An employee was recently found to have been unfairly dismissed once his employer discovered he performed work for a client during a period of annual leave.

Mr Jim Bril told his employer, Rex Australia Limited t/a K&K Glass (K&K Glass), he required annual leave for the purpose of registering his car. During the annual leave, K&K Glass’ General Manager discovered Mr Bril performing work for a client.  The General Manager was disappointed by this, feeling that Mr Bril had been dishonest when providing reasons for seeking annual leave. Mr Bril, however, maintained that he had been truthful and that the client offered him work after he commenced annual leave.

On his return from annual leave, Mr Bril’s employment was terminated. The main question in this case was whether Mr Bril resigned or whether, by K&K Glass’ conduct, he felt he had no choice but to do so. The Fair Work Commission (FWC) found that K&K Glass “dismissed” Mr Bril, by giving him the choice of resigning or being dismissed, after seeing him working for the client.

When determining whether the dismissal was unfair, the FWC considered whether there was a valid reason for the dismissal. There was no conflict of interest as there was no evidence that the work performed for the client was work which might otherwise have been done by K&K Glass. Further, as noted by the FWC, “undertaking secondary employment which does not encroach on the primary employer’s field of business does not contravene the implied contractual term of fidelity and good faith. Nor does the implied term impose any duty upon the employee to disclose secondary employment of this nature”.

But what about K&K Glass’ concern that Mr Bril was dishonest about his reasons for taking annual leave?  It was unclear whether Mr Bril had actually been dishonest. Even so, the FWC said Mr Bril “was under no requirement to disclose the reason, or the true reason, why he was taking annual leave or the activities he intended to undertake while on annual leave”.

Lessons learned: in the absence of a real or perceived conflict of interest to an employer’s business, undertaking secondary employment itself is unlikely to be a valid reason for dismissal. Therefore, employers should clearly articulate their expectations around disclosure of, and taking up, secondary employment in employment contracts as implied terms offer limited protection.