Manager argues 'right to silence' Was it unfair dismissal?
A former manager was recently terminated over "substantiated allegations" that he had failed to disclose his "sexually intimate relationship" with a co-director's "estranged wife."
The employer said his termination was also because of the worker's "dishonesty in denying the sexual relations on multiple occasions." Consequently, the manager filed an unfair dismissal remedy against the company.
The employer, Mt Alexander Timber & Hardware Pty Ltd, employed Rodney Hickey as its general manager on 13 December 2017 with the understanding that he would become a one-third shareholder when he was able to get the funding.
After a few years, he was appointed director in November 2020. One of his co-directors and his wife separated in the first half of 2022.
Originally, the estranged wife performed work for the employer in accounting. From February 2022, she performed work for the company directly as a contractor.
The wife continued to perform work, providing marketing and information technology services, working approximately 2 to 3 hours a week on-site and an additional 8-15 hours a week from home.
According to records, from January 2023, the manager and the co-director’s wife had a “close friendship that involved sexual relations.”
Around March 2023, the employer gave a direction to Star Electronics to remove the manager’s access to the store security camera system and alarms. A meeting was then held at Mt Alexander Timber and Hardware, where the executive team and the manager were present.
During the meeting, a letter titled “Show Cause – Allegations of Serious Misconduct” was given to the manager, outlining four allegations: “misuse of position,” “conflict of interest,” “dishonesty,” and “engaging in conduct causing serious and imminent risk to the reputation and/or profitability of the company.”
The letter requested him to provide a response in writing and attend a meeting to discuss his response. During the meeting, the co-director (husband of the manager’s sexual partner) told him, “I want to know when you stopped being my mate.”
After the meeting concluded, the manager walked back to his office, collected some of his personal items, and walked outside to his car, where the same co-director said, “You’ve got one week.”
Soon after, the employer told its IT team to block the manager’s access and change the passwords for his email and computer. The worker then emailed a response to the show cause letter, where he said: “he was too unwell to meet with the [rest of the management].”
A few days later, the employer contacted locksmiths to change all the locks on the building at the workplace, and the manager was likewise removed from the “deputy rostering system.” The employer also changed his password and transferred his profile to another employee.
The manager’s legal representatives communicated with the employer until 11 April 2023, when he was terminated by email. The company gave him four weeks’ payment in lieu of notice.
Before the Fair Work Commission (FWC), the employer argued that “as a senior employee and director,” the manager was “obliged to disclose the intimate nature of his relationship with the [co-director’s wife]” as it “could be a matter that would affect the relationship between employer and employee.”
It said his “failure to disclose his relationship was incompatible with his employment relationship and that his failure to do so constitutes a valid reason” to terminate his employment.
It added that his conduct “amounts to a misuse of his position and constitutes a valid reason because “it’s the wife of a fellow director” and that if “it was not a spouse of one of the other directors or senior managers, that it may have been a different matter.”
Meanwhile, the manager said that his dismissal “was motivated by personal reasons related to his [co-director’s] jealousy of [him] because of his interactions with [his wife].”
He said the employer did not “point to a contract or policy that contains a term obligating [him] to disclose the nature of his relationship with the [co-director’s wife].”
He said he “had a right to silence about the nature of his sexual and other interactions,” and since the wife was a contractor who was rarely on-site, he said his “private dealings with [her] had no impact on the fulfillment of [his] duties as an employee.”
The FWC emphasised that the matter that was being discussed was “not the relationship itself” but the manager’s “failure to disclose the relationship.”
It said his failure to disclose the relationship “is likely to cause serious damage to the relationship.” It said his conduct was “incompatible with the employee’s duties.”
Moreover, it found that the manager “was [also] dishonest during the show cause investigative process in the characterisation of his relationship with the [co-director’s wife].”
“This conduct, on its own, is sufficiently serious to constitute a valid reason for termination,” the FWC said. Thus, it said his dismissal was not unfair and rejected his application against the employer.
