Record damages awarded to NSW employee for wrongful termination: what can we learn?

Eden Elliott - Friday, October 30, 2020

Case study prepared by WISE Workplace State Manager NSW, Tracey Bosnich 

Image: unfair dismissal

Most of us may believe that if a contract is not signed, it is not legally enforceable. On 10 September 2020, the NSW Supreme Court handed down a significant decision, awarding record damages to an employee for termination of employment and amongst other findings, providing grounds upon which an unsigned contract may be held to be legally enforceable and take precedent over a signed contract.

Background

Ms Melinda Roderick (“Roderick”), the Executive Director of Washington H. Soul Pattinson & Company Ltd (“WHSP”) had been employed since 2006,  when Roderick commenced in the role of Chief Financial Director. She was appointed as Finance Director in 2014, till 12 April 2018, when she was terminated without notice. More notably, Roderick was the only female on the Board and was the second most senior employee in the company.

On 10 September 2020, Roderick was awarded record damages in the amount of $1.105 million. The case was litigated on the issues of termination of employment without warning, failure to give reasonable notice of termination, and failure to pay both short term and long-term incentive entitlements.

Original Signed Contract v Unsigned Contract

Roderick's terms and conditions of employment were originally set out in the 2006 contract ("the original contract"). However, following Roderick becoming the Finance Director in 2014, a draft ‘new contract’ was made in 2015, but was never signed. WHSP argued the original contract prevailed. 

Roderick submitted that when she became the Finance Director, the original contract was discharged. The Court noted that there was a significant change in her role tasks, obligations and duties and that the original contract could not have appropriately been applied in the circumstances, especially where the original contract ‘did not contain a clause specifying that it would remain in force, even if the duties are altered’. It was noted that under the new contract Roderick's responsibilities had significantly increased, in that she became the director of 12 companies. 

Despite the new contract being unsigned, the Court found that the implied intention was for her original contract to be discharged and for the parties to be bound by the new contract. Therefore, the terms and conditions of the unsigned new contract were found to apply and took precedent over the signed 2006 contract.

Calculation of termination payment 

WHSP calculated Roderick’s termination payment based on the signed original contract. Accordingly, Roderick was only paid three months’ of her old salary, in lieu of notice, which was expressly stipulated as the notice period in the original contract.

Roderick’s claim for damages was made in accordance with the notice period expressly stipulated in the new unsigned 2015 contract, being 24 months; and for payment of an amount representing her incentive entitlements under both the long-term and short-term incentive plan and scheme, included in the new contract.

Key issues litigated with respect to damages

There were five issues litigated: whether the original 2006 contract containing the express term of three months' notice applied; if the new unsigned contract applied, what was the implied period of notice; the notice period Roderick should have actually been given; determination of whether Roderick was eligible for entitlements pursuant to the short term and long-term incentives; and the reason for her termination.

Implied Notice and Incentive Bonuses

WHSP argued the original contract provided an express term of a three-month notice period.  As they did not give three months' notice, WHSP paid Roderick an amount in lieu of the three months’ notice and therefore argued they were not in breach of contract.  Roderick argued she was entitled to 24 months’ notice in accordance with the unsigned 2015 contract.

Once the Court established that the original contract no longer applied, it had to determine, what the ‘implied reasonable notice term’ should be. The Supreme Court did not uphold the 24 months’ notice period in the new contract, but determined that Roderick was entitled to 12 months' notice.

Roderick argued the new contract entitled her to the incentives. WHSP argued it was not obliged to pay the incentives as payment was discretionary and dependent on performance, and that Roderick was terminated for ‘poor performance’,  had not worked the full year and was no longer employed. WHSP further submitted that Roderick was terminated prior to the assessment of these incentive benefits.

The Court stated any "decision as to payment is only discretionary in the sense of assessing [Roderick's] performance against the KPIs". The Court stipulated that was an implied contractual obligation to "exercise any discretion conformably with the purpose of the scheme and not to choose arbitrarily or capriciously or unreasonably to not pay money, irrespective of whether the agreed parameters had been achieved". The argument to not pay Roderick as the employment ended "only a matter of days before the end of the relevant financial year would be quite unreasonable and arbitrary".

Reason for termination

The termination letter stated that Roderick was "not the right fit". Roderick argued that she was terminated without explanation. WHSP then subsequently submitted during the litigation, that Roderick was actually terminated for “poor performance”.

The Court noted that it was a "curious feature" that there was not a single document noting an issue with Roderick's performance, including the termination letter itself. It did not accept that Roderick had performed poorly,  but more so "that it (WHSP) could do better in terms of value for its money" given that a day after terminating Roderick, WHSP hired a new CFO on a lower salary. Further, the new CFO had no position on the board and reported to the chief executive, which the Court noted "would have saved [WHSP] a considerable sum".

