The Fair Work Commission recently considered unfair dismissal in the context of conflicts of interest in the case of Mr Matthew Boulton v Telstra Corporation Limited [2019] FWC 370.  Telstra was found to have validly dismissed Mr Boulton for breaching its Conflict of Interest policy by buying and selling new and used mobiles phones online and to family and friends.

Unfair Dismissal:

Employees who believe they have been unfairly dismissed have 21 days from dismissal to apply to the Fair Work Commission under s394 of the Fair Work Act (2009). The dismissal will be considered unfair if it is ‘harsh, unjust or unreasonable’, amongst other things. In assessing harshness, the Commission will evaluate the circumstances of termination with reference to the criteria outlined in s387. In particular they will consider whether there was a valid reason for dismissal ‘related to the person’s capacity or conduct’ and the process by which they were dismissed including communication of the reason to the employee and whether they were given an opportunity to respond.

In Matthew Boulton v Telstra Corporation Limited the Commissioner had to consider whether Mr Boulton’s purchase and re sale of phones was a valid reason for his dismissal. Mr Boulton was employed by Telstra as a Mobility Sales Representative with a focus on mobile devices, solutions and products. His duties included selling devices and services. Telstra submitted that Mr Boulton’s conduct was in conflict with its Conflict of Interest Policy.

Breach of Telstra’s conflict of interest policy:

Telstra’s Conflict of Interest policy requires employees to avoid ‘actual, perceived or potential conflicts of interest’ including ensuring that personal business, financial and other outside interests, dealings and relationships do not conflict with the employee’s work for Telstra. The document states that in the case a conflict arises that the employee ‘must promptly notify [their] manager, disclose it through the company’s process and take appropriate steps to manage the conflict’.  It also states that breach of the policy may result in termination.

The evidence led and accepted by the Commission was that Mr Boulton had sourced mobile telephones for family and friends online, had listed and sold them on websites such as a Gumtree and sold one of the phones privately to a Telstra customer. The Commissioner found that failing to raise to Telstra the perceived or actual conflict was a breach of the Conflict of Interest policy and amounted to misconduct. This conduct had a sufficient connection to Mr Boulton’s employment as it was incompatible with his duty to Telstra, as imposed by the common law duty of good faith and fidelity.

Process of termination:

Mr Boulton submitted that that the dismissal was harsh as the outcome of the investigation was disproportionate to his alleged misconduct. Telstra was found to have adequately notified Mr Boulton of the allegations against him and of an investigation into his conduct. He was interviewed twice and each time allowed the opportunity to respond to allegations as well as being given reasons for his dismissal. Whilst the Commission noted that it was reasonable for Mr Boulton to request written transcripts of these meetings it did not find that this prevented him from responding to the allegations against him.

Mr Boulton had been a long-term employee of Telstra in a regional town, and he argued that these factors meant his dismissal was inappropriate. The Commissioner considered Mr Boulton’s demeanour throughout the process relevant to this question. Evidence showed he was unwilling to cooperate, was evasive and gave conflicting versions of events and thus the dismissal was not considered disproportionate. Interestingly, the Commissioner noted that ‘had the applicant been open and transparent throughout the process, a different view may have been concluded’.

This case gives in an interesting insight into how unfair dismissal claims may be determined in cases of conflict of interest. In particular, it shows that a breach of a Conflict of Interest policy may constitute conduct warranting a valid dismissal by an employer.

If you are an employer or an employee, or have any further queries about unfair dismissal or conflicts of interest, please feel free to contact Michael Bishop on 9614 7707.

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