Power, sex and silence in the workplace: Cultures of complicity

David Weiler, Associate

Perhaps what is most concerning about the sexual harassment and assault alleged against Harvey Weinstein by several women is that it was an open secret in Hollywood for years. It was joked about by some and ignored by many others. However, it took two independent investigations, one from the New York Times and another from the New Yorker, for those with the power to step up and take a stand against the alleged behaviour.

It is not uncommon for those who take steps to report sexual harassment to find their experiences dismissed or trivialised. For example, in a landmark sexual harassment case in Australia1, the claimant stated that she had reported to her employer instances of sexual harassment. She recounted that the response from her supervisor was allegedly to laugh and say that “he himself had been hit with the ugly stick and that he never had the pleasure of being a target of sexual harassment and fantasies, and unfortunately no one had wanted to have an affair with him.” 2

These stories not only ignite a necessary dialogue within workplaces about such behaviour, but also provide a useful case study of how sexual harassment is aided and abetted by the inactivity and silence of those in a position to speak out about such behaviour.


Following the Weinstein accusations, several women made public allegations of sexual misconduct against the comedian, Louis C.K.. The celebrity responded by admitting to the claims and in a statement said:

“These stories are true. At the time, I said to myself that what I did was O.K. because I never [did anything] without asking first, which is also true. But what I learned later in life, too late, is that when you have power over another person, asking them…isn’t a question. It’s a predicament for them. The power I had over these women is that they admired me. And I wielded that power irresponsibly.”

The power that certain individuals have over those who might potentially speak out against inappropriate conduct is an important insight into how complicity is solidified within a culture. Take, for example, the situation of Quentin Tarantino whose movies, including Pulp Fiction, were distributed by Mr Weinstein. As far back as 1995 he knew of Weinstein’s conduct from his own girlfriend’s experience. As an “up-and-coming” director, the support that Mr Weinstein gave Mr Tarantino was critical to his success. Following the publicity around the allegations, Mr Tarantino reflected that he wished he “had taken responsibility for what [he] heard. If I had done the work I should have done then, I would have had to not work with him.”

Power and control are central to the employment relationship, and organisations must be enlivened to the possibility of such power being exploited. The power dynamic may contribute to an environment that prevents those affected from speaking out, as well as the willingness of peers, bystanders and other workers, who are dependent on the support of more powerful colleagues, from speaking out.


As the NY Times reports, the organisational silence echoes that of the broader industry. In 2015, an employee of Weinstein’s company, Lauren O’Connor, had written a letter to several executives in the business outlining inappropriate conduct against a colleague and notifying them that:

“There is a toxic environment for women at this company…

I am just starting out in my career, and have been and remain fearful about speaking up…But remaining silent is causing me great distress…

Harvey Weinstein is a 64 year old, world famous man and this is his company. The balance of power is me: 0, Harvey Weinstein: 10…I am a professional and have tried to be professional. I am not treated that way however. I am sexualized and diminished.”

According to the report, “some Weinstein Company board members and executives…were alarmed about the allegations….in the end though, board members were assured that there was no need to investigate. After reaching a settlement with Mr. Weinstein, Ms. O’Connor withdrew her complaint and thanked him for the career opportunity he had given her”.

These accounts offer a rare and candid glimpse into an industry where success is built, in part, on ignoring unfortunate facts and protecting one’s own interest in the face of inappropriate sexual conduct.

As a result of women coming forward to speak up against the systemic issues, change is possible. In a statement announcing the expulsion of Mr Weinstein from the body that awards the Oscars, the Board of Governors for the Academy of Motion Picture Arts and Sciences explained its decision as follows:

We do so not simply to separate ourselves from someone who does not merit the respect of his colleagues but also to send a message that the era of willful ignorance and shameful complicity in sexually predatory behaviour and workplace harassment in our industry is over. What’s at issue here is a deeply troubling problem that has no place in our society.

It is fair to be skeptical of the industry’s ability to change, but this sentiment draws attention to how institutional silence on issues such as sexual harassment plays a significant role in the perpetuation of this type of conduct and in disempowering those who experience harassment from bringing forward their allegations.

In Australia, organisations often have policies and procedures that make provision for raising allegations of this nature. But it is worthwhile considering whether the culture of an organisation creates a climate of silence and implicitly discourages the reporting of such allegations.


Another significant aspect is the liability that may arise for individuals who turn a blind eye towards inappropriate sexual conduct in the workplace. In terms of accountability within an organisation, the personal liability of individuals for breaches of the Fair Work Act 2009 (Cth) (“FW Act”) and anti-discrimination laws such as the Sex Discrimination Act 1984 (Cth) (“SD Act”) may become an issue for those considered to be “involved” in a contravention. This can include directors, compliance officers, managers and senior human resources staff.

Under the FW Act, involvement in a contravention is treated in the same way as an actual contravention. An individual is taken to be “involved” in a contravention if he or she:

(a) has aided, abetted, counselled or procured the contravention; or
(b) has induced the contravention, whether by threats or promises or otherwise; or
(c) has been in any way by act or omission, directly or indirectly, knowingly concerned in or party to the contravention; or
(d) has conspired with others to effect the contravention.

