Failing to follow a lawful and reasonable direction

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.

A particularly expensive cup of coffee

The relatively recent case of Raj Bista Glad Group Pty Ltd t/a Glad Commercial Cleaning was too unique and somewhat humorous not to warrant a post. Aside from Vice President Hatcher's rather witty highlights in his decision, it's the employer's extreme reaction to circumstance which makes this case particularly notable. The Sydney Morning Herald covered the case in an article here.

At a high level summary, this is an unfair dismissal case concerning a dismissal for serious misconduct. The conduct itself concerned Mr Bista, a part time cleaner for Glad cleaning services who was dismissed for having a cup of coffee at the client's premises prior to starting his shift.

Serious Misconduct is not just a loose term in Australian industrial relations, it is a specifically defined form of misconduct which warrants summary dismissal by an employer. The definition is found under Regulation 1.07 of the Fair Work Regulations and is designed to cover behaviours where an employee has engaged in theft, fraud, assault or engaged in deliberate conduct causing serious and imminent risk to health and safety etc.

Serious misconduct in unique in that there are not only very particular set tests one must meet but also that creates a material disadvantage to employee in regards to their termination. For instance employees are not entitled to notice in lieu of termination as noted in Section 123 (1) (b) of the Fair Work Act 2009 and this also impacts an employee's entitlement to Long Service Leave where they have had less than 10 years service (ACT and TAS being 7 and 15 years respectively as LSL is state based legislation).

With this in mind an employer should be sure they are on sound footing when terminating an employee for serious misconduct as in most cases they would at the same time be making a conscious decision to withhold entitlements the employee would have otherwise received on termination.

In this case the employer made the termination on grounds that Mr Bista engaged in theft stating to Mr Bista in a letter that "Neither the coffee nor the paper cup it was made in were the property of yourself or the Glad Group". Furthermore they claimed that this action this caused a serious and imminent risk to the reputation, viability or profitability of the business in that:

• The tenant expressed distrust towards Glad Group Cleaners; and
• Glad Group's viability depends on it's reputation when tendering for contracts.

I particularly enjoy Vice President Hatcher's reference to the English language when describing how disproportionate the employer's definition of theft was to that of common sense usage in the workplace.

In Mr Bista’s case, I consider that the conduct upon which his dismissal was based was insignificant to the extent that it could not constitute a sound, defensible or well-founded reason for his dismissal. In my view, any reasonable person would regard his conduct as involving no more than a trivial misdemeanour... I prefer to take a more commonsense approach to Glad’s characterisation of Mr Bista’s conduct. In my view describing his conduct as “theft” verges on an abuse of the English language as used and understood by the ordinary person...

Vice President Hatcher goes on to outline a number of mitigating circumstances to assert why this is the case noting points such as:

• Mr Bista had previously shared coffee with his own supervisor and had been invited to have coffee by staff members of the client.
• On the day in question, he made the coffee in front of two employees of the client and chatted with them while doing so. The employees made no objection to his actions.
• The "property" the employer was claiming that was stolen consisted of the "coffee, hot water and a paper cup. They were all consumable items. Their collective value would have been well under one dollar."
• Mr Bista apologised immediately when confronted by the Office and Facilities Manager and explained he did not know he was not allowed to make a coffee. It also appeared by actions of the manager that this apology was accepted at the time.

On the item of "serious am imminent risk to reputation..." etc. Vice President Hatcher interestingly notes that the mere fact that Glad was on a rolling monthly contract with the client and had to undergo a public tender did not substantiate the claim that such a risk existed. Also the Office and Facilities Manager's comment that there was now an "element of distrust" was directed at Mr Bista personally rather than the employer.

This second consideration highlights that employers need substantial grounds to claim such a risk and need to be cautious if the risk is actually concerning just an individual or the organisation. It was also noted that it would not have been difficult for the employer to simply relocate Mr Bista to another site if required.

Vice President Hatcher awarded $9172.20 in damages to Mr Bista in addition to reinstatement, resulting in what ended up being a very expensive cup of coffee.

Make sure you're on sound footing before directing an employee to attend a medical assessment

In the recent finding of Cole v PQ Australia Pty Ltd t/a PQ Australia [2016] the Fair Work Commission has provided some clarity around when it is reasonable for an employer to request an employee attend a medical examination.

In this case PQ Australia stood down Mr Cole after he had taken one day personal leave and directed him to attend a medical examination. When Mr Cole refused (and failed) to attend the medical examination, PQ Australia terminated Mr Cole's employment.

PQ Australia did not state this was the sole reason for his termination. They also mentioned he failed to comply with a direction to only communicate with PQ Australia's Vice President of HR during his stand down. In addition PQ Australia stated in their communication to Mr Cole:

“The reason that we have directed you not to attend for work until further notice is that a number of issues have arisen in the workplace over the last few months which have involved or affected you and we are concerned about the impact these issues have had on you and on others.”

However it was clear that not attending the medical assessment was the core issue here.

In situations such as these, one would expect Mr Cole to have a history of abnormal personal leave absences in order to justify the request for a medical. However this was not the case, as Commissioner Roe finds:

"PQ Australia did not allege that they had any concerns about the frequency or nature of Mr Cole’s absences from work on personal leave. Mr Cole had not had any lengthy or frequent absences. In fact he had accumulated more than 27 days of unused personal leave in his approximately 4 years of service. Mr Cole was absent for one day on personal leave on 14 June 2015. Mr Cole attended his doctor and eventually provided a medical certificate for this single day absence. He also provided a pathology request form signed by his doctor which included a diagnosis of his condition."

Given these facts it is unsurprising that Commissioner Roe found that the request to be unreasonable. While the employer presented a number of reasons to support their request, these were not substantial enough and in reviewing the matter Commissioner Roe outlined the following questions to consider:

1.   Was there a genuine indication of the need for the examination, such as prolonged absences from work, or absences without explanation, or evidence of an illness, which related to the capacity to perform the inherent requirements of the job

2.   Had the employee provided adequate medical information which explained absences and demonstrated fitness to perform duties?

3.   Was the industry or workplace particularly dangerous or risky?

4.   Were there legitimate concerns that the employee’s illness would impact on others in the workplace?

5.   Did the employee agree to the assessment by the medical practitioner selected by the employer?

6.   Was the employee advised of the details of the conduct which led to the concerns that he was not fit for duty?

7.   Was the medical practitioner advised of the issues of concern, and were those matters focused on the inherent requirements of the job? What information was proposed to be given to the medical practitioner about the actual job requirements?

8.   Was the employee advised of the matters to be put before the medical practitioner for his assessment?

9.   Was the medical assessment truly aimed at determining, independently, whether the employee was fit for work?

PQ Australia felt the full brunt of the Fair Work Act in Commissioner Roe's findings as he applied the full 6 month compensation as a remedy in favour of Mr Cole. This equated to a payment of $43,906.72.

I have found medical assessments work best with an open and transparent approach. Clearly in this case the situation became adversarial and hostile almost from the very start. It's important to ensure employees feel comfortable during the process so in turn they and their Doctor/s are more likely to be fully cooperative with the employer.

Holding Redlich also has a quick write up on the case here.