investigation

By Calum Woods and Lindsay Carroll, NRA Legal

Since before the introduction of the Fair Work Act it has taken more than just a valid reason to dismiss an employee.

From providing an opportunity to respond, to not refusing a request for a support person – these additional ‘procedural fairness’ steps are viewed by many as merely stages on the conveyor belt to dismissal.

It is easy, then for even the most experienced HR professional to forget that these rules were not developed in isolation, and that asking the right questions can sometimes avoid an embarrassing foray in the Fair Work Commission.

The recent decision of  Susan Edwards v Litchfield Council [2019] FWC 6660 helps to reinforce this important message for employers.

Digging up the dirt

Ms Edwards was employed by Litchfield Council in the Northern Territory as a gatekeeper at the local tip, a position she held for 7 years.

In late 2018, another employee complained to Ms Edwards’ manager that she had not directed a customer to deposit waste at the correct location. The employee who raised the complaint was responsible for sorting waste, and had become annoyed that waste was being improperly deposited. The employee it seems, had taken issue with a number of gatekeepers at the tip.

The manager passed this complaint on to the council’s CEO, who asked him to conduct an investigation. The manager reviewed CCTV footage, and found no evidence in support of the employee’s complaint.

However, according to the manager, he was also asked to review footage from different days and report his findings back to the CEO. The review considered weeks of CCTV footage outside the date of the alleged incident, and compared this with a log of transactions that recorded when vehicles were charged to make deposits.

Under examination in the Fair Work Commission, the manager conceded that this process was “long and laborious,” and that he did not review other employees to the same level as Ms Edwards.

The manager uncovered an incident where Ms Edwards handed a package wrapped in paper to a customer before he proceeded to dispose of waste at the tip. The manager presented a report to the CEO, alleging that the transaction was personal – possibly criminal – and that Ms Edwards did not charge the customer.

At the time, Ms Edwards had been involved in a long running dispute with the council about the amount of money she had received as part of an annual leave payout. Ms Edwards had initially written to the mayor, but was directed almost immediately by the mayor’s office to address the matter with the CEO.

The allegations coincided with a meeting Ms Edwards had arranged with the CEO to discuss the annual leave payout, and it was during this meeting were the allegations put to her.

 

The tipping point

Ms Edwards stated that the package she handed to the customer contained crystals that the customer had agreed to return to a local haberdashery store. The decision does not make clear whether the customer was in fact charged for this transaction, but it appears that the council was unconvinced by any explanation she may have provided.

Ms Edwards was issued a first and final warning, and was advised that any further incidents within the next 6 months would lead to the termination of her employment.

It should come as no surprise that Commissioner Spencer was critical of the council’s approach after this first meeting. In the story so far, the council: singled out Ms Edwards to the exclusion of other employees in investigating incidents unrelated to the initial complaint, raised the allegations in a meeting intended to discuss Ms Edwards’ grievance surrounding her annual leave pay out, and issued her a first and final warning in circumstances where the Commissioner considered it was not warranted.

However, the circumstances leading to the termination of her employment occurred some months later. In early 2019, the council received a further complaint alleging that Ms Edwards:

  • made inappropriate comments about another employee in the gatehouse logbook;
  • was rude to a customer; and
  • charged customers incorrectly.

It was unclear who raised these complaints, and how much detail was provided. It appears that a further review of CCTV footage occurred while Ms Edwards was on annual leave that uncovered additional two incidents where the council alleged she had charged customers incorrectly or not charged them at all. The council ultimately resiled from one of the incidents, however the second incident would later form the basis of their decision to terminate her employment.

It was alleged that she had incorrectly charged a customer driving a 10 ton truck carrying a mixed load of logs, dirt and green waste, including by applying the residential rate as opposed to the commercial rate.

Ms Edwards was suspended from her employment, and the council notified her that unless she could provide a reasonable explanation that her employment may be terminated.

Ms Edwards provided a response in writing, and in March 2019 the council terminated her employment. The reasons for the dismissal were similarly vague, with the termination letter referring to such conduct as “inappropriate behaviour towards a colleague and failure to follow Council procedure to raise a grievance” – presumably in reference to the comment in the gatehouse logbook – and “depriving Council of funds.”

Ms Edwards filed an application with the Fair Work Commission arguing that she had been unfairly dismissed.

 

‘Procedural fairness’ more than a checkbox?

This case stands as an example of the dangers posed by covert workplace investigations. While the Fair Work Act requires enough detail of an allegation to be provided to enable a response, this step is also critical in assessing the strengths and weaknesses about whether there’s a valid reason in the first place.

The CCTV footage on which many of the allegations were based was not provided to Ms Edwards until the hearing of the matter before the Fair Work Commission several months later. The entire process was undertaken in secret by the manager.

Perhaps unsurprisingly, the Commissioner ultimately held that the transaction log alongside the CCTV footage in fact established that she had correctly charged for many of the transactions.

Furthermore, the evidence at the hearing suggested that:

  • gatekeepers had an amount of discretion in determining fees;
  • there was a general lack of consistency between different gatekeepers;
  • it was not uncommon for gatekeepers to inadvertently miss certain loads (particularly green waste); and
  • the fact that someone is driving a 10 ton truck is irrelevant if they are a resident and are entitled to discounted rates for residents.

Perhaps most critically however, the council was unable to provide any documents or point to any training outlining how charges were to be applied. In fact, the only reference to any training was at a toolbox meeting that was said to have occurred while Ms Edwards was on leave.

As such, the Commissioner concluded that there was no valid reason for the dismissal, notwithstanding as well the significant procedural failings by the council in providing the necessary materials to Ms Edwards to enable a response to be provided.

Ms Edwards was awarded reinstatement and compensation for the intervening period.

 

At a minimum…

It is not only a legal requirement under the Fair Work Act to follow the ‘procedural fairness’ steps, it is also essential to ensuing that the reason for the dismissal holds up under scrutiny.

It seems that had the council provided Ms Edwards with the CCTV footage and the transaction log, that the council itself relied on to form the basis of the dismissal, it may have saved itself a great deal of embarrassment.

Knowing when (and how) to investigate is an acquired skill, one which the manager in this case has had to learn the hard way. For everyone else, the NRA’s Workplace Investigation Masterclass has been developed by our team of in house lawyers and advisors to be a hands-on introduction or refresher on conducting procedurally fair workplace investigations. The next masterclass will take place in Brisbane in February 2020, with tickets available here.

Can’t wait until February? To speak with one of NRA’s workplace relations specialists today, call 1800 RETAIL (738 245).