To be “knowingly concerned in or party to the contravention” (s 550(2)(c)), the conduct in question may take the form of an act or omission, with the potential to capture a failure to act where some form of action would have been the appropriate response. For example, where an HR manager had knowledge of the essential matters that made up the employer’s contraventions, he was found to have been knowingly concerned in these contraventions on the basis that “as human resources manager, he should have been aware of, and at least attempted to give advice on, [the employer’s] obligations under the [Act].3

Borrowing from the criminal law concept, “willful blindness” can arise “where a person deliberately refrains from making enquiries because he prefers not to have the result, when he wilfully shuts his eyes for fear that he might learn the truth, he may for some purposes be treated as having the knowledge which he deliberately abstained from acquiring”.

Where a remedy for sexual harassment or discriminatory conduct is pursued in the discrimination context, the personal liability of an individual alleged to be involved in a breach can also arise. Under the SD Act, a person who “causes, instructs, induces, aids or permits” another person to breach the legislation is taken also to have done the unlawful act.

In this context, the reach of the SD Act has been held to extend to the role of an employment agency that knew that several young women it sent to a particular employer had made sexual harassment allegations. The agency was found to have “permitted” the unlawful conduct that took place in relation to a young woman who was harassed at that workplace, on the basis that the prior complaints relating to that workplace should have alerted it to the distinct possibility that any young female sent to that workplace was at risk.4

Take the example of a senior employee or director who is aware of instances of inappropriate conduct occurring in workplace, but who remains silent in circumstances where, because of their position of authority in that workplace, action on their part could have had an impact on the behaviour. By their own inertia on the issue, they may run the risk that they are taken to have condoned or permitted such conduct. This becomes a greater risk where there are repeat and consistent allegations, making silence a poor choice.

The recent accusations made around the abuse of power and inappropriate sexual conduct by celebrities have brought to light how systemic sexual harassment in organisations thrives on silence and complicity. Key personnel in such organisations run the risk of being viewed as potentially involved in contraventions, where their awareness and position give them the capacity to influence such behaviour.

Key takeaways

  • Organisations need to be mindful of the power dynamics in the workplace that can foster a culture of silence and absence of complaints.
  • Diligent adherence to compliance obligations requires active, not passive, engagement.
  • “Wilful blindness” may be considered actual knowledge for the purposes of liability.

  1. Ewin v Vergara (No 3) [2013] FCA 1311
  2. Ewin v Vergara (No 3) [2013] FCA 1311 at [497].
  3. Fair Work Ombudsman v Centennial Financial Services [2011] FMCA 459 at [38]
  4. Elliott v Nanda (2001) 111 FCR 240.

First FWO prosecution for race-based underpayments

Therese MacDermott, Consultant

It is fairly well known to HR and legal practitioners that the extent of race based employment discrimination is not accurately reflected in the number of complaints lodged by individual workers. This makes the role of the regulator, in pursuing breaches of the Fair Work Act 2009 (Cth) (the “FW Act”) that are linked to race, a significant aspect of enforcement and compliance.

The Fair Work Ombudsman (“FWO”), since its inception, has assiduously prosecuted egregious underpayments and other conduct amounting to substantial non-compliance with core employment obligations.

In a recent case, following an audit of its work arrangements, an employer was found to have breached the FW Act in a number of respects, including by failing to pay the minimum award rates and other allowances for overtime, weekend work and public holidays and in relation to its record keeping obligations.1

The respondents admitted the underpayment and record keeping contraventions in relation to a number of its employees. However, the case proceeded on the outstanding issue of whether, in addition to the established breaches, the respondents had taken adverse action against particular employees because of their nationality or descent. Ultimately, the Court found that the employer contravened the prohibitions on discriminatory treatment in the FW Act. It held that the failure to pay particular workers correctly and other treatment was adverse action based on race.

In establishing the causal link between the treatment and the prohibited ground (in this case, race), many adverse action cases have turned on the state of mind or motivation of the decision-maker in order to ascertain the real reason for the decision-maker’s conduct. Many employers have been able to discharge the onus of establishing that a prohibited ground was not a substantial and operative factor for the treatment by establishing that the prohibited ground had nothing to do with the reasons the decision was made.

However, in this case, the Court did not accept that the second respondent (the decision-maker) was confused about the award obligations and concluded that the Malaysian national extraction and Chinese race of the employees in question was the substantial and operative reason. The Judge found that the employer failed to provide any convincing or credible explanations for the treatment consistent with the absence of race as a substantial and operative reason for the action.

This case is significant as it is the FWO’s first racial discrimination litigation. It is also a reminder to employers to ensure that decision-making within their organisations is not impacted by any prohibited grounds so as to bring into question compliance with the FW Act. Decision-makers must be able to provide credible explanations for the treatment of workers that is disassociated from any discriminatory treatment or other proscribed bases.

Fair Work Ombudsman v Yenida Pty Ltd & Anor [2017] FCCA 2299

“I’ll be back”: Reinstatement of sacked workers

Michael Starkey, Associate

It may be Arnie’s favourite catchphrase, but “I’ll be back” are the words no employer wants to hear when effecting a termination of employment.

This article considers the role of reinstatement in the Australian workplace relations system and highlights that an employer’s fear that a reinstatement order will be made is not how most matters are resolved. It uses recent case examples to explore what factors are taken into account by the Fair Work Commission (the “FWC”) in ordering reinstatement, and canvasses strategies that an employer might adopt when confronted with a reinstatement order to deal with its consequences at an organisational level.

