Macrossans Lawyers Brisbane law firm

COMMON DISCIPLINE AND DISCHARGE MISTAKES MADE BY EMPLOYERS

Speaker: Andrew Knott, Partner, Macrossans Lawyers

Introduction

The potential legal difficulties facing employers in taking disciplinary, particularly dismissal action, against employees have increased regularly in recent decades and will continue to do so. The degree of regulation of the employment relationship is definitely increasing, not decreasing. The number of cases, particularly in the common law and discrimination jurisdictions, continues to increase.  The range of issues which are regulated by the law is increasing, particularly as discrimination law has widened in scope and application, and as common law principles are tested and expanded by the courts.

Employees' rights may be based on the common law, industrial instruments such as awards and certified agreements, statutory provisions such as the powers of industrial commissions in relation to unfair dismissal, and human rights legislation such as equal opportunity statutes. If an employer's decision-makers have insufficient knowledge of the scope and significance of these laws, adverse consequences are likely to occur.

In this paper I will be looking at issues relevant to setting the context in which disciplinary action may take place. I will then cover issues arising out of the taking of disciplinary action by an employer.

Familiarisation with legal principle is important. It leads to awareness by operational management of potential problems. Managers then seek advice (either internally or externally) before taking a decision which may have adverse consequences for their employer. Acting without awareness is the most fundamental mistake. Managers or supervisors "at the coal face" need to be aware of at least the basic principles so that potential problems are addressed before they develop into real and major problems.

A considerable number of the suggestions in this paper are based on experience in actual cases. When sitting in compulsory conferences or court or tribunal rooms, one can (with the obvious benefit of hindsight) see clearly what different conduct might well have avoided, for both employer and employee.

Part A: Setting the Context - Common Mistakes Disciplinary Options

An employer's position will be better in any court proceedings if the employer can show that they have a well thought out system in place for dealing with disciplinary issues. An office manual, or disciplinary manual can be very useful in demonstrating both integrity and care. The contents must be communicated to employees and applied consistently by managers.

Typical disciplinary options include:

1.         Warnings - These can be verbal or written. If verbal, should be documented and desirably supported by a memorandum or a letter. A written receipt should be obtained. A common mistake is for such warnings to be expressed in extremely vague or general terms. It is vital that the employee is given an

opportunity to be heard before a warning is issued (and for this to be appropriately documented) and to have any response genuinely considered.

There are no laws about how many warnings must be issued. Everything depends on the circumstances, particularly the seriousness of the misconduct. However, for inadequate performance, or minor misconduct, the "three warnings" rule is a good rule of thumb. The first may be expressed in non­threatening terms. The second may well emphasise that adverse consequences may flow to the employee if there is continued non-compliance with the employer's direction on the relevant issue. The third should be explicit about the possibility of dismissal, whilst at the same time making clear that an open minded and objective decision will be made.

It is often appropriate with warnings to offer suitable counselling or training. If the employer assists or offers assistance to the employee to deal with the issues, two things follow. Firstly, the employee may respond in the very way that the employer desires. Second, if the employee does not, then the employer's position in any unfair dismissal case would be appropriately strengthened.

One instance of this which I recall, was of an employee emailing another employee, with whom she had had a personal relationship which had been terminated by the recipient, and continuing to do so after being directed to stop.  The employee was in all other respects a very valued employee. We recommended to the employer that, in addition to the warnings, an offer of confidential external counselling, to be paid for by the employer, be made to the employee. We also suggested that the employer should tell the employee that they wanted the person to in their employment. The problem had to be solved and that was why the employer was offering the external assistance. The employee's privacy was protected by the offer being on the basis that the only document which would pass from the external counsellor to the employer was the invoice.

2.         Fines and Monetary Penalties - The general principle is that employers have no right to fine employees. Even though in theory it may be possible, in some circumstances, to include such a right in a contract, this would probably only be appropriate in exceptional contexts.

3.         Suspension - At common law, the employer has no right to suspend an employee without pay as a disciplinary measure, even where serious misconduct is suspected. Even suspension with pay may be problematic where the employee is prejudiced by loss of opportunity to earn remuneration, or to preserve and enhance skills and reputation. Such a right may arise from contract or (particularly in public sector employment) from a statute or from an award.

