Big little lies: Dishonesty in the workplace and the potential ramifications

In order for any employment relationship to function, there needs to a level of mutual trust and confidence between employers and employees. It is often said that this goes to the very “heart” of the employment relationship. Indeed, employees need to trust that their employers will act honestly and not take advantage of them in the same way that employers need to trust that their employees will also act honestly and in the best interests of the business.

It is, unfortunately, not uncommon for either party to assume that a small white lie can have very little or no real consequence for the employment relationship. However, a recent decision of the Fair Work Commission (FWC) has shown that lying is no trivial matter and can have very serious consequences for both parties.

In Wiburd v Grandbridge Limited [2018] FWC 1900, the FWC heard an unfair dismissal application made by a Personal Assistant (PA) who had been summarily dismissed by her employer for lying to its Managing Director (MD) about the whereabouts of one of its other Directors.

The employee was the MD’s PA but was also quite close with the other Director.

In or about November 2016, the MD came across emails between the PA and the Director in which the Director had asked the PA to lie to the MD and “cover” for her being late. In one particular email, she asked the PA to turn her computer on and place a coffee at her desk to make it look like she had been in the office. The email chains confirmed that the PA had done so. The emails also showed that the Director and PA had often discussed how much they hated the MD and that he was “disgusting”.

The MD’s discovery of these emails was, however, part of a much bigger discovery of a plan by the Director (along with directors from associated entities) to oust the MD from his role in one of the associated entities.

As soon as he made this discovery, the MD took steps to remove the Director from her position with the employer and sought to dismiss the PA for lying to him as evidenced in the emails he had discovered. The MD gave evidence before the FWC that, at this point in time, he felt he could not trust anybody and had to dismiss them immediately.

It was later revealed that the Director had exercised voting rights without the MD’s knowledge in order to remove him as the MD of the associated entity. It was also revealed that the Director had asked the PA to place a password on the record of votes so that the MD could not get access to them.

The PA claimed that her dismissal was unfair because:

  • she was not aware of the Director’s larger plan;
  • whilst she did lie to the MD, the matters that she was dishonest about were very trivial in the total scheme of things; and
  • she thought she was following directions from a director whom she considered to be her boss.

Noting that the employer was a small business, the FWC was required to determine whether the employer had complied with the Small Business Fair Dismissal Code. Under the Code, it is necessary to determine whether the employer held a belief that the employee’s conduct was sufficiently serious to justify immediate dismissal and whether that belief was held on reasonable grounds.

The FWC considered the circumstances as a whole and found that it was readily open for the MD to form the belief that the PA had deceived him and that she was clearly willing to lie to him on behalf of the Director, given their close relationship.

The FWC noted that the PA had a duty of fidelity to her employer – not to the Director – which required her to be honest.

In upholding the dismissal, the FWC stated at paragraph [81]:

“To cause an employer to believe something that was not true is not trivial conduct. Such conduct went to the very heart of the duty [the PA] owed to Grandbridge, to be honest. The surrounding circumstances cannot be ignored.”

Lessons for employers

In order to ensure that dishonesty does not become an issue in the workplace, employers should develop an environment in which honest and open communication is encouraged (by both managers and employees) and that employees are made aware of the potential consequences of lying to their employer.

If dishonesty does find its way into the workplace, employers must act swiftly and hold employees accountable where necessary, so that it does not become a part of the workplace culture.

An employer’s reaction to an employee who has been dishonest will always vary depending on the context. Some situations will warrant little disciplinary action whilst others, such as the case above, will warrant summary dismissal. It is incumbent upon the employer to investigate any dishonesty thoroughly and ensure that it has all of the information necessary to make a reasonable decision regarding further action.

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 |

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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