SMEs are being warned to keep diligent notes and employment policy documents after the Fair Work Commission (FWC) ordered a Port Macquarie insurance broking business to pay an employee $10,000 in compensation after it dismissed him and claimed he was storing hardcore pornography on a work computer.
The employee was dismissed in January from Smarter Insurance Brokers for unsatisfactory performance in his role. The business used a termination clause in the staff member’s contract to end the employment arrangement and paid out four weeks’ wage in lieu of notice.
Management at Smarter Insurance Brokers told the Commission they gave the worker a number of verbal warnings about his performance in the months leading up to the dismissal, but nothing was put in writing and the employee said he had no recollection of concerns being raised.
After the termination of the employment, the employer subsequently raised claims that the staff member had downloaded and stored pornographic material on a work computer, which was discovered from mobile phone records and internet browsing history.
The employee did not contest that he had used work equipment to download and store pornography, although he did say he downloaded it during work breaks, and while the Commission indicated this could potentially be a valid reason for dismissal, on balance it found that “in the particular circumstances of this case, the subsequently discovered misconduct involving the accessing, downloading and storage of pornographic material could not be properly held to represent valid reason for the dismissal”.
Commissioner Ian Cambridge pointed out the business did not have a particular policy in place that stated employees should be using work equipment solely for work-related activities. The decision also suggested there was contested evidence over whether some of the directors of the employer had also participated in downloading pornographic material in the workplace, and that the staff member only downloaded the illicit material three times.
The Commission ruled the business had incorrectly believed that giving four weeks’ pay to the worker relieved it of the responsibility to provide proper procedure for the dismissal and give reasons substantive enough to justify an immediate end to the employment agreement.
As a result, the business was ordered to pay the worker $10,000 as a remedy to cover eight weeks remuneration.
Employment lawyer Peter Vitale told SmartCompany he believes the Commission got the decision wrong in this case, but says the ruling does drive home that businesses should be careful when relying on the strict letter of a contract, as contracts can be used as the basis for an unfair dismissal case.
“Reading between the lines, the commission seems to have determined that the company’s significant failures in terms of procedural fairness warranted a specific sanction,” he says.
“It seems to me that the absence of a policy was really was conflated with the procedural deficiencies.”
Smarter Insurance Brokers told SmartCompany that while it does not agree with the Commission’s decision, it has to accept the commissioner’s verdict.
“While we accept the decision, and we stand by the decision to let him go,” says Smarter Insurance director Lee Riske, “we lost on a technicality”.
Riske says the business understands the lesson from this case is that all small businesses need to follow process explicitly – and it is taking steps to review its HR practices.
“We’re already bringing in a HR consultant to redo our employment contracts,” Riske says.
The company will also be reviewing its decision “not to have a specific pornography policy in place”.
Vitale says that the decision to compel Smarter Insurance Brokers to pay compensation was based on correct procedure, which can extend to all parts of a business.
“It does demonstrate that implementing policies around the use of computers and indeed around a whole range of conduct are important basic steps,” he says.
SmartCompany attempted to contact the dismissed staff member but did not receive a response prior to publication.
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