4.         Withholding Remuneration - The general rule is that employers have no such right in relation to work which has been done. The position is rather complex where the employee refuses to do work as directed, and advice will always be needed.

5.         Withholding Bonuses - Whether an employer is entitled to not award, or withhold, a bonus will depend on the terms of the contract of employment.

6.         Demotion - As a general rule, demotion involves the termination of one contract of employment and the offering of another. Employers need to consider whether the contract should (provided that is not inconsistent with any overriding law), provide for demotion. There is obvious difficulty here in that the employee's enthusiasm for taking the appointment, may be seriously undermined by a general provision in the contract giving the employer a right to demote the employee.

7.         Transfer to a Different Location - This can sometimes be appropriate, not so much as a punitive measure, but to enable the employee to start afresh where there has been conflict with other employees, or the break down of a personal relationship. The employer's powers are discussed below in relation to termination provisions in contracts.

Background Law

Mistakes often arise from a failure to review carefully those laws which impose terms on the employer and employee which it is beyond their power to change - eg. legislative provisions and industrial instruments. It is not uncommon for employers to enter into arrangements in respect of the carrying out of duties outside normal working hours which are not paid for but for which there is in fact a legal obligation to pay overtime. When disciplinary action is taken against an employee, such employees are often advised they do have legally enforceable rights which might go back some years to enforce payment of overtime.

Events Prior to Recruitment

The first mistakes may be made before the employment commences, indeed before the advertisement for the position is placed. A failure to analyse carefully and document appropriately the skills and duties required of the occupant of a position, may result years later in expensive and distressing litigation.

The issues to include at this stage are primary functions of position, reporting lines to and from the position, the skills required, the appropriate training and experience, the proposed induction and supervision, and the duty statement. This should not only be stated in general terms, but also where possible, in terms which convey clear expectations as to precisely what is required in the position.

Any advertisements should then be consistent with this documentation. Any discussions with the prospective employees and follow-up induction procedures should also follow this documentation.

Promises and representations made by over-enthusiastic managers, may be significant in later proceedings. A statement made during the recruitment process about a "glorious and long future together", particularly where a person has been induced to relocate from another State or country, might well result in a longer period of notice or payment in lieu of notice than would otherwise apply. Only last year, the result in a Queensland case was influenced by the employer's statement that the job was "for the long term".

The Terms of the Contract

The employment contract should be prepared and submitted to the employee prior to a legally enforceable agreement being reached. An employer's position will be substantially weakened if a legally enforceable agreement is reached before the

employee has been presented with a contract. The employee may well assert (correctly) that clauses objectionable to the employee in the contract cannot be imposed on the employee against the employee's wishes.  This may include clauses of considerable significance in relation to possible later disciplinary action.

Important issues, from a disciplinary perspective, to be considered at this stage are:

• Is it a fixed term contact? If so, is an option to be conferred on the employee to renew (potentially very risky for the employer).

• If it is a fixed term contract, in what circumstances can the parties terminate the contract, and on what grounds.

• If it is not a fixed term contract, the notice period should be specified.

• Is there to be a probation period? If so, is it consistent with the law?

• If the employer wishes to have the right to pay in lieu of notice, then this should be explicitly stated. The contract should make clear that the employment does not terminate until the expiration of the period of notice for which payment has been made. The employee will then remain bound by the duties of the employment contract including loyalty to the employer.

• Is the employer to have a right to require overtime (and if so, is this to be paid)?

• The employer's right to change the place of work needs to be specified. An employee might otherwise argue that disciplinary action based on a change of place of work is not valid on the ground that the directed change was beyond power.

• The employer should consider whether it wishes to have a right to require the employee not to attend work such as the following:

"The employer reserves the right to require you not to attend at work and/or not to undertake all or any of your duties during any period of notice whether given by you or the employer provided that your salary and other contractual benefits shall be paid during such a period."

•          A detailed duty statement should be included.

Of increasing importance, particularly with knowledge workers and management employees, are a range of issues which I categorise as "market share protection". These can be critical in disciplinary context.

• Is the employee entitled to work other than for the employer?

• There should be an express prohibition on working for any competitor.

• Confidentiality obligations.

