17 March 2015: Workplace Relations Update for Executives On-the-Go

Failed drug test justified employer’s treatment of employee

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In this edition:

  • a lesson on how to enforce a zero-tolerance drugs policy;
  • International Women’s Day and your workplace; and
  • risk assessments can ensure safety and protect your job.

Failed drug test justified employer’s treatment of employee

Mr Hayes (we’ve used pseudonyms) was employed at the Company, which operated a power station facility. Mr Hayes was involved in the operation of a coal train unloading system and held other responsibilities as a Rail Safety Worker. The Company randomly tested its employees for drug and alcohol consumption, consistent with its policies and procedures in relation to drug and alcohol consumption. The Company had a policy of zero-tolerance for drugs and alcohol. On 22 August 2014 Mr Hayes was tested, along with 11 other employees. He returned two ‘non-negative’ drug test results and was stood down pending a disciplinary hearing. Mr Hayes subsequently admitted he had taken amphetamines around 36 hours before being tested.

Two other employees had returned non-negative drug tests from the same testing date and one employee was not dismissed as a result of his expressed remorse and previous employment history.

At a meeting on 3 September 2014 between Mr Hayes, members of his union (the CFMEU), and Company representatives, Mr Hayes resigned. Mr Hayes then launched proceedings under the Fair Work Act 2009(Cth) arguing that he had only resigned because he believed that the Company was going to dismiss him and he believed that he had ‘no choice’ other than to resign in order to keep any long service leave or notice entitlement payments.

Application of policies and procedures

As part of his argument that the termination of his employment was unfair, Mr Hayes asserted that he had not received proper training on the operation of the Company Drug and Alcohol Policy. Mr Hayes believed that a breach of that policy would result in warnings with termination only occurring after ‘repeated’ breaches. Other bases for Mr Hayes’s argument included that:

  • he knew that drug taking could result in termination of his employment but he gave evidence that he would not have attended work if he believed he was still under the influence of drugs;
  • he referred to other incidents where other employees had not been dismissed following positive drug or alcohol test outcomes; and
  • he had been given a ‘final warning’ in the 12 months before the drug test outcome but this warning ‘related to an entirely different set of circumstances to those that led to the termination of his employment’ (it was not related to drugs or drug testing).

The Company’s position

The Company gave evidence about their Code of Conduct and Cardinal Safety Rules and provided records showing that Mr Hayes had participated in training associated with those requirements on ‘numerous occasions throughout his employment’.

The Commission’s findings

The Fair Work Commission found in favour of the Company on various counts. These included:

  • Mr Hayes’s previous warning, even though it was not related to the drug policy, clearly placed him ‘on notice’ about his requirement to comply with the Company Code of Conduct (the warning stated that it was a condition of his employment that he comply with the Code and any further breaches of it would result in disciplinary action);
  • the nature of the Company’s business and the equipment used and functions undertaken by its employees justified a zero-tolerance approach to drug and alcohol use in the workplace, and termination of employment where the presence of drugs was detected could be expected; and
  • the Company took appropriate steps to implement the drug and alcohol testing regime.

In terms of Mr Hayes’ argument that he had ‘no choice’ but to resign, Senior Deputy President O’Callaghan concluded that the Company had not actually advised Mr Hayes that he was going to be dismissed before he decided to resign. The Company had provided advice to the CFMEU representative involved in the matter about the likely outcome in the course of the normal investigative processes (termination of employment) but it had been clearly conveyed that Mr Hayes’s dismissal was not a foregone conclusion and he had been offered a legitimate opportunity to provide further information at the meeting on 3 September. Providing the opportunity for the employee to give their response in these circumstances is a necessary component of ensuring that the procedures were ‘fair’.

What does this mean for other employers?

This case once again shows the importance of good policy management and procedures in relation to disciplinary procedures. There are two elements at play in this case. First, Mr Hayes’ admissions, his previous warning, and the evidence of training, meant that the termination of his employment was justified. Second, although Mr Hayes’ termination action was justified, he was still accorded procedural fairness by being given the opportunity to respond before a final decision was made by the Company. Both elements need to be addressed in developing and implementing company procedures. This will significantly reduce the risk of the Fair Work Commission finding that a termination has been ‘harsh, unjust or unreasonable’.

International Women’s Day and your workplace

Saturday 8 March 2015 was International Women’s Day, an initiative that has been endorsed by the UN. This year’s theme was ‘Empowering Women, Empowering Humanity: Picture it!’.

