The employer produces alcohol and customised branding on alcohol cans to its customers. The applicant, a sales executive at the company, had spoken to a co-worker on the phone about a large order for which the company’s marketing manager held responsibility. They knew that the marketing manager did not enjoy the process.

She joked with the co-worker that the marketing manager would “kill her”, and that the manager might “swear at her in Brazilian” out of frustration. The co-worker responded that she was Argentinian. The applicant commented along that lines that “they are all the same”.

The applicant was requested to attend a meeting but was not told why. During the meeting the general manager gave the applicant an ultimatum to either resign from the company or be dismissed for making “racial slurs” against a colleague. During the meeting she was given no opportunity to respond to the allegation and was provided limited information about the allegation.

Based on the inadequate knowledge available, the applicant denied the allegation, stating that she had “no recollection of it and believed it to be untrue”. The general manager stated that “it is irrelevant” and refused to listen to any further explanation from the Applicant, who was dismissed with one week’s wages in lieu of notice.

The manager claimed she and the company director were forced to act in response to the witness statements, noting that from a small business perspective, when presented with “something as serious as a racist comment”, they must act immediately. They believed this to be “against the law” and made the decision based on a duty of care to their employees.

The respondent also put forward alleged comments made throughout that employee’s history and noted that they “are a racist and have been racist in front of a lot of people”. The respondent did not elaborate on these points in the meeting with the employee.

Decision

Ultimately the FWC found that although the comments demonstrated “unsophisticated geographical intelligence and emotional intelligence”, they were not racist, and that the company grossly exaggerated the sales executive’s comments as breaking the law. It was held that the respondent had no valid reason for dismissing the applicant based on the criteria of section 387 of the Fair Work Act 2009 (Cth).

The FWC conveyed to the respondent that they should have considered disciplinary/performance management processes involving counselling and training on why making comments on the manager’s ethnicity or cultural background may cause offence. As such the company’s actions were held to be “capricious and spiteful”.

The Applicant was awarded $13,500 plus superannuation and six months’ wages minus the wages she would earn during the period in her new job ($22,500), excluding the one week of wages paid to her in lieu of notice.

Learnings for Business

This decision emphasises the importance of following a fair and reasonable process when taking disciplinary action against an employee, especially if it results in termination. It underlines the necessity of following a formal disciplinary management process and ensuring that all steps taken are clearly documented to mitigate the risk of a successful unfair dismissal claim.

It is made clear that the elements of s 387 of the Fair Work Act are scrutinised against the facts of the case to determine whether there is a valid reason for dismissal; these include allowing a support person to an employee engaged in a disciplinary process, ensuring that procedural fairness is adhered to by providing an employee an opportunity to respond to their allegations, and considering the severity of the disciplinary action that would be taken.

How the Victorian Chamber can assist

For assistance on any aspect of your employment obligations, please call the Victorian Chamber Workplace Relations Advice Line on 8662 5222.

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