Contrived investigation processes significantly increase organisational risk

The FWC recently (Mr Adam Rytenskild v Tabcorp Holdings Limited [2024] FWC 3129 (19 November 2024) ruled a CEO’s ‘forced’ resignation as a dismissal, criticising the employer for its calculated and opaque approach, which prioritised supposed corporate governance principles over fair treatment of its employees.

The employer was roundly criticised for strategically orchestrating the CEO’s departure, who had 24 years of unblemished service and denied the allegation, during a tightly controlled meeting where the allegations regarding a historical issue were raised for the first time. Compounding matters, the CEO was given a short time period to provide his resignation, whilst withholding clarity on his entitlements if terminated despite the employer’s lawyers and another adviser being in another room waiting on the outcome.

Our Take

We get that when stakes are high, and a member of the executive is involved that higher levels of rigour are required. We also get that sometimes allowing an employee to resign is actually doing them the favour. But it appears in this case that corporate governance ‘requirements’ were overly prioritised over procedural fairness, clarity, and respect for another person.

Sometimes the ‘rush’ to get the written resignation on the day just doesn’t pass the ‘pub test’, causes a worse case of ‘optics’ for the employer and exposes the organisation to legal claims such as general protections claim as occurred here.

Action Items

• have a ‘game plan’ for addressing misconduct issues – but be prepared to adjust for the circumstances

• recognise dismissal is still a people issue – As Simon Sinek said “if you don’t understand people, you don’t understand business”

• focus on achieving a just outcome in a respectful manner – rather than looking for what appears to look ‘good’ for the organisation

• don’t treat your people as ‘mugs’ – we all know what “resigned to pursue other opportunities” really means.

Edge Legal

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