In regards to dismissals for serious misconduct in my experience they have often come from actions which resulted in a serious an imminent risk to the reputation, viability or profitability of the employer's business (in reference to section 2 of the definition of serious misconduct).
Given this it's interesting to see a case which instead relies on section 3 (c) - The employee refusing to carry out a lawful and reasonable instruction that is consistent with the employee's contract of employment.
The recent case of Barkhazen v Conair Australia Pty Ltd [2016] FWC 6520 (an appeal has been lodged) looks at this element of the definition.
An investigation occurred where Ms Barkhazen was found to have engaged in improper conduct in a meeting (following on from a grievance from her requesting an apology from a manager in the meeting). Ms Barkhazen was informed she would receive no apology from management and was advised to move on and not raise the matter again.
Workplaceinfo has a useful write up of the case here. As a high level summary, this case involves an employee, Ms Barkhazen who was the Accounting, Tax and Payroll Manger at Conair Australia. Given her role, Ms Barkhazen was also known as the pseudo "HR Manager" for the office as well.
Unfortunately for Ms Barkhazen she did raise the matter again with the manager who then subsequently lodged a further complaint. Ms Barkhazen was placed on special leave with pay and a further meeting was held regarding Ms Barkhazen's ongoing pursuit of an apology from the employee against direction. At some point during the meeting Ms Barkhazen was informed she would also be required to undertake an independent medical assessment.
The employer agreed to Ms Barkhazen's wishes to not be escorted from the building after the meeting. Given this Ms Barkhazen returned to collect her belongings from the office and also took her personnel file unbeknownst to the employer.
While there are some other elements to the case, here i'll be looking into the issue around the personnel file. The employer quickly noticed that Ms Barkhazen's file was missing and formally communicated several times with Ms Barkhazen's solicitors requesting it's immediate return. This involved multiple letters each requesting a specific date of return or at a minimum information as to the whereabouts of the file (Commissioner Cambridge notes at least 7 formal requests). The final of these letters stated that the employer was considering termination due to willful misconduct as a result of her inaction. While Ms Barkhazen's solicitors responded to a number of letters, they never made reference to the missing employee file.
Given this the employer decided that in "the absence of any response from the applicant’s legal representatives regarding the whereabouts of the applicant’s HR file, represented the applicant’s failure to comply with a lawful and reasonable direction. Consequently, the applicant was considered to have engaged in wilful misconduct and it was decided that her employment should be summarily terminated."
It was not until the day of the unfair dismissal hearing that the personnel file was returned in person.
In her submission Ms Barkhazen raised the following:
Further submissions made on behalf of the applicant also dealt with the purported reason for the applicant’s dismissal being misconduct relating to her failure to return her personal HR file. It was submitted that at the time the applicant was suspended from duty, she was concerned that her HR file was the only objective evidence that could show that she was a diligent and productive employee. Further, the applicant feared that the respondent would alter her performance records if she returned the file to them. Consequently, she did not disclose the fact that she had the HR file.
In response, the lawyers for Conair submitted:
...that the valid reason for the dismissal of the applicant was her failure to respond to the lawful and reasonable direction to advise Conair if she had the HR file or if she didn’t, and that the evidence has now subsequently clarified that she did have the HR file all along. Ms Jones rejected the proposition that because the applicant may not have seen the letters of 21 and 23 December 2015, she could not have contravened the reasonable and lawful direction of the employer. Ms Jones submitted that there had been no response provided to any of the requests made for information or return of the applicant’s HR file.
Commissioner Cambridge considered these elements in his decision:
In this instance, the applicant was summarily dismissed for misconduct involving a failure to comply with a lawful and reasonable direction of the employer. The direction of the employer, conveyed through their lawyers to the applicant’s lawyers, involved either the return or information regarding the whereabouts, of the applicant’s HR file. At the time of dismissal the employer was not certain that the applicant had removed her HR file from the records held at its premises. The failure of the applicant’s lawyers to provide any response to the repeated inquiries concerning the HR file was construed by the employer to represent a failure on the part of the applicant to comply with lawful and reasonable directions.
In circumstances where communication regarding very serious employment related matters is transacted between legal representatives for the respective parties, it would be reasonable to expect that all communication would, at very least, be acknowledged and responded to, even if only in an elementary manner, perhaps indicating that a more comprehensive response would subsequently be provided once instructions had been obtained from the client...
...Although it has subsequently emerged that at the time, the applicant was unaware of the directions regarding the HR file contained in the letters of 21 and 23 December, the employer had valid reason for the dismissal because it was reasonable for it to assume that the absence of any response to those letters, and the earlier letter of 14 December, represented a deliberate refusal to comply with the directions. In any event, even if there was some invalidity that could be established for the reason for dismissal as was within the knowledge of the employer as at 4 January, the subsequent actions of the applicant have confirmed valid reason for dismissal.
It's interesting to note that even though Ms Barkhazen claimed she did not receive notice of the request for file from her solicitors it was found to be a valid reason for termination on the part of the employer. In this case, as Commissioner Cambridge notes, it became a redundant point as she clearly did have the file. However it does reinforce the point that communication to a person's appointed legal representative can have the same impact as communicating with the person directly.
In addition the case shows that a lawful and reasonable direction can also be a simple as being directed to respond to a question.
The Commissioner also addresses the claim that the file was taken for Ms Barkhazen's protection. Quite rightly the Commissioner mentions that Ms Barkhazen could have simply copied the contents of the file and then returned it.
It was a shame that this spiraled out of control so quickly. It was not raised that Ms Barkhazen had historical performance concerns and it appears that had Ms Barkhazen simply accepted her employer's initial finding that her behaviour was poor in a singe meeting and followed direction this would have ended there.
I have frequently seen employees start to dig themselves holes and get more and more extravagant in their fervor to defend their (often poorly justified) position on a matter. This seems to be one of those examples.
As an HR Practitioner I have often found that transparency and the philosophy of "no surprises" has been a useful in countering these behaviors before they crystallize. It becomes more difficult to hold an irrational position when all the pieces are on the board for you to see. It's not completely clear on why Ms Barhazen was asked to attend an independent medical examination, I can only assume this was in relation to her continuously seeking an apology after being directed not to. While speculation without all the information, it could be that this was potentially the catalyst for her to take the file out of concern regarding it's intention, justification and and impact.
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