Unfair dismissal; employers must conduct investigations with care

The need for care to be taken by an employer when conducting an investigation into an allegation or allegations of inappropriate conduct by an employee is well illustrated by the following extract from a recent decision of the Fair Work Commission in an unfair dismissal case. The dicta also 0065plains a finding of a constructive dismissal.

“ Unfortunately, after careful consideration, the conduct of the employer which involved Mr Shen unjustly concluding that the applicant was responsible for creating and disseminating the rumours, and then engaging in a process which involved the humiliating vote of all staff, was, on any objective and reasonable assessment, and having regard for the entire factual matrix, conduct that was intended to produce, or was likely to result in, the resignation of the applicant. Mr Shen was confident that his conduct would result in the resignation of the applicant, and he arranged for the preparation of her resignation letters before he confronted the applicant with the allegations of her involvement in the rumours. Faced with this conduct on the part of Mr Shen, the applicant had no realistic, alternative option but to resign.

[80] In this instance, a careful analysis of the factual matrix of the circumstances that gave rise to the resignation of the applicant has established that the conduct of the employer was intended to produce, or likely to result in, the resignation of the applicant. Consequently, the applicant was forced to resign from her employment because of the conduct engaged in by the employer. Therefore, the applicant was dismissed in satisfaction of the terms of subsection 386 (1) (b) of the Act………………………….

387 (a) – Valid reason for the dismissal related to capacity or conduct

[82] The dismissal of the applicant was directly connected with the conclusion reached by Mr Shen that the applicant was responsible for the creation and dissemination of the rumours. Mr Shen disingenuously asserted that the rumours were not of such significance as to warrant the resignation of the applicant. However, the approach that he adopted in response to hearing of the rumours at the Christmas party clearly reflected a desire to confirm what he had been told, and to hold someone, the applicant, responsible for the creation and dissemination of the rumours.

[83] Had there been a proper, careful, fair and just investigation into the rumours which ultimately confirmed that the applicant had maliciously and falsely created and disseminated false rumours about Mr Shen, such conduct may have represented a sound, defensible and well-founded reason to dismiss the applicant. Unfortunately, Mr Shen adopted a hasty and ill-considered conclusion which failed to contemplate that others that may have been more actively involved in the creation and dissemination of the rumours had managed to deflect all attention upon the applicant.

[84] The employer also sought to rely upon the applicant allegedly writing-off significantly more client fees than were authorised or disclosed. This alleged conduct of the applicant represented an additional basis that the employer asserted established valid reason for dismissal. In the absence of any clear warning to the applicant about the allegedly excessive level of her write-offs, such conduct on the part of the applicant, if it had been properly established, could not represent a valid reason for dismissal.

[85] Therefore, the dismissal of the applicant was not for valid reason related to the applicant’s capacity or conduct. Consideration of the other elements contained in s. 387 of the Act must also be undertaken……………………………….

Conclusion

[95] In this instance, the employer has asserted that it did not dismiss the applicant from employment. Consequently, the Commission has been required to firstly determine the jurisdictional objection raised by the employer.

[96] The Commission has undertaken a careful analysis of all of the evidence regarding the circumstances which led to the applicant signing duplicate resignation letters that had been prepared by the employer. This analysis has led to the conclusion that the applicant was forced to resign because of the conduct of the employer, which was intended to produce, or was likely to result in, the resignation of the applicant. The actions of the employer established the constructive dismissal of the applicant.

[97] Upon further analysis, there was no valid reason for the dismissal of the applicant. Consequently, the applicant was dismissed without valid reason related to her capacity or conduct.

[98] The conduct that the employer adopted when it confronted the applicant with allegations that she had created and disseminated the rumours was severely flawed. The confrontational approach adopted by the employer was designed to create an emotionally charged incident and it deprived the applicant of any natural justice.

[99] The dismissal of the applicant was harsh, unjust and unreasonable. Consequently, the application for unfair dismissal remedy has met the relevant legislative requirements and it is granted.”

Yang v FCS Business Service Pty Ltd (2020) FWC 45609 delivered 1 September 2020 per Cambridge C