• Restrictions both during and after the employment on soliciting for the purpose of any existing or proposed business either customers or employees of the employer.

Following Through

In addition to setting the context, it is important to make sure that there is appropriate follow through.

Operational managers and supervisors, the people actually making the decisions, must be sensitised to the issues.

If detailed manuals or protocols have been prepared, it is important that be implemented in practice. If not, the investment in creating these documents will have a negative, rather than a positive effect.

In a disciplinary action context, it may be vital to demonstrate that the employer's requirements and instructions have been effectively communicated to the employee, and their importance emphasised. Office manuals or similar documents should be supplied to the employee. The employee's signature should be obtained, with appropriate wording included, where the employee acknowledges the seriousness to the employer of compliance with the manual. It is also desirable to include reference to this obligation in the employment contract and to reserve in the contract the right of the employer to vary the manual from time to time.

Finally, it is sadly intriguing how often it becomes apparent that it was a failure to address the issue when it first arose which has led to or seriously aggravated the problem. The classic instance is the employer who is reluctant, for quite understandable and proper reasons, to raise an issue of concern with an employee. The issue festers and the employer eventually "blows up" with the result that the matter is handled extremely badly.

I shall finish with a couple of examples designed to illustrate how easy it is, even for well-intentioned employers, particularly where they have a range of demands and external pressures on their organisation, to quite inadvertently treat an employee unfairly. In both cases, the summary I am about to outline, became apparent both to my employer client and to me during a compulsory conference.

In the first case, an employer had terminated a middle management employee for unco-operative behaviour involving failure to disseminate information, withdrawal and lack of communication. The circumstances suggested that this employee had become very insecure. At the conference, the employee produced a newspaper advertisement, which had been placed by the employer and which the employee quite reasonably, though in fact incorrectly, believed was his job being advertised in a slightly modified form. A very sad set of events have flowed from the simple failure to communicate.

In the second case, another middle manager had been dismissed for performance failure. What became apparent at the conference, as the events were outlined from the employee's perspective, was that the employee had been recruited (as was clear from the advertisements and the correspondence) to a position using  a professional skill. Over time and after modifications which had a substantial cumulative effect, this employee's position had been changed to do something entirely different. It was then much more of a managerial role, involving quite different skills.  It was clear, there had never been, until that moment, a clear appreciation of how dramatic the cumulative effect of these changes were. It was also clear that the employee's failures arose from the position (nominally unchanged) now requiring entirely different skills.

Part B: Setting the Context - Taking action - Common Mistakes

Speaker: Bruce Tait, Solicitor, Macrossans Lawyers

"If a master gives correction to his servant,

 it ought to be with a proper instrument, as a cudgel, etc. 

And then if by accident a blow give death,

this would be but manslaughter

R v Keite

 (1697)

1

Employee rights have certainly come a long way since 1697!

Compare the approach of the judge in Keite to that of modern-day Commissions and Tribunals. In recent decisions those bodies have found:

• an employee was unfairly dismissed for sleeping at work despite having been cautioned about it previously and giving an undertaking that he wouldn't do it again;

• 4 employees were unfairly dismissed for breaching a policy prohibiting drinking alcohol at lunchtime - even though they were well aware of the policy;

• a service station operator was ordered to pay a male attendant nearly $17,000 after dismissing him for refusing to remove his earring at work

In each of those decisions the tribunal or commission had good reasons for coming to the decision it did and those decisions provide good examples of some of the pitfalls for employers in disciplining and dismissing employees. Those cases are discussed in further detail below.

This paper will examine the most common discharge mistakes made by employers. In doing so, it will discuss:

• applications for Reinstatement made to the Industrial Relations Commission (more commonly known as 'unfair dismissal' claims); and

• applications to the Anti-Discrimination Tribunal alleging that a person's dismissal was based on discriminatory grounds.

Unfair Dismissal

The most common mistakes made in dismissing an employee are often quite basic mistakes. For this reason it is worth reviewing the law on unfair dismissal claims.

This paper will focus on the laws applying to a claim brought in the Queensland Industrial Relations Commission. The Federal laws are very similar. There are, however, some differences which may be relevant in an individual case.

1

 (1697)

1 Ld Raym 138 at 144; 91 ER 989 at 992

When will a dismissal be found to be unfair?

