Allegations of sexual harassment, bullying require 'thorough' investigation
The Supreme Court of New South Wales recently dealt with a case involving the termination of a senior radiologist's employment at a medical imaging company. The dispute centred around allegations of workplace bullying, victimisation, and sexual harassment.
The allegations against the worker were serious and varied. They included claims of bullying and victimisation towards a radiographer, primarily involving communication issues and perceived rudeness.
The worker was accused of using post-it notes with capitalised text to communicate, which was interpreted as aggressive. There were also claims that the worker ignored or spoke dismissively to the radiographer.
Furthermore, there was an allegation of sexual harassment stemming from an incident at a company Christmas party, where the worker was accused of making an inappropriate "pelvic thrust" gesture towards a female employee.
The workplace dispute
The worker was described as a highly experienced radiologist with over 30 years in the field and had sold his successful medical imaging practice to the employer in 2019 for a substantial sum, reported to be between $15-20 million.
As part of the sale agreement, he entered into a three-year fixed-term employment contract with the employer, described as a "golden handcuffs" arrangement. This contract included a base salary of $500,000 per annum or 20% of billings (whichever was greater), a regional allowance of $100,000, and a clinic director allowance of $40,000 per annum.
The worker had built a reputation as an expert radiologist, particularly in women's imaging. His practice had grown from a small operation in 2010 to a successful business with 25-30 employees by the time of sale in 2019.
The sale agreement included a restraint clause preventing the worker from working at any other radiology practice in Cairns for five years.
About a year into the employment relationship, concerns began to surface. A radiographer, who had joined the practice in October 2019, raised complaints about the worker's behaviour towards her. These complaints escalated over time, eventually leading to formal grievances being lodged with the employer's human resources department.
The allegations against the worker included claims of bullying, victimisation, and an incident of alleged sexual harassment at a company Christmas party in December 2021. The employer conducted an investigation into these claims, which ultimately led to the worker's summary dismissal in May 2022, just three months before his fixed-term contract was due to expire.
Employer justifies summary dismissal
The employer argued that the worker's conduct constituted serious misconduct, justifying immediate termination without notice. They relied on clauses in the employment contract that allowed for such action in cases of serious misconduct or material breach of the contract.
Specifically, the employer pointed to the following allegations:
- Bullying behaviour towards the radiographer, including constant belittling and isolation.
- Victimisation of the radiographer.
- An incident of alleged sexual harassment at the 2021 Christmas party, where the worker was accused of making a "pelvic thrust" towards a female employee.
The employer's position was that these behaviours violated their workplace policies and constituted a material breach of the employment contract.
They argued that the worker's conduct had materially and detrimentally affected the employer, justifying summary dismissal.
The worker’s defence against the allegations
The worker strongly denied the allegations of bullying, victimisation, and sexual harassment. He argued that his interactions with the radiographer were primarily related to performance issues and frustrations with the employer's computer systems.
The worker claimed that the radiographer's performance in breast biopsies "missed the mark required, citing about 20% of cases when the usual success rate is 96 to 99%."
Regarding the alleged sexual harassment incident at the Christmas party, the worker denied making any inappropriate gestures. He provided an alternative explanation for his actions, stating he was demonstrating a haka in response to a conversation about New Zealand.
The worker contended that the employer had not provided him with a fair opportunity to respond to the allegations before terminating his employment. He argued that the termination was unjustified and sought damages for wrongful dismissal.
Court’s analysis
The court examined the evidence presented by both parties. It acknowledged that there were issues in the working relationship between the worker and the radiographer but found that some of the more serious allegations were not substantiated.
The judge stated:
"There is no doubt that [the radiographer] made complaints. She documented the first and third complaints and there were others at the clinic who observed at least some of the behaviour complained of seemingly on a repeated basis."
However, the court also noted:
"As [the employer] submits, it is important not to separate out each aspect of the alleged bullying and consider whether it might constitute bullying if considered independently of the other conduct. It is important to consider all of the conduct in the context in which it emerged."
The court found that while the worker's behaviour towards the radiographer was at times rude and unprofessional, it did not rise to the level of bullying as defined in the employer's handbook. The judge also could not find sufficient evidence to support the allegation of sexual harassment at the Christmas party.
The bar for summary dismissal
The court's decision emphasised the high threshold required for summary dismissal. The judge stated:
"The right of an employer to terminate the employment of an employee summarily or without notice is a right that should only arise in exceptional circumstances. Exceptional circumstances would generally involve some form of serious wrongdoing or misconduct on the part of the employee."
This ruling underscores the importance for employers to have clear evidence of serious misconduct before resorting to summary dismissal. It also highlights the need for thorough investigations and proper procedural fairness when dealing with workplace complaints.
The court ultimately found in favour of the worker, ruling that the employer was not entitled to summarily dismiss him. The judge stated:
"For all the reasons set out herein, I am not satisfied that the conduct engaged in by [the worker] entitled [the employer] to dismiss [the worker] without notice."
However, the court limited the damages to the remaining three months of the fixed-term contract plus an additional three months' notice period.
The judge explained:
"In the circumstances, the damages [the worker] is entitled to recover are limited to the last three months of his fixed term period and the additional three months' notice which [the employer] accepts it would have been required to provide to [the worker]."
The total damages awarded were $320,000, plus pre-judgment interest of $47,952.56, for a total judgment of $367,952.56. This decision highlights the importance of carefully considering the terms of fixed-term contracts and the potential damages that may arise from early termination.