Primary Remedy or an Uncommon Remedy?

Reinstatement is the “primary remedy” under the unfair dismissal jurisdiction of the Fair Work Act 2009 (Cth) (the “FW Act”). This means that if the FWC finds that an employee has been unfairly dismissed, it must order reinstatement of that employee unless it is satisfied that reinstatement is inappropriate in the circumstances.1

In the previous edition of Strateg-Eyes, we flagged that the Productivity Commission has recommended that reinstatement be removed as the primary remedy of the unfair dismissal jurisdiction (while stopping short of calling for the remedy to be abandoned completely). In support of its view, the Productivity Commission noted that:

  • reinstatement is often impractical given that “the trust that is central to a harmonious and productive employment relationship is irremediably destroyed at the end of most unfair dismissal cases”;
  • parties often elect compensation during mediation in any event; and
  • reinstatement is an uncommon remedy in practice.2

Although no changes have yet been made to implement the Productivity Commission’s recommendations, employers who may be concerned about reinstatement can take some comfort in the last of the Productivity Commission’s observations. In its 2014-15 Annual Report, the FWC noted that of 188 dismissals found to be unfair at arbitration, reinstatement (in addition to compensation in some cases) was ordered in only 27 cases (or just over 14 per cent).3

Avoiding reinstatement: what the FWC will consider

The FW Act does not specify what factors the FWC must take into account when considering whether reinstatement is appropriate in the circumstances of a particular dismissal. While the appropriateness of reinstatement will therefore be determined on a case by case basis, a number of recent cases highlight some of the factors that may be considered.

Is loss of trust and confidence enough?

Often, employers will argue against reinstatement on the basis that the circumstances leading to the termination have resulted in the employer losing the necessary trust and confidence in the employee to maintain his or her employment.

While it is recognised that a degree of trust and confidence is required in an employment relationship, in one recent case, it was held that a loss of trust and confidence will not always be the sole (or even a necessary) criteria in determining whether or not to order reinstatement because “in most cases the employment relationship is capable of withstanding some friction and doubts”.4

A loss of trust and confidence will only be enough to prevent reinstatement if its effect is to make the employment relationship unproductive and unviable.5

Maintaining a culture of compliance

Employers have had more success in demonstrating that reinstatement is inappropriate by establishing that it would undermine the policies and disciplinary procedures relied on to terminate an employee’s employment.

In one recent case, the FWC found that the “application of the relevant policy and the maintenance of appropriate discipline” within the organisation were important, and that the applicant had “not shown any real appreciation of [how] her conduct” (which included acting aggressively toward suspected shop lifters) may have breached those policies. In these circumstances the FWC concluded that reinstatement was not the appropriate remedy.6

Post-termination conduct

With the proliferation of social media, the post- termination conduct of employees is becoming increasingly visible to a broad audience. In one recent case, while the employee’s dismissal was determined to be fair (due to his dishonesty during a workplace investigation), it was held that reinstatement would not have been possible even if the opposite conclusion had been reached because of derogatory Facebook posts he shared about his former employer.

The New South Wales Industrial Relations Commission held that it would be unreasonable to reinstate an employee who had “publicly characterised his employer as ‘bastard’ and ‘criminal with stars’”, particularly given the posts were not “put up in the heat of distress about a dismissal and taken down again, but posts put up publicly two months after the termination and left there”.7

Dealing with the reality of reinstatement

While the statistics demonstrate that reinstatement is not necessarily a common remedy for unfair dismissal, a case from March this year demonstrates a number of factors which may lead the FWC to exercise its power to order it.

The case involved a Centrelink officer who posted comments on social media describing his clients as “spastics” and “whingeing junkies”, criticising the government and allegedly bringing the Department of Community Services into disrepute.

While the FWC found the posts meant there was a valid reason for the employee’s dismissal, it found the dismissal harsh because of mitigating factors, including the length (twenty years) and quality of the employee’s service, and that the dismissal was disproportionate “having regard to all the circumstances of [the] conduct, including that it bore no relationship to his actual work performance, caused no actual detriment to the Department, was situational in nature and engaged in impulsively rather than with deliberation, and consisted of a small number of widely interspersed comments over a period of years”.8 Further, it was held that there was no real risk that the misconduct would be repeated, and that the employee understood that his conduct was inappropriate.9

Cases like this reinforce the understandable concerns that management and human resources personnel may have about the workability of the employment relationship following reinstatement. In this respect, organisations should keep in mind the following strategies that can provide a framework to help deal with reinstated workers.

  • Acknowledge difficulty: potential difficulties associated with reinstatement should be acknowledged both internally, and between management and the reinstated employee (if appropriate) with the intent of developing an open and productive dialogue.
  • Communicate effectively with line managers: communication is key to tracking the pulse of the working relationship between a reinstated employee and his or her colleagues and line managers.
  • Consider mediation: particularly if the working relationship seems problematic or unproductive, or if the reinstated employee is required to work with personnel who played a role in his or her dismissal.
  • Act in good faith: managers must not be perceived as “out to get” a reinstated employee, who will have all the usual rights and protections of any other employee.
  • Reinstated employees are not a protected species: just as significantly, employers should maintain the confidence to deal with reinstated employees as they would the rest of their employees. Further or repeated misconduct or poor performance need not be tolerated and should be dealt with in accordance with usual policy.
  • Consider the big picture: organisations in which an employee has been reinstated should take the opportunity to review the procedures that led to that employee’s unfair dismissal in the first instance, and make improvements where necessary.

