Termination process doesn’t “stack” up, leading to extension of time to lodge unfair dismissal application

Merlino v Coles Supermarkets Australia Pty Ltd [2015] FWC 1185

A Coles employee was granted an extension of time to lodge his unfair dismissal claim after two Coles HR managers were found to have misled the employee into believing that his dismissal was being investigated with the possibility of his dismissal being reversed. The employee, who was on a final warning, was dismissed for breaching safety standards by standing on a number of pallets. The employee did not accept the termination of his employment and asked for an investigation into the circumstances surrounding his dismissal and his prior first and final warning. 

The first problem with the process undertaken by Coles was that its HR Manager informed the employee that the termination of his employment may be reversed.

The second problem was that Coles proceeded on that basis and provided the employee with a process to formalise and escalate his concerns to a senior manager. 

These conversations were found by the Fair Work Commission (“the Commission”) to have led the employee to believe that his dismissal would be “stayed” during any internal investigation by Coles and the employee delayed the lodgment of his unfair dismissal application. The employee followed the advice of the HR manager and raised his concerns with the State HR Advisory Manager where he was invited to provide submissions and evidence in relation to a number of complaints he had identified that he considered relevant to his dismissal. 

The Commission found that whilst the Coles HR managers did not set out deliberately to mislead the employee to delay the lodgment of his unfair dismissal application, the statements made to the employee by the HR managers lead to a series of miscommunications and misunderstandings. The Commission was of the view that even though the employee became aware of the dismissal on the day, he had a genuine belief that his dismissal was being reviewed and could be overturned. The ultimate problem with the dismissal process was that at no point did Coles make it clear to the employee that the review process did not relate to his dismissal and would not encompass the termination of his employment and as such there was no prospect that it could be overturned. Rather to the contrary, the HR manager left open the possibility that the dismissal might be reversed.

The Commission decided that these circumstances were exceptional circumstances and made an order for an extension of time.

Lessons for Employers

Employers and HR managers who are involved in dismissals must ensure they clearly state that the employee is dismissed and not provide any false hope to the employee as to the possibility that the dismissal may be reversed. 

HR managers are expected to take reasonable steps to ensure employees are not misled in these types of situations.

Workplace Investigations | Five steps to best practice

When it comes to workplace investigations, an employer’s good intention sometimes isn’t enough. In a recent decision, the Fair Work Commission held that an employer’s otherwise well handled investigation into complaints made against an employee was unfair because the employee (who was the subject of the complaint) was only interviewed after findings in the investigation had been made. Although the employee had an opportunity to respond to the findings before a disciplinary decision was made, this opportunity was not “genuine” because the employee wasn’t given a chance to explain his conduct.

To ensure workplace investigations meet best practice standards, and to protect themselves from liability in a range of areas, employers should:

  • Be thorough: plan the investigation. Particularise allegations made by the complainant.
  • Communicate with fairness in mind: don’t make assumptions. Listen, put allegations to the accused, and give all parties an opportunity to respond before a finding is made
  • Report on your decision: detail the steps you have taken and why.
  • Use findings proactively: could the findings uncovered in the investigation be indicative of a wider problem in the workplace? Could they be used to inform behaviour and culture training to prevent future incidents?
  • Maintain confidentiality and an open, non-victimising culture: this is important from both a legal perspective and to ensure trust in the investigation process.

Handled properly, workplace investigations not only ensure employers are prepared should a worker pursue a legal claim arising out of the investigated conduct, but have the potential to prevent workplace issues from becoming legal issues in the first place.

Personal Risk for HR and Executives

HR and other executives generally accept that that their employer can be liable for the actions of its workers. Surprisingly though, many of the same executives often overlook the fact that they can become personally liable where their employer is found to have breached a range of employment or safety legislation.

This webinar:

  • provided a refresher on the sources of personal liability for HR professionals and other executives;
  • explored the commonality of interests between those Executives and the company; and
  • outlined strategies for aligning personal risk management with the best interests of the company.

Are restraints of trade anti-competitive?

Late last year, the Supreme Court of Tasmania (in Bulk Frozen Foods Pty Ltd v Excell [2014] TASSC 58) upheld a restraint of trade which imposed on the Defendant a total of 8,190 separate non-compete covenants. On one argument, this decision is yet another that demonstrates the anti-competitive nature of restraints of trade. However, this argument needs to be balanced against the need for employers to prevent employees using information and knowledge gained during the course of employment when those employees leave the organisation.

Contrary to the argument that restraints of trade are anti-competitive, the Tasmanian decision demonstrates the need for employers to frame restraints as more than mere fetters on competition in order to have them upheld.

Non-compete restraints will not be upheld unless they protect a “legitimate interest” of the employer. An employer’s “legitimate interests” are those it has in, for example, its confidential information, customer connections and goodwill.

Restraints that cannot be said to reasonably protect one of these interests will not be enforced. Further, Courts have repeatedly emphasised that non-compete clauses are only enforceable if they do no more than is necessary to protect the employer’s legitimate interests. This means close attention is paid to the scope of the restraint in terms of:

  • prohibited activities;
  • time; and
  • geography.

A restraint will be unenforceable to the extent that it goes beyond what is necessary in these respects.

The appropriate scope of a restraint is always dependent on the nature of the employment concerned. For example, in general terms:

  • executive employees with access to highly confidential information may usually be restrained for longer than non-executive employees; and
  • employees who act as the “human face” of an organisation may generally be subject to more restrictive non-solicitation restraints.

Lessons for employers

Courts have recognised that, in some instances, non-compete restraints, going above and beyond traditional non-solicitation and confidential information restraints, are reasonable means by which an employer is entitled to protect its legitimate interests. However, in order to have such restraints enforced, it is imperative that they are framed properly so as to avoid falling foul of the rule that restraints must not be merely anti-competitive.