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Unfair Dismissal Due to Unreasonable Demands for Company Property

Demanding that an employee return company property within an unreasonable time frame amounted to unfair dismissal.

28 May 2024

Mike Toten

Mike Toten is a freelance writer, editor and media commentator.

When an employee was being made redundant, the employer, relying on an HR Consultant to handle the matter, demanded that he return a company-supplied laptop and phone within a very short time frame.

The employer then wrongly accused him of sending malware when he returned the phone and dismissed him. The Fair Work Commission (FWC) found he had been unfairly dismissed and awarded compensation of $38,437. It was scathing about the HR Consultant’s conduct and advice provided.

Facts of case

The employee was a Manager employed for 14 years. He had arranged seven months earlier to relocate and work from home. The General Manager arranged for him to meet with an HR Consultant at a cafe near his home.

The Consultant told him the business was suffering a downturn, leading to an operational review, and offered to pay him $5,000 to take a voluntary redundancy. The employee said he would prefer a pay cut to redundancy, but was told he was a “cost-cutting exercise”. A follow-up meeting was scheduled for two days later, during which time the employee tried and failed to get answers to various questions from the General Manager.

At the second meeting, the Consultant told the employee he would be retrenched on the agreed terms provided that he returned his company-issued laptop and phone. He returned the laptop to factory settings and handed it over, but requested more time to transfer his contacts from the phone and purchase a new one for himself. The Consultant then told him the employer would “reserve the right to reclassify the dismissal” and gave him a deadline of two days to return the phone.

He returned it by registered mail, but the next day the Consultant emailed him to claim that the mail tracking number “had come up as malware” and that he had “erased all company intellectual property” from the laptop. The email said that he was now summarily dismissed for serious misconduct, and threatened to refer the matter to the police.

The employer accused the employee of behaving “belligerently” and repeatedly attempting to bypass the HR Consultant and contact senior management, despite being directed to only deal with the Consultant.

Misconduct by employer and HR Consultant

The FWC made the following observations:

The employer’s claim that it was “consulting” with staff as part of its operational review was false.
No other employees had meetings with the HR Consultant.
To meet at a cafe was “callous and unprofessional”, given the content of the meeting (proposed redundancy).
The complaint about returning the laptop to factory settings was overblown, as this is easily restored.
The employee was taken by surprise and his request to keep the phone to transfer his contacts was reasonable. He did not act maliciously towards the employer and was entitled to protect his own interests in that way.
The Consultant’s statement that he was being made redundant but would be summarily dismissed if he failed to return the company property almost immediately was “bizarre”. When the employee tried to contact the General Manager about it, he was “spitefully” ignored.
There was evidence of a fallout between family relatives underlying the decision to initially make him redundant and then terminate his employment.

When the employer and HR Consultant found out that the employee had obtained a new job, the Consultant contacted another Consultant to “outsource a reference check” to attempt to find out details (start date, salary, etc) of the new job. They claimed the employee had given permission to contact the new employer, but he had not. The FWC strongly condemned this conduct also.

Decision

Relying on the “poor advice” of the HR Consultant resulted in the employer unfairly dismissing the employee. The FWC awarded compensation of $38,437.

What this means for employers

The FWC was scathing of the conduct of both the employer and the HR Consultant it used. There was no genuine consultation about the “redundancy” – the employee was taken by surprise, his offer to take a pay cut was ignored, and he was given ultimatums. When he did not “cooperate” and sought to ask questions and request time to remove personal data from his phone, the employer and HR Consultant contrived to turn the situation into a dismissal – which the FWC ruled was procedurally unfair.