Key Takeaways

  1. While reinstatement remains the primary remedy of the unfair dismissal jurisdiction, it is not as common as employers might fear.
  2. Whether or not a worker will be reinstated will often come down to more than whether there has been a loss of trust and confidence in the employment relationship (which, on its own, may not be enough to prevent reinstatement).
  3. Employers should put in place strategies for dealing with reinstated workers (who should be treated as any other worker would be) and utilise the opportunity reinstatement presents to review any potential flaws in the disciplinary or performance management procedures that led to the dismissal.

1. Fair Work Act 2009 (Cth), s 390 (“FW Act”).

2. Productivity Commission, Productivity Commission Inquiry Report Volume 2 (30 November 2015), 595-6.

3. Fair Work Commission, Annual Report 2014-15 (13 October 2015), 76.

4. Nguyen v Vietnamese Community in Australia [2014] FWCFB 7198, [27] (“Nguyen”).

5. Nguyen, [28].

6. Smith v Coles Supermarkets Australia Pty Ltd [2015] FWC 5446, [136].

7. Marroun v State Transit Authority [2016] NSWIRComm 1003, [107]-[108].

8. Daniel Starr v Department of Human Services [2016] FWC 1460, [93] (“Starr”).

9. Starr, [97].

Serious Misconduct: when is it safe to terminate without notice?

Kathryn Dent, Director and Beverley Triegaardt, Associate

It’s a situation no employer hopes they’ll have to deal with, but just in case you must, here’s what you need to need to know about instantly or summarily dismissing an employee due to serious misconduct.


The definition of serious misconduct under the Fair Work Regulations 2009 (“the Regulations”) expands on the common law definition as including: 

  • wilful or deliberate behaviour by an employee that is inconsistent with the continuation of the contract of employment; or 
  • conduct that causes serious and imminent risk to the health and safety of a person or the reputation, viability or profitability of the employer’s business. 

Depending on the circumstance, examples of serious misconduct include: 

  • theft; 
  • fraud; 
  • assault; 
  • intoxication at work; 
  • refusal to carry out lawful and reasonable instructions

Where an employee engages in serious misconduct, an employer is at common law entitled to summarily dismiss them, which in other words deprives the employee of any notice or payment in lieu. Many written contracts of employment will set out grounds. The employer is permitted to summarily dismiss as long as it can demonstrate that the employee has engaged in serious misconduct, serious enough to warrant instant dismissal.

Commonly, employers question what exactly that constitutes sufficient evidence for establishing the conduct occurred and how serious the conduct must be to avoid to the risks that can follow from terminating employment without notice. In short, an employer’s exposure to the legal and non legal risks will be minimal if:

  • the employer has complied with any relevant contractual obligations, policies and procedures;
  • the employer has observed procedural fairness particularly in circumstances where the employee has access to the Fair Work Act 2009 (Cth) (“the Fair Work Act”) unfair dismissal jurisdiction, which includes an investigation (in circumstances where the conduct/allegations of misconduct may be factually in dispute);
  • the employee has wilfully or deliberately engaged in conduct that is inconsistent with the continuation of their employment;
  • the employer is reasonably satisfied that, on the balance of probabilities, the conduct occurred (we discuss this in further detail in this article);
  • the employer acts without delay (the argument being that if the conduct was so serious to terminate without notice it should be done as proximate to the offence as possible); and
  • no other form of disciplinary action is appropriate.

What are the risks?

Terminating an employee’s employment without providing or paying them their notice can have both legal and non-legal repercussions for the employer.

Legal Risks

Summary dismissal can result in exposure to the following types of claims:

Unfair dismissal claim

An employee who falls within the jurisdictional threshold can claim under the Fair Work Act that the termination of their employment was either substantively or procedurally unfair, or both, if it was harsh, unjust or unreasonable. If the employee is successful, reinstatement, reemployment or up to six months’ compensation may be awarded and in some cases backpay.

General protections claim

Employees may claim under the Fair Work Act that their summary dismissal constituted adverse action because they exercised a protected workplace right or that they were discriminated against. For this reason, it is vital that the employer has evidence to dispel the claim as they bear the onus of proof. Compensation is uncapped in these types of claims and penalties may also be imposed on companies and individuals involved in the breaches.

Unlawful discrimination claim

Similar to general protection claims, unlawful discrimination claims may be pursued if an employee believes (and can prove) the dismissal was causally connected to a protected characteristic including but not limited to their race, gender, marital status or political affiliations. An employer can be liable for up to $100,000 compensation in the jurisdiction of NSW. (Federally damages are uncapped)

Breach of contract claim

If an employee can establish their conduct did not amount to “serious misconduct” then an employer may be liable for breach of contract relating to the termination of employment. Recently, an employer was ordered to pay its ex-senior executive US$2.65 million and AUD$6,425 in lost entitlements and damages when it failed to attend court to defend a breach of contract claim made by the executive after he was summarily dismissed (and thus there was no evidence to support the allegation, as pleaded, that the employee was guilty of the serious misconduct relied upon to terminate).1

Non Legal Risks

The range of non-legal risks include:

Media attention

If an employer’s actions in dismissing an employee reveal questionable or harsh practices, or reveal the inner workings and personalities within an organisation, then resultant litigation can impact adversely on that employer’s short and long term profitability if its reputation amongst its client base, prospective clients and employees and other stakeholders is damaged. In some circumstances it may be best to avoid public litigation and the scrutiny of the press by settling a matter privately. However, depending on the nature of the conduct, it may also be in an employer’s interest to show to both internal and external stakeholders the firm stance they will take in respect of certain conduct to reinforce cultural and behavioural expectations.

