Bowen Buchbinder Vilensky

Archive for May, 2015

Why Companies Must Follow Their Own Policies in Handling Workplace Complaints
Wednesday, May 6th, 2015

By Les Buchbinder, Director at Bowen Buchbinder Vilensky Lawyers

6 May 2015

In December 2014, the Federal Court of Australia handed down a decision (Romero v Farstad Shipping (Indian Pacific) Pty Ltd (2014) FCAFC 177) which has important implications for the way that companies handle staff complaints.

The starting point in this particular case was that an employee of Farstad Shipping, who was second Officer of a supply ship, fell out with the Captain during a 12 day voyage in 2011.  After disembarking, she sent an email to Farstad outlining  concerns about the way that she had been treated.  Farstad had several workplace policies including those concerning workplace harassment and discrimination, and documented procedures about how such complaints were to be handled.  While the employee’s email was not intended as a formal complaint, Farstad treated it as such.

At the same time, the ship’s Captain complained to Farstad about the employee’s competence and temperament (later shown to be unfounded).  The company no longer treated the employee’s email as private and the dispute quickly escalated so that Farstad found itself investigating both the employee’s concerns, as well as the Captain’s claims of incompetence.

Worried that Farstad seemed to be giving far more weight to the Captain’s allegations than her own, the employee lodged a complaint with the Australian Human Right’s Commission.  When no resolution was achieved, she took the matter to the Federal Court of Australia.

Initially, this claim failed.  The primary Judge rejected a claim of sex discrimination.  Importantly, he held that Farstad’s workplace policy did not constitute part of her contract of employment and, in any event, Farstad had not departed sufficiently from its own policy enough to have breached it.

The employee took this decision further on appeal, where the primary Judge’s decision was found to be wrong.  The Appeal Court concluded that the Policy did in fact form part of the employee’s contract of employment; that Farstad had not complied with its own Policy; and that the contract of employment had been breached by Farstad.  The employee was therefore entitled to relief, including damages.

This decision by the Federal Court of Australia highlights a number of important matters, but in particular

  1. Where an investigation into a complaint made by an employee is undertaken it must be undertaken in accordance with existing formal policies of the company and must be undertaken in a proper and thorough manner and be properly documented in compliance with the policies in accordance with the Rules of Natural Justice; and
  2. Where a company does have in place a formal Policy in relation to the making of complaints by one employee against another and that Policy is not followed or adhered to by the employer then a breach of the Policy by the employer may constitute a breach of the employment contract, thus giving rise to the employee having any entitlement to compensation or other relief.
  3. Where there is more than one complaint being investigated, then it is essential to treat those investigations separately.

As awareness of harassment and discrimination cases continues to rise, companies also need to be highly vigilant in the way they manage employee complaints.  While this article outlines a few of the general principles, legal advice for specific cases is always advised.  Should you wish to discuss such a case, please contact Les Buchbinder on 08 9325 9644.

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