of having received the document (for example by requesting the employee sign acceptance of the document) is a wise way to confirm the document was brought to the attention of the employee.
Employers must ensure that policies are reasonable and implemented in a manner that protects employees from treatment that might be considered harsh, unjust or discriminative.
Karingal’s documented policy and codes of conduct supported its defence against the unfair dismissal of Mr Carroll. These documents set out the required standards of behaviour from employees, including managers, and the implications (informal or formal) they would face for breach.
Given Mr Carroll’s acknowledgement that he was aware of the policy, it might also be assumed that Karingal had in place an effective system to ensure employees received such documents.
Engaging an independent investigator, providing Mr Carroll opportunity to comment on the reports and following a fair process during the enquiry also weighed in Karingal’s favour.
A serious breach of company policy, particularly when the conduct results in behaviour that is unlawful, can be grounds for termination.
Employers should ensure that they have well-written policies and codes of conduct so that employees understand what is expected of them in the workplace. These should be brought to the employee’s attention and reviewed regularly.
Employers should also adopt fair and consistent procedures for dealing with workplace complaints and incidents to ensure employees have the benefit of an impartial hearing if allegations are made against them.