Impact on other employees

The serious misconduct of an employee can impact on the productivity of other employees. Workplace gossip and speculation can divert their attention away from important tasks at hand, cultivate mistrust and unease in the workplace and reduce team morale.

Punishment that fits the crime

The impact of summary dismissal on an employee is significant as not only does it mean they are dismissed with no period of notice or payment in lieu of notice but the nature of the termination is such that it can adversely impact upon their reputation, career development and ability to obtain alternative employment. Therefore, it is only fair that the degree of certainty in the misconduct having occurred and the seriousness of the allegations are considered in tandem prior to instant dismissal. This is commonly referred to as applying the Briginshaw standard.

The Briginshaw test does not create a third standard of proof in addition to the criminal (i.e beyond reasonable doubt) and civil standards (i.e balance of probabilities), but rather, requires that the more serious the allegations and/or consequences arising from a finding, the stronger the proof (ie evidence of serious misconduct) should be. The Briginshaw test does not require the standard of proof in a criminal matter – employers do not need to go to that extent to prove serious misconduct occurred – but employers do need to be reasonably satisfied by evidence of sufficient weight and feel an actual persuasion based on the evidence at hand that, on the balance of probabilities, the misconduct occurred.

Accordingly, we recommend that in order to satisfy the Briginshaw standard, a prudent employer intending to summarily dismiss an employee for serious misconduct would ensure that they:

  • diligently investigate the allegations of serious misconduct (deploying an appropriate level of resources having regard to the factual circumstances and legal risks);
  • have regard to the seriousness of the allegations and the consequences of accepting them as truth; and
  • are sufficiently persuaded that the misconduct more than likely occurred, having considered whether the sufficiency of the proof was commensurate with the seriousness of the allegations.

Is it sufficiently serious?

Serious misconduct is not defined by way of examples but can be characterised as conduct that damages the employment relationship to the point of no return. Summary dismissal may be warranted in the following circumstances, although each case must be considered on its own merits.

Employee is convicted of a criminal offence

An employee’s criminal conduct, if sufficiently serious and relevant to the employment, can jeopardise an employer’s trust and confidence in an employee which is an essential foundation of the employment relationship and can therefore be grounds for summary dismissal. Employers should be mindful that until criminal charges are proven (resulting in a conviction) summary dismissal may not be warranted. For this reason, it is recommended that employers specify in their contract and policies that criminal charges (as opposed to a conviction) can be grounds for instant dismissal.

Safety breaches

In the case of Singh v Fenner2, a mill operator was witnessed by his workmates intentionally placing his hand over a machine that was rotating at high speed and placing him at risk of serious injury. The Fair Work Commission (“FWC”) considered the summary dismissal of the employee as a justified (“not inappropriate”) response to his actions considering the potential damage that could have been caused by the employee’s reckless action (both in terms of serious injury and “significant cost resulting from disruption to the production process”). In this case, the employer was successful in defending the unfair dismissal application because it involved a serious safety breach. Not every safety breach will justify termination though and the individual circumstances must be considered.

Conduct that is not unlawful but has the capacity to bring the employer into serious disrepute

Misconduct that involves an employer being publicly associated with the actions or views of an employee may be grounds for instant dismissal. In today’s age, employers may experience this in the form of offensive or careless use of social media by employees. This sort of misconduct must be dealt with carefully and with and in a procedurally fair manner as dismissal may not always be the proportionate response to the misconduct.

Drug / alcohol related conduct

Instant dismissal may be justified if an employee is impaired by alcohol or illicit substances such that they cannot responsibly or safely perform their duties or fulfil their obligations towards their employer. Furthermore, cases such as Toms v Harbour City Ferries Pty Limited [2015] FCAFC 35 have established that where an employer has a “zero tolerance” policy on drugs and alcohol and safety is paramount to the role the employee performs, returning a positive result in a drug test can be grounds for instant dismissal regardless of whether the employee appears intoxicated or impaired.

Dishonest conduct or theft

Dishonestly claiming personal expenses as business expenses may be grounds for summary dismissal. In Mohapatra v Acciona Energy Australia GlobalPty Ltd t/ as Acciona [2015] FWC 5976 the FWC agreed with the employer’s decision to summarily dismiss an employee after he made a number of unauthorised personal purchases on the company credit over a the course of a few months and dismissed the employee’s unfair dismissal application. Amongst the items were a blender, two Australia Day boxer shorts, a pair of gym shoes and shorts, a cooler bag, vitamins, a heater and 14 massages. The FWC observed that “it is such an extreme case, having regard to the level of education, responsibility and seniority of the employee” that the behaviour, “(e)ven if motivated by a lack of judgment and understanding” “has to be regarded as serious misconduct”.


