It's in the Contract…...

- Monday, July 27, 2015
Workplace Policies: Are They Legally Binding?
Workplace Policies: Are They Legally Binding?

A recent decision of a Queensland appeal court raises some interesting questions about the role that workplace policies play in the employment relationship, and specifically whether they form part of the employment contract.

In 2009, the employment of a lecturer at a Queensland university was terminated for serious and wilful misconduct. The lecturer alleged that:

  • In breach of its own policies, the university failed to consider his applications for promotion properly.
  • His dismissal was unfair.
  • He was bullied, harassed, intimidated and subjected to psychological abuse by university staff.
  • The university engaged in coercive practices.
  • The university failed to address his concerns and complaints, and responded to them inappropriately.
  • The university failed to manage his work environment in a reasonable and responsible way.
  • The university failed to provide him with a safe work environment.  

The lecturer also argued that as the policies formed part of his employment contract, he was entitled to contractual damages of more than $2.5 million.  

The trial judge found that the policies did not form part of the employment contract, although they could still regulate the employment relationship. This meant that the lecturer was not entitled to sue for damages for any failure by the university to follow its own policies.

What happened on appeal

The lecturer appealed the decision to the full court of the Supreme Court of Queensland, which handed down its decision  earlier this month. 

On the whole, the full court agreed with the original decision, saying that there was a difference between a statement of policy, which could often be viewed as aspirational, and a contractual promise. 

However, there was one exception to this. The lecturer alleged that for a period of many years he had been subjected to bullying and harassment by senior staff. Despite his complaints, the university had failed to deal with the matter. The Senior Staff Disciplinary Policy provided for a four-phase approach to such complaints, and the lecturer alleged that the university failed to follow that approach when investigating his complaints.

The full court found that this was in effect a contractual promise, and so it allowed the lecturer’s appeal on this question alone. For all other matters, it upheld the original decision. 

Implications for employers

This decision is important for two reasons. 

The first is that it is a reminder to employers that policies, procedures and Enterprise Bargaining Agreements (EBAs) need to be dealt with carefully in an employment contract. Workplaces need established policies and procedures to ensure that they run smoothly and efficiently, but it should not necessarily follow that those policies and procedures form part of the employment contract. A contract cannot and should not regulate every small detail of an employee’s existence in the workplace. Compliance with the contract would be near impossible if that were the case. Every time a change, however minor, is made to a policy or procedure, every employee’s contract would need to be renegotiated. The workplace would grind to a halt under the administrative burden. 

An employment contract should make it clear that policies, procedures and EBAs do not form part of the employment contract, while at the same time outlining the employer’s expectation that those documents are complied with as the employee goes about their duties.This means that the employee cannot sue the employer for damages for any breach of policies, procedures or EBAs. 

The other reason that this decision is significant is that it serves as a reminder to employers to regularly review policies and procedures to ensure that:

  • They are up-to-date and reflect current law.
  • They are being complied with. 
Taking care with policies and procedures

If policies and procedures are not being complied with, employers should consider whether they should be amended or even dispensed with. In the absence of clear wording excluding policies and procedures as contractual terms, employers could be exposed to claims for damages if they are not following their own policies and procedures. Drafting effective wording for employment contracts and reviewing policies, procedures and EBAs requires careful consideration. 

WISE Workplace provides training courses and masterclasses in investigations for HR practitioners, workplace investigators and managers.  Our courses are designed and taught by investigators specifically designed for those engaged in the investigation of workplace misconduct including bullying and harassment.  See below for upcoming course dates.

(Articulates with Cert IV in Government Investigations)

Location: Melbourne
Date: 5-7 August

Location: Brisbane
Date: 16-18 September

Location: Sydney
Date: 13-15 October

6 easy steps to avoid drunken workers

- Monday, July 13, 2015
The perils of the office Christmas Party
The perils of the office Christmas Party

The office Christmas party. It’s a time of celebration, and an acknowledgement of all the hard work done by the team over the year. So what could possibly go wrong? Plenty for employers, as the recent decision in Keenan v Leighton Boral Amey Joint Venture demonstrates, especially when the alcohol is free-flowing. 

