Key learnings for employers

• Investigations into alleged serious misconduct must be conducted in a professional and comprehensive manner.
• Hearsay, assertions, anonymous surveys and ‘feelings’ do not constitute evidence on which to base a decision to terminate.
• Employers must not make a decision to terminate until objectively reviewing and testing the employee’s response/explanation to any findings established through an investigation.
• Employers need to look at the legal definition of bullying before labelling any such behaviour.

“I am not satisfied that Ms Panchal bullied or discriminated against anyone. Contrary to the company’s contention, the evidence in this matter is not compelling. It is scanty, conclusory, and largely second hand, that is to say, hearsay. Bulla put eight allegations of misconduct to Ms Panchal and referred in its evidence to many more. It appeared to believe that the sheer number of allegations against Ms Panchal presented a persuasive case of guilt.”  Decision extract - 2024 FWC 2784.  

It didn’t

In an interesting case that highlights the importance of carefully collecting and assessing real substantive evidence before making a decision to terminate, the Deputy President found that the applicant had been unfairly dismissed. A compensation payment of 6 months wages was contemplated as suitable given the seriousness of the case but was reduced due to the inaction of the applicant to mitigate their own financial loss by not attempting to find alternative employment while waiting for the case to be heard.

The applicant, a supervisor, had been suspended on full pay, pending an investigation, due to serious allegations of bullying. The bullying was alleged to have occurred over a period of two years.

A week later the Chief Executive provided the supervisor with a letter outlining eight allegations including bullying, religious discrimination and racial discrimination. The allegations included reducing an employee’s working hours, inappropriately raising her voice, giving employees unreasonable tasks, asking employees to work faster, dismissing an employee’s concerns of being mistreated by another employee, isolating workers, and not taking someone through the standard onboarding process. Many of these activities were alleged to have occurred on racial or religious grounds (the employee wore a burka).

The supervisor responded to each of the 8 allegations stating that they were unfounded and denied bullying or discriminating against anyone. She provided a detailed written response which included what appeared to be legitimate reasons for certain actions that she took such as the reduction of one particular casual employee’s working hours was matched by other employee’s similar reduction at the same time and was due to a lack of work in that week. She stated she had raised her voice due to being in a noisy work area where large cooling fans were operating. The unreasonable tasks (cleaning the kitchen and amenities area) were undertaken by all employees on a rotational basis or when an employee was under occupied on their normal work.

Within four hours of receiving the supervisor’s detailed response to the allegations the Chief Executive responded to the supervisor stating that they had concluded that all of the allegations had been substantiated and that the company was proposing to terminate the supervisor’s employment. The supervisor was invited to respond by 4pm the following day. The supervisor’s request for more time was ignored and she was terminated at 4.30pm on the following day.

In the hearing the company submitted that ‘there was compelling evidence that Ms Panchal had engaged in a pattern of bullying and discrimination of employees which made her continuing employment unsustainable’ It submitted that Ms Panchal had been terminated for a valid reason.

The Fair Work Commission Decision

The following are some of the key points extracted from the Deputy President’s decision leading to the conclusion that the decision to terminate was unjust and unreasonable and therefore unfair.

• The investigation process included the Chief Executive speaking to various employees. She stated ‘that it was clear that staff were not happy with the way Ms Panchal treated them’ but were uncomfortable raising concerns with senior management. These discussions formed the basis of the 8 allegations mentioned above. 
• The employer failed to assess the allegations against their own normal workplace practices. Allocating an employee to cleaning duties was fully within the scope of the normal practice (to make up rostered hours when there was a lack of work) and not bullying. 
• The employer failed to assess the allegations against all the facts. While the raw data showed that a particular casual employee’s hours had been reduced in a specific week, they did not look beyond this to establish that the employee had been off work that week due to sickness. 
• The employer had hired a new manager shortly before the supervisor’s termination who discovered a ‘manipulative streak’ in the supervisor and that they had not been following instructions. 
• The employer had hired a new manager shortly before the supervisor’s termination who discovered a ‘manipulative streak’ in the supervisor and that they had not been following instructions. 
• In coming to a decision to terminate the employer had conducted an anonymous survey in which it asked employees whether they had been bullied at work by the supervisor. The survey results were not presented as evidence.
• There was no evidence (only assertions) confirming any actions taken by the supervisor were done for racial or religious grounds and therefore discriminatory. 
• The manager from the Labour Hire firm the employer regularly used gave evidence that twenty former employees had complained about the supervisor including references to alleged bullying and discrimination. Examples include

- ‘Paul L felt discriminated for being white Caucasian and not Indian’, and ‘Ruwada said he was of African descent and that Ms Panchal were from India and favoured the Indian workers’.

• No employees or labour hire workers affected gave any evidence.
• No employees or labour hire workers affected gave any evidence.
• The employer based their decision to terminate on the sheer number of allegations against the supervisor. The fact there were multiple allegations did not lower the standard of proof. 
• Many of the supervisor’s actions labelled as bullying did not meet the legal definition. (i.e. inappropriately raising her voice or not conducting the onboarding process for a new employee) 
• The allegations of discrimination on racial or religious grounds were mere assertions. Often, they related to how employees ‘felt’ but were not supported by any actual evidence or instances.

 During the hearing the supervisor elaborated on the same explanations that had been provided in response to the eight allegations originally raised against them. Without any evidence to the contrary the Deputy President accepted the supervisor’s explanations.

The Deputy President stated that the allegations of bullying, discrimination and inappropriate conduct levelled at the supervisor by the company were unsubstantiated and that there was therefore no valid reason for termination.

As the allegations were unsubstantiated the supervisor had not been provided with a valid reason for termination. It was also noted that in the lead up to the termination no warnings had been issued to the supervisor for their alleged conduct. The Supervisor was awarded compensation.

It is possible that all of some (or all) of the allegations against the supervisor could have been substantiated however the investigation process was seriously deficient and relied on open conversations, hearsay and anonymous surveys. In the absence of actual direct evidence the Deputy President had no other option than to come to the conclusion that the allegations were unsubstantiated and therefore the termination was unfair.

Employers requiring assistance with disciplinary or other investigations should contact Hunter Employee Relations.

Kind Regards
Michael Schmidt
M 0438 129 728
[email protected]
www.hunteremployeerelations.com.au

Industrial Relations - Employment Law - Workplace Performance

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