A dismissal is unfair if it is:

(a) harsh, unjust or unreasonable; or

(b) for an invalid reason.

What makes a dismissal 'harsh, unjust or unreasonable'?

In deciding whether a dismissal was harsh, unjust or unreasonable, the commission

must consider the following points:

� whether the employee was notified of the reason for dismissal;

� whether the dismissal related to the operational requirements of the employer's

undertaking, establishment or service;

� whether the dismissal related to the employee's conduct, capacity or

performance and, if it did:

(i) whether the employee had been warned about the conduct, capacity or performance; or

(ii) whether the employee was given an opportunity to respond to any

allegation about the conduct, capacity or performance; and � any other matters the commission considers relevant.

When is a dismissal for an invalid reason?

Invalid reasons for dismissing an employee include:

� temporary absence from work because of illness or injury;

� membership of an employee organisation or participation in the

organisation's activities;

� filing a complaint, or taking part in proceedings, against an employer;

� the employee or their spouse is pregnant or has applied to adopt a child;

� discrimination.

What orders can the Commission make?

If the commission is satisfied an employee was unfairly dismissed it may order the employer to reinstate the employee to the employee's former position. Where reinstatement is impracticable, it may order the employer to re-employ the employee in another position that that the commission considers suitable.

If, and only if, the commission considers reinstatement or re-employment would be impracticable, it may order the employer to pay the employee an amount of compensation decided by the commission.

Compensation is capped at the equivalent of 6 month's pay. The 6-month limit, however, is not reserved for the most ‘unfair' of dismissals. It is simply an arbitrary cap on the amount that may be awarded.

The commission may also order the employer pay the employee the remuneration lost, or likely to have been lost, because of the dismissal, after taking into account any employment benefits or wages received by the employee since the dismissal.

What about summary dismissals?

The Act provides that an employer may dismiss an employee only if the employee has either been given the period of notice required by the Act (see section 84) or has been paid compensation in lieu of that notice. If an employer dismisses an employee without

giving the required notice or paying the required compensation the employee may pursue that amount by lodging an unfair dismissal claim.

The only exception to this is if the employee engages in misconduct of a type that would make it unreasonable to require the employer to continue the employment during the notice period. The Queensland Act states that such misconduct would include, but is not limited to theft; assault; and fraud.

What about redundancies?

The Industrial Relations Act does not make any specific provision for the process of redundancy (other than the unfair dismissal provisions discussed above). The majority of awards and agreements, however, will contain provisions on redundancy. Typically employees whose positions are to be made redundant will be entitled to:

• discussions before termination regarding: � the reason for the proposed termination of employment; � measures to avoid or minimise the terminations; and � measures to mitigate the adverse effects of any terminations.

• time off during any notice period to seek alternative employment.

• severance pay based on the length of continuous service

A common mistake occurs when employers dismiss employees ostensibly on the grounds of redundancy rather than their unsatisfactory performance.  Our experience is that employers are far better off addressing the issue as it is.

Recent case examples

The guiding principle for the Industrial Relations Commission, when hearing an unfair dismissal claim, is to seek to ensure a "fair go all round" - that is, a fair go for employees and for employers. Typically, in making that assessment, Commissions will look in some considerable detail at the background to a dismissal and the process adopted in the dismissal.

CASE EXAMPLE 1: Caught napping on the job

On 30 May 2003 the decision in the case of R C Barclay and Nylex Corporation Pty Ltd was given by the Australian Industrial Relations Commission (AIRC). The applicant, Mr Raymond Charles Barclay, commenced employment with Nylex Corporation Pty Ltd (the respondent) on 7 October 1977.

For the last 20 years of his employment Mr Barclay held the position of Nightshift Supervisor, Injection Moulding Department at the respondent's plant at Hartnett Drive, Seaford. He was employed on permanent nightshift and worked from 11.00p.m. to 7.00a.m. Monday to Friday. He often used to work seven day weeks, especially during busy production periods.

As Nightshift Supervisor the applicant had responsibility with respect to the supervision of employees, the quality control of manufactured product, the maintenance of plant and the health and safety of employees.

On 16 July 2002 his employment was suspended and was subsequently terminated on 29 July 2002, essentially for sleeping while at work.  At the time his employment was terminated Mr Barclay was 60 years of age.

