Can you back it up? Dismissal unfair where allegations that an employee leaked information were unsupported and employee’s WHS reporting was justified

An employee who was summarily dismissed by her employer for allegedly leaking sensitive business information has been awarded 11 weeks’ compensation in the Fair Work Commission (FWC).

In this case, Bond v Wynbob Pty Ltd [2017] FWC 1337, the employee worked in a carpeting and flooring franchise that was facing a possible take-over by the franchisor.

The manager of the franchise believed that the franchisor’s actions toward claiming ownership over the business were prompted by leaks from within the business to head office, specifically about the manager’s conduct in the workplace.

In an effort to keep employees informed and to stamp out any future leaks, the manager called a meeting with employees regarding the potential take-over by the franchisor stating that:

  • It was possible that the franchisor would soon take control of the business;
  • He believed that an employee was responsible for making damaging reports to the franchisor’s head office about the business and about him; and
  • He didn’t know who had been making the reports, but he intended to find out.

The manager also informed the employees that what was said in the meeting was strictly confidential and they were not to discuss it with anyone.

Several days later, the manager became aware that a contractor to the business had found out about the possible takeover. The manager considered this a leak of information from the confidential meeting and concluded that the employee was the source of the leak.

The manager confronted the employee about this and, despite the employee’s denials of having leaked the information, the manager decided to summarily dismiss the employee.

In the FWC, the employee claimed that she was unfairly dismissed on the basis that the conduct she was alleged to have committed did not actually occur. The employee maintained that she did not tell the contractor that the franchisor was going taking over the business. The employee was supported by the contractor who insisted that he had overheard two other employees talking about those matters, and the employee was not the source of his information.

The FWC found that the manager was an unreliable witness and preferred the evidence of the contractor. The FWC concluded that the manager had already decided that the leak was the employee before any investigations into the matter and was fixed on that conclusion. Therefore, it found that the employer could not justify the summary dismissal as it could not have been reasonably satisfied that the alleged misconduct actually occurred.

Following the employee’s dismissal, the employer sought to rely on information it discovered in the course of the proceedings to further justify the employee’s summary dismissal. Specifically, it came to light that it was in fact the employee who had been making reports to the franchisor’s head office about the manager’s conduct in the workplace. The reports included:

  • A complaint that the manager was driving a work van under the influence of alcohol. Upon receiving this report, the franchisor contacted the police who apprehended the manager. He was found to have been driving with a blood alcohol concentration above an acceptable level and lost his licence as a result.
  • A photograph the employee took of the manager asleep in a breakroom which she claimed was evidence of his intoxication in the workplace.

The employer claimed that these revelations about the employee’s reports to the franchisor rendered the dismissal fair and reasonable because the employee’s conduct was damaging to the employer’s business and to the manager on a personal level. The manager claimed to suffer from a medical condition which made him appear to be intoxicated when he was not.

The employer also claimed that in making reports directly to the franchisor, the employee unreasonably circumvented the employer’s own policies on reporting incidents. The manager submitted that on the occasion when the employee reported the manager driving under the influence, she should have called the manager’s wife (a director of the employer), rather than report the matter to the franchisor.

The FWC rejected these submissions and commented that it was appropriate in all the circumstances for the employee to make the reports that she did. The employee’s reports were made for health and safety reasons and her complaint regarding the manager driving whilst under the influence was ultimately for the benefit of other road users.  

The FWC found that there was no valid reason for the employee’s dismissal and that her dismissal was harsh, unjust and unreasonable. The FWC ordered the employer to pay the employee 11 weeks’ wages in compensation, less remuneration she had earned in the intervening period and the two weeks’ wages she was paid on termination of employment.

Lesson for employers

When considering summarily dismissing an employee, an employer should make reasonable attempts to satisfy itself that any alleged serious misconduct did actually occur.

Employers should be mindful that employees have a responsibility for health and safety within the workplace and are entitled to (and should be encouraged to) raise health and safety matters. Where employees believe that a senior manager is placing the health and safety of others at risk, it will not be unreasonable for an employee to look further up the chain of command for an appropriate reporting avenue.

Shane Koelmeyer is a leading workplace relations lawyer and Director at Workplace Law. Workplace Law is a specialist law firm providing employers with legal advice, training and representation in all aspects of workplace relations, employment-related matters and WH&S.

02 9256 7500 | sydney@workplacelaw.com.au

Information provided in this blog is not legal advice and should not be relied upon as such. Workplace Law does not accept liability for any loss or damage arising from reliance on the content of this blog.

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