Key lessons

This case illustrates the following important points for employers:

  • employers should be aware of the terms of their employment contracts;
  • employers should ensure the contract is executed by all the parties;
  • where an employee’s role title, duties and obligations are changed, the Court will look into the ‘intention of the parties to be bound by that contract’ as well as any alteration of responsibilities and duties, to determine when there is a signed contract and an unsigned contract, which contract will apply.

The dangers of wrongful termination for employers are significant – in this case, to the tune of over a million dollars. Employers should always be cautious when ending employment contracts, particularly if the termination involves role changes, very senior employees, complaints, disputes, poor performance or particularly wrongdoing, to ensure termination processes are both compliant and procedurally fair. 

WISE Workplace offers consultancy support with HR and dispute resolution matters to assist employers in meeting these obligations.  If you are seeking advice on the proper way to resolve an internal workplace dispute, contact us today.

Racial Discrimination at Work

Natasha Kennedy-Read and Vince Scopelliti - Wednesday, February 05, 2020

We are all familiar with the more obvious signs of workplace discrimination; but with targeted racism and xenophobia spreading faster than the Coronavirus, it is vital to be aware of the more nuanced and subtle acts of discrimination at work. 

Queensland has seen MP Duncan Pegg slam a phoney health department bulletin that warned online communities to avoid areas with high proportions of Chinese residents. In France, East-Asian communities began the now global #imnotavirus campaign, highlighting discriminatory comments from “are you dangerous if you cough?” to “stop eating wild animals then infecting everyone around you.” 

This problem is not new. In Canada in 2003, a similar wave of outbreak-fuelled xenophobia cost Toronto an estimated C$1bn, prompting public health officials to remind Canadians not to let ignorance triumph over respect in their communities.  

This viral endemic has already had a global impact on small businesses, schools and communities around the world, and workplaces are far from immune. Queensland surgeon Dr Rhea Liang said that “misinformation” on the virus has led to racially motivated remarks such as were made to her at work last week. Dr Liang’s patient refused her routine handshake, saying “you might have coronavirus” in front of her colleagues and several medical students. 

Most Australian workers are not at significant risk of infection, and employers and employees alike should be aware of the legal pitfalls they may encounter, and harm they may inflict, in attempts to protect themselves from the virus. In Dr Liang’s case, her colleagues were immediately supportive, but she worries about more vulnerable people exposed to racism that results from the stereotyping. 

The Racial Discrimination Act 1975 (RDA) makes it unlawful to discriminate against a person because of his or her race, colour, descent, national or ethnic origin or immigrant status. This extends to expressions of racial hatred against another person, and discriminating in the provision of services, entertainment and facilities or on less favourable terms and conditions. 

WHAT Does this mean for you?

We are all familiar with the obvious signs of racial or xenophobic discrimination, like slurs, segregation, targeted aggression and spreading racist rumours. Refusing to serve or deterring customers on the basis of their nationality or race, out of fear of Coronavirus is also an obvious and unlawful form of discrimination. However as a modern employer, it’s important to recognise the more subtle and nuanced forms of racism which can go unnoticed, and therefore be more damaging than overt behaviours. 

It is likely that racism at work is vastly underreported. 20% of Australians experience racism every year, but the Australian Human Rights Commission receives just several hundred racial discrimination complaints annually. 
More subtle and dangerous examples of discrimination include:

  • Xenophobic or racist ostracism of, or hostility towards, colleagues or customers in their workplace.
  • Avoiding contact or proximity with, or hostile body language towards people on the basis of their skin colour or nationality 
  • Unintentional or subconscious behaviour 

Subconscious biases and assumptions, even with positive intentions regarding safety or risk to others can all be considered racist behaviour. 

Prevention is always better than cure, and as an employer, workplace culture starts with you. If you are worried about your workplace culture, contact us to organise a Cultural Review. 

SO, how can i prevent racial discrimination from infiltrating my workplace? 

Education: 

Education on racial discrimination at work empowers employee understanding, sensitivity and conversation. Training programs are an important tool for eliminating more subtle discriminatory behaviours, by highlighting the nuanced nature of racial and cultural experience and necessity for sensitivity, and avoiding unintentional or subconscious infliction of harm. This can not only reduce incidences of discrimination but also create a positive culture where employees support each other, demonstrate and monitor their own standards of conduct and can minimise the emotional and psychological impact of external harm to their peers.

