Why being judge, jury and executioner may cost your business thousands

Imagine having to pay $12,000 for an unfair dismissal to an employee who was described by the Fair Work Commission (FWC) as having engaged in conduct that was “reprehensible…belligerent, disrespectful…unnecessary, unbecoming and an overreaction”.

This is exactly what happened in a recent FWC matter where a small not-for-profit, the Environment Centre NT Inc (ECNT), was ordered to pay more than $12,000 compensation after the FWC found its Executive Director should not have acted as “judge, jury and executioner” by overseeing the entire disciplinary process in the decision of Skei Batton v The Environment Centre NT Inc [024] FWC 597.

This is one of the most incredulous cases we’ve seen in a while, so strap in for an interesting read.  There is a lesson in this for employers in handling what can appear to be a clear cut case…

What happened 

The employee (the Finance Manager), was dismissed after a series of events that began with the ECNT’s Biodiversity Policy Officer asking her how to go about reimbursing volunteers for fuel costs.

When the Finance Manager insisted on being provided with more details, the Executive Director and the ECNT’s Treasurer became involved and recommended using a standing expense code. In response, the Finance Manager replied in an email using quite belligerent wording and excessive caps lock.

When the Executive Director and Treasurer questioned the Finance Manager about her behaviour, she yelled:

“Whatever! Do whatever the f** you want to do and dump whatever sh*t in my lap [you’re] going to do. I don’t care!” and left the office.

The Finance Manager did not return to the office the following day, despite there being urgent, time sensitive tasks needing to be completed. In an email checking on the whereabouts of the Finance Manager, the Executive Director said that she considered her conduct the previous day and the tone of her earlier email to be “unprofessional and unacceptable”, and stated that she intended to discuss it with ECNT’s employment committee.

She concluded the email by asking the Finance Manager to “Please let me know as soon as possible what your intentions are regarding the above matters, including whether you intend to return to work at ECNT”.

After receiving no response for four days, the Executive Director sent the Finance Manager a “notice of warning and investigation” letter “regarding alleged misconduct and poor performance which may result in dismissal”.

The Finance Manager responded two days later, after which a meeting was held, an investigation conducted and the decision was made to dismiss her for “misconduct of a very serious nature” that included “yelling and swearing” at the Executive Director and Treasurer, being absent from work without explanation and “refusing” to follow the Executive Director’s lawful and reasonable directions “asking you to confirm that urgent, time-sensitive work fundamental to your role as Finance and Officer (sic) Manager would be completed by you as agreed”.

So far so good you might be thinking …

The Fair Work Commission Proceedings 

The Finance Manager subsequently filed an unfair dismissal claiming disputing the termination of her employment and the matter was heard by Fair Work Commissioner Riordan who had to consider whether there was a valid reason for the dismissal and whether it was harsh, unjust or unreasonable.

In first considering whether the ECNT had a valid reason to dismiss the Finance Manager, Commissioner Riordan said he was satisfied that her “reaction to the request [regarding how to reimburse fuel costs] was highly emotional and belittling”. He stated “To treat a fellow employee in this manner cannot be condoned”, “The [finance manager] was asked a simple question. It deserved a simple answer, without histrionics or condescending capitalisation.”

The Commissioner also found that the Finance Manager’s conduct in the sub-committee meeting was “belligerent and disrespectful”.

His view was that:

  • “The [ECNT] had every right to question her work performance.”
  • “[Her] reaction was unnecessary, unbecoming and an overreaction.
  • “For a senior employee to stand up, swear, storm out of the office and slam the door is reprehensible behaviour.“

When considering the Finance Manager’s unexplained absence from work for 3.5 days, Commissioner Riordan noted that the Executive Director had tried to contact her on “numerous” occasions and stated that it was his view that:

  • “I do not accept the proposition that the [finance manager] did not receive any of these communications.”
  • “Even if she did not receive these emails and texts, [she] knew of the time critical period in relation to the audit, the budget and the upcoming board meeting.
  • “It is not appropriate or fair to the [ECNT] for [her] to simply ‘disappear’. “The [ECNT] would have been well within its rights to question whether [she] had simply abandoned her employment.

Commissioner Riordan held that ECNT had a valid reason to terminate the Finance Manager.

Where it all come undone though, was then the Commissioner assessed whether the dismissal was fair in all the circumstances. He observed that it was “obvious that the [finance manager] was not confident about performing the tasks that were assigned to her in relation to the audit and the budget”. “This is not surprising. [She] is not a qualified accountant but was studying part time to achieve her diploma. [She] should have been provided with more support for these tasks. It would appear that the situation simply became too overwhelming.“

In considering the disciplinary process which was wholly undertaken by the Executive Director who was also a complainant and witness of the conduct, Commissioner Riordan ultimately held that there was a lack of procedural fairness afforded to the Finance Manager and that it necessitated a finding that her termination was harsh. He stated:

  • “I am satisfied that [she] did not receive her statutory entitlement to a ‘fair go’.”
  • ”[She] was entitled to a fair disciplinary process.”
  • “The Executive Director was a witness and complainant to the behaviour of the [Finance Manager]. As such, the Executive Director should not have conducted the investigation or made the decision to terminate the [Finance Manager]. The Board should have made the decision on the Applicant’s employment future. The Executive Director assumed the role of “judge, jury and executioner”. “This was not appropriate and denied the Applicant procedural fairness.”

The Commissioner ordered that the Finance Manager be paid $12,000 plus super.

Lessons for employers 

This decision serves as an important reminder for those in leadership positions to consider distancing themselves from investigations and/or being the decision maker in disciplinary processes in circumstances where they are a witness and/or complainant.

Depending on the business size, this can be difficult and that is why it is important to get advice early and to consider outsourcing to external specialists to assist with disciplinary processes and make recommendations regarding who should manage the process and make decisions regarding termination.

Please contact our team if you would like to discuss this or other matters of concern to you.

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