Investigation criticised by court highlights importance of employer fairness and transparency in HR processes

The court delivered the critical judgment against the HR manager, following the sacking of a former retail operations manager who was employed to oversee 23 stores from mid-2019 until the manager was suspended in 2021 and ultimately terminated from their position.

The retail manager was called into a meeting with the HR manager in June 2021 after the retail operations manager had raised a complaint against her manager.

An audit, requested by the retail manager, uncovered problems at one of the stores she managed, and the HR manager used it to justify allegations of poor performance against the retail operations manager.

The court found that “it was provided in the audit report that in the event of an unsatisfactory grading the internal auditor was required to conduct a follow-up audit within a four-month period to ensure that non-compliance issues had been addressed, no report evidencing the result of any such follow up audit was ever disclosed during the course of the trial" and “there was no evidence that a follow up audit even took place.”

Facing over 20 allegations of misconduct, the retail operations manager was suspended. After providing responses to the allegations, she was dismissed on the recommendation of the HR manager and with the chief executive's approval, who admitted during the trail that he hadn’t read the responses and instead relied upon the HR manager’s recommendation.

The court held that the HR manager, who had over a decade of experience in human resources management, had “misrepresented” the retail operations manager’s responses to the chief executive and had already decided to recommend termination before the disciplinary meeting, resulting in a “blatant exercise in deception” to create the appearance of due process.

The court also found that the "whole investigative process was a sham, orchestrated by (HR manager), to give the outward impression that due process had been followed”.

“The formal steps taken by (HR manager) in the investigation were but the application by her of a veneer designed to cover up (her) pre-determined intention.”

According to the court, it was no coincidence that the HR manager had acted against the retail operations manager “after she made those further complaints” against her manager.

Key findings

The court ruled that the HR manager had justified the termination with a “sham” investigation, the chief executive had relied entirely on the HR manager’s recommendation and adverse action was taken because the operations manager had made complaints against her own manager.

The court highlighted the HR manager’s disingenuous approach and lack of fairness in the process, alongside several issues with the processes and procedures, including:

A lack of checks and balances allowing the HR manager to engage in deceptive practices, ultimately resulting in a sham investigation with concocted allegations;

The sacking showed a lack of due process due to the HR manager pre-determining the outcome before the disciplinary meeting, alongside the misrepresentation of the operations manager’s responses being used to justify the termination;

The HR manager’s conduct made the CEO an unwitting participant in the misconduct after he relied solely on the recommendations without proper scrutiny or review.

Employees who undergo conduct investigations or disciplinary processes may scrutinise whether the employer has followed a fair and reasonable process.

Key points for employers

For employers, the case underscores the importance of fair and transparent processes within internal employment matters, alongside requirements for senior management to critically and objectively evaluate recommendations before acting.  Employers should:

Review your current investigation, disciplinary, and termination policies and procedures to ensure they allow for sufficient flexibility to deviate from or modify any prescribed steps;

Develop an investigation and disciplinary internal guide for managers to ensure they are correctly applying the policies and procedures in these matters. The guide should also emphasise that any investigation or disciplinary process should be as procedurally and substantively fair as possible;

And ensure that any investigation findings are based on conduct that has been presented to the employee, and that the employee has been given the opportunity to respond.