Conversation:

Creating space for productive conversations about race and discrimination at work is vital to a positive workplace culture. To encourage employee participation and make the most of these conversations, frame them in a positive and constructive way.

Outline the purpose and goals of the conversations from the outset:

  • Discuss views and experiences relating to racism in a non-judgmental and safe environment 
  • Learn from each other’s experiences and gain understanding that people experience racism in different ways
  • Reflect on intention and how we can unintentionally cause racial harm to our peers or colleagues 
  • Identify opportunities for growth within the organisation and develop systems for positive change 

Be prepared to support employees who may lack understanding of the real prevalence of racism and need for proper attention. People who are not part of a minority group are likely to have less experience of racism, so the nuanced nature of modern discrimination might come as a surprise. Constructive conversations can help these team members challenge their preconceptions, and help them to approach the issues with awareness and understanding. 

For tailored, expert and neutral third-party training programs or conversational facilitators to improve your workplace culture and tackle complex issues such as racial or xenophobic discrimination, contact WISE Workplace today. Working with an experienced facilitator or training provider such as WISE minimises the risk of tricky power imbalances countering your efforts to eliminate racial discrimination at work. 




Whistleblowing in 2020: Is Your Organisation Ready?

Vince Scopelliti - Thursday, January 23, 2020

The concept of whistleblowing was once frowned upon, or at the very least looked upon with trepidation. However, in recent years, the value of promoting whistleblowing as an acceptable way to improve corporate regulatory compliance and culture has been demonstrated. In this changing landscape, organisations are embracing whistleblowing - and many also have new obligations to comply with. 

Is your organisation ready for whistleblowing in 2020? Let's look at who can be a whistleblower; who is authorised to receive disclosures; and which organisations must have a whistleblower platform in place. 

What is whistleblowing?

Whistleblowers are individuals with some connection to an organisation, who choose to report corporate misconduct or illegal activities. 

Legislation, including new legislation which came into force on 1 July 2019, provides extended rights and protections to whistleblowers. Ultimately, the intent of the legislation is to ensure that whistleblowers are protected against reprisals, legal action, or general detriment, such as disciplinary action taken by the employer. 

Whistleblower protection may be afforded to various categories of people, including: 

  • Current employees of a company (or a related company)
  • The spouses or relatives of employees 
  • Officers of a company 
  • Contractors who have dealt with the company (potentially including volunteers)
  • General associates of the company

Whistleblowing also includes public interest disclosures. An example of a public interest disclosure might be an employee making a report about a bank which has been consistently charging members fees for no service. These apply in circumstances where a previous report has been made to ASIC or APRA and not actioned within 90 days, and the whistleblower is of the view that the information is of such importance to the public interest that it would be worthwhile reporting concerns to a journalist or a parliamentarian. 

Alternatively, emergency disclosures may be made if concerned parties have reasonable grounds to believe that the matters to be reported concern substantial or imminent danger to health and safety of people or the environment. 

how the disclosure process works

Disclosure about misconduct may be made anonymously, but must be reported to a specific group of people, including: 

  • Directors, company officers or senior managers
  • Auditors of the company 
  • Actuaries associated with the company 
  • A person specifically authorised to receive disclosures (generally a Human Resources officer) 
  • Regulatory authorities such as ASIC or APRA
  • Legal practitioners

Concerns can be reported internally using pre-determined organisational systems such as phone or online reporting. At the very least, an organisation should publish its whistleblowing policy and identify the people who are entitled to receive reports. 

Within a company, those authorised to receive disclosures must act on disclosures by investigating and protecting whistleblowers. 

WHY IS A WHISTLEBLOWING PLATFORM IMPORTANT?

The new legislation means that all public companies, large proprietary companies and corporate trustees of superannuation funds must have a whistleblower policy from January 1, 2020. Large proprietary companies are classed as those that have a consolidated annual revenue of at least $25 million, consolidated gross assets of at least $12.5 million or at least 50 employees.  

In addition to the legislative requirements, there are reasons why all organisations should have a strong platform for whistleblowing. 

These include increasing public and employee confidence in the desire of the organisation to “do the right thing”, and ensuring that senior personnel are safe in the knowledge that, if anybody is committing wrongdoing, staff and related persons can be confident to report those matters without fear of reprisals. 

One of the most effective ways to deal with whistleblowers is to set up an external hotline. This means that reports can be made anonymously. People can avoid potential embarrassment or concerns about making a report in circumstances where they potentially see the people whose conduct they are reporting on a daily basis.

WISE is a leading provider of whistleblowing services in Australia, offering organisations a secure service known as ‘Grapevine’ for staff to report concerns. 

