Social club ordered to pay worker $27,000 after firing him over claims he made sexual comments and revealed the company’s finances to patrons

A social club venue in Melbourne has been ordered to pay thousands of dollars in compensation to a worker it dismissed over allegations he had told patrons the business had no money and had alleged open discussions of a sexual nature about activities with women in Thailand.

The worker, who had been employed at South Oakleigh Club in Melbourne from July 2012 until January 2017, lodged an unfair dismissal claim with the Fair Work Commission when he was fired after the general manager of the establishment put five allegations to him.

These included that he had told patrons of the venue that the business “had no money”; that he had revealed confidential details of another staff member’s employment to one of the club’s members; that he had spoken disrespectfully to management; and that he had engaged during work time in “open conversations of a sexual nature” in relation to women in Thailand.

The employee denied the allegations, although he did admit to having a conversation with someone who wasn’t an employee of the club about the sale of the venue’s car park. When he was told of the allegations against him, the worker asked for a copy of the company policies he was said to have breached.

He was issued with a letter from the employer containing an “amicable cessation” offer from the business, which the Commission heard was rejected, before making his own a counter-offer to the club, which was also rejected. As a result, the worker was dismissed and proceeded with filing an unfair dismissal claim.

The case heard evidence from seven staff members at the business, who gave accounts of the various claims made against the employee, including that he openly discussed the club’s financial position, was aggressive to staff and discussed topics of a sexual nature at work.

However, Fair Work Commissioner Michelle Bissett said in her decision she found the evidence presented by the employer was “far from compelling”.

“In particular much of the evidence given by witnesses for the respondent was self-serving, inconsistent, non-specific, based on hearsay and in some cases just not believable,” she said.

The commissioner found it was likely that the staff member had discussed the financial position of the club, but that this was in the context of the financial challenges being widely known rather than a tightly-held secret.

She was also satisfied one of the instances raised about the staff member, in which he is alleged to have acted in an aggressive manner towards a chef, did occur.

However, based on the evidence provided, Bissett said there was not enough to decide the other claims took place. On balance, the commissioner decided the instances that did happen could have prompted “further counselling” of the staff member, but not dismissal.

The employer was subsequently ordered to pay $27,417 to the worker, plus superannuation.

SmartCompany contacted management at South Oakleigh Club this morning but was told no comment would be made on the case. SmartCompany was unable to contact the staff member for comment.

Detailed investigations are key

Concerns about a staff member potentially damaging the reputation of a business naturally spark emotions, says Holding Redlich partner Rachel Drew, but SMEs must engage in detailed investigations before acting.

“Even where the employer is quite sure the employee has said something or brought the employer into disrepute, the employer will need to establish they have entered into some level of natural justice in their investigation,” she says. 

This means it’s important to act quickly and with a clear process if rumours or allegations are ever brought up about an employee, she says.

“It’s a very natural reaction for an employer to want to protect their reputation, but in terms of general principles, it requires the employer to be calm, logical and considered,” she says.  

Athena Koelmeyer, director of specialist law firm Workplace Law, says cases like this one are a reminder to businesses that the Fair Work Commission favours clear, first-person accounts as much as possible, over any evidence that could be considered hearsay.

“If a respondent comes to present itself in the manner that this club tried to, it really needs to present some first-hand evidence,” she says. 

In her decision, Commissioner Bissett made referred to information that had to be disregarded because of hearsay, and Koelmeyer says employers need to weigh up whether to introduce second-hand accounts into unfair dismissal cases at all.

“You can see the Commission does give pretty short shrift to that kind of thing,” she says. 

If rumours about the poor performance or behaviour of a staff member start to surface, Koelmeyer suggests starting to record these in as much detail as you can as soon as possible.

“An investigation doesn’t necessarily have to be by a lawyer: There tends to be someone in an organisation who is impartial enough to go and make some enquiries. The Commission doesn’t expect a work of art, but it does expect that detail,” she says. 

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