Forced to Quit? The Hidden Cost of Poor Investigations.

The Fair Work Commission (FWC) recently handed down a significant decision in Sewell v dnata Airport Services Pty Ltd, awarding an employee the maximum compensation of six months’ pay, in the sum of $36,468.39 for unfair dismissal.

Although the employee resigned, the Commission found that her resignation was forced due to her employer’s poor handling of a workplace sexual harassment complaint. This constituted a “constructive dismissal” under the Fair Work Act 2009 (Cth).

What Happened?

• A female passenger services delivery agent reported that a male colleague allegedly made repeated inappropriate comments about how she should dress for an upcoming social event, including a comment that she should wear “a hijab with a short mini skirt”, and that “it would look really good”, to which the complainant repeatedly replied “no”.
• She found the comments extremely uncomfortable, and subsequently told two co-workers, who encouraged her to speak up, and formally report the incident – which she did.
• The employer initially acted appropriately, offering support, including Employee Assistance Program support, and suspending the alleged harasser pending an investigation.
• However, shortly after, problems began to emerge:
  • The alleged harasser received a written outcome letter weeks before the complainant did;
  • The complainant was only told verbally that the investigation was closed with no consequences for the male employee because “either side could not be substantiated”. She later had to request a written outcome and then follow up before finally receiving a written outcome.
  • The content of that letter was inconsistent with the earlier verbal communications.
  • Her request to be rostered separately from the alleged harasser was denied, with the employer saying it would be “discrimination” against him. She was instead offered to consider roles in other departments or in a different airline — requiring her to compromise her own position.

Key Issues Identified by the Commission:

• Failure to adequately separate staff: Following the verbal receipt of the investigation outcome, the complainant made a request to be rostered separately from the alleged harasser. This request was denied on the basis that the Applicant would have to change airline or position in order for that to occur. The employer also alleged that changes to the male employee’s shifts could not be made due to discriminatory reasons, and due to his visa arrangements (though the FWC did not accept this explanation due to lack of evidence). Ultimately, this left the complainant with no safe or practical option to continue working.
• Delay in communication: The employer failed to provide the complainant with a timely written outcome of the harassment investigation, despite giving the alleged perpetrator written confirmation weeks earlier. The FWC found this differential treatment by the employer demonstrated a failure to contemplate the significance and seriousness of the complainant’s report and that it understandably led, in part, to the complainant forming the view that the employer did not value her as an employee.
• Inconsistent messaging: Verbal and written communications to the employee about the outcome of the investigation were contradictory, undermining trust. The employee was first verbally informed that the allegations were “not able to be substantiated” and that the male colleague would return to work. However, the subsequent written letter stated that the employer was “unable to make a finding for some of the allegations raised throughout this process”, and that steps had been taken to ensure the conduct did not recur.
• Flawed conclusion: The employer had treated the allegations as “not substantiated” simply because the complainant’s and the alleged harasser’s recollections differed – without properly considering other available evidence. In this regard, the Deputy President made the following observation: “[113] As can be appreciated, there will often be circumstances where an alleged interaction occurs between two employees in the absence of a witness or overt recording. That does not in turn mean that allegations are unable to be substantiated unless the evidence of those two employees aligns.”
• Procedural gaps in the investigation: Potential witnesses were not interviewed (i.e. the two co-workers the complainant confided in), and the investigative process was found to lack thoroughness and balance.

FWC’s Findings:

• The employer’s conduct was “sufficiently egregious” to force a resignation. In particular, the FWC concluded it was unreasonable for the employer to place the applicant in a position of having made a report of alleged sexual harassment against a male employee, only to find herself in a situation where it appeared that she would be placed back on shift with that same male employee imminently.
• The employee’s resignation was not a genuine choice, and was the “probable result” of the employer’s conduct.
• The dismissal was unfair because the employee was effectively forced out by poor handling of the complaint and workplace arrangements.
• Compensation of six months’ pay was ordered, with no deductions as to failure to mitigate loss.

What Employers Should Take Away:

• Timely and consistently accurate communication with all parties is critical when managing complaints;
• Procedural fairness requires careful, consistent, and thorough investigations, including interviewing all relevant witnesses and robust justification to investigation outcomes;
• Employee well-being and safety must be prioritised, including properly considering rostering or redeployment solutions where necessary.
• Constructive dismissal risks may arise in circumstances where an employee feels they have no real option but to resign due to the employer’s conduct.

This decision is a timely reminder for employers to properly manage workplace complaints, particularly around bullying and harassment, as it may trigger unintended consequences where an employee’s resignation is later treated as an unfair dismissal.

Ask for help:

Navigating workplace investigations can be challenging, particularly if there are a number of parties involved, or where the investigation encompasses a series of events.

If you require any assistance or advice regarding how to manage workplace investigations or if you would like us to review your existing investigation policies or procedures, please feel free to reach out to one of our Workplace lawyers for specific advice and assistance.

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For further information on this alert, contact Director Danny Clifford.

The assistance of Lawyer Monique Chow in the research for this article is gratefully acknowledged.