Grapevine allows for anonymous reporting via phone call or online report. Reporters are enabled to provide supporting evidence, and can also choose whether to remain anonymous or leave their contact details. Each report is assigned a case number so it can be tracked throughout the whistleblowing and assessment process. Reports are reviewed by a highly trained and experienced team, and the organisation's nominated contact person is notified within 24 hours. Updates are available online. Depending on the level of service, the Grapevine team can also follow up and take action according to an organisation's whistleblower policy.

For more information on complying with whistleblower legislation, please download our free whistleblowing whitepaper which can answer your questions regarding the changes. If you would like an obligation-free cost estimate to implement a confidential hotline in your workplace, contact us here.

Police Involvement in Workplace Investigations

Vince Scopelliti - Wednesday, September 25, 2019

On occasion, police will become involved and/or need to be involved in the allegations from a workplace matter. In this situation, it's important for employers to know what their obligations are, and to be aware of some of the challenges that can arise. 

So, let's take a look at when police are or may need to be called in and what should happen once they are. 

WHAT matters require the police? 

Generally speaking, any allegation of a serious or potentially criminal nature necessitates the involvement of police. This includes allegations of physical assault, sexual assault, stalking, child abuse, significant fraud or theft. 

In the event that a complaint could have criminal implications, it is always a good idea to get the police involved as soon as possible. This helps ensure that any police investigation is not hampered by destroyed evidence, ongoing delays or similar interference. 

the employer's obligations

If police have become involved in a workplace matter, the police investigation takes precedence over the internal one. 

However, while the police investigation does take priority, an employer must still carry out an internal investigation. This is to afford the employee who is the subject of the investigation due process and procedural fairness. 

The internal investigation and a police investigation must both be treated entirely separately, but run in tandem. The internal investigation must be managed without impeding the police investigation. It is essential for the employer to communicate closely with police and provide assistance wherever required.

It is also important for an employer to remember that one of their paramount obligations is to provide a safe working environment for staff. This means that if there have been serious allegations such as physical or sexual abuse, the complainant and respondent must be separated in the workplace. Generally, staff against whom allegations have been made should be suspended on full pay, pending the outcome of the police investigation. 

the challenges involved 

It is likely that the police investigation will require the use of resources that would otherwise be engaged in conducting the internal investigation. For this reason, it can be difficult to actively investigate a workplace matter internally while the police are undertaking their own investigation. 

It can also be difficult for employers to balance the need to assist police with their legal obligations to their employees.

a case in point

This balancing act is demonstrated in the matter of Wong v Taitung Australia Pty Ltd [2016] FWC 7982. In this matter, Mr Wong, an employee who was accused of theft, named several other employees allegedly involved in a criminal enterprise. 

Police suggested that the employer not take disciplinary action in relation to the employees, in order to obtain and preserve the evidence against them. This meant that the employer permitted Mr Wong to continue working with no warnings, despite having sufficient evidence to conduct a summary dismissal.

The police were unable to obtain sufficient evidence to charge him, however he was ultimately terminated. However, the Fair Work Commission found that the summary dismissal of Mr Wong was unjust in the circumstances. 

The added factor of police involvement while undertaking internal workplace investigations presents unique challenges for employers. The balancing of police intervention into serious criminal allegations, with the strict employment principles and procedures, is both challenging and essential to ensure employers' actions are reasonable. WISE provides external investigation services as well as training in conducting investigations necessary to manage the workplace-police dynamic. 

Ruling on Anonymous Social Posts a Warning for Employees

Vince Scopelliti - Wednesday, August 21, 2019

In the highly-anticipated decision of Comcare v Banerji, the High Court has found it is not unconstitutional for the federal government to restrict the rights of public servants to express their political views in a public forum. 

So what does this decision mean for employees, freedom of political communication and the right to free speech? 

The facts of the matter

The respondent in Comcare v Banerji [2019] HCA 23, Ms Michaela Banerji, was employed by the Department of Immigration and Citizenship until September 2013. At this time, her employment was terminated for having breached the Australian Public Service's social media policy and code of conduct. 

Specifically, it was claimed that Ms Banerji had 'tweeted' several thousand posts under an anonymous handle. Those posts commented explicitly on the federal government; Australian immigration policy; ministers; opposition spokespeople and her specific department. 

Following her dismissal, Ms Banerji pursued a number of legal proceedings, claiming that her termination had breached her implied right to freedom of political communication. 

Ms Banerji was successful in her argument before the Administrative Appeals Tribunal, which held that the anonymity of her Twitter account meant that she could not be identified as a public servant and the policy of her employer had been applied too strictly. 

