The Fair Work Com­mis­sion — Has it lost its way?

Trust — the key ingredient

There is no mys­tery as to what lies at the heart of healthy staff/​management rela­tion­ships in a busi­ness – the key is trust! (See my Decem­ber post)

So, what hap­pens to employ­ment oppor­tu­ni­ties in our coun­try when the busi­ness com­mu­ni­ty los­es faith in the Fair Work Com­mis­sion — the insti­tu­tion estab­lished to umpire those relationships?

The Com­mis­sion is charged with respon­si­bil­i­ty for uphold­ing the objects of the Fair Work Act, includ­ing mak­ing deci­sions in a man­ner that are fair and just” with out­comes that ensure flex­i­bil­i­ty “…for busi­ness­es, [and] pro­motes pro­duc­tiv­i­ty and eco­nom­ic growth for Aus­trali­a’s future eco­nom­ic pros­per­i­ty”.

Well, accord­ing to one of its most senior mem­bers, the Fair Work Com­mis­sion has so pro­found­ly failed this object that he could not – in good con­science — con­tin­ue as one its most senior mem­bers. This month, VP Graeme Wat­son will quit the Fair Work Com­mis­sion in dis­gust. Accord­ing to The Aus­tralian news­pa­per, the ex-top-tier law firm part­ner and soon-to-be-for­mer vice-pres­i­dent of the Com­mis­sion high­light­ed the lack of exper­tise of many of the Com­mis­sion­ers and an over­all lack of under­stand­ing of the impact of their deci­sions on jobs in the community.

It’s easy to under­stand why many Aus­tralian busi­ness­es have lost their faith in the Fair Work Com­mis­sion, when Com­mis­sion­ers reg­u­lar­ly make deci­sions that seem to favour employ­ees who are incom­pe­tent or seri­ous­ly dis­obe­di­ent. Deci­sions that reg­u­lar­ly endan­ger the safe­ty or ongo­ing employ­ment prospects of their co-work­ers and the via­bil­i­ty of the business.

This loss of faith in the Fair Work Com­mis­sion can have real impli­ca­tions for the wider work­force. I recent­ly post­ed an excerpt from the Wall Street Jour­nal out­lin­ing the dra­mat­ic trend towards out­sourc­ing in busi­ness­es – a trend which is reflect­ed with­in Australia… 

I under­stand that mak­ing deci­sions that weigh employ­ees’ right to fair­ness with the needs of busi­ness­es to func­tion and pros­per, is not straight­for­ward. How­ev­er, VP’s Wat­son’s view that the Fair Work Com­mis­sion can often be par­ti­san in its deci­sions in favour of employ­ees, is not made in a vacuum. 

Your Hon­our — may I ten­der Exhibits A and B’

Let’s look at two recent exam­ples that clear­ly exem­pli­fy this loss of bal­ance in the Commission:

A case in Vic­to­ria, where a male nurse:

  • post­ed and tagged to fel­low employ­ees a video which showed an obese woman in under­wear engaged in an act with clear sex­u­al over­tones with a male also in his under­wear – and sent it to a col­league with the title get­ting slammed by [female col­league] at work yes­ter­day
  • left blobs of Sor­bo­lene togeth­er with crum­pled tis­sues on a male col­league’s desk
  • when an inves­ti­ga­tion was car­ried out, con­tact­ed his col­leagues (con­trary to an explic­it direc­tion from man­age­ment) and told them not to co-oper­ate with the inves­ti­ga­tion (using, it might be not­ed, abu­sive lan­guage in that communication).

Com­mis­sion­er Bis­sett found that it was a seri­ous mat­ter”, that the nurse’s actions had exposed two col­leagues to humil­i­a­tion and poten­tial ridicule at work” and con­sti­tut­ed a valid rea­son” for ter­mi­na­tion and – indeed – that she could appre­ci­ate why Bendi­go Health reached the con­clu­sion it did”. Nev­er­the­less, she decid­ed that the employ­er was not enti­tled to ter­mi­nate the employee.

