Record damages awarded to NSW employee for wrongful termination: what can we learn?

Eden Elliott - Friday, October 30, 2020

Case study prepared by WISE Workplace State Manager NSW, Tracey Bosnich 

Image: unfair dismissal

Most of us may believe that if a contract is not signed, it is not legally enforceable. On 10 September 2020, the NSW Supreme Court handed down a significant decision, awarding record damages to an employee for termination of employment and amongst other findings, providing grounds upon which an unsigned contract may be held to be legally enforceable and take precedent over a signed contract.

Background

Ms Melinda Roderick (“Roderick”), the Executive Director of Washington H. Soul Pattinson & Company Ltd (“WHSP”) had been employed since 2006,  when Roderick commenced in the role of Chief Financial Director. She was appointed as Finance Director in 2014, till 12 April 2018, when she was terminated without notice. More notably, Roderick was the only female on the Board and was the second most senior employee in the company.

On 10 September 2020, Roderick was awarded record damages in the amount of $1.105 million. The case was litigated on the issues of termination of employment without warning, failure to give reasonable notice of termination, and failure to pay both short term and long-term incentive entitlements.

Original Signed Contract v Unsigned Contract

Roderick's terms and conditions of employment were originally set out in the 2006 contract ("the original contract"). However, following Roderick becoming the Finance Director in 2014, a draft ‘new contract’ was made in 2015, but was never signed. WHSP argued the original contract prevailed. 

Roderick submitted that when she became the Finance Director, the original contract was discharged. The Court noted that there was a significant change in her role tasks, obligations and duties and that the original contract could not have appropriately been applied in the circumstances, especially where the original contract ‘did not contain a clause specifying that it would remain in force, even if the duties are altered’. It was noted that under the new contract Roderick's responsibilities had significantly increased, in that she became the director of 12 companies. 

Despite the new contract being unsigned, the Court found that the implied intention was for her original contract to be discharged and for the parties to be bound by the new contract. Therefore, the terms and conditions of the unsigned new contract were found to apply and took precedent over the signed 2006 contract.

Calculation of termination payment 

WHSP calculated Roderick’s termination payment based on the signed original contract. Accordingly, Roderick was only paid three months’ of her old salary, in lieu of notice, which was expressly stipulated as the notice period in the original contract.

Roderick’s claim for damages was made in accordance with the notice period expressly stipulated in the new unsigned 2015 contract, being 24 months; and for payment of an amount representing her incentive entitlements under both the long-term and short-term incentive plan and scheme, included in the new contract.

Key issues litigated with respect to damages

There were five issues litigated: whether the original 2006 contract containing the express term of three months' notice applied; if the new unsigned contract applied, what was the implied period of notice; the notice period Roderick should have actually been given; determination of whether Roderick was eligible for entitlements pursuant to the short term and long-term incentives; and the reason for her termination.

Implied Notice and Incentive Bonuses

WHSP argued the original contract provided an express term of a three-month notice period.  As they did not give three months' notice, WHSP paid Roderick an amount in lieu of the three months’ notice and therefore argued they were not in breach of contract.  Roderick argued she was entitled to 24 months’ notice in accordance with the unsigned 2015 contract.

Once the Court established that the original contract no longer applied, it had to determine, what the ‘implied reasonable notice term’ should be. The Supreme Court did not uphold the 24 months’ notice period in the new contract, but determined that Roderick was entitled to 12 months' notice.

Roderick argued the new contract entitled her to the incentives. WHSP argued it was not obliged to pay the incentives as payment was discretionary and dependent on performance, and that Roderick was terminated for ‘poor performance’,  had not worked the full year and was no longer employed. WHSP further submitted that Roderick was terminated prior to the assessment of these incentive benefits.

The Court stated any "decision as to payment is only discretionary in the sense of assessing [Roderick's] performance against the KPIs". The Court stipulated that was an implied contractual obligation to "exercise any discretion conformably with the purpose of the scheme and not to choose arbitrarily or capriciously or unreasonably to not pay money, irrespective of whether the agreed parameters had been achieved". The argument to not pay Roderick as the employment ended "only a matter of days before the end of the relevant financial year would be quite unreasonable and arbitrary".

Reason for termination

The termination letter stated that Roderick was "not the right fit". Roderick argued that she was terminated without explanation. WHSP then subsequently submitted during the litigation, that Roderick was actually terminated for “poor performance”.

The Court noted that it was a "curious feature" that there was not a single document noting an issue with Roderick's performance, including the termination letter itself. It did not accept that Roderick had performed poorly,  but more so "that it (WHSP) could do better in terms of value for its money" given that a day after terminating Roderick, WHSP hired a new CFO on a lower salary. Further, the new CFO had no position on the board and reported to the chief executive, which the Court noted "would have saved [WHSP] a considerable sum".

Key lessons

This case illustrates the following important points for employers:

  • employers should be aware of the terms of their employment contracts;
  • employers should ensure the contract is executed by all the parties;
  • where an employee’s role title, duties and obligations are changed, the Court will look into the ‘intention of the parties to be bound by that contract’ as well as any alteration of responsibilities and duties, to determine when there is a signed contract and an unsigned contract, which contract will apply.

The dangers of wrongful termination for employers are significant – in this case, to the tune of over a million dollars. Employers should always be cautious when ending employment contracts, particularly if the termination involves role changes, very senior employees, complaints, disputes, poor performance or particularly wrongdoing, to ensure termination processes are both compliant and procedurally fair. 

