By Amber Wood, Associate, People + Culture Strategies
(Part 1 of this article appeared earlier this week)
Failure to investigate allegations of bullying was a key issue in the recent unfair dismissal case of Adam James Harley v Aristocrat Technologies Australia Pty Ltd  FWA 62. In this case, Mr Harley successfully argued that he was constructively dismissed from his sales role having received a “show cause” letter from the company and being required to attend a meeting with management to respond to allegations of alleged poor performance.
Fair Work Australia (FWA) found that Mr Harley had been subjected to a course of harassment by his manager which culminated in the company’s attempt to terminate his employment. Despite Mr Harley making complaints about his manager’s constant criticisms, the company did not take the complaints seriously, and did not investigate the complaints.
FWA found that the applicant had been unfairly dismissed and awarded the maximum of six months’ compensation to Mr Harley. FWA was particularly critical of the company’s human resources department for failing it investigate the matter, despite being a large multinational company with ample resources including a dedicated human resources team.
Trial by media
The recent allegations of sexual harassment made by a female staff member from a high profile company marketing department against its CEO resulted in a shock resignation from the CEO, who had been widely regarded as one of Australia’s most talented executives.
When announcing his resignation, the CEO released a statement acknowledging that he had “acted inappropriately” towards the staff member at two company functions and as a result had “inexcusably let down the female staff member”.
Regardless of any legal outcome, the allegations by the employee and the CEO response may have caused significant damage to the company’s reputation.
The company lost a CEO who helped quadruple the company’s market value during his seven year reign. The company’s share price plummeted in the immediate wake of the resignation announcement. Arguably, the brand, which had been carefully crafted for over a century, suffered the most damage. A company with a predominately female customer base, 70% female staff, and many female shareholders, could not have relished the extensive publicity surrounding the resignation.
Some commentators have praised the board of the company for acting promptly and for paying out a relatively small termination payment to the CEO, allegedly stripping him of significant share entitlements. Other commentators have praised the CEO for publicly acknowledging his inappropriate behaviour and resigning.
The company’s quick, public, and seemingly decisive steps should be of particular interest to employers. According to statements issued on behalf of the company, it is conducting an independent inquiry into sexual harassment within the company and has created an anonymous hotline for employees to report instances of harassment. These measures appear to be positive steps, designed to avoid a large damages award to the complainant. However, allegations, if proven, that sexual harassment at the company was commonplace, or that there were previous complaints which were not properly investigated or resolved, may prove problematic for the company.
Employers’ “must do” list
The above cases show that an employer must negotiate through a maze of obligations it has to its employees. With the economic, social and legal costs and risks so high, what should employers do to ensure they maximise productivity and do not get caught in with WorkCover’s nine-month campaign or face similar situations to those detailed above?
(i) Develop policies which specify what types of workplace behaviour will not be tolerated and the consequences of breaching these policies.
(ii) Policies and the corresponding processes should allow confidential internal complaints and thorough and transparent investigation processes so that any complaints can be dealt with promptly, discretely and thoroughly.
(iii) Policies must be reviewed and updated regularly and adapted to suit the needs of the employer and its employees.
(iv) The policies must be enforced consistently and fairly. Best practice is to ensure good workplace behaviour is part of the employer’s culture.
(v) Employers should ensure that policies are supported by training so that employees understand the subtleties and consequences of poor workplace behaviour.
(vi) Employees must know they can make a complaint about a fellow employee regardless of seniority or status within the organisation.
(vii) Management and human resources staff must be properly trained to investigate and handle complaints appropriately.
(viii) Employers should keep detailed records of any complaints, investigation of complaints and the outcome of complaints including the contemporaneous meeting notes and copies of all correspondence.
(ix) All complaints should be investigated promptly and taken seriously.
(x) Finally, complainants, alleged perpetrators and witnesses should be treated with respect at all times. All parties should be afforded procedural fairness.
People + Culture Strategies is a law firm specialising in advising employers nationally on all aspects of workplace relations and people management and has an extensive training practice. The firm can assist organisations to develop the right solutions and strategies in all workplace issues, including the development and implementation of policies, workplace training, conducting investigations into allegations of bullying or harassment, performance management, and assisting with WorkCover investigations.
Disclaimer: any views expressed in this article are those of the author’s only and does not constitute the provision of legal advice.