Mr Barclay subsequently filed an application for reinstatement in the AIRC arguing that his dismissal was harsh, unjust or unreasonable.

Extensive evidence was presented to the Commission on the background to the dismissal.

Meeting December 2001

In late December 2001 the Production Manager and Mr Barclay met and discussed issues related to sleeping at work. The essence of Mr Barclay's evidence in respect of this meeting was that the Production Manager said that if he slept on his break he should ensure that he didn't exceed his allocated break time.

Mr Barclay maintained that the Production Manager did not tell him that he was not allowed to sleep on his breaks, nor was he given any warning to that effect.  The Production Manager initially claimed that he had given Mr Barclay a verbal warning but later gave contradictory evidence.

Importantly, there was no written confirmation of any verbal warning on Mr Barclay's personnel file.

Meeting March 2002

In November 2001 a work colleague, Mr Steer, took some photographs of Mr Barclay, apparently sleeping at work.

Mr Barclay did not see Mr Steer taking the photographs but became aware of their existence. He lodged a complaint against Mr Steer in relation to the issue.  This led to an internal investigation under the Company's dispute resolution process.

As part of that process Mr Steer and Mr Barclay both signed a Complaint Handling System Agreement (referred to as the EEO Agreement). The EEO Agreement stated that the parties agreed to resolve the complaint, on the following basis:

"To resolve the complaint.

3.1 Simon Steer agrees/has been directed to do the following things:

Simon has been informed that cameras are not permitted on site, any further breach of this conduct will be dealt with the upmost (sic) severity.

3.2 Ray Barclay agrees/has been directed to do the following things:

Not to sleep at anytime during the shift he is responsible for running."

The Commission noted that paragraph 3.1 amounted to a warning but paragraph 3.2 was only an undertaking by Mr Barclay as to his future conduct. Mr Barclay did not regard it as a warning and neither did the Human Resources Manager.

Meeting April 2002

The Human Resources Manager gave evidence that he met again with Mr Barclay on 8 April 2002 and that, at that meeting, he stressed to Mr Barclay that, given his responsibilities as Night Shift Supervisor, any incidents of sleeping on the job were a serious breach of his employment contract.  He said he told Mr Barclay that if there

were any breaches of his undertaking the Company would have no choice but to terminate his employment.

In his evidence, Mr Barclay accepted that the HR Manager said that the meeting was to ensure he understood how serious the company was taking the issue. He did not concede, however, that he was given any warning.

The Commissioner concluded that Mr Barclay was not told that if he was found sleeping on the job again the company would have no choice but to terminate his employment.

The Commissioner noted Mr Barclay's termination letter made no reference to any previous warnings and that Mr Barclay's personnel file did not include one written warning, nor was there any record of him ever receiving a verbal warning.

Meeting July 2002

On 17 July 2002 the Operations Manager, the Human Resources Manager and another Human Resources officer met with Mr Barclay. At this meeting Mr Barclay denied having slept on a shift since the signing of the EEO Agreement.  In his evidence to the Commission, however, he accepted that this ‘wasn't strictly correct' and admitted he lied.

The Commission concluded that the allegation against Mr Barclay was raised with him and he was provided with an opportunity to respond to it.

The Operations Manager undertook to contact Mr Barclay the following week to discuss the findings of the further investigations the company was to conduct. In his evidence to the Commission, the Operations Manager conceded that he did not call Mr Barclay back to discuss the progress of the investigation. In fact, no-one from management spoke to Mr Barclay until a further meeting on 29 July 2002 at which his employment was terminated.

After considering the evidence, the Commissioner concluded that the decision to terminate Mr Barclay's employment was made prior to the meeting with Mr Barclay on 29 July 2002.

Findings of the Commission

A. Valid reason for termination

� There was a valid reason for the termination of Mr Barclay's employment ­specifically Mr Barclay slept at work despite undertaking to senior management that he would not do so. The Commission noted that Mr Barclay was the most senior employee on the nightshift and his responsibilities included the supervision of employees and their health and safety.

B. Employee Notified of Reason and Given Opportunity to Respond

� As the decision to terminate Mr Barclay's employment was made prior to the meeting on 29 July 2002, Mr Barclay was not notified of the reason for the termination of his employment prior to the decision to terminate.

