It is a common problem faced by managers under the Fair Work Act 2009 (Cth) (“FW Act”): you are trying to discipline an employee, but they hide behind a bullying complaint rather than improve their performance or conduct.
The FW Act’s section 340 prohibits dismissing an employee because of a “prohibited reason” (including if the employee recently exercised a workplace right). Unfortunately, we are seeing many new clients coming to us to help after a disgruntled ex-employee has applied to the Fair Work Commission (“FWC”) to use this provision to argue their dismissal was unlawful ‘adverse action’ because they recently made a workplace complaint.
What can employers and managers learn from recent Federal Court cases where an ‘adverse action’ claim was successfully defeated?
In Ibarra Campoverde v Regional Health Care Group Pty Ltd  FCCA 1502 (“Ibarra”), the ex-employee (Mr Ibarra) alleged that he had informally complained to his manager that a colleague had bullied and harassed him at work. The complaint was promptly investigated by the company.
However, the investigation showed the complainant (Mr Ibarra) had been the one engaging in misconduct. Based on the investigation’s outcome, management decided to dismiss Mr Ibarra for misconduct. Consequently, Mr Ibarra brought a claim alleging his dismissal constituted unlawful ‘adverse action’. Mr Ibarra generally relied upon the following arguments:
- Basic ‘adverse action’ allegation – Mr Ibarra argued that he had been dismissed because he made a complaint (based on the proximity of his complaint to when he was dismissed); and
- Allegation of a collective decision involving witnesses – as an alternative to the above, Mr Ibarra claimed he was dismissed by a decision-making process that occurred during the investigation, so involved witnesses which had been motivated to want him dismissed due to his earlier complaint.
In Ibarra, the ex-employer defeated the ‘adverse action’ claim by showing:
- Regarding the basic ‘adverse action’ allegation – The termination letter, and management’s verbal evidence, showed the decision to terminate was made because of Mr Ibarra’s misconduct, not the mere fact he made a complaint;
- Regarding the allegation of a collective decision involving witnesses – The ex-employer could show the investigation witnesses were not involved in the decision to dismiss Mr Ibarra, because:
- The witnesses were interviewed and provided evidence Mr Ibarra had engaged in misconduct; and
- Management’s decision-making process to determine what to do based on that evidence was done after the investigation was completed and based on the evidence discovered during the investigation.
How does Ibarra help employers?
The decision in Ibarra highlights that employers will be able to successfully defend an ‘adverse action’ claim if the employer can prove that a prohibited reason (such as the fact an employee made a bullying complaint) was not operating on the mind of the decision-maker (i.e. the manager) when he/she made the decision to dismiss the employee. Furthermore, Ibarra and Endeavour Coal have shown the courts may place significant weight on:
- Verbal evidence from the decision-maker as to their reasoning and thought process; and
- Documents created when management made the decision to dismiss the employee.
How can I defeat a rogue employee’s attempt to hide behind a bullying complaint?
As a general guide, based on Ibarra and Endeavour Coal, we recommend managers take the following precautions if needing to dismiss an employee for misconduct after the employee has recently made a bullying complaint:
- Ensure there is a clear distinction between the end of an investigative process and the decision-making process used by the manager who will decide what disciplinary action is required;
- Always give an employee an opportunity to ‘show cause’ why they should not be dismissed and ensure you consider their responses prior to finalising a dismissal letter;
- Ensure your dismissal letters are specific enough to allow the company to rely upon them at the FWC and Federal Circuit Court; and
- During an investigation, avoid asking witnesses how they think a matter should be resolved (this is a question for the investigator and management decision-makers after the investigation is completed, to make it easier to clearly show management made its decision after the investigation was completed, and not as part of the investigation process).