Ignoring allegations of inappropriate behaviour leads to costly litigation

When an employer is faced with allegations of inappropriate employee behaviour, it is important that the complaint is investigated thoroughly. Initiating an investigation in response to a complaint can accelerate the resolution process and ensures that all parties are heard by an impartial person and decisions are evidence-based. Putting up the shutters and ignoring the complaint will only lead to an embarrassing and costly legal action. A recent case before the Federal Circuit Court highlights the importance of an employer thoroughly investigating allegations of inappropriate employee behaviour.

The respondent held a store manager’s function on 28 April 2014, which the applicant attended. As a part of this, a dinner was arranged at a Melbourne restaurant, which was attended by the applicant and the managing director, amongst others. The applicant makes allegations about an incident that occurred at that dinner.

During the event, the store manager alleged that that she felt “extremely uncomfortable” during a conversation with her managing director after he brushed his leg against her and invited her to discuss future business plans away from head office. The manager claims she politely declined the “unwarranted and inappropriate behaviour” and made it clear to the managing director that his advances were unwelcome.

The following day, the manager reluctantly reported the store’s daily sales figures to the managing director, who told her, she alleged, “[t]hanks very much for that, now that you have ruined my night you ‘little slut’.” The manager advised that she informed her National Retail Manager of the inappropriate behaviour and explained to her manager that she would not be attending a work function that night as a consequence. According to the manager, the NRM advised, “I am very sorry to hear that. I am not entirely sure what has transpired – we shall discuss tomorrow…”

Allegedly, the NRM did not follow up the applicant’s complaint directly, nor did she advise her of the results of her inquiries.

On 26 May, after being absent from the workplace due to illness, the manager received a letter, delivered by courier, stating her six month contract had ended and would not be renewed. This reason given was her unsuitability for the position.

The manager claimed that the employer contravened section 340 of the Fair Work Act, dismissing the applicant and/or refusing to employ the applicant because she exercised the workplace right to make a complaint.

The Court found that the retailer took adverse action against the store manager when it refused to renew her job after she complained to the NRM about the alleged incident involving the managing director, breaching her workplace rights. Furthermore, the Court ruled that the store manager should be compensated for loss of income, but that there was insufficient evidence to determine whether her re-employment would have continued for a substantial period of time had it not been for the adverse action.

Such a time-consuming and costly legal dispute could have been avoided had the employer initiated a workplace investigation upon the manager’s allegation of misconduct. iHR Australia believes prevention is the best cure. When an employer is faced with an allegation of inappropriate behaviour, a workplace investigation carried out by an experienced workplace assessor is vital. Compared to litigation fees, the cost of a workplace investigation is minimal.

iHR is a leading provider of workplace investigation services to organisations that are dealing with allegations of allegedly inappropriate workplace behaviour. iHR provides a range of investigation services, from handling informal complaints to significant and complex investigations. iHR can also review internally conducted workplace investigations, offering advice or recommendations. This service can help ensure internal workplace investigations are sound and will stand up to external testing.