A Christmas party to remember

In a decision which just may have employers re-thinking the bar arrangements at the annual do this year, the Fair Work Commission (FWC) considered the termination of a worker’s employment following his behaviour at the office Christmas party. Although the employer had issued a reminder to staff to behave responsibly, Mr Keenan consumed two beers prior to attending the event, and in the course of the evening, consumed another 10 beers and a vodka and coke. Wait staff were serving drinks, but later in the evening, guests could help themselves to alcohol. During the party, Mr Keenan told his boss to “f___ off” and remarked to another colleague “who the f¬¬¬¬___ are you? What do you even do here?” When the party ended, Mr Keenan and some other employees moved to another part of the hotel and continued drinking. There were further incidents which included calling a co-worker a “stuck-up bitch,” kissing another co-worker without warning or consent, and some other comments with sexual overtones. Following an investigation, Mr Keenan’s employment was terminated. Mr Keenan claimed unfair dismissal.

The FWC findings

The FWC found that Mr Keenan had been unfairly dismissed. The after-party incidents were not in connection with his employment, as they were not sanctioned or organised by the employer. Mr Keenan’s conduct during the party was not so serious to warrant termination of employment. The FWC said that the incidents were isolated, and that generally he had a fairly good employment record.

The service of alcohol

Key to this decision were the comments about the service of alcohol at the party. “It is contradictory and self-defeating for an employer to require compliance with its usual standards of behaviour at a function but at the same time to allow the unlimited service of free alcohol at the function,” the FWC said. The FWC said that the venue had agreed to refuse service to anyone thought to be intoxicated. Mr Keenan was not refused a drink by wait staff and was not prevented from helping himself to beer later in the evening. No one with managerial authority was made responsible for ensuring the smooth conduct of the function.

Effects of the decision

This decision will cause some problems for employers, especially as Christmas season approaches. Employers can be in a difficult spot when it comes to office functions and Christmas parties in particular, as many employees expect and look forward to the annual party and judge their employer by the quality of the party (including the amount of alcohol served).  

But there are a number of things an employer can do to avoid difficulties with drunken workers: 

  • Prior to the party, remind staff of the organisation’s policies on sexual harassment, occupational health and safety and showing respect for other workers. 
  • Remind staff that they are to conduct themselves appropriately at the party as it is a work function.  
  • Consider service of drinks for a limited period, for example two hours. 
  • Do not allow self-service of drinks at any stage in the evening. Ensure the venue will refuse service of drinks to anyone who is intoxicated and make sure the venue has adequate security staff to remove any employees who are behaving offensively.
  • Ensure there are at least two senior staff members overseeing the smooth running of the event.
  • Consider organising and funding transport for staff to leave the venue as soon as the function is over.

Mixing work and alcohol is always a difficult undertaking, and employers need to carefully plan work functions to avoid the difficulties faced in the Keenan case. But with good management, the traditional Christmas party is still a possibility, even if it might be a little more subdued!

Scheming and Plotting in the Workplace

- Monday, July 06, 2015
Corruption and Collusion
Corruption and Collusion: Working Together for Harm

It can be a shock to discover that an employee may be corrupt. An employer can be frozen with disbelief, deeply hurt by the breach of trust, and put in a dire financial predicament. These feelings (and the financial losses) can be magnified when more than one employee is involved in the corruption. Collusion is an increasing issue in the workplace.  

What is employee corruption?
Employee corruption is dishonest conduct in which an employee abuses their position of trust to gain an advantage for themselves or others. Workplace fraud is a form of corruption and includes lying to obtain a benefit (for example fraudulently claiming sick leave) and falsification of documents (for example forging a manager’s signature to gain a benefit). Theft is also employee corruption, and can include manipulation of accounts or systems to steal money from an employer’s bank accounts. 
Why is it a problem?
Employee corruption is a huge issue for Australian businesses, and the financial losses are widespread. The 2012 KPMG survey of fraud, bribery and corruption found that Australian and New Zealand respondents to the survey reported losses of almost $373 million. Employees were responsible for 75% of major fraud activity amongst those companies. And as other KPMG research shows, employees who engage in corruption very often don’t work alone.
How widespread is the problem of employee collusion?
The 2013 KPMG study Global Profiles of the Fraudster found that there was increasing collusion between employees to commit acts of fraud. The report noted that “the fraud is often too complex for one person to execute; it requires others to turn a blind eye, or to provide passwords or falsify documents.” 70% of the fraudsters analysed by the study had acted in concert with others, and in 33% of cases, the cost to the organisation exceeded $US1 million. The report also found that incidents of collusion more than doubled between 2007 and 2013. 
What leads to collusion?
What the study did not show was why employees collude, although it did find that most people are capable of committing fraud, given the right circumstances. In some cases, two like-minded employees may have combined their skills for a greater gain. In others, more junior employees may have colluded because they felt they had no choice but to take orders from their superior. It is possible that company culture contributes to the problem. If there is a perception that the company never checks up on its employees’ activities and “everyone does this kind of thing”, then employees may more readily collude. Also, if there is a widespread feeling that the company treats its employees badly, disgruntled employees may be quite open to taking money that they feel is rightfully theirs. 
Warning signs for corruption and collusion
Interestingly, the studies have found that fraud and corruption are usually committed by male employees who have been with the organisation for at least five years, but not necessarily in a management role. In other words, the person you’d least expect. The biggest reason for corrupt activities is greed and maintaining a certain level of lifestyle.  Lack of internal controls, or the employee’s ability to override internal controls, is how most corruption is committed – when an employee is highly trusted and respected, the employer sometimes stops checking to see what they are up to. While some corrupt employees believe they have an entitlement to the employer’s money, the other key warning signs for potentially corrupt employees are workplace dissatisfaction and financial hardship.

