Does your business have workplace policies?

Yes.

Great! When was the last time you reviewed them, updated them and reminded your staff of their existence?

Ummm…

Having sufficient workplace policies and implementing them appropriately can assist employers to regulate employee conduct by outlining the expected standard of behaviour. In addition, they can also:

  1. provide a basis for termination of employment where employee conduct is inconsistent with their terms; and
  2. protect against claims for vicarious liability, such as in cases of bulling, harassment and discrimination where it can be argued that the employer is liable for the acts or omissions of its employees.

But it’s not just a case of “set and forget” as the following recent cases identify.

Relying on a policy to validly terminate an employee

In Joy Lawrence v Calvary Home Care Services Ltd T/A Calvary Community Care [2016] FWC 175, Ms Joy Lawrence was terminated from her employment with Calvary Community Care (Calvary). Ms Lawrence had worked for Calvary for 14 years before her employment as a support worker was terminated for a range of reasons, including for breaching a workplace policy in relation to accepting private work for patients of Calvary.

Ms Lawrence brought an unfair dismissal claim arguing that:

  • she did the private work, including by way of her doing extra shifts for Calvary’s clients outside her normal work hours, because she felt that she owed the clients a duty of care; and
  • Calvary put too much emphasis on its policies and procedures.

The policy relied upon by Calvary in terminating Ms Lawrence’s employment set out the standard of conduct expected of support workers and procedures to be followed. The policy was provided to employees, who received regular and ongoing training about them.

In considering whether the breach of the workplace policy constituted a valid reason for termination, the Tribunal considered the following passage from the case of Woolworths Limited (t/as Safeway) v Cameron Brown PR963023 (26 September 2005):

“A failure to comply with a direction to do or refrain from doing something in compliance with an employer’s policy will not provide a valid reason for termination of employment where:

  • the policy, or a direction to comply with the policy, is illegal;
  • the policy does not relate to the subject matter of the employment or matters affecting the work of the employee; or
  • (sic) the policy, or a direction to comply with the policy, is unreasonable.”

The Tribunal also considered the case of Kolodjashnij v Lion Nathan T/A Boag and Son Brewing Pty Ltd [2009] AIRC 893, where it was said:

“Not every breach of a policy will provide a valid reason for termination of employment. However in circumstances where the policy is both lawful and reasonable and an employer has stressed the importance of the particular policy to the business and made it clear to employees that any breach is likely to result in termination of employment, then an employee who knowingly breaches that policy will have difficulty making out an argument that there is no valid reason for the termination.”

It was held that Calvary had valid reasons for the existence of the relevant policy and it should, therefore, be followed. Importantly, the fact that Ms Lawrence’s dealings with clients when they requested further care may consist of private work (the substance of the breach) was discussed and acknowledged by Ms Lawrence in an annual performance review. The breach of the policy, along with Ms Lawrence’s refusal to attend a meeting with Calvary, were held to be valid reasons for Ms Lawrence’s dismissal.

Relying on a policy to defend a claim of vicarious liability

In the recent case of Newchurch v Centreprise Resource Group Pty Ltd, Mr Graham Ride and Ms Sarah Ride [2016] NTADDComm 1 (5 January 2016), Ms Newchurch claimed that she was discriminated against by Mr Ride, the Managing Director of Centreprise, due to her Aboriginal heritage. Ms Newchurch alleged that Mr Ride made derogatory comments about her and her fellow indigenous employees and discriminated and differentiated them due to their race.

For Centreprise Resource Group Pty Ltd (Centreprise) to avoid being vicariously liable for Mr Ride’s conduct, it needed to show that it took ‘all reasonable steps” to avoid discrimination from occurring in the business. The Tribunal, therefore, considered “its provision of anti-discrimination training, its development and implementation of an equal opportunity management plan, its publication of an anti-discrimination policy, its financial circumstance, and the number of its workers and agents”.

Centreprise argued that it had policies in place to avoid discrimination, however the tribunal held that “the mere existence of policies is insufficient”. This was based on the Queensland Anti-Discrimination Tribunals’ decision in Hopper v Mount Isa Mines Ltd and others [1997] QADT 3, where it was held that “the employer has a duty to ensure that its policies are communicated effectively to its executive officers, and that they accept the responsibility for promulgating the policies and for advising of the remedial action when breached”.

In addition, the tribunal referred to the Federal Court of Australia case of Richardson v Oracle Corporation Australia Pty Limited [2013] FCA 102, where the court considered what it meant for an employer to take ‘all reasonable steps’ to ensure that bullying/harassment does not occur. In that case, the training package did not state what types of discrimination are unlawful or identify the legal standard, nor did it state that the employer may be vicariously liable for such behaviour. It was held that these omissions from the policy meant that the employer had not taken all reasonable steps.

In the current matter, the tribunal noted that it had not heard any evidence from Centreprise about whether the policies had been communicated effectively to executive officers and whether those officers had taken responsibility for promoting and enforcing such policies. The tribunal also stated that it has not heard any evidence about the provision of anti-discrimination training, the publication of the policies or the implementation of an equal opportunity plan for the indigenous workers. It was held that “The reliance by Centreprise on its Policies and Procedures Manual and the terms of its contract of employment is inadequate to show that it took ‘all reasonable steps’ to prevent the discriminatory conduct”. Accordingly, it was held that Mr Ride discriminated against Mr Newchurch and Centreprise was vicariously liable for this discrimination, partly due to the lack of education and enforcement of its workplace policies to ensure that such discrimination should not occur.

Checklist for employers

The cases outlined above demonstrate the need for employers to ensure that their policies are appropriate and sufficiently implemented to provide valid grounds for terminating an employee and avoid being held vicariously liable for wrongful conduct by an employee.

In summary, employers must:

  • Clearly outline in its policies the conduct expected of employees, as well as conduct that is prohibited or unlawful.
  • Clearly identify to employees the consequences of breaching policies, making it clear that both the employee and the employer can be held liable for any unlawful conduct.
  • Regularly audit workplace policies to ensure they are kept up to date with relevant laws and other internal policies and procedures.
  • Publicize and ensure all employees have ready access to the policies.
  • Request all new employees to review and acknowledge their awareness and understanding of workplace policies.
  • Conduct regular training on appropriate workplace behaviour – be proactive, rather than reactive.
  • Act swiftly to investigate or otherwise deal with any inappropriate or unlawful behaviour in accordance with relevant procedures.