� Allegations against Mr Barclay were raised with him at the meeting on 17 July 2002 and he was provided with an opportunity to respond to those issues at that time. Mr Barclay was, however, never given any particulars of the allegations against him and the Operations Manager failed to contact Mr Barclay in the week following the meeting on 17 July 2002, as he had promised he would. The Commission found that Mr Barclay was provided with only a limited opportunity to respond to the reason for his termination.

C. Warnings

� Mr Barclay was not warned that if he slept at work his employment would be at risk - the EEO Agreement contained no warning and Mr Barclay's personnel file had no record of any warnings.

� The respondent's policy in respect of warnings was not clearly communicated to employees. A number of employees gave evidence they believed the respondent's general practice was to provide an escalated series of warnings prior to terminating an employee's employment.

� New management was attempting to take a tougher stand on Mr Barclay's sleeping at work. Evidence was given by Mr Barclay's supervisor of 20 years that under the previous management Mr Barclay would most likely have received a first warning rather than being dismissed. 

� The Commission concluded that in the circumstances it would have been more appropriate to provide Mr Barclay with a final warning, rather than terminating his employment.

D. Other matters

� Mr Barclay was a dedicated employee with 25 years' service. � Mr Barclay was financially devastated by the termination of his employment, his health suffered and he was prescribed anti-depressant medication. � Mr Barclay was 60 years of age at the time the decision to terminate his employment was taken.

Conclusions of the Commission

� There was a valid reason for the termination of Mr Barclay's employment; � Mr Barclay was not notified of the reason for the termination of his employment before a decision was taken to terminate his employment;

� Mr Barclay was provided with a limited opportunity to respond to the reason for the termination of his employment, before a decision was taken to terminate his employment; and

� The termination of Mr Barclay's employment was harsh - having regard to all of the circumstances, his conduct warranted a final warning.

Order made

The Commission found that, in light of the breakdown of trust and confidence between the company and Mr Barclay, an order for reinstatement was not appropriate.

Mr Barclay's failure to acknowledge that there was any problem with his conduct led the Commission to conclude that had his employment not been terminated at the

meeting on 29 July 2002, he would have eventually returned to his past pattern of behaviour and resumed sleeping at work and that, but for his termination, Mr Barclay's employment would only have continued for another eight weeks.

Thus, the employer was ordered to pay the equivalent of 8 weeks' pay plus superannuation as 'lost remuneration' to Mr Barclay.

CASE EXAMPLE 2: A "copybook dismissal" but......

A case where the employer had a valid reason to dismiss and went to great lengths to ensure the employees received natural justice before being dismissed was Agnew & Others v Nationwide News Ltd.  This case was decided by the AIRC in February 2003 and involved four employees dismissed for having consumed alcohol during their lunchbreak.

The company had a written policy prohibiting the consumption of alcohol on lunchbreaks. The policy provided that it was to be strictly adhered to and a breach of it "might result, or may result", in termination of employment (emphasis added). The policy was developed by 31 May 2002 and soon after communicated to all employees. The four respondents were among the employees informed of the policy in early June 2002.

The Commissioner found that the adoption of such a policy which included termination of employment if breached (particularly in circumstances where employees operated heavy machinery and forklifts) was reasonable.

He said that in the circumstances each of the dismissals was for a valid reason.  The Commissioner considered whether the dismissals were harsh, unjust or unreasonable.

The Commissioner found the process adopted by the company leading to the

terminations of employment was "copybook material" He noted:

� the employees were treated with civility;

� they had an overnight to consider their situation;

� they were presented with the company's side of things;

� they were allowed to have their union participate and assist them; and

� they were invited to provide their responses to the company.

After finding a valid reason to dismiss and finding that the employees had been afforded natural justice, the Commissioner went on to consider several other matters.

First he noted that in most previous instances of an infringement of the policy, warnings had been given. On only one occasion had an infringement of the policy led to dismissal and that employee had been consuming alcohol during working hours when he was on a final warning.

Next the Commissioner referred to evidence relied upon by the employees about persons who had been accused of drinking and infringing the policy but had been counselled or disciplined rather than had their employment terminated.

