The Dangers of Poor Workplace Investigations in Sexual Harassment Cases

Two recent decisions in the Fair Work Commission highlight the importance of due process prior to termination, even in the context of sexual harassment allegations and within the Minimum Employment Period (MEP).

The Case Overview

In the case of ‘Mr. Roy Smout v BHP Coal Pty Ltd [2024] FWC 2062,‘ Mr. Smout was dismissed for sexual harassment towards two female cleaners. Mr. Smout was 59 years old with 38 years’ service with BHP (he had been employed there since his apprenticeship). After dismissal, his future job prospects were uncertain.

The Fair Work Commission found that Mr. Smout’s dismissal was unfair for reasons as follows.

Key Issues in the Investigation

Rushed Investigative Process: The investigator carried out the investigation within 7 days, despite normally taking 20 days.
Partially Flawed Investigation: A draft report was provided to management, leading questions were asked of the interviewees, and the interviews were conducted partially by phone and video. Some interviews were not conducted at all.
Lack of Adequate Opportunity to Respond: There was no “show cause” process, which was the employer’s standard procedure, and the employee was not given an adequate opportunity to respond.

The Myth of Protection from Unfair Dismissal

The protection from unfair dismissal (and the corresponding right to make an unfair dismissal claim to the Fair Work Commission) is only available to an employee if they have served a Minimum Employment Period (MEP) under the Fair Work Act.

The MEP is the employee’s first 6 months of employment for employees other than small business employers. For a small business employer, the MEP is the employees first 12 months of employment.

An employee dismissed during the MEP will not be able to bring an unfair dismissal claim in the Fair Work Commission.

This provides employers with the ability to dismiss an employee for conduct or performance reasons at an early stage in their employment without the risk of a complaint that the dismissal was unfair.

Due to this, employers are sometimes lulled into a false sense of security or believe that they can terminate an employee without risk during the MEP.

Employer Misconceptions

Employers sometimes believe they can terminate an employee without risk during the MEP, but this is a misconception. Employees have other rights under the Fair Work Act, such as protections under General Protections, which are applicable regardless of the employee’s short tenure.

This was recently illustrated in the decision of ‘Dabboussy v Australian Federation of Islamic Councils [2024] FCA 1074.‘ In that case the employee was the subject of a sexual harassment complaint.

The employer hastily proceeded with the dismissal without conducting a proper investigation into the sexual harassment allegations or ensuring procedural fairness for the employee.

The dismissal took place just one day before the employee’s Minimum Employment Period (MEP) expired. The employee complained that the employer had dismissed him when it did, not because it was satisfied that sexual harassment had occurred, but because the employer wanted to avoid the employee concluding the MEP and becoming entitled to the protection from unfair dismissal (and the corresponding obligation that any dismissal decision should be fair).

The FWC accepted the employee’s complaint and found that there was a “strong inference” that the reason for the rushed process was due to the employer believing that they owed no obligation of fairness (and were therefore protected from an unfair dismissal claim) because the employee was within their MEP which was due to expire the following day.

These cases demonstrate that even if serious allegations are bought against an employee, such as sexual harassment allegations, an employer is not relieved of its obligation to afford the subject employee proper process via an independent fact-finding investigation and due process before making a decision about disciplinary action such as dismissal.

Key Takeaways for Employers

These cases demonstrate that, even in situations involving serious allegations such as sexual harassment, employers must still provide the accused employee with due process, including a fair and independent investigation, before making a dismissal decision.

Timing of Dismissal: The dismissal decision was made one day before the employee’s MEP expired.

Employee’s Claim: The employee argued that the dismissal was not due to the sexual harassment allegations but rather to avoid the employee completing the MEP and becoming entitled to unfair dismissal protection.

FWC Findings: The Fair Work Commission found that there was a “strong inference” the employer rushed the process to avoid the employee gaining protection from unfair dismissal.

Employers must conduct thorough investigations, ensure procedural fairness and afford the employee an adequate opportunity to respond.

Struggling with Workplace Investigations?

A rushed or poorly handled investigation can leave your business vulnerable to unfair dismissal claims and procedural fairness breaches. When dealing with serious allegations like sexual harassment, a thorough and compliant investigation process is crucial to protect your business.

Get expert support to streamline your workplace investigations. Whether you need tailored training for your team or hands-on assistance with conducting investigations, we’re here to help. Contact IRiQ Law today to safeguard your business and ensure compliance with workplace laws.