Employee corruption is a huge problem for employers and collusion makes it even more difficult to tackle. However, companies that regularly audit their accounts and have in place a range of preventative measures and procedures can often limit the impact of corruption.

WISE Workplace provides training courses and masterclasses in investigations for HR practitioners, workplace investigators and managers.  Our courses are designed and taught by investigators specifically designed for those engaged in the investigation of workplace misconduct including bullying and harassment.  See below for upcoming course dates.

Location: Sydney
Date: 22-23 July 2015

(Articulates with Cert IV in Government Investigations)

Location: Melbourne
Date: 5-7 August

Location: Brisbane
Date: 16-18 September

Location: Sydney
Date: 13-15 October

Overstepping the Mark

- Monday, June 29, 2015
Overstepping the mark
Overstepping the Mark: When Unions Fail to Protect Workers
In our last post, we looked at the importance of properly investigating allegations in the case of Amiatu and Others v Toll Ipec Pty Ltd. This case is also a significant commentary on union representation, and what can happen when a union official oversteps the mark. Even though unions are charged with acting in employees’ best interests, there can also be negative repercussions for employers if unions act without authority. 

In the Toll case, three employees had discovered an open box containing Toll safety uniforms. They put on some of the uniforms, going about their normal duties and making no attempt to cover up having taken them. When the company became aware that the workers had taken the uniforms, it informed the union that it believed that the employees had committed theft and that it intended to terminate their employment and report the matter to the police. The union organiser persuaded Toll to allow the employees to resign. 

The employees had been filmed by surveillance cameras. When the employees raised the possibility of an unfair dismissal claim, the official told them that the video evidence was far too strong, and that they had “no hope” of succeeding.The official then assisted them to write out their letters of resignation. The employees subsequently made a claim for unfair dismissal in the Fair Work Commission (FWC).

The FWC findings

The FWC found that the union official had made the deal with the company without the employees’ authorisation. The company had agreed, and then the official met with the workers, saying that their two options were to resign or to be sacked and face police involvement. The commission also found that they had been coerced into resignation by this threat of police involvement and poor future work prospects. There had been no intention by the workers to steal the uniforms. Reprimands or warnings would have been more appropriate disciplinary action. 

The FWC was concerned that the union had so strongly encouraged the employees to resign when they had done nothing wrong. This effectively deprived them of adequate representation. The union official “was acting as an advocate of a proposed course of action which he had invented and which had been negotiated by him, accepted and agreed by Toll, in Toll’s best interests.” But the union official’s duty was to act in the best interests of the workers. 

Employers beware

This case serves as a warning to employers to tread very carefully when dealing with union involvement in disciplinary matters. The FWC made it very clear that the official had overstepped the union’s authority in negotiating an outcome for the employees before even discussing it with them. He was so swayed by the video footage and the threat of police involvement that he forgot the crucial steps of getting the employees’ version of events, assessing the evidence and acting in their best interests. This approach also caused another significant problem – Toll reasonably thought that it had negotiated an outcome because it was dealing with the employees’ representative, only to discover that the employees were taking legal action. 

The lesson for employers is to be very cautious about negotiating a matter with a union when the employee is not present. Any agreement made should be checked with the employee to ensure the employee is making the decision freely. Employers should be careful not to say or do anything that might later be construed as having pressured the employee to make their decision, for example, a threat to make a police report. As the FWC noted, “It would have been open to [the company] to simply advise [the union official] that the Applicants could make up their own minds whether to resign their employment.”  