Three of the dismissed employees gave evidence that they did not think that if they infringed the policy their employment would be terminated. They thought they would be given a final warning or some lesser sanction than dismissal.

Finally, the Commissioner noted that each of the respondents had substantial periods of service with the appellant.

Balancing these considerations, the Commissioner concluded that while the company had a valid reason to dismiss each respondent and did so by a process which was fair, the termination was "nonetheless harsh for each of the employees in the context of their substantial years of service with no previous warnings in regard to matters such as these, and where they may have expected that they will receive, at most, a penalty of a final warning". He found each of the terminations of employment was harsh.

The Commissioner made an order that the employees be reinstated to their previous positions and that their continuity of employment be maintained.

The Commissioner's decision was appealed to a full bench of the AIRC.  The appeal was dismissed.

Implication for employers

Checklist for dismissal - unfair dismissals

� Ensure there is a valid reason for the dismissal;

� Exercise particular caution for long standing employees with good

employment records

� If appropriate, conduct a comprehensive and impartial investigation;

� Provide employees with sufficient details of any allegations against them

and set out why termination of their employment is being considered;

� Allow employees sufficient time to respond to any allegations against them

- make clear to the employee that no final decision has been made or will be made until their response has been received and considered;

� Ensure that dismissal is the appropriate and justifiable disciplinary action to

take (for example, consider the nature of the conduct and any previous

warnings given to the employee);

� If a warning is appropriate ensure that warning is clear � If dismissal is appropriate, determine whether summary dismissal is justified or whether the employee is entitled to notice of termination; � Ensure the requirements of any applicable award or agreement have been met; � Have an observer attend the termination interview and invite the employee to bring along an observer; � Treat the employee with dignity and respect.

Discrimination

The number of unfair dismissal claims being lodged seems to be gradually decreasing. By contrast, the number of claims relating to alleged discrimination in employment has been steadily but consistently increasing.

While many employers are familiar with the unfair dismissal rules, there is not the same level of awareness of discrimination principles - particularly as the scope of the Ant-Discrimination Act (Q) has been recently extended.

This paper will focus on the laws applying to complaints of discrimination made at the State level. The Federal laws are very similar. There are, however, some differences which may be relevant in an individual case.

What is "discrimination"?

Queensland's Anti-Discrimination Act prohibits two types of discrimination:

(a) direct discrimination; and

(b) indirect discrimination.

What is direct discrimination?

Direct discrimination happens if a person treats, or proposes to treat, a person with a particular attribute less favourably than another person without that attribute.  It is not necessary that the person who discriminates considers that treatment is less favourable. The person's motive for discriminating is irrelevant.

What is indirect discrimination?

Indirect discrimination happens if a person imposes, or proposes to impose, a term -

(a) with which a person with a particular attribute does not or is not able to comply; and

(b) with which a higher proportion of people without that attribute comply or are able to comply; and

(c) that is not reasonable.

Many employers fail to consider issues of indirect discrimination.

Discrimination must be based on an "attribute"

To breach the Act the discrimination must be on the basis of one of the attributes listed in the Act. These include attributes such as sex; pregnancy; parental status; age; and race.

Can I discriminate at work?

The general position is "no, you can't discriminate at work". The Act specifically prohibits discrimination in the ‘work' area and the ‘pre-work' (e.g. recruitment) area.  This is, however, subject to a number of exemptions.

Are there situations in which discrimination is allowed?

Yes, there are. The Act provides certain exemptions under which treatment that would otherwise be unlawful will be permitted.  The most common of those exemptions in the work area is that of "Genuine occupational requirements" -that is, a person may impose genuine occupational requirements for a position.

For example, considering only women applicants for a position involving body searches of women.

Recent Case Example

In June of 2003 the Equal Opportunity Division of the New South Wales Administrative Decisions Tribunal handed down its decision in the case of Lupevo Pty Ltd & Ors v Bree.  In that case a service station operator was ordered to pay a male console

operator nearly $17,000 as compensation for sexual discrimination after he was dismissed for refusing to remove an earring.

The console operator, Mr Bree, alleged the operator and manager of the service station directed him not to wear the earring.

