Recent Decision a Cautionary Tale For Covid-time Terminations

In a recent unfair dismissal case, the Fair Work Commission (FWC) highlighted the challenges associated with managing remote workers during the Covid-19 pandemic. Interestingly, the FWC considered the impact of Covid-19 on the employee in this case in deciding whether or not there was a valid reason for the dismissal and whether the dismissal was harsh.

Key to the FWC’s finding was the fact that the employee’s work expectations and workload had been increased during the pandemic despite a 20% cut to her hours and pay.

“[the employer] failed to recognise [the employee’s] natural anxieties about COVID-19 (mixing with clients in public places) and all that COVID-19 could mean for her job security if the business was to be severely impacted.”

DP Anderson observed that not all performance failures are a valid reason for dismissal and a consideration of context and circumstances is required to assess seriousness.

Background

The employee, a Sales Executive for Allpet Products (Allpet), was summarily dismissed in April this year after a series of events over a few weeks, including failing to consistently provide reports, exhibiting (in her director’s view) rude behaviour during a teleconference, not disclosing that she carried on a business which may be (in the director’s view) in competition with the employer’s business, and finally, in what appears to have been the last straw, posting content on Instagram which appeared to show her attending a bridal boutique and driving a friend to the airport during normal work hours.

In the director’s subsequent termination letter, the director cited the employee’s failure to provide weekly sales reports, customer complaints, poor attitude and “demonstrated lack of respect” for management.

Reporting obligations increased, pay and hours cut

In determining whether the dismissal was unfair the FWC took into consideration the current work environment of Covid-19 with particular reference to:

• The employer had failed to take into account the employee’s “natural anxieties about COVID-19 (mixing with clients in public places) and all that COVID-19 could mean for her job security”;
• The employee’s days and wages had been cut by 20% due to economic effects on the business and she was working remotely covering customers in two states; and
• The employer, in requiring competing and conflicting obligations of their employee, should not have objectively assessed her performance against standard performance criteria at this difficult time.

“Handful” of errors warranted a warning

The FWC held that a number of errors in the employee’s conduct warranted a warning but not summary dismissal.

In relation to the Instagram posts, the FWC found there was no evidence it compromised her employment obligations to the company and thus this was not a valid reason to terminate her employment. Neither was the director’s conclusions about the Instagram posts which were tested in evidence and were found by the Deputy President to be factually wrong, or did not meet the standard of proof.

Judgement

DP Anderson criticised the absence of a formal performance improvement plan despite it being clear that the employee was “a committed but occasionally deficient employee”.

“When COVID-19 hit, the combination of reduced hours to do the job, demotivation arising from reduced hours and pay and an additional reporting obligation combined to create a set of circumstances in which an objective assessment of performance was fraught.”

Ultimately it was held that Allpet applied an unfair disciplinary approach: a spur of the moment performance meeting, then a week later, a formal warning letter and then a week later, termination.

The impersonal nature of the dismissal by email and letter compounded the procedural unfairness.

“Allpet tried to act fairly but its judgement in the final analysis was rash and impaired. When considered objectively [the salesperson’s] dismissal was harsh, unjust or unreasonable.”

The Deputy President found that the employee was unfairly dismissed and awarded the worker $9120 in compensation.

Takeaway

While glimpses into an employee’s personal life on social media can cause a great deal of angst for employers, they should think twice before dismissing an employee because of it. A “big picture” approach, with consideration of the context and circumstances of an employee’s performance and conduct issues, is recommended. In this case, the FWC demonstrated its willingness to take Covid-19 into account in its decision. Employers must accordingly adapt disciplinary and termination processes to the current climate.

If you need assistance with carrying out disciplinary procedures in these unique Covid times please do not hesitate to contact Nick Stevens or Jane Murray.