This simple step may have allowed the company to successfully defend the unfair dismissal claim. When unions overstep the mark, there can be difficult and expensive ramifications for the employer. When in doubt about how to negotiate with a union, we recommend seeking the help of an experienced workplace consultant.

WISE Workplace provides training courses and masterclasses in investigations for HR practitioners, workplace investigators and managers.  Our courses are designed and taught by investigators specifically designed for those engaged in the investigation of workplace misconduct including bullying and harassment.  See below for upcoming course dates.
Location: Sydney
Date: 22-23 July 2015

(Articulates with Cert IV in Government Investigations)

Location: Melbourne
Date: 5-7 August

Location: Brisbane
Date: 16-18 September

Location: Sydney
Date: 13-15 October

It's not always Black and White…...

- Monday, June 22, 2015
Think Employee Behaviour is Black and White?
Think Employee Behaviour is Black and White?
Sometimes, workplace incidents can seem straightforward to an employer – an employee has done something wrong, and action should be taken. But two recent cases before the Fair Work Commission (FWC) demonstrate the importance of properly investigating a matter and relying on sound evidence before taking action against an employee, and making sure that the action is an appropriate response.
Allegations of theft, and disproportionate action
In Amiatu and Others v Toll Ipec Pty Ltd, three employees took action against Toll for unfair dismissal. They came across an open box containing Toll safety uniforms. Surveillance cameras filmed them removing some of the uniforms and putting them on. They then went about their work. The following day, they worked their usual shifts, wearing the uniforms.

When Toll management became aware that the workers had taken the uniforms, it interviewed each of the workers and then spoke with the union delegate. Toll intended to terminate their employment for theft, and report the matter to the police. The union delegate persuaded Toll to allow the employees to resign, and convinced the employees to do so, despite their protests. The employees subsequently brought an action for unfair dismissal against Toll. 

The FWC found that they had been coerced into resignation by the threat of police involvement and poor future work prospects. The FWC also found that there had been no intention by the workers to steal the uniforms. They wore the uniforms in full view of other Toll staff and were also probably aware of the surveillance camera. They believed they had done nothing wrong, and had not made any attempts to cover up their actions. At worst, they had made an error in judgment by not following proper procedures to acquire the uniforms. Reprimands or warnings would have been more appropriate disciplinary action, the FWC found. 

Toll had failed to prove that theft had occurred. 

The FWC was also concerned that the union had so strongly encouraged the employees to resign when they had done nothing wrong. This effectively deprived them of adequate representation.

Although the FWC found no further significant issues with the investigation process, it would have been prudent for Toll to have conducted further interviews with each employee, with their representatives present, before any decisions were made about termination of employment and police involvement. 

The FWC found that the workers’ employment had been unfairly terminated and ordered their reinstatement.

The need for a proper investigation and sound evidence

In the case of Elton v Acupuncture Australia Pty Ltd, the FWC found that there was insufficient evidence to justify the termination of Ms Elton’s employment. 

Ms Elton worked for the employer (AA) in sales. Another employee had reported that she was behaving in a suspicious manner, printing out sales reports, rushing to the printer to collect them and then putting them in her handbag. AA looked into the matter, and found that a number of invoices had been deleted from the accounts system. AA terminated Ms Elton’s employment for engaging in “corporate theft and fraud involving cash, credit card, paypal and direct deposit.” It also accused her of acting with two former employees, and threatened to report the matter to the police.

Ms Elton denied the allegations and took action for unfair dismissal. The FWC accepted her explanation that she was printing out the reports to monitor her own performance. It also accepted that deleting invoices was a standard practice for cancelled orders, and that anyone could have done so. 

The FWC held that there was no evidence to suggest that Ms Elton had acted with the former employees, and that AA had failed to produce any evidence to support its claims of theft and fraud. Nor had AA made a police report. According to the findings, there were also issues with the investigation process, particularly that Ms Elton was not given a proper opportunity to respond to the allegations. Without warning, she was called to a meeting and the allegations were put to her. No documents were shown to her, either to justify the allegations or to seek her explanation. 

