Inadequate Disciplinary Policies Risk to all Australian Organisations

The Fair Work Commission has called on employers to introduce a greater range of disciplinary options like fines and unpaid suspensions into agreements to avoid “inappropriately lenient or inappropriately harsh” responses to misconduct that are problematic for all parties concerned.

The Commissioner made his comments in finding that an oil and gas production technician was unfairly dismissed for using a derogatory term in describing a sexual encounter with an Aboriginal woman within earshot of indigenous co-workers while on a bus to a project site.

While the Commissioner found that the technician’s use of the word “gin” – a racial epithet referring to Aboriginal women – amounted to inappropriate workplace behaviour under the company’s discrimination policy, he said a number of factors led him to conclude the dismissal was harsh and unreasonable.

Such mitigating factors included the company’s Aboriginal employment manager who emailed the human resources manager stating the bus incident demonstrated the “seriously entrenched¬ racist attitude of certain individuals”, and who was criticised by the Commissioner for prejudging the issue.

In reaching his conclusion, the Commissioner also took into consideration that the second Aboriginal man who overheard the bus comments had told the company that “growing up in WA in his culture ‘gin’ is not necessarily derogatory” and that regard should have been had for the fact there was a range of opinion as to how rude or ¬offensive the term is.

The Commissioner said the difficulty with identifying appropriate disciplinary action is compounded by highly variable mitigating circumstances, including the seriousness of the misconduct and whether the misconduct is an isolated incident or a pattern of behaviour. Additionally the often limited range of disciplinary options available to employers only serves to increase the likelihood of action being inappropriately lenient such as a written warning or inappropriately harsh in the case of dismissal.

He said employers should consider other forms of disciplinary action, such as fines, unpaid suspensions or other financial penalties, which can be adjusted depending on the seriousness of the
misconduct and the particular circumstances. These options should be canvassed when negotiating enterprise agreements, he recommended.

The technician was working at a major LNG project in Western Australia until he was dismissed in October last year for serious misconduct after an indigenous colleague reported overhearing an “inappropriate” and “offensive” conversation between others at the back of a bus travelling from the accommodation centre.

The technician, who is on an annual¬ remuneration package of $193,000, admitted saying “gin” but maintained he thought it was derogatory only if it was said ¬directly to an Aboriginal woman. The technician said he had worked with indigenous people for years and they would use the word “gin” regularly. He was previously employed as an indigenous employm¬ent adviser and later by as an indigenous development adviser. He also told HR that he immediately apologised to his indigenous colleagues once he became aware that the term is always derogatory and that they were offended by the incident.

However, the company dismissed the technician for breaching its discrimination policy, paying him five weeks’ salary in lieu of notice.

While the Commissioner found the company had a valid reason for the sacking, he ruled the dismissal harsh and unreasonable and upheld the unfair dismissal claim, ordering the company to reinstate him.

In reinstating the technician the Commissioner judged the lost remuneration, as a result of the dismissal, as appropriate penalty for the technician’s failure of his obligation to ensure anything rude or offensive he said could not be overheard.

The Commissioner’s decision is a reminder that what may seem like an egregious breach of workplace policies should not necessarily result in the sanction of dismissal.

iHR Australia’s Director of Workplace Relations, Mr John Boardman said however that care needs to be taken that a financial penalty is not imposed unilaterally that might be considered a breach of contract, Award, Enterprise Agreement or the Fair Work Act. Employers could enter into an agreement to withhold an entitlement such as performance bonuses, by agreement as an alternative to termination in the form of a Deed of Agreement / Settlement.

Mr Boardman said employers need to be mindful that they cannot contract out of an Award or EA entitlement using a common law agreement. A way to facilitate sanctions more effectively would be to include specific remedies provision within the organisation’s EA.

iHR Australia’s Custodians of Culture Anti Discrimination and Bullying training provides Managers with and understanding of legal implications of not dealing with poor behaviour and the importance of well-developed policies and procedures around complaints and disciplinary action.