An employee who was sacked over allegations of racism has received $13,500 in compensation by the FWC, after it found a lack of procedural fairness and that her employer had been “very unfair” in labelling her a racist.

A recent case of unfair dismissal has been upheld by the Fair Work Commission (FWC), after a sales executive at a boutique liquor retailer was accused of making racist comments and given a ‘resign or be sacked’ ultimatum by her manager.

Commissioner Jennifer Hunt said that while the employee’s comments demonstrated “unsophisticated emotional intelligence”, her employer’s suggestion that they were “racist” and constituted a breach of workplace law was a “gross exaggeration”.

In order for an unfair dismissal claim to be upheld, the FWC must find that the employer dismissed a worker in a “harsh, unjust or unreasonable manner”. In this case, the Commissioner found not only that the employer had been harsh in its classification of the employee as a racist, but that it had also neglected its duties to follow correct procedures for summary dismissal.

The employee was consequently awarded with $13,500 in compensation, recognisant of the fact that she had been unemployed for eight weeks following the dismissal, and had ultimately taken a role at another organisation with lower pay than her previous job.

“This a very instructive case in relation to unfair dismissals, and also in not jumping to conclusions that an employee’s conduct is something that it may not be,” says Aaron Goonrey, Partner at Lander and Rogers.

“This is a good illustration that even in a case where you think the conduct is extreme, and you think you’ve got grounds for summary dismissal, that does not necessarily give you a right to avoid following a process.”

‘Insensitive’ comments did not warrant dismissal

The incident that triggered the employee’s dismissal occurred when she was overheard speaking on the phone with a coworker about the company’s marketing manager. The employee had just taken a large order from a customer that would create a lot of complex and time-consuming work for the marketing manager – work that the employee knew she did not enjoy. 

As a result, the employee joked to her colleague on the phone that the marketing manager would “swear at her in Brazilian”. When her colleague told her that the manager was actually Argentinian, not Brazilian, the employee replied, “They’re all the same.”

The employee was subsequently called into an unscheduled meeting with her manager, and was told that she could either resign or be dismissed because she had made “racial slurs” about a colleague. 

“This is a good illustration that even in a case where you think the conduct is extreme, and you think you’ve got grounds for summary dismissal, that does not necessarily give you a right to avoid following a process.” – Aaron Goonrey, Partner at Lander and Rogers.

In her appraisal of the unfair dismissal claim, Commissioner Hunt said that while the employee’s comments did not constitute ‘racism’, they showed a lack of “geographical intelligence”, and the employer’s response “should have involved some cultural training”. However, she said the employer “ought to know that requesting a person resign or be terminated is simply no longer acceptable”. 

Goonrey points out that the employer rushed to characterise the comment as ‘racist’ on face value, without careful consideration of whether it was actually unlawful with regard to the Racial Discrimination Act 1975.

“This conduct is disrespectful and it is discourteous,” says Goonrey. “And I think the employee has to wear that – you can’t go around and make those types of remarks. But are they racist in nature? That’s questionable.”

An interesting aspect of the Commissioner’s ruling was her observation that people confusing various accents is a common occurrence, giving the example of Australian and New Zealand accents often getting mixed up.

“I do have some sympathy for the employer because you can see [a case where] someone mixes up nationalities in a mocking way, and then starts to expand upon that and vilify someone,” says Goonrey.

“More often than not, in my experience, when employers think something is completely out of bounds, and it’s to the extreme, they jump to the conclusion that the punishment also has to be extreme, without pausing to think, ‘Is what we’re looking at really so serious as to warrant the disciplinary action that we’re contemplating?’”

How to ensure procedural fairness to avoid unfair dismissal claims

While the employer’s accusation of racism in this case proved to be unfounded, Goonrey says that even if the employee’s comment had been legally classed as racist, the employer would still be vulnerable to legal action based on the way the dismissal was conducted.

Most significantly, the employee was not provided with any prior notice of her dismissal or details of the allegations in question. She was told at the time that she had made other racist comments in the past, but the manager refused to elaborate on when these incidents occurred.

Fair Work’s criteria for ‘harshness’ in an unfair dismissal case considers whether the employer demonstrates a valid reason for dismissal, and that the person is given an opportunity to respond to the reasoning behind it – neither of which occurred in this case. 

The employee was also not given the option of having a support person present during the dismissal proceedings. The absence of a support person was recognised by the FWC in its ruling, but the Commissioner noted that while employers cannot refuse employees the right to have a support person present, there is no positive duty for them to offer this provision.

However, according to Goonrey, proactively offering employees this option is advisable to help ensure that the dismissal is being conducted in the most ethical way possible.

Read HRM’s guide on managing support people in sensitive meetings.

“I see no reason why an employer could or should not afford the opportunity of having a support person present, particularly if the employee is vulnerable – for example, if English is their second language – because [in those cases], there’s a huge power imbalance between the employer and the employee,” he says. 

“Even if it’s not legally necessary, we should be looking at it with a very broad lens to ensure that we have fulfilled everything we possibly can in relation to a procedurally fair dismissal.”

As well as providing access to a support person, it is advisable that HR/managers:

• Give a clear indication of the cause of dismissal in a written format
• Offer the employee a “fair and reasonable” chance to respond to the claims
• Give the employee time to seek advice
• Consider if warnings have been given in the past. If not, consider if this would be appropriate in this instance
• Can prove to the Commission that they considered the employee’s response before deciding to terminate.

Cases like this are a valuable reminder to employers that no matter how severe the behaviour is, they are not immune to retribution when established procedures are not followed correctly.

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