In certain professions such as accounting or where an employee holds an executive role or directorship, it is an inherent requirement of the job to be adept at handling finances. An employee’s insolvency may be deemed serious misconduct as it can be indicative of a lack financial proficiency required for a role and also because the negative stigma attached to insolvency can be particularly damaging to an employer’s credibility and reputation. This is even more so where the employee is very senior or recognised as a public figure. In those circumstances, termination on the grounds of serious misconduct where the employee becomes insolvent, especially where such a term forms part of the employee’s contract, may be justified.

What can you do to prevent serious misconduct?

Hope for the best but prepare for the worst. Give your organisation the best chance of success against serious misconduct occurring by taking heed of these preventative measures.

Induction and training

Set your organisation’s expectations for standards of professional conduct by providing new starters with a proper induction and training on policies around work health and safety, workplace behaviour and codes of conduct.

Contracts and policies

Not only do contractual clauses and policies serve as forewarnings to employees (and are therefore advisable) but they can assist to swiftly resolve termination disputes particularly where the categories of serious misconduct are set out.

Assess your workplace culture

A culture of tolerance for wrongdoing can weaken an employer’s position when allegations of serious misconduct arise. Seek to find innovative ways to reward positive behaviours in your workplace and encourage staff at all levels to speak out in the face of questionable conduct.

What if it’s too late?

While the above measures may prevent serious misconduct from becoming an issue for your organisation, it is important to remember that an employer must deal with allegations of misconduct with a sense of seriousness and urgency, otherwise it risks being seen as affirming the employee’s continued employment. While termination may be upheld by a tribunal, it could be that termination with notice is seen, by the employer’s delay, as being the more appropriate outcome.

When faced with allegations of misconduct, follow your organisation’s policy for investigating the conduct and remain cognisant of the need for procedural fairness. This means putting all the allegations and evidence to the employee and providing them with a fair opportunity to respond. In some circumstances, a neutral third party is best engaged to investigate serious misconduct. This can also provide insurance for the employer if there is a risk of being perceived as biased.

Employers are well within their rights to terminate employment without providing notice where serious misconduct occurs. If your organisation would like to prevent serious misconduct occurring or safeguard against a summary dismissal being mishandled, please get in touch with the experienced team at PCS.

1. Coghill v Indochine Resources Pty Ltd (No 2) [2015] FCA 1030
2. Singh v Fenner (Australia) Pty Ltd [2015] FWC 5583 (25 August 2015)

What’s the difference? Defending a General Protections Claim vs a Discrimination Claim

When an employee alleges experiencing discrimination at work and wishes to pursue a legal remedy, the employee has a variety of options available to them. Two of those options are a discrimination claim under Federal or State anti-discrimination law or recourse under the general protections provisions of the Fair Work Act 2009 (Cth) (the “FW Act”).

It is beneficial for an employer to be aware of the differences between a general protections claim and a discrimination claim to understand why an employee may have chosen a certain legal path and to defend a claim in the event that it arises in their organisation.

1.   Not Just Confined to Discrimination

Under the FW Act, an employer is prohibited from taking “adverse action” against an employee or prospective employee “because of” various prescribed grounds which can be grouped into three main categories:

  • industrial activities;
  • workplace rights; and
  • discrimination.

This means that an employee or prospective employee could bring a general protections claim on the basis of discrimination as well as, for example, making a complaint in relation to their employment.

Anti-discrimination legislation, on the other hand, is confined to direct or indirect discrimination based on a prohibited ground under the legislation.

2.  Burden of Proof: the Reverse Onus

Importantly for employers, if an employee brings a general protections claim under the FW Act and can establish that they possess a particular attribute and allege they have suffered adverse action for that particular reason, the onus of proof falls on the employer to prove that the reason for the adverse action was not because the employee possessed a particular attribute. In other words, it is presumed that the employer’s action was taken for that discriminatory reason unless the employer can prove otherwise.

3.  Compensation Caps

Under Federal anti-discrimination law and State anti-discrimination legislation in Victoria, Queensland, Northern Territory, Tasmania and South Australia, there is no cap to the amount of compensation that an employee can be awarded if their discrimination claim is successful. The general protections provisions also do not provide for a cap on compensation.

However, a compensation cap of $100,000 is prescribed under the Anti-Discrimination Act 1977 (NSW) and $40,000 under the Equal Opportunity Act 1984 (WA).

This is important as some employees may tactically choose which jurisdiction they wish to bring their claim under based on whether there is a compensation cap.

4.  Costs

One of the purported benefits of bringing a general protections claim as opposed to a discrimination claim is the “no cost” jurisdiction under the FW Act. Costs will only be awarded in limited circumstances where the Fair Work Commission (“FWC”) is satisfied that the proceedings were vexatious or without reasonable cause. If a general protections claim proceeds to the Federal or Federal Circuit Court, costs may be awarded, but only in limited circumstances.

In relation to Federal anti-discrimination claims, the Federal Circuit Court and the Federal Court have a general discretion to order costs in these matters. Regulation of costs under State anti-discrimination varies, with claims beginning in a regulatory body, where parties try to conciliate the matter and bear their own costs. For example, in NSW a claim is commenced in the NSW Anti-Discrimination Board. If the matter is then referred the the NSW Civil and Administrative Tribunal, the parties will continue to bear their own costs except in special circumstances.