In oth­er words, even though the employee:

  • exposed the employ­er to poten­tial claims for hun­dreds of thou­sands of dol­lars in damages,
  • showed a com­plete dis­re­gard for the feel­ings and emo­tion­al well-being of his co-workers,
  • had sex­u­al­ly harassed anoth­er employ­ee by asso­ci­at­ing her with the woman in the video, and
  • dis­re­gard­ed explic­it man­age­ment instruc­tions cru­cial to the integri­ty of the investigation,

Com­mis­sion­er Bis­sett found that the employ­er should have giv­en the employ­ee anoth­er go. What fur­ther hav­oc might that employ­ee have caused if the employ­er had not ter­mi­nat­ed him but had adopt­ed the Com­mis­sion­er’s approach?

I do not doubt that Com­mis­sion­er Bis­sett believed in a fair go for the employ­ee who had been ter­mi­nat­ed. How­ev­er, it dif­fi­cult to see in her deci­sion, a sim­i­lar con­cern for the fel­low employees.

In anoth­er recent deci­sion, Com­mis­sion­er Hunt in a work­place per­for­mance case (unfor­tu­nate­ly involv­ing an HR Man­ag­er), exhib­it­ed a sim­i­lar igno­rance of the com­mer­cial and legal risks posed to a busi­ness by an employ­ee’s con­sis­tent­ly under­per­for­mance and its poten­tial impact on the employ­ee’s colleagues. 

The facts were sim­ple: the HR man­ag­er, after many months of fail­ing in her role, had made a mess of a pre-audit process — caus­ing a huge amount of addi­tion­al work for those around her — and had been ter­mi­nat­ed before the full audit took place.

The Com­mis­sion­er found that:

  • the employ­er had met with the HR man­ag­er “… on a num­ber of occa­sions to address with her the var­i­ous short­com­ings that he con­sid­ered she had … [but] … unfor­tu­nate­ly [the employ­ee] had not ade­quate­ly improved her performance”
  • the issues raised with the employ­ee short­ly before her ter­mi­na­tion were “… impor­tant, seri­ous mat­ters that demon­strate [she] was not ade­quate­ly per­form­ing her role. None of them are triv­ial or petty.”

Despite this, Com­mis­sion­er Hunt decid­ed that the employ­er should have allowed the employ­ee to car­ry out the actu­al audit — despite the like­li­hood of her mak­ing a mess of it. In fact, the Com­mis­sion­er said that only after the employ­ee had failed with the audit (with all its poten­tial­ly dis­as­trous impli­ca­tions for the busi­ness and addi­tion­al stress on fel­low work­ers), should the employ­ee have been terminated.

Com­mis­sion­er Hunt’s approach to this case involv­ing an employ­ee who was not ade­quate­ly per­form­ing her role” dis­plays a con­cern­ing lack of insight as to the poten­tial for a failed audit to threat­en the jobs of com­pe­tent and com­mit­ted staff. In the real world, a failed audit can have seri­ous con­se­quences – not the least for the ongo­ing employ­ment of oth­er staff.

Why Com­mis­sion­er Hunt’s appar­ent indif­fer­ence to this com­mer­cial real­i­ty lends cre­dence to VP Wat­son’s tren­chant crit­i­cism of the Fair Work Commission.

It’s (not) all about the ter­mi­nat­ed employee

I under­stand that fair­ness’ is a sub­jec­tive matter.

I am also aware that employ­ers are not always going to like the deci­sions of the Commission.

How­ev­er, what most con­cerns me is how often (and these cas­es were good examples):

  • the debil­i­tat­ing impact of employ­ee poor per­for­mance (week in — week out) or
  • the effect of dan­ger­ous or offen­sive employ­ee mis­con­duct on fel­low staff, 

is glossed over by the Com­mis­sion­ers in their decisions.

Equal­ly the Com­mis­sion­ers so often seem to dis­re­gard the risk of huge fines or com­pen­sa­tion claims that lie with the employ­er and per­son­al­ly its man­agers, if the employ­er allows such con­duct to persist.