The Tribunal noted that: � the earring was a small stud style earring; � that it was a form of adornment which is not uncommon to be worn by male

persons in the modern day community; and � the earring would not constitute a safety hazard and would not physically interfere with the proper discharge of the duties of Mr Bree.

On 11 October 1996, the service station operator handed Mr Bree a letter drawing his attention to a particular item in his job description that referred to "no earrings/studs". Evidence was given to the Tribunal that female staff members and the female co-owner of the service station wore earrings at the workplace.

On the 17th of October 1996 Mr Bree said the owner handed him a further letter, the formal parts of which read:

Your continued wearing of a "Stud" in your ear is in breach of the company policy and grooming standards explained to you by two members of management on 09/08/96 and provided to you in writing on 11/10/96. I therefore ask you to ensure you comply with all standards immediately. Failure by you to comply (without proper reason) may be regarded as insubordination and may result in termination of your employment."

A discussion followed on 21 October 1996 between Mr Bree and the owner, the result of which was that Mr Bree was dismissed.

At the hearing, the respondents argued that Mr Bree was dismissed at the end of a trial period of employment or, alternatively, he was dismissed because he had breached his duties as a console operator.  They said he had:

� given free cups of coffee to Police and local SES personnel, without authority. � repeatedly left his console position unattended. � failed to account for short-falls of money in his till. � failed to report at least two `drive-offs' which occurred during his shifts. � been guilty of gross insubordination to his employer.

Mr Bree denied these allegations. Importantly, none of these items appeared in the warning letters given to Mr Bree.

The Tribunal said the subsequent dismissal of the Applicant three days after the last warning letter and ten days after the first warning letter, led to an inevitable conclusion that one, if not the dominant reason for the Respondent dismissing the Applicant was the Applicant's persistence in wearing the earring.  While the letters of 11 October and 17 October 1996 contained references to other aspects of Mr Bree's conduct, none of those items related to items which in evidence to the Tribunal were emphasised as the reasons for Mr Bree's dismissal.

The Tribunal found the dismissal to be directly discriminatory as female attendants were able to wear earrings while working at the service station - in other words, Mr Bree was treated less favourably than if he had been a female employee.

The Tribunal made an award to Mr Bree for loss of earnings for a period of 6 months (the period it took him to find another position). This amounted to $11,956.00. In addition, the Tribunal made an award of $5,000.00 for the hurt and humiliation suffered by Mr Bree as a result of the respondents' discrimination.  Finally, the Tribunal also ordered the respondents to pay Mr Bree's costs and expenses incurred in making and pursuing his complaint.

The operator appealed the decision but was unsuccessful and was also ordered to pay Mr Bree's costs of the appeal.

Reflections on the case

From a discrimination point of view this case was a relatively straight-forward example of an employer dismissing a worker for reasons which included a discriminatory reason. From the point of view of common discharge mistakes, however, this case is a good example of how an employer may have missed an opportunity to lawfully dismiss an employee by focussing on the wrong issues. This occurs frequently in practice.

According to the employer's submissions to the Tribunal, there were clear performance issues with Mr Bree. In retrospect, the employer would have been far better served to have ignored the wearing of the earring and to have concentrated on those performance issues which, it seems likely, would have led to a situation in which the employee could have been lawfully dismissed.

Another common mistake made by the employer in this case, was a failure to ensure their Manager/Supervisor was alert to possible issues of discrimination. Employers should aim to create a non-discriminatory culture in their workplace.  Managers and Supervisors should be trained in these issues so that they know when to seek further advice.

Implications for employers

Checklist for dismissal - discrimination:

� Assess whether the Ant-Discrimination Act may apply � Ensure there is a valid, non-discriminatory reason for the dismissal; � If the dismissal is due to a number of reasons, ensure that no discriminatory

reasons are a ‘substantial reason' for the dismissal (there may be more than one substantial reason); � If a discriminatory reason is a substantial reason for the dismissal, check if one of the exemptions applies (for example, genuine occupational requirements); � Consider whether there are alternative means to accom modate the affected employee (and document the process);

� Always look at the specific circumstances of an employee (for example, consider carefully the precise impairment of an employee and how that impacts on their ability to perform the duties of the position - this may require obtaining specific medical evidence - eg. do not simply assume that a blind person can not perform the duties of a receptionist or a manager);

� Document the process; � Make your decision.