This is important as employers need to remain conscious of the commercial impact that defending a general protections application may have on its bottom line, (noting that it is unlikely that costs will be awarded against the employee if an employer successfully defends a general protections application).

5.  Time Limits

Under Federal and State anti-discrimination law, there is no time limit as to when a complaint can be made however, in general, a complaint may terminated if it is lodged more than 12 months after the alleged unlawful discrimination took place.

However, an employee who is terminated from their employment and wishes to bring a general protections application must apply to the FWC within 21 days of the termination (it is possible for the FWC to grant an extension). In other circumstances, (for example, where there has been no termination of employment) there is a six year time limit for an employee to make a general protections claim to the FWC.

If you have any questions or require any assistance with defending a discrimination or general protections claim, please call PCS on 8094 3100.

Protected industrial action sends Melbourne off its rails

Today Melbourne’s vibrant tram network will grind to a halt as the Fair Work Commission (“FWC”) has refused to prevent a four-hour strike planned by the Rail, Tram and Bus Union (“RTBU”).

The application by tram operator, KDR Victoria Pty Ltd (better known as “Yarra Trams”) to have the FWC suspend or terminate the protected industrial action was brought under s424(c) of the Fair Work Act 2009 (Cth) (“FW Act"). Under this section, the FWC has an obligation to make such an order if it is satisfied that the proposed action will “threaten to endanger the life, the personal safety or health, or the welfare of the population or part of it.”

Commissioner Lee of the FWC heard the application late Tuesday evening in Yarra Trams’ final effort to quell the disruption. When presented with the arguments that this action would satisfy the requirements of s424(c) Commission Lee was not persuaded and applied the typically stringent threshold necessary for the FWC to find that there was a real threat to the population arising from the tram strike. 

The protected industrial action is expected to last from 10am to 2pm Thursday and will affect all of Melbourne Trams. It is unclear whether there will be further actions but RTBU divisional secretary, Phil Altieri, has indicated the parties are still fairly far apart.

The most recent offer by Yarra Trams of a 15% pay rise over four years, if staff agreed to work a 14-day roster, was rejected by the RTBU. 

FWC makes first formal ruling in anti-bullying jurisdiction

CF and NW and Company A and ED [2015] FWC 5272

More than 18 months after the anti-bullying jurisdiction was introduced, the Fair Work Commission (“FWC”) has made its first formal finding of bullying, having found that two employees were subjected to bullying and harassment by their manager, and issued orders to stop the bullying. As well as being the first case in which the FWC has made a formal finding of bullying, this is just the third anti-bullying order to be issued by the FWC since the inception of the anti-bullying jurisdiction in January 2014.

In this matter, the Applicants alleged that their manager had engaged in belittling conduct, swearing, yelling and inappropriate language, interference with and undermining of their work, physical intimidation, attempts to incite victimisation of other staff members and threats of violence. Following an investigation of the Applicants’ complaints, their employer moved the manager to another branch of its real estate agency. The Applicants took leave from work to receive medical treatment and claimed workers’ compensation in respect of their manager’s behaviour.

In finding that the Applicants’ allegations were founded and that the manager’s conduct constituted bullying, the FWC held that the manager’s behaviour created a risk to the Applicants’ health and safety and that that risk was ongoing because, although the manager had moved offices, there was “common ownership of the businesses” which made the threat of “future work related interactions… real”.

The FWC ordered that, for 24 months:

  • the manager and the Applicants must not make contact with each other;
  • the manager must not attend the Applicants’ workplace and the Applicants must not attend the manager’s workplace;
  • the manager must not be given access to the Applicants’ portfolios when they return from leave;
  • the employer must, by 1 September 2015, provide anti-bullying training to all its employees and update its anti-bullying policy, including its grievance procedure; and
  • the employer must provide the Applicants with written clarification of reporting arrangements upon their return to work.

This decision is also interesting because it provides some insight into how the FWC may seek to manage the sensitivities surrounding the disclosure of the identity of the parties the subject of a bullying application moving forward. In this matter, the FWC ordered the identity of the parties remain suppressed despite the finding of bullying. This was because:

  • the suppression of the parties’ identity had been an important factor in the employer conceding that the manager’s behaviour could be dealt with under the FWC’s anti-bullying jurisdiction; and 
  • the stop-bullying orders had been developed with the parties’ consent with a view to the resumption of a productive working relationship between the Applicants and the employer.

Lessons for employers

This case demonstrates that, when anti-bullying applications cannot be resolved by mediation, the FWC is willing to impose wide ranging orders to stop conduct that constitutes bullying in the workplace. Such orders will not necessarily be limited to the relationship between the bullying and bullied parties and may, as here, impose material obligations on employers.

It is essential that organisations develop behaviour and culture policies which highlight the responsibility of employees to refrain from bullying conduct in the workplace, thoroughly train employees on their obligations under such policies and enforce these policies effectively.

FWC Full Bench denies employee with pending criminal charges unfair dismissal remedy

Dr Daniel White, Executive Director of Catholic Schools and legal representative of the Catholic Education Office, Sydney v Mr Gerald Mahony [2015] FWCFB 4952

In a decision which departs from previous approaches, the Full Bench of the Fair Work Commission (the “Full Bench”) has held that a school teacher with pending criminal charges relating to children cannot pursue an unfair dismissal remedy following the termination of his employment in 2013.

