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False narratives continue to come at a significant cost for employers in dismissal disputes

Employers need to continue to be wary about the significant negative impact that false internal narratives can have on the defensibility of dismissal disputes.

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In the recent case of Sherry v Toyota Motor Corporation Australia Limited (TMCA) [2020] NSWDC 827 (23 December 2020), the District Court of NSW awarded a long-tenured employee a remedy of $276,681 (plus costs) for his successful claim that TMCA had repudiated his employment contract by summarily dismissing him three days before he was due to receive a substantive redundancy payment.

Mr Sherry was summarily dismissed by TMCA for serious misconduct after an investigation by TMCA into expenses claimed by Mr Sherry on his corporate credit card determined that he had incurred personal expenses on the credit card and fraudulently claimed them as business-related.

During the investigation, Mr Sherry consistently denied any wrongdoing and provided explanations for the expenses which were determined to be dishonest by TMCA without being properly tested by contemporaneous evidence. In alleging that Mr Sherry had engaged in such serious financial fraud, TMCA’s investigation attracted the imposition of the Briginshaw principle, meaning that TMCA needed significant and convincing evidence to rebut the consistent and convincing evidence of Mr Sherry to the contrary. No such evidence existed and, accordingly, the decision that he was dishonest was not supported by the requisite standard of proof.

In finding that the matters relied on by TMCA to summarily dismiss Mr Sherry did not reach the threshold of serious misconduct, Scotting DCJ emphasised that the decision-maker had reached a decision to terminate Mr Sherry’s employment borne out of prejudice towards Mr Sherry and then created a narrative around the expenses matters to justify her decision by any means.

Key lessons for employers

  • Ensure that employee responses to allegations put to them are properly considered and tested against evidence before being rejected.
  • Any allegations that an employee is being dishonest during an investigation must be based on objective evidence and the allegation of dishonesty put to the employee (if that dishonesty is sought to be relied upon as a reason for termination).
  • Don’t allow decision-makers to make decisions about termination of employment before reaching conclusions as to the matters that are being investigated.

Written by Mathew Reiman

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Our team are here to provide the right advice for your business and workforce. If you have a question or require assistance, please contact Andrew Douglas or Kim McLagan.

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