Claimant ordered to pay $150,000 to employer: how a well-documented employee code of conduct can minimise business risks

In a Federal Circuit Court ruling in March this year, having a well-documented code of conduct clearly worked in favour of a company who was subject to an alleged discrimination claim. A dismissed software engineer had to pay her employer’s litigation costs of $150,000 after she failed to convince the Court that she had been unfairly dismissed and treated differently due to her gender and status as a young mother.

The order to pay came after her rejection of the employer’s offer for both parties to meet their own costs if she withdrew the action. The software engineer alleged that she had been working more than her pre-determined 20 hours per week and that there was a pay inequity between her and a fellow male colleague, her ex-spouse. The employer held that they had informed her not to work longer hours and that the difference in pay was purely based upon the difference of skill and experience between her and the colleague.

The judge noted that her failure to put her complaints in writing was itself a breach of her employer’s code of conduct, which identified the responsibility of employees to know and follow the guidelines, including reporting potential violations, in order to uphold a workplace free from discrimination and harassment.

Ultimately, the judge found it significant that in the software engineer’s own evidence, she agreed that her work performance “would have justified her dismissal” by the employer – a striking statement in relation to the claims that she sought to advance.

According to the judge, “The code had ‘contractual effect’ and while the failure was ‘in no way determinative’ of whether a breach of the Sex Discrimination Act had occurred, it was a ‘further factor’ of concern regarding her evidence.” The court was satisfied that the employer had not breached the Act, and on the contrary displayed a level of care and concern in their dealings with the software engineer who fabricated evidence to advance her case against the company.

Setting clear and specific behavioural standards, which aren’t loosely defined or open to individual interpretation, is critical to establishing a framework for identifying and tackling a breach of such standards. Having well-documented policies and procedures in place is tangible proof that your organisation has taken reasonable steps to minimise business risks and unlawful practices or inappropriate behaviour.

Policy and procedure-driven conventions can improve how your employees interact, and minimise financial and litigation risk as a result of a breach of conduct in the workplace. While a policy formally documents a principle or rule that all employees are expected to follow, procedures are the “how to”, serving as step-by-step instructions for carrying out the policy. Devoting the time and resources to develop sound HR policies and procedures for your business — before the need arises — is clearly an investment that can pay large dividends in higher productivity and reduced risk of potential litigation. Moreover, it is a fundamental building block of your comprehensive people strategy.

iHR Australia can assist with the design and development of individual policies, procedures and handbooks to meet the specific needs and requirements of your organisation. In particular, iHR can provide well-documented HR policies and procedures that will comprehensively cover such key areas as equal employment opportunity, anti- bullying and harassment and more, in addition to tailoring manuals for different groups or levels of staff.


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