After a lawyer engaged in “volatile conduct” and refused to leave the premises, police needed to escort him out. On top of that, the lawyer refused to accept a termination.

What would you do if a worker wouldn’t leave the premises when you asked them to? What if you then terminated them, but they refused to accept it?

This recently happened at a Sydney-based law firm, and the worker then filed for an unfair dismissal claim. The case went as follows.

In a meeting to discuss a graduate lawyer’s poor conduct in August last year, the company’s principal said he asked the lawyer, who was allegedly behaving in a hostile manner, to exit the premises.

The lawyer claims he told the principal that he wouldn’t be “going anywhere” because he was an employee of the firm, despite being in a profit-share arrangement which meant the lawyer was not formally employed. 

The police were then called by both the employer and the lawyer.

Before the police arrived on the scene and is said to have removed the lawyer from the premises, the principal alleges the lawyer backed up nearly 6000 emails from the company’s computer system and deleted the originals, allegedly storing them on a personal server.

The following day, the principal sent an email informing the lawyer that there would be an investigation into his behaviour, and that they would no longer be able to supervise him due to his “volatile conduct… last evening and on a few previous occasions with office staff”.

The email went on to explain: “Your rude and crude behavior [sic] with fellow staff has been continuing in the office from some time now which is not acceptable as it has seriously impacted the work environment…”

After this, the lawyer, aged in his forties, allegedly replied in an email with the subject line “exploitation of young lawyer”, and accused the company of “brainwashing” him to sign a dodgy contract (more on that below), he was informed by the company that he had been reported to the Office of the Legal Services Commissioner. The company also said his engagement with the law firm would be terminated immediately.

The lawyer claimed the law firm owed him nearly $94,000 to cover IT work and furniture assembly/removal, and once this had been paid, he would hand over office items, including case files.

In light of the lawyer’s conduct, and the nature of the terms of engagement, the Commissioner concluded that the company was right to end the working relationship and to call the police.

HRM unpacks the ins and outs of the case with Mariam Chalak, solicitor at JFM Andreyev.

Conduct in question

Describing the lawyer’s behaviour and refusal to leave the premises as “egregiously unacceptable”, Fair Work Commissioner Donna McKenna found that “the applicant’s conduct was sufficiently serious to justify immediate termination of the relationship”.

In Chalak’s view, the employer responded to the lawyer’s poor conduct in an appropriate manner by phoning the police, which she says is a reasonable step to take in certain circumstances.

“If a person is posing a risk to the workplace, and that’s a risk to other employees or to visitors, then of course you would have reason to remove them from the workplace, which would include potentially calling the police to usher the person from the premises,” says Chalak.

“If an agreement has been terminated, and there’s no longer a requirement for that person to carry out work for an organisation, then there’s no purpose for that person to remain on the premises.”

In relation to the applicant’s claim that he was subject to exploitation due to his status as a young lawyer, the Commissioner said this “repeated self-descriptor of being a young lawyer was inapt”.

From Chalak’s perspective, his age is not relevant because the case came down to his unacceptable behaviour, and the nature of their working relationship.

Not an employee

Even if the Commissioner were to have found the lawyer acted reasonably, a dismissal could not have taken place since the lawyer wasn’t under an official employment arrangement.

McKenna said the terms of engagement “expressly disavowed an employment relationship”.

The lawyer’s contract explicitly stated that it was “expressly understood and stated that the parties do not form an employer-employee relationship” and that the “pure and simple objective” was supervised training with an agreed upon form of remuneration.

Chalak notes the Commissioner came to the conclusion that there was no employment relationship for a few reasons, including:

1. Intention of the parties at the time of engagement: “In this case, the applicant clearly did not seek employment when he first approached the respondent,” says Chalak, as the graduate lawyer had proposed the profit-sharing arrangement. “It was open to both parties to voluntarily enter into a contract of employment, and it was very clear that there was no intention for an employment relationship to come to fruition.”The terms of the arrangement were “clearly formalised in a legally binding document, not a contract of employment”, says Chalak. “That was very clearly drafted, and there was a specific provision in there that indicates this wasn’t an employment contract.”
2. The parties freely entered into the agreement: “The Commission held there was no coercion or duress for the applicant to enter into the terms. This is important because it clearly shows that the [employer] wasn’t trying to avoid entering into an employment relationship,” says Chalak. The Commissioner’s finding sits in contrast to the lawyer’s claim that he was forced into signing a sham agreement.
3. The firm had offered to directly employ the lawyer as a solicitor, and the lawyer was found to have turned this offer down, preferring to enter into a profit-share arrangement.
   
   “It goes to show that he voluntarily chose to enter into this kind of arrangement,” says Chalak.

“In circumstances where the applicant could have been considered an employee, there still would have been a valid reason for his dismissal,” says Chalak. “And that dismissal would have been in accordance with the Small Business Fair Dismissal Code.”

Lessons for HR

The firm, yet fair, ways in which the employer responded to the lawyer’s refusal to accept a termination offers some useful takeaways for HR.

First and foremost, it’s essential to have a robust employment contract in place.

“The contract needs to identify the key terms of the relationship. That will prevent any ambiguity about the nature of the relationship. Conversely, if there isn’t an intention to create an employment relationship then that also needs to be reflected in a different form of agreement,” says Chalak.

“This could be an independent contractor’s agreement or service agreement, which expressly excludes an employment relationship.”

These are still considered contracts, she notes, they’re just a different form and still have powerful entitlements.

If an employer is seeking to end the working relationship, Chalak advises ticking off the following steps:

1. Issue a dismissal letter: “That letter should very clearly spell out that the contract of employment has ended, and it should also spell out the reasons for termination, and identify the last day of employment. If relevant, it should also include the direction that the employee is required to return confidential information and property to the employer, and potentially a reminder that the employee remains bound by post-employment obligations.”
   
   (Read HRM’s article about how to write a strong dismissal letter) 
2. Pay out all entitlements: “This includes accrued statutory entitlements and outstanding wages,” says Chalak. “That would signal an end to the employment relationship. 
3. Discontinue access: “An employer should also disable an employee’s access to its properties and digital assets.”

“Taking all those steps will ensure that there is a very clear end to the employment relationship, and there isn’t any ambiguity about the last day of employment and the intention of the parties.” 

Should the employee still refuse to accept a termination, Chalak advises following up with a second termination letter.

“That second letter should also make reference to the previous correspondence, which will include the letter of termination, and also reiterate that the employer has ended the employment relationship. Confirm the last day of employment again, too.”

While all these points are important to bear in mind to ensure the employer is covering all their bases, Chalak says the key takeaway is keeping clear written records.

“You really need to document any arrangement with employees or contractors because if a matter does proceed to an unfair dismissal claim, that agreement, whatever form it takes, is going to form a very important part of the evidence in the proceedings.”

Unsure how to deal with a difficult employee in an appropriate and legally defensible way? Sign up to AHRI’s Introduction to HR law short course.
Book in for the next course on 22 November 2021.