In Australia, International Women’s Day was marked by both the Prime Minister Tony Abbott and the Opposition Leader Bill Shorten endorsing the #HeForShe movement which ‘asks men to pledge to take active steps in promoting gender equality and women’s empowerment’. Many eyes are on the federal government which recently increased the number of women in federal Cabinet, from one to two. There are now 2 women and 18 men (not counting the Prime Minister).

We’ve collated a few facts for you to think about and maybe to provoke discussion in your workforce.

In February, the Workplace Gender Equality Agency (the WGEA) published Gender Workplace Statisticswhich reveal that there is still much room for improvement.

The Statistics are based on data obtained from companies with 100 or more employees (who are required to report to the WGEA) and include the following facts:

  • full-time earnings for women in the private sector are, on average, 19.9% less than for men;
  • one-third (33.5%) of reporting organisations have no key management personnel who are women, and 31.3% of organisations have no other executives/general managers who are women;
  • at Board level, women hold 12.0% of chair positions, 23.7% of directorships, and 17.0% of ASX 200 companies do not have a woman on their board.

Unsurprisingly, women are significantly better represented in NFPs than they are in publicly listed companies.

If you are an ASX-Listed Entity, under the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations (CGPRs) then you are required to have a diversity policy and to ‘set measurable objectives for achieving gender diversity’. The CGPRs state that ‘research has shown that increased gender diversity on boards is associated with better financial performance’. The CGPRs also require an ASX-Listed Entity to disclose its progress towards meeting its diversity objectives and, if an entity does not have a diversity policy, explain why not under the ‘if not, why not’ rule for not following a recommendation.

For more statistics on the proportion of women on ASX-Listed Entity Boards refer to the ‘Board Diversity‘ section of the Australian Institute of Company Directors website.

You may not realise that if your company employs more than 100 employees, you are required to make reports under the Workplace Gender Equality Act 2012 (Cth) (see further information about WGEA reporting obligations). The WGEA is ‘charged with promoting and improving gender equality in Australian workplaces’. It also has further information about the current national gender pay gap, which is at a ‘record high’.

Conducting a risk assessment can ensure your safety and protect your job

A decision by the Fair Work Commission to reject an unfair dismissal claim on the basis that important safety procedures were breached demonstrates that it is important that all employees understand the importance and application of policies and procedures at work.

The facts

Mr Tusk was employed as an electrical services technician at a security company, Secure Co (pseudonyms have been used). Mr Tusk was working at a University in NSW (the University) when he was subject to a random, unannounced safety audit on 19 September 2014.

During the audit four safety breaches were detected:

  • failure to complete the required risk assessment before commencing the task;
  • failure to comply with the University’s safety requirements;
  • incorrect Personal Protective Equipment (PPE) (his shirt sleeves were rolled up); and
  • incorrect hand tools being used.

As a result of the audit, Mr Tusk was stood down while an investigation was undertaken by Secure Co.

Following a meeting between Mr Tusk and Secure Co, Mr Tusk’s employment was terminated but the termination letter only referred to two of the alleged breaches above, being the failure to correct the risk assessment and the incorrect PPE.

History of non-compliance

Prior to the audit on 19 September, Mr Tusk had been warned about other safety breaches. Two months earlier he had received a warning letter regarding a failure to follow safety procedures including a failure to complete the appropriate risk assessment before commencing the task, and failing to comply with two of the company’s specific safety procedures.

In addition to receiving this written warning, Mr Tusk was told he would be subject to further training and unannounced audits.

Mr Tusk participated in safety training a few days later, which involved conducting a risk management assessment using a hand-held device before starting a task.

Was the dismissal unfair?

While he acknowledged the earlier breaches and the ensuing warning letter, Mr Tusk argued that his dismissal was unfair as he was not at fault for the breaches detected in the September audit.

Although Mr Tusk managed to defend two of the four alleged breaches, he was unable to persuade the Commission that he had not been trained in performing risk assessments. The company had provided training and had given him a ‘Take-5 notebook’ (a risk assessment tool).

Commissioner Bull also referred to the fact that Mr Tusk had not taken any constructive steps to improve his understanding of safety procedures. He did not request further training nor did he make a comment to his supervisors that he was insufficiently trained to conduct risk assessments.

The Commissioner found that the dismissal for failure to conduct the risk assessment was valid, but that the dismissal for the reason that Mr Tusk wore the shirt sleeves up was not a ‘safety issue of such significance that termination of employment should result’.

In this case, a failure to conduct the required risk assessment posed a significant safety risk that could not be overlooked.

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