The FWC found that Elton had been unfairly dismissed. AA later appealed and the Full Bench of the FWC upheld the decision.
Implications for employers
These decisions demonstrate the need for employers to proceed with great care during investigations, especially ensuring that procedural fairness is adhered to every step of the way. Employers must also carefully assess the evidence against the allegations to ensure that there is enough proof to warrant disciplinary action. This can be challenging if the employer is very involved in the matter, as it can become difficult to make an impartial assessment .An experienced workplace investigator can be of great assistance in these situations, and it’s always a good idea to seek advice before a decision is made to terminate or discipline an employee.
WISE Workplace provides training courses and masterclasses in investigations for HR practitioners, workplace investigators and managers.  Our courses are designed and taught by investigators specifically designed for those engaged in the investigation of workplace misconduct including bullying and harassment.  See below for upcoming course dates
(Articulates with Cert IV in Government Investigations)

Location: Melbourne
Date: 5-7 August

Location: Brisbane
Date: 16-18 September

Location: Sydney
Date: 13-15 October

Getting off on the Right Foot

- Monday, June 15, 2015
How to Cover Essential Rights in an Interview
How to Cover Essential Rights in an Interview

Covering the essential rights of a person in an interview is crucial to procedural fairness. If the interviewee is not made aware of their rights from the outset, anything that they may say during the interview may be viewed as being lacking in procedural fairness and of limited value. Or worse, the interviewee’s statements may be entirely discounted. This may be especially true if there is a subsequent claim for unfair dismissal, a claim of discrimination, or other litigation.

Basic steps

Whether you are interviewing a complainant, an alleged perpetrator, or a witness, the same basic information needs to be given to the interviewee at the beginning of the interview. There is no doubt that an audio recording of an interview is the best way to document what has been said. But before a recording device is switched on, there are a number of steps to be followed. 

If possible, meet at a place that is private so that confidentiality is preserved. If this is not possible, take steps to ensure that other employees can’t see or hear the interview. Explain to the employee the purpose of the meeting. For example, “You have made some allegations about employee X, and I would like to discuss those allegations in detail so that we can investigate the matter.” It is always better to conduct the interview in person, as it gives you a chance to assess how the interviewee reacts to certain questions. 

Regardless of whether the interviewee is the complainant or the alleged perpetrator, they should be told that complaints or incidents of the type that you are investigating are taken seriously, and there may be some potentially serious consequences for the person against whom the allegation is made. Ask the interviewee to give honest responses to all questions. Seek the interviewee’s permission to audio record the interview and tell them that they will be asked to check and sign a transcript of the recording. If the interviewee agrees, commence the audio recording. In some cases, the interviewee may refuse their consent. You should seek advice about this prior to commencing the interview.

After audio recording has commenced

Once you have commenced recording the interview, you need to ensure that you cover various formalities: 

  • State the time and the date. 
  • State that it is a recorded interview between the parties, and identify all parties by getting each person to state their name (this includes any support person and any other witnesses). You must ensure that you clearly identify which person is being interviewed. 
  • Reiterate that a transcript of the recording will be produced and the interviewee will be asked to check it for accuracy. 
  • Inform the interviewee that the interview is not compulsory, that they can have a break at any time, and that they can have a support person present. If they elect not to have a support person present, they can change their mind about this at any time. The interview can be stopped to arrange a support person. 
  • Tell the interviewee that what is said in the interview is confidential, although the person against whom allegations are made will be informed of the allegations so that they can properly respond to them. 
  • If anyone is to be provided with a transcript, for example the human resources manager of the organisation, tell the interviewee that this will happen.
  • To preserve the integrity of the investigation and the confidentiality of all parties, tell the interviewee that they are not to discuss the interview or allegations with anyone, except their union representative or support person. This is a key aspect of the introduction, as confidentiality can make or break an investigation. Once these things have been covered, you are satisfied that the interviewee has understood what you have said, and you have answered any of their questions, you can commence the interview proper. 

Getting introductory matters right in interviews is a key aspect of procedural fairness, and ensuring that the essential rights of the interviewee have been acknowledged and met. It is a crucial foundation element for a successful interview.

WISE Workplace provides training courses and masterclasses in investigations for HR practitioners, workplace investigators and managers.  Our courses are designed and taught by investigators specifically designed for those engaged in the investigation of workplace misconduct including bullying and harassment.  See below for upcoming course dates

Location: Sydney
Date: 22-23 July 2015

(Articulates with Cert IV in Government Investigations)

Location: Melbourne
Date: 5-7 August

Location: Brisbane
Date: 16-18 September

Location: Sydney
Date: 13-15 October

Careless Whispers: Confidentiality and Office Gossip

- Tuesday, June 09, 2015
Confidentiality and Office Gossip
Careless Whispers: Confidentiality and Office Gossip

It’s human nature, really. We all love glimpses into the private lives of others, which is why the Kardashians are a household name. And our appetite for gossip can naturally extend to the workplace as well. We spend a lot of our lives in the company of our workmates after all, which naturally can make us very curious about their lives. But sometimes office gossip can be hurtful, and damaging not only to the person involved but to the company as well, especially if there has been a breach of confidentiality.

