Andrew Douglas: What are we doing next? We’re off to the main topic.

Tom Daly:  Yeah, it’s called Plumb Tracks.

Andrew Douglas: Yeah, so-

Tom Daly: Price limited.

Andrew Douglas: Let’s talk about this. There is an issue that sits at law and it sits under what are called fiduciary duties, or the common law duties, that sit behind the relationship of an employer and employee. An employee must not do something which is inconsistent with their obligations to an employer whilst they’re employed, that includes setting up a business that is in competition, and that’s what this case Plumb Tracks is about.

And I guess one of the issues that I want to say again is, the complexity of common law and fiduciary duties is something that sits in the court process that have these fights on a regular basis, commonly in a commercial context. When it’s agitated before the Fair Work Commission, there’s a much more practical view taken, perhaps legally not as sharp, but in Plumb Track’s case, there was a person who set up, who was doing all the preparatory work to setting up a competing business, put up an Instagram site, but had not acted upon it at that stage.

Tom Daly: And they’d used the employer’s equipment to undertake these preparatory steps, I think.

Andrew Douglas: Yeah, now in a court of law, not the Fair Work Commission, that is fundamental breach of the fiduciary duty, okay?

Tom Daly: Even the preparatory step?

Andrew Douglas: Yeah, using your client’s assets, your employer’s assets, is a fundamental breach. It’s a breach of the Corporations Act, so it’s a breach of duties that sit under 182-183. But here in the Fair Work Commission, they said, “Yeah, but it wasn’t really competition because they hadn’t started competing at this stage.”

Tom Daly: Yeah.

Andrew Douglas: And therefore-

Tom Daly: They hadn’t solicited any clients or things like that.

Andrew Douglas:  Yeah, so we’re actually going to reinstate and give you $11,000 worth of compensate. What nonsense. Anyway, I guess what I’m saying is you need very clear policies and procedures. You need people competent to understand that you must not, your contract of employment must say you must not do any of these things because then you win, you win in every jurisdiction, but if you are hoping, the understanding fiduciary duties that exists at law, which is acknowledged and known at law, will be applied accurately in the Fair Work Commission, think again, so get your contracts right, get your policies right, act quickly, and you would’ve been successful. I think it’s probably time for us to go onto the case study, Tom.

Tom Daly: Yep. I’ll get reading then.

Andrew Douglas:  Okay.

Tom Daly: “Wilma was not happy. Her boss appeared to be excluding her from key meetings and treating her poorly. It all started after the strategic sales retreat at Deep Sleep Winery in September. Wilma had spoken at the retreat on the intrusion of AI into online selling. Her present presentation was well-received, perhaps the best of the retreat. Her boss, Candida, did not fare so well. She undertook an analysis of historical sales and the audience felt blamed. The CEO, in wrapping up the retreat, mentioned Wilma’s talent, imagination and leadership in the changing world.

He pointedly explained that history speaks more eloquently about the failure of leadership to embrace change. Now, with a new direction from Wilma, the pathway forward should be paved with gold. At the last night drinks, Candida took Wilma aside and told her to never upstage her again. Wilma felt humiliated. Candida angrily noted how blindsided she felt by what Wilma had said. Wilma could smell alcohol on her. She knew the CEO had worked with her on the paper and rated her highly. She also knew that Candida had sidestepped the project months earlier. Wilma tried to be kind and change the subject, but Candida continued.

When they returned from the retreat, Wilma noticed changes in the way Candida worked with her. The sole method of communication was now by email. Her work instructions were unclear and high-level, and when Wilma sought clarification, she received brusque comments, directing her to put her head down and do it. Wilma sometimes failed to read the tea leaves, and when she did, candida pounced. Wilma applied for a job with a competitor and advised her CEO. She explained what happened and said it was now untenable and was starting to affect her health and happiness. He told her to hold off and that he would fix it.

He spoke to HR who investigated claims of bullying by Candida toward Wilma. The HR manager found the claims of bullying substantiated and issued a show-cause notice to Candida, stating that the allegations of bullying were substantiated, but that there was no particulars of how she was said to have been bullied. Candida sent a certificate of capacity from her GP stating she had been hurt and humiliated from the retreat until now, and that the disciplinary process was the final straw. She suffered from an adjustment disorder, anxiety and depression.”

Andrew Douglas: All right, Tom, so the first question is, would Candida have a good workers’ compensation claim? And I think we both agree overwhelmingly yes.

Tom Daly: Yeah, and Candida is the-

Andrew Douglas:  The wrong.

Tom Daly: The worker who had been accused of bullying, found substantiated claims, but they weren’t properly put to her.

Andrew Douglas: That’s exactly right, so she never had the procedural fairness, one of the key issues that sits around the acceptance of claim, and so she’s got a medical condition, a diagnosable medical condition under DSM, so she’s got that. She’s been treated in a manner which lacks procedural fairness and is fair, so there’s no proper management action that occurred. Her claim will be accepted.

Tom Daly: It’s easy to think about because you get accused of bullying, it’s confirmed, but it was never said how you did it.

Andrew Douglas: No, that’s right. How could you respond to it? So that’s it.

Tom Daly: Yeah.

Andrew Douglas: The question is, would Wilma have a good workers’ compensation claim, assuming that she had a disability from DSM?

Tom Daly: Yeah, because she was… The risk, the psychological hazards to her created by the way that Candida was treating her after the retreat presented an obvious risk that wasn’t identified and dealt with.

Andrew Douglas: Yeah, and can never be reasonable management action, so on those circumstances, Wilma, if she had a dis disability, yeah, she’s fine. Was there any safety breaches? And I think the answer for that is-

Tom Daly: Yes.

Andrew Douglas: It’s interesting, isn’t it? There’s none from Wilma ’cause she’s the white knight, but there’s plenty from Candida, and Candida’s behaviour will be attributed-

Tom Daly: Attributable.

Andrew Douglas: Yeah, to the employer.

Tom Daly:  So the employer has-

Andrew Douglas: Yeah, and the CEO’s failure to intervene may place them at risk. Would there be a prosecution in this case? No.

Tom Daly: And why’s that?

Andrew Douglas: It’s all low-level. It’s not stuff that they could really hang their hat on. But if Candida’s employment was terminated, would she have a strong unfair dismissal claim or common law damage?

Tom Daly: Yes, because of the, as we said before, the poor investigation into the-

Andrew Douglas: So the unfair dismissal, but of course, procedural fairness is not part of a common law claim, so you might have an argument under Elisha and Vision Australia that the termination process was wrong, and therefore possibly, but I think the common law claim wouldn’t be as strong as the unfair dismissal claim in levels of success.

Tom Daly: And psychological damages, yes.

Andrew Douglas: Yeah, psychological damages, yeah. Would Wilma’s claim that she was constructively dismissed-

Tom Daly: Could Wilma claim that she was distraught?

Andrew Douglas: Yeah, she’d have to, wouldn’t she?

Tom Daly: Yeah, if she left.

Andrew Douglas: Unsafe place to go to. You had to work with her. No attempt was made to fix it, so I think she’s got a really powerful claim, so there you go. That’s it for this week. Can you give us the thumbs up and we’ll see later. Well done, Tom, with the cape, good.

Tom Daly:  Thanks, yeah.

Andrew Douglas: I’m done.