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Weinstein scandal throws up employer dilemma

Adam Zuchetti
Adam Zuchetti
31 October 2017 2 minute readShare
Victim, crying, sad, bullying

The Hollywood scandal involving producer Harvey Weinstein has thrown up a dilemma for employers about what they can do if an employee is accused of serious misconduct.

The belief may be that as a business there are only two options: sack the worker and risk an unfair dismissal claim, or retain and defend them and risk losing customers.

“You can look at this almost entirely as a risk management issue,” Geoff Baldwin, an employment law specialist at Stacks Law Firm, told My Business.

“In the Weinstein example [from the business’ point of view], we don’t immediately care whether he’s guilty or innocent. These allegations have been made against him, they are clearly not fanciful, and we have a whole bunch of other staff and other women who work here who may be at risk if he continues now that we know about this.”

According to Mr Baldwin, the saying of “innocent until proven guilty” applies purely to a verdict in court.

“All that you don’t suffer is that you don’t suffer a criminal penalty until a court has found you guilty,” he said.

“It is not a phrase that means that an employer cannot take some action against you until a court has found you guilty.”

What’s more, he said, any employer who fails to take any action after being made aware of allegations against an employee can become a target for prosecution or financial reparations.

“From a Worker’s Compensation point of view … if you did not stand aside somebody [like Mr Weinstein] and he went on to harass some other woman, and she put in a psychological injury claim, Work Cover might say that is even worse than the original – you knew that there was a risk and you failed to take a step you could have taken to remove that risk,” he said.

According to Mr Baldwin, protecting the reputation of the organisation can be a legitimate reason for placing someone on ‘garden leave’ while investigations are undertaken to determine the truth of allegations, or for a judicial process to be completed – and should be an automatic response when it comes to certain allegations in certain industries.

“For example childcare workers or people work with children and are accused of some child-related misconduct, they are immediately removed from the workplace – but still paid – because the argument is that the risk, if they are guilty, posed to the children far outweighs the problem if they turn out to be innocent,” he said.

Mr Baldwin said that from a legal perspective, it falls back to having a solid employment agreement and workplace procedure documents in place, which outline the actions the business may take in the event allegations arise against an individual that may adversely affect the business, as well as steps to be taken once a resolution to the claims is reached.

“If somebody like [Mr Weinstein] was dismissed half-way through their contract and there wasn’t a clear clause that said that they could be sacked if they copped some adverse mention in the media, then they would have a cause for action and they would probably win damages for breach of contract,” he said.

However, if your documentation is in order, you retained the suspended employee on full pay so they did not suffer financially and they are welcomed back to work should the allegations prove unsubstantiated, any potential claim for unfair dismissal, treatment or reputational damage against you as an employer would be minimised.

“I might win, but my damages would be reduced because the employer … has done whatever it can to remedy the damage,” said Mr Baldwin.


Weinstein scandal throws up employer dilemma
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Adam Zuchetti
Adam Zuchetti

Adam Zuchetti is the former editor of MyBusiness and a senior freelance media professional, specialising in the fields of business, personal finance and property. In 2020, he also embarked on his own business journey – inspired in part by the entrepreneurs and founders he had met through his journalistic work – with the launch of customised pet gifting and subscription service Paws N’ All.

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