However, this decision of the AAT was ultimately overturned on appeal to the High Court.

the findings of the high court

In determining in favour of Ms Banerji's employer, the High Court explicitly found that, although the Australian Constitution provides a freedom of political communication, this 'is not a personal right of free speech'.

It was further concluded that, anonymous or not, the tweets threatened the 'integrity and reputation' of the Australian Public Service. Moreover, it was of relevance that Ms Banerji was a public servant, which would become topical if her anonymity was ever threatened.  

the wider implications of the case

As stated in the Administrative Appeals Tribunal's decision, placing such significant restrictions on - anonymous - public servants could be considered akin to dealing with 'thoughtcrime'. This means that society is imposing rules and punishments on people who have 'done nothing' other than have differing opinions. 

Ultimately, the decision means that employees, whether in the public or private spheres must carefully consider expressing opinions, be they political or otherwise, which differ from those of their employer. It is clearly unwise to post controversial personal opinions under a readily identifiable name, which could in turn identify and embarrass a worker's employer and lead to a conclusion that the opinions have caused damage to an employer's reputation for example. However, of some concern is the decision of the High Court in applying the Australian Public Service's standard and code of conduct requirements to anonymous tweets. 

This decision is particularly topical given the controversy over the recent legal proceedings involving Rugby Australia and Israel Folau, a devout Christian, 'cut and pasted' text on social media about homosexuality and hell. Given Folau's high profile as a rugby player, his employer Rugby Australia, terminated his employment. Folau is pursuing legal proceedings, arguing that his religious freedom has been interfered with as a result of his termination. 

Although the nature of the defence differs from that put forward by Ms Banerji, the ultimate concept is the same: private individuals are putting forward commentary on personal beliefs and opinions, but on a public forum, and are being penalised by losing their employment as a result. Rugby Australia maintains that Folau's breaches of conduct occurred repeatedly, and that he had been warned on several prior occasions about posting such commentary on social media. 

While it is not yet known what the outcome will be for Folau, it is clear that these cases have wide-ranging implications for organisations and employees. 

WISE Workplace is highly experienced at conducting investigations and the surrounding complexities of contemporary legal issues. If your organisation holds concerns regarding inappropriate social media use, WISE can conduct investigations and analysis of electronic evidence to establish defensible findings.

The Role of the Fair Work Commission in Workplace Disputes

Vince Scopelliti - Wednesday, August 14, 2019

There is a high likelihood that every employer will have to deal with action - or at least the threat of action - involving the Fair Work Commission (FWC). 

Let's take a look at the role of the FWC, and the importance of a defensible investigation report in the event an employee lodges a claim. 

what is the fwc?

The FWC is Australia's national workplace relations tribunal. It deals with a variety of workplace matters, such as salary disputes, enforcing agreements, reviewing workplace conditions, and making decisions on terminations. 

As part of making such determinations, the FWC has the power to impose an outcome on an employer and/or an employee. For example, if a person is considered to have been unfairly dismissed, the FWC may order that their employment is reinstated, or that compensation is payable. 

However, the FWC is not a court, and as such, its decisions can be overruled by a formal court judgement.  

how is the fwc approached?

Applications to the FWC can be lodged online or by mail. Except in certain circumstances where significant financial hardship can be demonstrated, a filing fee ($73.20 at the time of writing) is payable with the application. 

If a former employee wishes to lodge an application relating to unfair dismissal, it must be received by the FWC within 21 days of the official date of the dismissal. 

What does the fwc consider?

A number of different matters can be dealt with by the FWC. However, up to 40% of all applications heard by the tribunal involve claims for unfair dismissal. Other commonly heard applications include those seeking:

  • "Stop" orders for industrial actions;
  • Approval for enterprise agreements/clarification on the terms of an enterprise agreement;
  • Variations in salary awards;
  • An order to prevent bullying in the workplace;
  • A finding as to whether a disciplinary action is reasonable. 

what is the claims process?

Although the exact process differs slightly depending on the nature of the claim, the FWC may elect to: 

  • Recommend informal dispute resolution;
  • Proceed to a hearing of all interested parties;
  • Require written submissions by way of evidence;
  • Provide directions on dealing with the matter;
  • Make binding decisions. 

It is essential to the FWC process, that all matters are dealt with impartially and as swiftly as reasonably possible. 

the importance of a defensible investigation report

The involvement of the FWC generally means that, at some point, an employer will be required to provide evidence. Often, the best evidence available will be a properly completed investigation report. 

The existence of a robust investigation report may prevent a claimant from pursuing an application to the FWC in the first place. The FWC is also likely to look favourably on an employer who has engaged an unbiased external investigator to prepare a detailed report. 