Final­ly, so sel­dom do Com­mis­sion­ers acknowl­edge in any way the future impact of such behav­iour on the via­bil­i­ty of the jobs of exist­ing staff or poten­tial employees.

Impor­tant­ly, Com­mis­sion­ers are required to take into account ‘… any oth­er mat­ters that the FWC con­sid­ers rel­e­vant’ (s.387(h)) in con­sid­er­ing an unfair dis­missal claim. The threat that the ter­mi­nat­ed work­er would have posed to the job secu­ri­ty of oth­er staff and the legal risks faced by the employ­er and man­age­ment, had the work­er been allowed to con­tin­ue in the role, are sure­ly rel­e­vant mat­ters in decid­ing whether the employ­er was enti­tled to ter­mi­nate the work­er. Yet, in their unfair dis­missal deci­sions, too many of the Com­mis­sion­ers focus almost exclu­sive­ly on the impact of the ter­mi­na­tion on the per­son­al cir­cum­stances of the employee.

Per­son­al respon­si­bil­i­ty is at the heart of trust

I have high­light­ed many times in my arti­cles, the need for the Com­mis­sion to recog­nise the impor­tance of employ­ees’ per­son­al respon­si­bil­i­ty with­in a work­place. How­ev­er, in their deci­sions, few of the Com­mis­sion­ers seem to dis­close any real under­stand­ing of the con­se­quences of per­mit­ting a lack of account­abil­i­ty to be the key note fea­ture of Aus­tralian work­places. This leaves employ­ers with lit­tle con­fi­dence that they can safe­ly take any mean­ing­ful action to deal appro­pri­ate­ly with the minor­i­ty of staff who do not con­duct them­selves pro­duc­tive­ly and respect­ful­ly in the workplace.

In seek­ing to save the jobs of the unwor­thy few, Com­mis­sion­ers endan­ger the jobs of the deserv­ing many

In the shad­ow of deci­sions like this, who can blame employ­ers for weigh­ing up whether to employ peo­ple direct­ly or out­source the role?

Hav­ing read such cas­es – if your cap­i­tal (or that entrust­ed by oth­ers) was on the line, what would you do?

A Com­mis­sion­er’s job is not always easy — bal­anc­ing the com­pet­ing inter­ests of the employ­er and the employ­ee. Yet, in Graeme Wat­son’s view, too many of the Com­mis­sion­ers in the cur­rent Fair Work Com­mis­sion have lost that sense of bal­ance, default­ing too often in favour of giv­ing the bul­ly­ing or dis­hon­est employ­ee anoth­er oppor­tu­ni­ty to behave badly. 

With­out that bal­ance in its deci­sion mak­ing, the Fair Work Com­mis­sion too often seems to tac­it­ly endorse a cul­ture of poor per­for­mance amongst employ­ees. A cul­ture where behav­iour that endan­gers the well-being of oth­er staff or the via­bil­i­ty of the busi­ness is excused. This inabil­i­ty to find that bal­ance endan­gers the job oppor­tu­ni­ties of tens of thou­sands of com­mit­ted, com­pe­tent and respon­si­ble Aus­tralian work­ers, as employ­ers become reluc­tant to take on the risks of employ­ing staff. 

After all if they per­ceive that the Fair Work Com­mis­sion is prone to penalise them for tak­ing mean­ing­ful steps to pro­tect the well-being of oth­er staff (and their jobs), why would a busi­ness be enthu­si­as­tic about expand­ing job opportunities? 

Is it any won­der that VP Wat­son was so scathing in his crit­i­cisms of the func­tion­ing of the Fair Work Com­mis­sion in its cur­rent form?

There is an increas­ing under­stand­ing in the busi­ness com­mu­ni­ty that the Fair Work Com­mis­sion is par­ti­san, dys­func­tion­al and divided”

This arti­cle was first pub­lished as a LinkedIn blog. You can read it here.