FWC Says No to Judge, Jury and Executioner Process
In the decision of Skei Batton v The Environment Centre NT Inc [2024] FWC 597 dated 6 March 2024, the Fair Work Commission (‘FWC’) determined that an employee’s dismissal was unfair due to a denial of procedural fairness on the basis that the same person conducted the disciplinary investigation and made the decision to terminate.
The facts
On 26 July 2022, the employee commenced employment as a Finance and Office Manager with the employer, which is a small not-for-profit organisation.
As result of the employee’s alleged behaviour towards the Treasurer and Executive Director during a meeting on 24 July 2023, being absent from work without leave and repeated failure to carry out the Executive Director’s lawful and reasonable directions (‘alleged unprofessional behaviours’), the Executive Director undertook a disciplinary investigation. This included the Executive Director issuing the employee with a ‘Notice of warning and investigation’ letter dated 28 July 2023 that required the employee to respond to allegations concerning the alleged unprofessional behaviours. The employee was allowed an adequate opportunity to respond to the allegations.
On 17 August 2023, the Executive Director sent an email to the employee attaching the investigation findings that substantiated the alleged inappropriate behaviours thereby supporting a decision to terminate with 2 weeks pay in lieu of notice. The email also offered the employee an opportunity to resign and attached a proposed ‘Settlement Agreement and Deed of Release’.
There was no agreement to resolve the proposed termination thereby resulting in the Executive Director issuing the employee with a termination letter dated 28 August 2023. The termination letter advised the employee that the alleged unprofessional behaviours were substantiated, she had engaged in “misconduct of a very serious nature” and would be paid 2 weeks pay in lieu of notice.
The decision
On 7 September 2023, the employee lodged an application for unfair dismissal and the employer raised a jurisdictional objection on the basis that it was a small business employer that had complied with the Small Business Fair Dismissal Code.
The FWC determined that the employer had complied with the fundamental requirements of section 387 of the Fair Work Act 2009 (Cth) such as there being a valid reason for dismissal, notification of the reason for dismissal, an opportunity to respond and no refusal of a support person. In relation to whether the employee had been warned about her unsatisfactory performance prior to dismissal, the FWC noted that the employee was not confident performing her assigned audit and budget tasks due to not being a qualified Accountant, she should have been provided with more support and that the situation became too overwhelming.
The FWC noted that the employer was a small employer that did not employ any HR specialists. However, in relation to the consideration of any other matters, the FWC noted that the employee was entitled to a fair disciplinary process and that the Executive Director was both a witness and complainant to the behaviour of the employee. The FWC was critical of the Executive Director for having conducted the investigation and making the decision to terminate the employee’s employment.
The FWC was of the opinion that the investigation should have been conducted by an independent third party or a member of the Board with the Board then tasked with making a decision about the employee’s employment (presumably excluding the Board member that would undertake the investigation). The FWC referred to the Executive Director assuming the role of “judge, jury and executioner” and that this was inappropriate and thereby denied the employee procedural fairness. The employer’s objection on the grounds of compliance with the Small Business Fair Dismissal Code did not override its obligation in relation to procedural fairness. The FWC also took into account that the employee was a single mother and a survivor of domestic violence.
The FWC determined that the lack of procedural fairness necessitated a finding that the employee’s dismissal was harsh and ordered 12 weeks compensation (less tax) plus superannuation.
Key takeaways
A workplace investigation that does not adhere to the rules of procedural fairness will not only negate the investigation findings but also any decision made on the basis of that investigation.
A fundamental rule of procedural fairness is the rule against bias whereby the investigator must be impartial and not be subject to actual or apprehended bias.
Actual bias occurs where there is evidence that the investigator acted with prejudice or had an inclination for or against an individual involved in the investigation. This requires cogent evidence that the investigator was in fact bias.
Apprehended bias does not require direct evidence but an objective assessment of the investigator’s state of mind. It is sufficient to prove that the circumstances are such that the investigator could have been affected by bias.
The High Court in Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 at paragraph 33 set out the test as follows:
“…whether a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial mind to the resolution of the question the judge was required to decide.”
In this FWC decision, the Executive Director was clearly the subject of apprehended bias having been a witness and more importantly a complainant to the behaviour of the employee. Therefore, it was a breach of procedural fairness for the Executive Director to conduct the investigation. Similar considerations apply with respect to making a decision about termination of employment as noted by the FWC. This is particularly the case given the ability to utilise Board members.
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Mapien is a market leader in managing difficult employee issues, including conducting workplace investigations. If you would like to know more about procedural fairness when conducting workplace investigations, please contact us and a Mapien Workplace Strategist will be in touch within 24 hours.