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Fair Work Commission (“FWC”) upholds the requirement that CEOs must have trust and confidence in senior staff

On 20 July 2018, the FWC, in the case of Belinda Ayres v Kingston City Council, [2018] FWC 4291, has upheld the proposition that the Manager of People & Culture is required to have a relationship with the Chief Executive Officer (and other senior staff) that is based on trust and confidentiality, given their dealings with and access to sensitive and confidential information concerning the staff within the organisation.

The FWC found that Ms Ayres had acted in a manner inconsistent with these expectations and was satisfied that the allegations that provided the basis for her termination were substantiated.

The termination of employment was held to be based upon a valid reason and the Council had given Ms Ayres every opportunity to respond to the allegations over an extended period of time.

The Facts:

The Council’s Manager, People and Culture, Ms Ayres was suspended on pay on 8 June 2017 pending an investigation into a range of matters.

The following day, Ms Ayres’ lawyers wrote a 17 page letter to the Council and lodged a complaint with the FWC alleging workplace bullying and adverse treatment by senior management.  This letter and its contents contributed to Ms Ayres’ downfall in the FWC as it revealed she had been collecting a dossier against the Council for use in the future.

A wide range of allegations were made in writing against Ms Ayres on 4 July 2017, including that she had undermined Council’s trust and confidence in her as its People and Culture Manager, by:

  • openly and repeatedly disparaging Council and Council management to other Council employees, in the workplace;
  • openly and repeatedly informing other Council employees in the workplace that she was actively seeking opportunities to receive a financial payment from Council, if her employment with Council ended; and
  • engaging in conduct outside of her authority by telling, a now former employee, Mr McMahon, that his position was redundant and his employment would be terminated, without cause or approval.

Further allegations included that Ms Ayres had engaged in conduct contrary to the interests of Council by:

  • supporting a former employee of Council in relation to his claim against Council, while she was directly involved in representing Council’s interests in relation to the claim;
  • encouraging an employee to make a false bullying claim against another employee; and
  • repeatedly asking a colleague to contact a friend at WorkSafe, to encourage that friend to initiate legal proceedings by WorkSafe against Council.

During the period 4 July to 20 December 2017 there was significant activity between the parties, including two FWC conferences to seek to resolve the complaint that Ms Ayres’ lawyers lodged with the FWC about workplace bullying and adverse treatment.

However, Ms Ayres’s employment was terminated on 20 December 2017 and she commenced Unfair Dismissal Proceedings shortly after.

In the Unfair Dismissal proceedings, Ms Ayres submitted that her dismissal was unfair because the misconduct did not occur.  She denied the allegations.  She also claimed she was not afforded procedural fairness in the processes gone through in terminating her employment.

The Council denied that Ms Ayres was unfairly dismissed, and her employment was terminated after she contravened its Code of Conduct by:

(a)       failing to act in a professional and ethical manner that fostered the trust, confidence and goodwill of her colleagues;

(b)       failing to act in the best interests of the Respondent; and

(c)        failing to be honest in her dealings with the Respondent.

In the FWC’s opinion, the 17 page letter to the Council provided the day after she was suspended, provided evidence of a concerted campaign that was clearly in prospect over an extended period of time in which Ms Ayres was looking for opportunities to build her case rather than acting in the best interest of the Council.  The FWC was satisfied that this action was entirely inappropriate given her responsibilities as a senior manager within the organisation.  It was also satisfied that the content of the letter, and what it says about Ms Ayres’ motivation, called into question the credibility of much of her evidence.

The message for employers

With the information that falls regularly from the Hayne Royal Commission, the issue of workplace culture and the need to manage it correctly has become very topical.

CEOs have the right to expect that their senior managers (especially those in human resources and dealing with the organisation’s culture) will exhibit appropriate levels of trust and confidentiality, given their dealings with and access to sensitive and confidential information concerning staff.

When that trust and confidentiality is damaged CEOs have the right to take action, provided there is sufficient evidence to justify doing so.