Perhaps most crucially, the FWC will make an assessment on whether an employer's findings and actions are defensible. This will include close examination as to whether the employer can be demonstrated to have shown procedural fairness when dealing with an investigation. 

Dealing with matters brought before the FWC can be a stressful time for employers. WISE are proud that none of our decisions have been successfully challenged in the FWC. If you are looking for assistance to navigate the complex issues of workplace investigations, contact us! Alternatively, download our ultimate toolkit, which will give you confidence in making your workplace investigations procedurally fair, cost effective and consistent.

How to Write Letters of Notification and Allegation

Vince Scopelliti - Wednesday, July 17, 2019

During the process of conducting workplace investigations, it is generally necessary to prepare letters of notification, and later, letters of allegation. 

We take a look at the difference between the two, and provide some tips on how to prepare these important documents. 

notifying the parties involved

The letter of notification serves as confirmation that an investigation is going to be launched. These formal documents are sent to the respondent, the complainant and any witnesses involved in the investigation. 

It communicates how the process of the investigation will occur, who will be conducting it, as well as detailing the involvement required from the individuals.

For the complainant, this will generally mean the formalisation of their complaint and participation in an interview. A respondent will also need to undergo a formal interview and be advised of their rights, such as having a support person attend. 

A letter of notification should ideally be prepared and sent as soon as an investigation plan has been finalised.

the elements of a letter of notification

When writing a letter of notification, it is important that it contains specific details including:

  • What exactly is being investigated.
  • Who is conducting the investigation. It is important to identify which members of the organisation will be involved.
  • A formal request for interview. 
  • The offer of a support person to all parties who will be interviewed.
  • A reminder for all parties involved to maintain confidentiality around the process, and the potential consequences of a failure to do so. 

Writing letters of allegation

Although similar to a letter of notification, a letter of allegation contains more detailed information. Instead of being addressed to all the parties involved, only the respondent will receive a letter of allegation. 

The letter should clearly set out: 

  • Details and particulars of the allegations. This information should be as specific as possible, to give the respondent a genuine opportunity to respond to the allegations. 
  • A request for supporting documents. The respondent should be advised of the opportunity to provide any information or evidence supporting their position. 
  • A formal request for interview. Although this has already been identified in the letter of notification, the letter of allegation reiterates the requirement for participation in the interview process. The letter should also reiterate the right of the respondent to have a support person involved in the process. 
  • The letter is required to stipulate if there is a finding of misconduct, what disciplinary actions may be considered and imposed. 
  • A further reminder of the need to maintain confidentiality.  

A letter of allegation should be sent after the complainant has been formally interviewed. This means that detailed allegations can be put to the respondent. 

Do's and do not's when preparing letters of allegations

When preparing a letter of allegations, it is important that procedural fairness is maintained. The respondent should have only clear allegations put to them, supported with evidence where available of the conduct or behaviour alleged. 

The letter of allegation should avoid making any conclusions about the investigation. 

Importantly, it should also demonstrate that the investigators and decisions-makers involved are objective. 

Communication with the parties to a workplace investigation is critical in ensuring a fair and considered approach is taken. Failing to comply with the steps of procedural fairness can impact on the soundness of investigation outcomes, findings and recommendations and leave employers open to decisions being overturned. 

WISE Workplace provides training in investigating workplace misconduct. This training is aimed at providing practical skills that enable you to draft procedurally fair and legally compliant letters of notification and allegations.   

What Should You Include in a Whistleblower Policy?

Vince Scopelliti - Wednesday, June 05, 2019

Whistleblower protections have been top of mind for many Australian organisations recently, following a number of changes to the law. 

The Treasury Laws Amendment (Enhancing Whistle-Blower Protections) Bill 2017 is due to come into effect from July 2019.

This will result in significant changes to the way whistleblowers are to be treated under a raft of existing legislation, including the Corporations Act 2001 (Cth), the Banking Act 1959 (Cth) and the Superannuation Industry (Supervision) Act 1993 (Cth).

One of the key changes is the need for organisations to have policies in place around whistleblower procedures and protections. 

