With the coming of the COVID-19 pandemic many employees are working from home and this appears likely to continue for some time yet - especially in Victoria.
In a decision highlighting the challenges of managing remote workers, the Fair Work Commission has held that a salesperson working remotely was unfairly dismissed whilst performing her duties in the COVID environment (see Clair Petersen v Kizuri Capital Pty Ltd, Maycorp Pty Ltd and Cricklewood Capital Pty Ltd trading as Allpet Products  FWC 5332 (20 October 2020)).
The employee was a South Australian based salesperson who consistently exceeded sales targets after joining the Perth based Allpet Products in early 2018. Her territory was extended to include Queensland in recognition of her success.
In October 2019 a new national sales manager commenced and increased the reporting responsibilities for all employees. With the arrival of COVID-19, all sales representatives were then asked to also submit daily sales reports at the same time as having their days and wages cut by 20%. The employee failed to do this on 2 April 2020 and received an emailed written warning. Upon receipt of the emailed written warning, the employee emailed back that "no sales were made Thursday 2 April - hence no email" adding that she did "however work on my unpaid day off, Friday 3 April - hence update of sales for that day today?".
The employee had previously claimed that she could not do her overdue weekly reports because she could not do them in the car, could not do them outside as it was raining and could not do them inside as cafés and shops were closed due to COVID-19 lockdowns.
Over the Easter long weekend, the employer visited the employee's Instagram account and found what it believed to be evidence of personal activities conducted on company time during the employee's territory trip to Queensland. This was regarded as the last straw and immediately thereafter the employer sent a letter by email dismissing the employee for serious misconduct.
After a hearing conducted by video conference due to COVID-19 restrictions, the Fair Work Commission took the view that, in the heat of the moment, the employer drew an adverse and unreasonable conclusion based on review of the Instagram account and held that the dismissal was unfair.
This was despite the fact that the salesperson's failure to consistently provide reports after October 2019 was a performance failure and that the employee should have realised that she needed to meet the increased reporting obligations. Nonetheless, not all performance failures are a valid reason for dismissal. The seriousness of a performance failure requires a consideration of context and circumstance. This was particularly relevant during the COVID pandemic and the employer failed to recognise the employee's natural anxieties about COVID-19 such as mixing with clients in public places and all that COVID could mean for her job security if the business was severely impacted.
It was the Fair Work Commission's view that instead, the employer required competing and conflicting obligations such as:
- servicing all customers largely to the same extent (including keeping an eye out on days off);
- completing all reporting obligations;
- complying with the new reporting obligations; and
- doing this for 20% less pay and in 20% less time.
While the employer was also dealing with competing and conflicting pressures (not wanting to lose customers but having to contain costs in light of uncertainty) this was, objectively viewed, an "unreasonable cocktail of expectations" on the employee.
With the sudden changes to working hours, pay and job security, the employee's performance could not at that time be objectively assessed against orthodox working hours or standard performance criteria.
The Fair Work Commission concluded that this taken together with "a heavy handed disciplinary approach" meant there were mitigating factors in assessing the seriousness of the salesperson's failures. Given the context and circumstances the reporting failures warranted formal sanction (either by a fairly conducted performance meeting or a fair written warning once the immediate impact of COVID-19 on the business and on employees had become clearer) but were not a valid reason for dismissal.
The Fair Work Commission noted that the short comings of the employee warranted a business response, but a handful of errors scattered across months of otherwise productive work was not, particularly in the unorthodox circumstances operating from COVID-19 coupled with the reduced hours and salary, a sound or defensible ground for dismissal.
In the final analysis, the employer tried to act fairly but its judgement was harsh and impaired. The salesperson was awarded 15 weeks' salary compensation amounting to $9120 after deduction of other earnings.
Points to note for employers
- The decision to terminate an employee for poor performance always warrants careful consideration of the context and circumstances in a holistic sense.
- With employees working remotely and in the more stressed COVID environment, employers are advised to give even more consideration of the context and circumstances of performance failures and err on the side of caution.
- Like many small to medium sized businesses, this employer did not have specialist human resource capability available. Nonetheless it was the FWC's view the business had been operating for over 37 years and was expected to understand the risks and complexities inherent in employing and dismissing staff even given the unusual pressures of 2020.
- The employer's examination of the employee's social media posts cross referenced with her work schedule, orders and GPS data from her company iPad did not substantiate the alleged misconduct and a number of the conclusions drawn by the employer were, when tested in evidence, factually wrong or unable to be made out to the required standard of proof being that of an employer acting reasonably.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances. Madgwicks is a member of Meritas, one of the world's largest law firm alliances.