Gardening Leave

There was a great write up by Ashurst recently on Gardening leave.

Focusing on the case of Actrol Parts Pty Ltd v Coppi (No 2) [2015] VSC 694, this explores a case which I imagine would be common across many organisations. Here a Sales Manager leaves for a competitor and is placed on gardening leave during his notice period. The employer attempts to enforce their contractual provisions when the Sales Manager begins employment with the competitor within the notice period.

Here i'll point out a few items of Ashurst's analysis I found particularly interesting.

Impact of the employer asking the employee to return their material benefits

Justice Bell J accepted the employee's argument that by removing the company car, iPhone and iPod the employer had repudiated the contract by unilaterally reducing the employee's remuneration. It's important to remember that employees are still entitled to all of the benefits of their employment contracts while on gardening leave and this may mean access to tools and perks normally associated with performing their roles.

Businesses need to also be aware that there is a "quid pro quo" in gardening leave. For the business to receive the person's loyalty and fidelity, the employee must remain "on the books" as an employee and, critically, must continue to receive all contractual entitlements, such as a company car or technology. 

The right to place employees on gardening leave

The Fair Work Act 2009 is silent on the issue of gardening leave, or more specifically the ability for an employer to direct an employee not to perform work. Given this an employee's contract needs to be worded appropriately to provide these options. If a contract doesn't allow for such an action an employee could also argue that the employer has repudiated the contract.

Dealing with confidential information 

Again, this case acts as a clear example demonstrating the importance of contacts filling in gaps of law. While generally there are protections for employers dealing with misuse of confidential information, these protections probably stop short of the prescription most employers would like.

In the Actrol case, the employer had no redress against the employee in relation to the emails because the employee had not breached any contractual term or any policy by sending information outside the employer's IT system to his personal email address. The fact that he had a legitimate business purpose for doing so, and had not otherwise used or misused the emails was sufficient. It did not matter that it was not management's preference that documents be transferred as the employee transferred them.

Abandonment, small business employers and a very poorly worded text message

A recent Human Capital email in my inbox reminded me of a case earlier last year where a small business employer dismissed an employee for sending a text message to her manager calling him a "complete dick".

Colourful texts aside, I find Louise Nesbitt v Dragon Mountain Gold Limited [2015] interesting because it touches on both serious misconduct for small business employers and abandonment of employment.

Dragon Mountain is about as small as a small business can get, consisting of two employees. Mr Gardiner, Chairman and Managing Director and Ms Nesbitt Office Administrator/Bookkeeper.

On 12 January 2014, Ms Nesbitt sent a text message intended for her daughter's boyfriend to Mr Gardiner stating "Remember.... Rob [Mr Gardener] is a complete dick... we already know this so please try your best not to tell him that regardless of how much you might feel the need."

Realising her mistake almost immediately, Ms Nesbitt sent two subsequent messages of apology and did not attend for work the following day. Ms Nesbitt also did not complete a task required for the board meeting on 14 January 2014.

Having not returned to the employers office between 13 to 17 January 2014, her employment was terminated on 17 January 2014 sating the Board considered the matter on the 12th and made a finding of gross misconduct.

Abandonment of employment:

Commissioner Cloghan found that while he did not accept Ms Nesbitt's argument that she performed work from home, he never the less found Ms Nesbitt did not abandon her employment.

Effectively this was because on a number of occasions Ms Nesbitt held points of contact with the employer. Such as when she:

• attempted to resolve the matter with the non-executive directors, 
• stated she was unable to prepare board packs 
• and left documents at the office door. 

Abandonment of employment comes into play when an employer is effectively getting radio silence from an employee after attempting to contact them by all reasonable means (Some Awards also have additional rules). Here the employer clearly knew where Ms Nesbitt was and she was in contact with them so abandonment was not an issue. 

Gross misconduct:

Being a small business employer, Dragon Mountain was subject to the Small Business Fair Dismissal Code.

Here Commissioner Cloghan considers a few things. The context of the relationship between Ms Nesbitt and her employer, the wording of the text itself and her actions and words used following the text.

Below are a few select excerpts from Commissioner Cloghan showing his reasoning:

To call a person a “dick” is a derogatory term to describe them as an idiot or fool. The word “complete” is used to convey the message that the person is, without exception, an idiot or fool - they are nothing less than a “dick”.