What is workplace gossip?

Workplace gossip is informal chatter about work colleagues and/or their acquaintances. For example, two employees discussing a rumour that the husband of another employee is having an extramarital affair.There are two big concerns with workplace gossip. The first is that an organisation’s workers typically spend much time in each other’s company. If an employee is the victim of gossip, they may no longer feel comfortable in the workplace, and various consequences may flow, including:

  • Loss of productivity.
  • Increased sick leave.
  • An allegation of workplace bullying.
  • Management time spent counselling employees.
  • Management time spent investigating incidents.
  • Low morale amongst staff.
  • An increase in inappropriate employee behaviours, especially in respect of office gossip.
  • The employee may resign.
  • Legal claim for termination of employment.

Almost all these consequences will likely result in some sort of financial loss to the organisation. 

The other big issue with workplace gossip is that it can compromise confidentiality - and confidentiality between workers, particularly about their employment conditions, is key to how effectively an organisation functions. For example:

  • Workers discussing how much another worker is getting paid can lead to disquiet amongst workers who think they should be paid as much, or more, than their colleague. 
  • Workers discussing a rumour that there will be forced redundancies when no redundancies are planned, or when the announcement is not ready to be made, can be enormously damaging. 
  • Workers discussing the possibility that another worker’s employment will be terminated is inappropriate for similar reasons. 
  • If a worker acts as a support person for another worker involved in a disciplinary matter, any discussion of the matter with other employees may compromise the investigation. 

When employees start speculating about operational matters, an atmosphere of mistrust is generated and the employer will be forced to spend time trying to make things right, rather than getting on with running the organisation.

Office gossip and termination of employment

An office gossip can have their employment terminated for various reasons, including breach of confidentiality, bullying, lying, or deliberately causing trouble. For example, in the case of Reedy v Global Cranes Pty Ltd, Fair Work Australia (FWA) found that there was a valid reason for terminating Mrs Reedy’s employment. Mrs Reedy had told a co-worker, Ms Tarrant, that their boss took illicit drugs and that he had been photographed with another woman. The co-worker was the fiancée of the boss and reported the gossip to him. Mrs Reedy’s employment was subsequently terminated and she made a claim for unfair dismissal against the company. FWA held that: “Mrs Reedy deliberately told Ms Tarrant about a rumour in a manner which was designed to cause trouble in the workplace, in particular between Ms Tarrant and Mr Vidaic, who was her fiancée and the Managing Director of Global Cranes. It is clear what a reference to another woman was in the context of the conversation. It was not an innocent reference.”

How to curb office gossip

Workplace gossip may start out innocently but when it escalates, the consequences can be serious. Wherever possible, employers need to keep a close ear to the ground to monitor what’s being discussed.There should be a clear policy about what is unacceptable employee conduct, including gossiping or spreading untrue or unconfirmed stories about a colleague. In addition, employees should receive training about the importance of confidentiality in the workplace, the harm that can result from gossiping, and how gossiping can morph into more serious issues such as bullying and harassment. Employers should strive to keep an open door to employees who feel that they have been victims of gossip. It is important that any complaints are treated seriously and investigated as thoroughly as other workplace incidents. The more that employees feel that complaints are taken seriously, the more likely that they will speak up before matters get out of hand. Workplace gossiping is an issue that if left unchecked, can have serious consequences for the employee concerned and the organisation’s bottom line. 

The Top 3 Red Flags for Workplace Fraud

- Monday, June 01, 2015
The Red Flags for Workplace Fraud
Red Flags for Workplace Fraud

It’s a bright, sunny day outside and an employee really doesn’t feel like going to work. They decide to call in sick and spend the day at the beach. It must be okay, because everyone does it. Right? Wrong. An employee claiming paid sick leave when they are fit to work is workplace fraud, and can lead to termination of employment. 

Workplace fraud can take many forms, whether it’s purchasing a few groceries on the company credit card, taking office supplies for personal use at home, right through to large-scale theft of equipment and money. While in many cases fraud is dealt with by termination of employment, sometimes it also involves a police investigation and possible imprisonment.
The statistics
A 2014 study by accounting firm PWC surveyed 5,000 organisations of various sizes and sectors across the globe. More than one-third of respondents said they had been struck by economic crime. The most common types of economic crime were: 
Asset misappropriation. 
  • Procurement fraud. 
  • Bribery and corruption. 
  • Cybercrime. 
  • Accounting fraud. 
KPMG’s biennial fraud survey of 281 companies in Australia and New Zealand found that respondents had a total loss through fraud of nearly $373 million in 2012. Employees were responsible for 75 per cent of major frauds. 

