Trust and conduct issues at centre of unfair dismissal case

Workplace Directions

Background

Mr Khoder Abdulrahim (‘the applicant’) lodged an application under s.394 of the Fair Work Act 2009 (Cth) (‘the Act’) alleging that the termination of his employment by QBE Management Services Pty Ltd (‘the respondent’) was unfair.

The applicant purchased a discount motor vehicle insurance policy for his father’s car under the respondent’s employee insurance program and nominated himself as the contact person, since his father could not speak English.

The applicant made an insurance claim against that policy, contending that another driver had run into his father’s vehicle while it was parked in the street. The applicant then refused to participate in an interview with an investigator from the respondent’s financial crimes team.

The respondent wrote to the applicant advising him of his failure to participate in the interview. The respondent directed the applicant to attend an interview, and raised the prospect of disciplinary action should he fail to comply. The applicant did not agree to participate in the interview and was summarily dismissed by the respondent.

The applicant’s case

The applicant submitted that there was no valid reason for his dismissal and that it was harsh, unjust or unreasonable, having regard to matters such as his length of service and employment record.

In his witness statement, the applicant wrote that he declined the interview because he was not the policyholder, or involved in the accident, and that he was unable to meaningfully contribute to the investigation. The applicant further wrote that his employment contract did not specify that he must participate in investigations unrelated to him.

At the hearing, the applicant attested that he had made a claim on his father’s behalf and that his panel beating business prepared a quote of over $38,000 to repair his father’s car.

The respondent’s case

In its submissions, the respondent contended that its investigations had determined that 24 motor vehicle claims totalling over $106,000 and two household claims totalling more than $15,000 had been made from the applicant’s residential address, with the applicant’s personal bank account having been the nominated bank account for five QBE motor vehicle insurance claims during his period of employment.

The respondent submitted that that the dismissal was proportionate to the seriousness of his conduct and the level of wrongdoing. The respondent added that trust and confidence were essential in the performance of the applicant’s employment and that he knowingly placed his personal interests in direct conflict with the interests of his employee on multiple occasions and in a most serious way.

Was the dismissal harsh, unjust or unreasonable?

Kovacic DP had regard to criteria set out in s387 of the Act, and in particular: whether there was a valid reason for the dismissal; whether the applicant was notified of that reason; whether the applicant was given an opportunity to respond; and any other matters that the Fair Work Commission (‘FWC’) considered relevant.

Kovacic DP considered the direction to be lawful and reasonable in circumstances where the respondent had legitimate concerns about a potential conflict of interest, regarding not only the father’s insurance claim but also the applicant’s panel beating business. Kovacic DP was satisfied that the reason for the applicant’s termination was defensible or justifiable on an objective analysis of the relevant facts and was not ‘capricious, fanciful, spiteful or prejudiced’.

Kovacic DP also considered that the applicant was notified of the reason for his dismissal, as the respondent’s letter stated he was expected to comply with the direction and if he failed to do so, the respondent might take disciplinary action including termination of employment. The applicant was further advised by his manager that he should attend the interview. Finally, the termination letter stated that the respondent had decided to terminate the applicant’s employment on the basis of his repeated failure to follow a reasonable and lawful direction.

The applicant indicated to the respondent that his main reason for not participating in the interview was he had concerns regarding the investigator’s conduct. Despite the respondent’s offer to provide a different investigator, the applicant was not willing to participate in the investigation. That evidence supported a finding that the applicant was provided an opportunity to respond to the reasons relating to his conduct.

Kovacic DP considered there was a valid reason for the applicant’s dismissal, having regard to the respondent’s legitimate questions regarding the insurance claim, the applicant’s potential conflicts of interest, his refusal to participate in the investigation, and the fact he had been warned of the potential consequences of a failure to do so.

Further, the applicant’s failure to cooperate with the investigation begged the question – ‘what did he have to hide?’. It was held that this went to the issue of trust and counterbalanced the weight to be given to the applicant’s length of service and employment record.

For all of these reasons, Kovacic DP did not consider that the applicant’s dismissal was harsh, unjust or unreasonable and the application was dismissed.

[Khoder Abdulrahim v QBE Management Services Pty Limited [2016] FWC 2985]

Authored by Bruce Butler, Partner and Oliver Lesage, Lawyer – Melbourne


Related Articles

Annual leave payments on termination of employment

Workplace Directions

In our March 2015 edition of Workplace Directions, we reported on the Federal Court of Australia’s decision of Centennial Northern Mining…

Continue reading

Rewarding employees with bonuses: when discretion gets tricky

Workplace Directions

As the end of financial year approaches, many employers are currently undertaking annual performance reviews. Businesses need to understand the difficulty…

Continue reading

Costs awarded in unfair dismissal appeal

Workplace Directions

The recent decision of Roy Morgan Research Ltd v Baker [2014] FWCFB 1175 is another case in the growing body of…

Continue reading