So what are some of the key changes to the law, and what should your whistleblower policy include? 

the key changes to the law

A number of changes will take effect under the new legislation, including: 

  • The expansion of the definition of 'whistleblowers' to include relatives, dependants, their spouses, former employees and former associates.
  • Excluding personal work-related grievances from conduct that is otherwise deemed to be reportable.
  • Enhancing protections for whistleblowers. This includes increased anonymity, more significant penalties for revealing identities of whistleblowers and facilitating the ability for whistleblowers to seek compensation or redress in situations where they have been victimised. 
  • Limiting the persons in a business who are entitled to receive disclosures, but permitting externalisation of whistleblowing to the media and/or parliamentarians in circumstances where the disclosure may be a matter of public interest or emergency. 
  • Requiring public and large proprietary companies (defined as companies with consolidated revenue of at least $25 million, consolidated gross assets of at least $12.5 million or at least 50 employees) to have a detailed and compliant whistleblower policy in place. 

defining conduct to be reported

The intention of the legislation is to protect people who: 

  • Report misconduct or 'an improper state of affairs or circumstances' in situations where the whistleblower has reasonable grounds to suspect that the misconduct has occurred. This is generally expected to cover 'unethical' conduct. 
  • Believe an offence has been committed under legislation whose supervision comes under the purview of the watchdogs APRA or ASIC.
  • Report behaviours which 'represent a danger to the public or financial system' or otherwise relate to a civil or criminal offence which could result in imprisonment for a period of at least one year. 

explaining the process

In the event that a staff member wishes to make a disclosure, it is essential that it is only made to the appropriate category of person. Internally, this includes officers of the company, a person authorised by the company to receive 'protected disclosures' (such as an HR representative) or a senior manager of the whistleblower, who is an employee of the company. Companies can facilitate disclosure by implementing a mechanism for staff members to report online or over the phone. 

External disclosures can be made to ASIC/APRA, auditors or actuaries reviewing the company, lawyers or journalists or parliamentarians where public interest would be met by making the disclosure.

Whistleblowers are entitled to retain anonymity. However, the information does not need to remain confidential, as long as it can be demonstrated that:

  • The information requires investigation.
  • Reasonable steps have been taken to maintain the anonymity of the whistleblower in conducting such an investigation. 

protections for whistleblowers

The new legislation sets out a number of strengthened protections for whistleblowers.

  • Immunity against civil, criminal, administrative or disciplinary action.
  • An inability to enforce contractual remedies against a party making the disclosure.
  • An inability to admit information provided by a whistleblower into evidence in proceedings against them (unless those proceedings are pursued because of the falsity of the information). 
  • Protection against victimising conduct (such as dismissal, demotion, discrimination or similar).
  • Increased anonymity protection through strict liability criminal offences for revealing identities of whistleblowers
  • Significant monetary penalties applicable to person(s) who reveal the identities. 

What to include in a whistleblower policy?

Organisations who are required to have a whistleblower policy must ensure that it covers off key points, including: 

  • What protections the employee can expect to receive.
  • Details on how those protections will work in practice.
  • Specific information on how a disclosure can be made.
  • Details on how disclosures will be investigated.
  • How the policy will be transparently implemented. 

The policy should be communicated to all staff, from the CEO down. It should be made available where all staff members can easily access it, for example posted on an intranet. 

It is clear that the content and nature of a whistleblower policy are key to appropriately implementing the legislation. To assist our clients in understanding the looming changes and preparing, we have published a white paper, which is available on our website for free download.

We also provide our industry-leading Grapevine Confidential Whistleblower Hotline, which is staffed 24 hours a day, 7 days a week. Grapevine provides employees with the opportunity to make anonymous complaints to trusted and experienced operators.

Substantiating Claims of Reportable Conduct

Vince Scopelliti - Wednesday, May 01, 2019

It is one of society's great shames that our most vulnerable individuals are often open to abuse by those entrusted with their care. However, it is somewhat edifying to know that stringent legal and regulatory measures are in place in Australia to ensure that employers and others act quickly when allegations arise of abuse in care. 

In the case of issues involving children, organisations such as the Ombudsman mandate that 'reportable conduct' must be swiftly acted on by employers. In particular, a thorough investigation must be made into the situation to determine whether allegations of abuse in care have been substantiated. 

It is also important to note that organisations involved in regular contact with children are required to have proactive and preventative measures in place. After all, there is no more important issue in society than the protection of vulnerable individuals.

what is reportable conduct

Across Australian states and territories there is general uniformity in the way in which 'reportable conduct' is defined and applied. Section 25A(1) of the Ombudsman Act NSW defines reportable conduct as:

  • Any sexual offence or sexual misconduct committed against, with or in the presence of a child - including a child pornography offence.
  • Any assault, ill-treatment or neglect of a child.
  • Any behaviour that causes psychological harm to a child - even if the child consented to the behaviour. 