It is clear that fraud is a huge issue for all employers, as it adds significantly to the costs of running their organisations. 
Red flags for the risk of workplace fraud
Various analyses of workplace fraud carry a common message: Prevention is better than cure. If organisations are aware of the risk factors for workplace fraud, they may be able to take steps to prevent it. It may be surprising that greed is not considered to be the most significant motivator. Here are three of the main motivating factors behind workplace fraud. 

1. Workplace dissatisfaction 
Workers who are dissatisfied with their organisations or for whatever reason have an axe to grind may try to put things right (in their eyes, at least) by stealing from their employer. One example is the bookkeeper whose request for a salary increase of $100 per month was rejected by his employer. For the next 20 years, the disgruntled bookkeeper stole the amount of $100 per month until he retired. The lesson to employers is to strive to create a positive work environment in which employees feel happy and valued. Employers should also be alert to any rumblings of discontent. 

2. Financial hardship 
Workers who are strapped for cash may also turn to fraud. Fraud committed by this group often comes to the fore in times of economic hardship. An increase in job insecurity leads to people tightening their belts. This often fuels a temptation to use company money for personal expenses, for example using the company credit card to buy petrol for the family car. Also, gambling, and in particular playing poker machines, is known to be more popular in tough economic times and this activity seems to remain a key motivation for committing workplace fraud. Another reason why incidents of fraud seem to increase in tough financial times is because companies tend to scrutinise their books more closely in these periods, attempting to find ways to make savings. If companies are not as vigilant in good economic times, they may be unwittingly sending a message to employees that committing low-level fraud is okay because the company doesn’t pay much attention to that kind of thing. Employers should be on the lookout for fraud at all times, regardless of the economic climate. 

3. Opportunity 
The last major risk factor is opportunity. Some employees, especially managers, have opportunity to commit fraud because of their position in the company and their access to company funds. Recommendations to combat this include: 
  • Dividing responsibility so that no single person is responsible for managing company funds and assets. 
  • Establishing good regulation and controls so that books are regularly checked and employee activities are accounted for.
  • Continually educate staff about what constitutes fraud and what is unacceptable conduct. Workplace policies should also detail these things. 
Workplace fraud is a complicated and difficult aspect of running an organisation, but with identification of risk factors and adequate preventative measures in place, employers can successfully limit their exposure to workplace fraud. 

Watch Your Step!

- Tuesday, May 26, 2015
Raising Allegations
Tiptoeing Through the Minefield of Raising Allegations

There’s an awful lot at stake when conducting workplace investigations, and so they need to be handled with care and skill. It really is like tiptoeing through a minefield. One wrong move can cause an explosion of legal consequences that may harm your organisation. One key area of concern is how to raise allegations during an interview that forms part of a workplace investigation.

The need for procedural fairness

When an allegation has been made against an employee and an investigation is required, procedural fairness takes centre stage. This means that the investigation must be conducted in a fair, objective and timely manner and: 

  • All relevant parties must have the opportunity to have their say, especially the person against whom the allegations are made. 
  • The investigator must be impartial – they must not have reached any kind of conclusion about the allegations until the investigation has been completed. 
  • The investigation must be conducted as soon as possible after the allegations have been raised. 

The employee under investigation must also be informed of the investigation process, any possible disciplinary action if the allegations are proved, and must have the opportunity to be represented and/or to seek legal advice.

Key elements to remember

The manner in which the allegations are put to the employee is critical to the procedural fairness of the investigation. If procedural fairness is found to be lacking at this stage, the entire investigation is put at risk. This could have serious consequences down the track if the employer finds themselves having to defend a claim of unfair termination of employment. 

There are some key elements to remember when putting allegations to an employee. 

1. The interviewer must make the employee aware that part of the interview process is that all allegations will be put to the employee. This can be done as part of the introductory matters covered at the beginning of the interview.   

2. The allegations must be put to the employee in objective terms. That is, avoiding language that is emotional and judgmental. For example: "Fred said you punched him hard, and I could tell you knocked the daylights out of him because afterwards he didn’t know what was going on. What have you got to say for yourself?" This is subjective language because the interviewer has made a judgment about the incident. The question could be recast in an objective manner: "Fred said that you punched him. What can you tell me about that?" There is no judgment in this allegation and the question is open, inviting a detailed response from the interviewee. 

