Employer’s poor communication of employee’s resignation costs much more than an unfair dismissal.

Human resources professionals are acutely aware of the process adopted when terminating an employee. A fair dismissal which leaves little grounds for a complaint looks like this: you outline an allegation, allow the person to respond, listen to that response and make a decision based on the information provided.

A fair process guards against the risk of unfair dismissal or general protections litigation. However, even when this risk is realised, liability is usually nominal. 

Once the employee is gone, an explanation may be called for, and staff and clients need to be informed. A recent case highlights the intersection between a fair process, explaining a termination and the extraordinary risks of getting it wrong. 

Bowden v Hubba Bubba & Chapman

Mr Bowden commenced employment with Hubba Bubba Childcare while undertaking his Certificate III in children’s services. Hubba Bubba knew this and engaged him in a classification which did not require a qualification if the employer believed he had the necessary skills. 

Hubba Bubba implemented a poorly drafted policy intended to prevent employees from providing babysitting services to children in its care. 

In December 2015, during Christmas shutdown, Bowden – who was unaware of the policy – provided babysitting services to enrolled children. Shortly after the Christmas break, Hubba Bubba discovered this and Bowden was reprimanded, apologised and committed not to repeat it.

On 11 March 2016, Bowden resigned, giving one month’s notice. During the notice period, he walked non-enrolled children to school. This was reported to Hubba Bubba who summarily dismissed him without a fair process.

After termination, Hubba Bubba circulated an email advising clients Bowden was “not truthful with us regarding his studies” and “no longer with us due to disciplinary reasons”. 

Bowden commenced proceedings in defamation, claiming the email meant he was dishonest, was fired for disciplinary reasons, and was unfit to work in childcare.

Hubba Bubba defended the claim pleading justification (truth) and qualified privilege (protection from the penalty of a lawsuit for acts committed in the performance of a legal or moral duty and acts properly exercised and free from malice). The defence of justification was dismissed. The Court found Bowden had not been fired but resigned, was truthful about his qualifications and was fit to work in childcare.

The defence of qualified privilege is established when:

• the reader has an apparent interest in receiving information on the subject;
• the defamatory matter is published while giving information on that subject; and
• the conduct of the employer in publishing the information is reasonable in the circumstances.

The Court held:

• while clients have an interest in knowing an employee left, their interest ended there, and comments about the reason for termination were not protected;
• the content of the email was not reasonable when evidence contradicted it, and a fair process was not adopted prior to dismissal;
• the employer’s failure to give Bowden a chance to comment on the email before it was sent showed the email was actuated maliciously.

For these reasons the defence of qualified privilege was defeated.  

Be fair or pay up

Defamation allows employees to obtain significant damages. The Court awarded Bowden $237,970 in damages with costs likely exceeding $400,000. The most Bowden could have hoped for in unfair dismissal litigation would have been two weeks’ wages. 

This decision demonstrates the importance of adopting a fair process before termination, and the potential risks of explaining termination to clients and staff. 

HR professionals can assist employers to limit risk by ensuring a fair process is adopted, and ensuring employees are given input into the explanation of termination, when appropriate. If employers are determined to make adverse comment there is value in seeking competent legal advice beforehand.

Stefan Russell-Uren is an Employment Lawyer at Aulich Civil Law.

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