At first instance, the Fair Work Commission (the “FWC”) rejected the argument of the Catholic Education Office (the “CEO”) that the applicant’s contract of employment had been “frustrated” (that is, terminated by an event entirely outside the control of the parties) by the introduction of the Child Protection (Working With Children) Act 2012  (NSW) (the “Child Protection Act”). On its terms, the Child Protection Act prevented anyone charged with offences relating to children from performing child-related work. The FWC held that the contract had not been frustrated because the action which brought it to an end was the CEO sending the applicant a termination of employment letter explaining the reasons for his dismissal. Commissioner McKenna said:

“How the contentions about the doctrine of frustrations as against what was, in form and substance, a dismissal for cause –the reasons… described… in the CEO’s letter advising of the termination of employee – are to be reconciled is not immediately apparent… A contract of employment cannot be terminated twice”.

In a judgment comprising just seven paragraphs, the Full Bench overturned the FWC’s decision. The CEO argued not in terms of frustration, but on the basis that the applicant’s employment was “not permissible” under and “inconsistent” with the Child Protection Act. The Full Bench agreed, holding that the Child Protection Act made the continuing employment of the applicant illegal. It could therefore not be said that the applicant’s employment had been unfairly terminated at the initiative of the CEO.

Lessons for employers

  • Although this case is significant in that it means that the employment of employees working with children will automatically terminate if they are charged with offences relating to children, in considering whether the reasoning of the Full Bench will extend to other types of criminal charges, the terms of relevant legislation will be of prime importance. The Child Protection Act is unusual in that it allows for termination of employment prior to a final conviction.
  • Employers should ensure that their contracts of employment include provisions which allow them to take disciplinary action against employees who fail to promote the best interests and reputation of the organisation, both during and after work hours.

Offensive Drunk Slips Employer’s Noose

A team leader whose employment was terminated after he verbally abused and sexually harassed colleagues on the night of his office Christmas party has successfully challenged his dismissal. Vice President Hatcher of the Fair Work Commission found the dismissal harsh for the purposes of section 394 of the Fair Work Act 2009 (Cth).

Following the end of year Christmas party an employee of Leighton Boral Amey NSW Pty Ltd (‘Leighton Boral’), Mr Keenan, acted inappropriately towards a number of his Leighton Boral colleagues. At the official Christmas party the conduct included:

  • repeatedly asking a female colleague for her number;
  • telling the company director and senior project manager to “F&*kOff”; and
  • speaking to a junior employee in a threatening and bullying manner, including by saying “who the F&!k are you? What do you even do here?

The inappropriate conduct continued following the official Christmas party at a separate private bar and included:

  • trying to touch the dimple on a female employee’s chin and remarking “I used to think you were a stuck up bitch”;
  • kissing a female colleague on the mouth and telling her “I’m going to go home and dream about you tonight”; and 
  • saying to a female colleague “my mission tonight is to find out what colour knickers you have on”.

Following an investigation into the incident, Leighton Boral terminated Mr Keenan’s employment.

The decision 

In determining that the dismissal was unfair, Vice President Hatcher delineated between the conduct at the official Christmas party and the conduct at the private bar, ultimately ruling that the conduct at the private bar could not be considered for the purposes of assessing the fairness of the dismissal. 

Accordingly, while acknowledging that some of the conduct at the after party constituted sexual harassment under the Sexual Discrimination Act 1984 (Cth), the Vice President was not prepared to take it into account because it was not “in connection” with Mr Keenan’s employment. 

Having regard to only the conduct that occurred at the official Christmas Party VP Hatcher held that the dismissal was harsh for a number of reasons including:

  • his prior good employment record;
  • the isolated and aberrant nature of the conduct;
  • the fact that Mr Keenan was intoxicated as a result of alcohol consumption at a Christmas function where Leighton Boral had failed to monitor the responsible service of alcohol; 
  • the availability of alternatives to dismissal which were proportionate to the conduct involved; and
  • the severity of the penalty compared to Leighton Boral’s treatment of other employees with similar records.

Although Hatcher VP acknowledged that Mr Kennan’s conduct toward the younger employee who he bullied by saying “who the F&!K are you? What do you even do here?” constituted a valid reason for dismissal, Leighton Boral could not rely on this as they did not properly communicate this allegation to Mr Kennan, and give him an opportunity to respond.

What does this mean for employers?

  • Don’t cherry pick allegations of misconduct: employers should put all allegations of misconduct to an employee and provide an opportunity to respond. If there are multiple valid reasons for termination of employment, employers will be in a much better positon to defend their decision if the employee is afforded procedural fairness in respect of each allegation. 
  • Employers should act consistently with their legal obligations and polices: employers have an obligation under OH&S laws to provide a safe work environment for all employees at all work related activities (including Christmas parties). Accordingly, prior to such events, employers should remind employees of applicable polices and procedures, the types of behaviours that will not be tolerated and encourage responsible consumption of alcohol. During such events employers should also monitor compliance with these policies by ensuring responsible service of alcohol and where possible addressing instances of misconduct.
  • The delineation between work and private lives remains grey: the law with respect to misconduct out of hours is not black and white. If in doubt seek professional advice.