The principal reason for Ms Nesbitt’s dismissal was the text message describing Mr Gardner, the Employer’s Chairman and Managing Director, as a “complete dick”. However, the evidence provided in the hearing indicates that this remark appears to have been the culmination of a “testing” relationship with Mr Gardner.

Ms Nesbitt poses the rhetorical question of how the Directors of the Employer describe an “accidental, out of context text message as gross misconduct.” Accidental or not, what matters is the content of the text message. In view of the deteriorating working relationship, I consider the Employer had reasonable grounds to believe, that Ms Nesbitt considered Mr Gardner a fool or idiot.

Ms Nesbitt assumes that having called her boss a fool or idiot she is able to reformulate its consequences by considering it acceptable to apologise (by text), provide implausible reasons for calling Mr Gardner “a complete dick” and go to third parties and seek that they not speak to her boss, before they discuss the text message with her. I mention these matters, because the Employer was aware of them and they should be considered, in whether Mr Gardner’s believed the conduct was sufficient to justify immediate dismissal.

This case shows the importance of the employment relationship and how that importance is arguably heightened in smaller teams, in this case two people. Ms Nesbitt's choice of words was carefully analysed by the Commissioner including her actions following the text in forming a view of the relationship. This obviously works both ways and careful wording of letters and following of procedures is just as important for employers. 

For another opinion, CCIQ has a write up here.

Don't go shopping for employees when you're hungry!

Ben Eubanks, from Upstart HR did a quick audio review of a book called "Red Flags: How to Spot Frenemies, Underminers, and Toxic People in Your Life" on a recent HR Happy Hour Podcast and did so through the lens of a HR practitioner (although this is not an HR book).

Ben raises some interesting thoughts and got me pondering. I'l quote some of his review below.

1.
"We all know the advice we shouldn't go shopping when you're hungry so why are we looking for employees to solve problems only when we really get desperate?"

Interesting point. Being in HR I've seen plenty of cases where managers are trying to fill gaps in their team and lose track of time. It can be very easy to overlook how much time a recruitment process can take up. One has to consider evaluating business needs, advertising, shortlisting, synchronising with panel members and applicants for interviews, debriefing and discussions on suitability and negotiation with the preferred applicant. After all that you may have to wait another 4 weeks before they can walk in the door ready to work.

I appreciate sometimes we are sprung with a termination or resignation and time is never a luxury however it got me thinking; how many managers have crisis plans for their team if they suddenly lose a critical FTE or two?


2.
If you want to know about someone at a deeper level the book discusses the FLAG acronym and Ben considers these a useful tool to help build questions around in recruitment.

Focus - What do they focus on?
Lifestyle - What are their lifestyle choices?
Association - What are the types of associations they make with other people?
Goals - Consider the goals people have.

For me these are the elements that can separate a good candidate from a star candidate. People that tick these boxes well are the candidates that take a professional and personal pride in building their brand and will be able to sell themselves articulately beyond the confines of the role. Who do they network with? How do they build their skills? How have they built their career progression around adding value to organisations?

I would imagine elements of this could be drawn out through psychometric screening and others through interviewing and seeing who can bring the 'answer plus' responses.


3.
"The worst people aren't the ones that look bad right away. We naturally shrink back from those kind of people. The worst ones are the ones that look great just before they attack you behind your back."


Not sure if I agree with Ben's take on this one. In the personal, social context in which this was written I can see the point however in the workplace context (unless your talking about the 'corporate psychopath') I would argue employees with fundamental flaws tend to filter themselves out easily with good recruitment processes.

I'll take it then that this quote is pointing to poor recruitment practice. I.e not having behavioral questions, not identifying STAR answers, not following up on matters of concern and not investing the time needed to actually identify a great candidate.

I'll put extra emphasis on the last point there. I've run into recruiting managers that are happy to spend a surprisingly small amount of time on selecting the best candidate. I'm talking a single 45 minute interview, no phone discussion and no second round.

I like to point to the example of a business plan to highlight my concern with this approach. Lets assume someone wanted to propose a project that would cost approximately $300,000 and run for 4 years. I would expect a robust plan, discussion and evaluation of tenders before making the call. No right minded manager would sign off after 45 mins of thought.

However when it comes to employing someone on a 75k salary, who may well stay with the organisation for 4 years, the view the value of the recruitment process for some can be dramatically less. And lets not forget, unlike a faulty product, you can't just ask for a refund!