Earlier this year, an employer who emailed warnings to clients about a former employee was taken to the NSW District Court for defamation. The case proved to be very costly for the employer and highlighted the legalities around what an employer can say publicly about the dismissal of an employee.

Exercise due diligence before making a public statement about ex-employees

The case involved a young TAFE childcare student who was dismissed from a childcare centre. After the employee had left his position, his former employer sent an email to the parents of the children he had cared for, explaining why the student was no longer employed.

The problem with the email was in the wording. The childcare centre told parents that the student was no longer at the centre because of "disciplinary reasons" and for being "untruthful" with the centre regarding his studies, along with "some other issues".

The student took the childcare centre to court for defamation, claiming the emails impugned his integrity, honesty and fitness to work in the childcare sector.

Giving false explanations to clients about an employee's dismissal can backfire

The emails sent by the childcare centre employer cost him $237,000 in a defamation payout to the former employee, in a decision made by the NSW District Court. (See Bowden v KSMC Holdings Pty Ltd t/as Hubba Bubba Childcare on Haig & Chapman [2019] NSWDC 98.)

It was found that the email the employer had sent to parents had led them to believe there was something more serious behind it. One mother told the court that the employer had warned her about the student, claiming he couldn't be trusted and wasn't honest.

The student told the judge that when he learnt about the emails two weeks later, he became quite ill and required psychological treatment.

Did the employer resign or was he sacked?

The judge determined that the employer's email to clients gave the impression that the student had been fired. The student had, in fact, resigned after he was pressured to work 40.5 hours a week. This was incompatible with the hours required for his TAFE studies. Also, his contract allowed for a minimum of 16 hours a week, with two days time off for TAFE.

The employer told the court the student had been sacked because he had overstated his qualifications; a claim the judge rejected.

Grapevine effect of defamatory statements detrimental to career

The judge found the emails to be defamatory under the NSW Defamation Act 2005 and injurious to the man's otherwise good reputation. He found malice in what the employer had said, stating it was a "callous defamation of a vulnerable young man".

In awarding damages of $237,970.22, plus legal costs, the judge also noted that the grapevine effect among parents left a cloud over the former employee's childcare career.

Employers urged to seek legal advice before making statements about former employees

Making public and disparaging statements about an employee, past or present, can lead to an employer being sued for defamation.

If an employer has genuine concerns about a former employee and has something they wish to impart to clients, it would be wise to seek legal advice on workplace law before taking any action.

Nathan Luke
Stacks Law Firm

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