February 2012 – Update

Trust and honesty is an essential element of the employment relationship

The tribunals are increasingly finding that trust and honesty in the employment relationship is critical. When Mr Green lost his driver’s licence for drink driving he told his employer, NAISDA Dance College, that the loss of licence was for speeding. The employer initially allowed the employee to take leave and provided alternate duties however when the truth was discovered, the employee was terminated. Fair Work Australia found that the employer had lost trust in the applicant and that was a valid reason for dismissal. Whilst the employer did not meet all procedural requirements, the tribunal was sympathetic considering the employer’s size. ([2011] FWA 8372)

Fair Work Australia was also lenient with Moore Park Bowls and Sports Club when they showed procedural deficiencies in terminating their club manager, Mr Carlon-Wilde, for inadequate management actions which breached the trust and confidence between the employer and employee. ([2011] FWA 8612)

Likewise, Ms Hazelle’s unfair dismissal application was dismissed when Fair Work Australia found that it was reasonable for Meridian Hotels to terminate the employment relationship after she failed to report missing monies in a timely fashion, even though evidences suggests it was a security guard who actually stole the money. ([2011] FWA 7969)

However getting the evidence documented is critical, as Fair Work Australia tells us in the recent decision of Xu v DesignInc (Sydney) Pty Ltd. In this case, the employer suspected the employee of providing confidential company information to a former employee and terminated the employment relationship on the basis that the loyalty was lost. In hearing this matter, the member found that the applicant was honest in disclosing the nature of dealings with the former employee and was less impressed with the company’s witnesses. The termination was found to be harsh, unjust and unreasonable and on that basis DesignInc was ordered to pay Mr Xu compensation of $50,000. ([2011] FWA 8037)


Contact Nicole or John at Industrial Relations Law for more information on this or any other employment matter.