3. Give as much detail as possible in the allegations for example date, time and location. 

4. Cite any policies or standards that are breached by the alleged conduct. 

5. If there is more than one allegation, put each allegation to the employee one at a time and invite the employee to respond to the allegation before moving on to the next. 

Learning from past mistakes with case law
A leading case in this area is the Federal Court decision of Lohse v Arthur, in which the court found that the employee had not been informed of all the allegations against him, and that the independent workplace investigator prejudged the matter even before the allegations had been put to the employee. In this case, initially some allegations were put to the employee but after other witnesses were interviewed, more allegations arose and the investigator did not put them to the employee. The court held that procedural fairness was a fairly flexible concept, so it was only fair that if more allegations came to light, the employee ought to have an opportunity to respond. 

Putting allegations to an employee must be done in a methodical and objective manner. It helps to have them written down so that they can be properly framed and ordered, especially if there is more than one allegation. The key point is to ensure that there is procedural fairness –that the employee has an opportunity to hear and respond to every single allegation and that the investigator does not make any determinations until the investigation is concluded. 

How to Stop Workplace Bullying in its Tracks

- Monday, May 18, 2015
How to Stop Workplace Bullying in its Tracks
How to Stop Workplace Bullying in its Tracks

Workplace bullying is an enormous problem, which can be very difficult to manage effectively. Not only does the victim experience high levels of stress, but bullying can cause a loss of productivity, and prevent staff from being able to work together. It can also result in more management time being spent dealing with bullying issues, increased costs due to investigations, and higher rates of sick leave, workers’ compensation claims and unfair dismissal claims.

How much of a problem is bullying?

The Commonwealth Government’s Guide to Bullying in the Workplace has estimated that 20 per cent of all workers’ compensation claims for psychological injury are the result of workplace bullying. Further, psychological injury claims are the most expensive type of claims. According to the guide, workplace bulling is the “repeated, unreasonable behaviour directed towards a person or group of persons at a workplace, which creates a risk to health and safety.” Single incidents of unreasonable behaviour are not considered bullying, although they can be a warning sign that the behaviour may escalate and lead to bullying.

The importance of workplace culture

Bullying usually comes into focus only after there has been a complaint. Steps are taken to investigate the complaint, and measures are put in place to resolve the issues. While it is important that incidents of bullying are investigated and appropriate action is taken, it’s much more effective to tackle the problem of bullying by trying to prevent it from happening in the first place. 

In workplaces where employees work well together, are treated respectfully and have open channels of communication, a bully will be less effective. In contrast, in a culture where workers feel suspicious and fearful, the conditions for workplace bullying are ideal. Often, it may be a manager doing the bullying through an “iron fist” approach, strictly controlling work and demeaning the victim. If this style of management has been accepted by the organisation, then the organisation has (perhaps unwittingly) accepted a culture of bullying. 

Effective bullying investigations

Because of the many legal requirements of a formal investigation, they tend to be formal processes and can even become adversarial if the complainant and the alleged bully have to sit down together in an attempt to resolve the matter. But if organisations are able to handle the matter a little more creatively, informal processes can be adopted. For example, an independent person may speak to both parties separately, giving both sides the opportunity to freely express their views. A code of conduct may be drafted, setting out acceptable and unacceptable behaviours, and both parties can agree to be bound by that code. Informal processes can often bring a speedy halt to bullying issues.

Other strategies to help prevent bullying

It is important that the organisation has an anti-bullying policy, which must be read and signed by every employee to indicate understanding and agreement to its terms. 

This is a foundation document which must:

  • Set out the definition of bullying.
  • Give examples of bullying behaviours.
  • Set out a grievance procedure.
  • Indicate that disciplinary action that can be taken against a perpetrator. 

This document will also become very important in the event of any grievance procedure or litigation arising out of a complaint of bullying. 

One of the most effective preventative measures is to promote a happy, healthy workplace in which employees are valued and respected. Managers should be regularly reminded that they are role models. Regular training of all employees on bullying issues also reminds everyone about what behaviour is acceptable, and sends a strong message that bullying will not be tolerated by the organisation. 

Preventative measures will never fully protect organisations and staff from bullying, but they can certainly help to reduce incidents of bullying, and show that the organisation is serious about stamping out bullying.