Knead-To-Know: HR Manager Found Personally Liable After Hasty Sacking Of Pizza Production Worker

In April 2023, the Federal Circuit and Family Court of Australia ordered an employer and its HR Manager pay over $100,000, following findings that:

• it was remiss of the HR Manager to accept a resignation made in the heat of the moment and by the employee’s spouse;
• the HR Manager’s evidence was unreliable given he had failed to take the most basic steps expected of an HR professional; and
• nothing turned on the fact it was the employee’s spouse who communicated the existence of a workplace right to the employer.

These proceedings highlight the need for HR professionals and employers to reasonably engage with complaints of bullying and harassment, and to exercise due diligence before accepting an oral resignation.  

Background

Della Rosa Fresh Foods, a family run ready-made pizza production business, employed Ms Kaur as a production worker.  Ms Kaur was a vulnerable employee and a relatively recent immigrant, with a poor command of English.

After a performance meeting with her employer, Ms Kaur went home upset.  Subsequently, the company’s HR Manager (who was also present at the meeting) called Ms Kaur to conduct a welfare check.  Ms Kaur answered the call but was so upset that she passed the phone to her husband.

Ms Kaur’s husband complained to the HR Manager that his wife had been bullied and harassed at work and expressed his wife’s distress.  He also told the HR Manager that Ms Kaur would take the matter to “Fair Work”.  It was alleged that when the HR Manager asked about Ms Kaur’s expected return to work date, Ms Kaur’s husband said that she was “never coming back”.

Two hours after this phone-call, Ms Kaur received a letter from the HR Manager which stated that her resignation from employment had been accepted.  Ms Kaur responded 3 hours later by email, confirming she had not resigned, with a medical certificate attached.  Five days later, Ms Kaur requested confirmation that her employment remained on foot.  The HR Manager replied that due to her resignation, Ms Kaur was no longer employed.  

Liability Decision

Ending the Employment Relationship

The Court found that the verbal resignation said in the “heat of the moment” should not have been accepted by Della Rosa.  In any event, Ms Kaur’s husband was unable to resign on his wife’s behalf and it was therefore Della Rosa that had terminated Ms Kaur’s employment.  The Court noted that only parties to the employment contract could exercise the rights and obligations under it.  

Workplace Rights

The Court held that it was irrelevant that Ms Kaur’s husband was the person who raised Ms Kaur’s rights with the HR Manager.  The Court accepted that Ms Kaur had a workplace right to initiate a process or proceedings in ‘Fair Work’ and the HR Manager was concerned that Ms Kaur would do so.  The Court did not find that Ms Kaur had exercised a workplace right to make a complaint about workplace bullying and harassment, because there was no evidence of the source of the entitlement to which the complaint related.  The Court found that when the HR Manager was presented with an opportunity to avoid a drawn-out process, he grasped it (by accepting the resignation). 

Penalty Decision

The Court ordered:

• Della Rosa pay 12 months compensation ($47,834.26), plus interest, in respect of economic loss;
• Della Rosa pay $9,000 in non-economic loss;
• Della Rosa pay a penalty equal to 60% of the maximum, being $37,800; and
• the Court also ordered the HR Manager pay a penalty equal to 60% of the maximum, being $7,560.

Economic Loss

The Court accepted that Ms Kaur had not worked since her termination (some 3 years), and highlighted the effect of the dismissal on Ms Kaur in stating that:

“It is difficult to think in the modern age of anything more humiliating, or destructive of the self-confidence, than for a female employee with low self-confidence to have her employment ended by an employer assuming a husband has an authority to determine contractual relations for his wife”.

However, the Court noted that Ms Kaur had failed to attempt to mitigate her loss, and therefore held 12 months to be reasonable in the circumstances.

Non-Economic Loss

In relation to the amount for non-economic loss, the Court noted there was no expert evidence of lasting psychological damage.

Penalty

In ordering payment of the penalty, the Court noted a high need for deterrence in this case.

Further aggravating factors included:

• the nature of the contravention and the serious circumstances of its occurrence;
• the involvement of senior management;
• lack of contrition, whereby the employer and the HR Manager fought the case to the end; and
• the significant losses sustained by Ms Kaur. 

Lavan Comment

As a matter of practice, a resignation should always be confirmed in writing and should always come from the employee (rather than a family or friend, for example).

However, an employer should treat a complaint or allegation from a family member, friend or colleague of an employee in the same manner as if the employee had made the complaint or allegation.

When allegations of bullying or harassment are made to an employer, as a minimum, the employer should:

• enquire into what has occurred;
• take steps to initiate an investigation into all allegations made, particularly by the employee;
• invite verbal allegations to be put in writing; and
• where allegations are general, invite the person to particularise the allegations.

See:
United Workers' Union v Bervar Pty Ltd [2022] FedCFamC2G 418
United Workers' Union v Bervar Pty Ltd (No 2) [2023] FedCFamC2G 251

If you would like to know more information about this topic, please do not hesitate to contact Lavan’s Employment, Safety and Education team.