It is apparent that the legislation targets all manner of abuse, including sexual, physical and psychological. The net is wide and for good reason: any employee or other associate of an organisation who crosses the bounds of propriety and trust with a child should and will be held accountable for their actions. The legislation also covers situations of alleged consent by the child to the behaviour. There can be no doubt that the imbalance of power inherent in these situations is taken into account under the legalisation.

substantiating reportable conduct

While it is essential that inappropriate conduct be reported, facts must first be verified. Upon being notified of allegations related to child abuse, employers must ensure that a professional and objective investigation takes place. If there is insufficient expertise to carry out this serious task, expert advice and investigative services should be sourced externally.

Once the workplace investigation has concluded, the employer will be provided with a report which indicates whether reportable conduct has in fact been established.

Report to which body?

For employers it can be a little confusing to know which conduct to report - as well as who exactly to report issues to. This is in part because Australia has clear distinctions between states, territories and the Commonwealth, and in the field of reportable conduct there are subtle changes to be aware of. The Australian Institute of Family Studies has compiled a Resource Sheet that explains the different reporting requirements across jurisdictions, including the right body to approach in the context of an employer's place of business. 

Discipline and internal procedures 

Once there is a finding that reportable conduct has in fact occurred, attention then turns to the questions of what disciplinary measures might be appropriate in a given context. These will vary in strength and reach. For example, conduct that is substantiated but is of a lower gravity - such as slapping a child's hand for example - might be met with a requirement for training and/or a reprimand by the employer. More serious abuse of a child could lead to the dismissal of the employee and/or criminal charges being founded.

It is crucial that employers within child-related areas train their staff on the nature and consequences of reportable conduct, in addition to having robust procedures in place for dealing with such unfortunate situations. Some larger organisations such as the Department of Education will have quite extensive material and processes in this area. Yet for smaller businesses and organisations, it is vital to understand reportable conduct and to educate staff around this pressing issue. There are serious legal consequences for an organisation and its staff concerning the failure to identify and report child reportable conduct. 

WISE provides Investigating Abuse In Care training, which is specifically developed for organisations dealing with vulnerable clients. Alternatively, we are highly experienced at investigating reportable conduct matters, through our investigation services.       

The Privacy Act: Implications for Workplace Investigators

Vince Scopelliti - Wednesday, April 24, 2019

There can be many questions, fears and insecurities that arise in the course of a workplace investigation. Experienced investigators are often asked by witnesses and other staff to divulge what has been said and by whom. This is unsurprising; after all, for one or more people their reputation and/or job could be on the line as a result of accusations made. 

Workplace investigators must take care when dealing with the information gleaned from their enquiries. The Privacy Act 1988 creates a legal structure that controls how personal information can be obtained and used. From initial enquiries through to the final report, workplace investigators must carefully weigh the privacy implications of their work.

privacy and workplace investigations

The Privacy Act 1988 places firm legal boundaries around how businesses and government agencies are to deal with the personal information of individuals, including employees. Most employers will have the capacity under the Act to deal with employee information as they see fit - providing it is for a lawful purpose. 

Workplace investigators are bound by the privacy legislation, just as any person or organisation who deals with private information is. This can lead to considerable challenges within the course of the investigation, such as having private information that might or might not be of interest to another party or witness within the investigation. It is only in very unusual circumstances that such disclosures could be lawfully made. Overall, consent will not have been given for release to another party; consent is crucial in all such situations.

personal information and the final report

The client is of course the employer in workplace investigations, and it is to the employer that briefings and reports must be directed. It is not unusual for investigators to be bombarded by employees with requests for the release of information, statements, witness accounts and the like, that have been elicited during the investigation.

The reason for the requests is certainly understandable - people will be anxious to know what has been said, by whom and how this could potentially affect their employment. Yet legally this is not information that the workplace investigator is at liberty to provide, unless express consent has been given. 

Personal information at the disposal of the workplace investigator must be returned to the employer, generally in the form of the investigator's final report. Complainants, respondents and witnesses are certainly afforded a summary of the report and findings. Yet actual statements and transcripts involving personal information are certainly protected under the Act from most curious stakeholders.   

Privacy and future proceedings

It makes sense to keep a tight hold on information released during the investigation. Considering that investigative reports are often later scrutinised for their evidentiary worth, it is important for workplace investigators to keep in mind the ramifications of privacy principles upon their work. 

For example, statements that are tainted by knowledge of what another witness has said could certainly be inadmissible or weighted lightly in later proceedings. A loose investigative structure can also see one party privy to more information than another, raising inevitable questions of procedural fairness. 

Navigating a workplace investigation is certainly a matter of juggling many moving parts. Keeping a firm reign on the use of personal information during the investigation is one task that must remain at the forefront of all activities and decisions. For assistance on ways to ensure compliance with the Privacy Act 1988 during an investigation, get in touch with WISE.