WISE Workplace offers consultancy support with HR and dispute resolution matters to assist employers in meeting these obligations.  If you are seeking advice on the proper way to resolve an internal workplace dispute, contact us today.

How to Navigate Counter Allegations in Investigations

Natasha Kennedy-Read and Vince Scopelliti - Friday, February 14, 2020

It is not unusual when investigating allegations such as sexual harassment, bullying or theft for the person accused of the misconduct to make a counter allegation.

This in turn can generate further counter allegations, making it difficult for investigators to keep track of a growing litany of wrongdoings!

Steering through the sea of counter allegations means handling each complaint separately, being mindful of procedural fairness and adhering to the civil standard of proof. 

Divide ALLEGATIONS into separate incidents

It is important not to conflate cause and effect when it comes to counter allegations. If the allegation is that person A slapped person B, who, according to A, retaliated by stealing A’s smartphone, these two allegations must be investigated separately.

It may be that that person B had nothing to do with the smartphone’s disappearance, or the slap never happened. 

By looking at them as two unrelated incidents, investigators will not ‘miss’ important evidence, such as A accidentally leaving their phone in a meeting room.

keep procedural fairness top of mind 

The smartphone theft/disappearance may only come up when B is being investigated for the alleged slap. The alleged wrongdoer makes the counter claim in an interview that was up to that point unknown.

In effect, this means there are two allegations under investigation. Depending on the circumstances, this new information may require the interview to be suspended while further inquiries are made by the investigator. 

While it may be tempting to view the counter allegation as 'tit for tat' failing to investigate this new complaint could be viewed by a court or tribunal as a denial of procedural fairness by the employer.

Many unfair dismissal claims are successful because the employer in question failed to afford procedural fairness to the alleged wrongdoer.

The civil standard of proof

While investigating allegations and counter allegations, compartmentalising each alleged incident, its timings and events ensures impartiality and clarity.

This means taking care with unwitnessed and testimonial evidence (hearsay). Vivid descriptions of events may sometimes be compelling yet have no bearing on actual events. Finding an impartial witness to an event can short-circuit this problem, but it can be difficult. Just because person C saw B running from the bathroom crying does not mean the cause was a slap from A. 

Investigators should apply the civil standard of proof when assessing evidence. This means that for an allegation to be substantiated, the evidence must establish that it is more probable than not that the incident occurred.

The strength of evidence necessary to establish an allegation on the balance of probabilities may vary according to the: 

  • Relevance of the evidence to the allegations. 
  • Seriousness of the allegations.
  • Inherent probability of an event occurring.
  • Gravity of the consequences flowing from a finding.
  • The likelihood that the required standard of proof will be obtained.

Employers and management must at all times remain unbiased. Just because a counter allegation is made during an investigation does not mean it lacks substance. It may be that the counter allegation carries more weight and is of a more serious nature than the initial claim.

It can be challenging for investigators when presented with counter allegations. If you want to ensure that you are undertaking investigations effectively, WISE provides a range of skills-based short courses for investigators, as well as formal qualifications such as Certificate IV and Diploma in Government Investigations.



How to Take Action when Employees and Alcohol Mix

Vince Scopelliti - Wednesday, March 27, 2019

Alcohol and workplaces never mix well. No matter the sort of work they do, employees should not be in the workplace when they are under the influence or still suffering the effects of alcohol consumption. This includes drinking at work or immediately before starting work, and those who are still impacted by a big night out. 

So what steps should an employer take when dealing with a worker who they suspect is intoxicated in the office?

approaching an intoxicated employee

Occupational health and safety legislation throughout Australia places an obligation on employers to protect not only the safety of the intoxicated employee, but that of all other employees as well. 

This means making sure that an intoxicated employee can't hurt themselves or anyone else. Accordingly, employers have an obligation to approach intoxicated employees and ask them to leave work immediately (without driving a vehicle, of course!). 

However, being intoxicated at work does not necessarily mean that employees can be terminated immediately. When determining whether a dismissal for intoxication in the workplace is 'valid' or can be upheld, courts will consider several factors. These include whether the company's drug and alcohol policy or any contractual arrangements in place with the employee are sufficiently clear to demonstrate that there is a 'zero tolerance' policy for alcohol in the workplace. 

Although employees should certainly be disciplined for being intoxicated at work, employers who are wishing to avoid claims for unfair dismissal should consider interim steps such as clearly worded warnings rather than summarily dismissing staff.

factors that may contribute to alcohol abuse

Of course, prevention is always better than cure. Employers should give some thought to factors that may encourage their staff to over-indulge in alcohol to the extent that they are intoxicated in the workplace. 

Key risk factors include:

  • Age, gender and socio-economics. According to the Alcohol.Think Again campaign, young men who work in lower skilled or manual occupations are statistically most likely to be involved in 'risky drinking'.
  • Isolation (geographical isolation or social isolation within work peer groups)
  • Bullying, harassment and other interpersonal difficulties
  • Poor supervision, or support in the workplace
  • Difficult working conditions
  • High levels of stress 

How alcohol use can impact the workplace

An intoxicated employee can pose a risk to the safety of themselves and others. This is magnified when the employee is in a customer-facing role, or they are required to do manual work involving precision or machinery. 

Regardless of the nature of the work however, job performance can suffer as a result of the poor concentration and low productivity that will likely result from intoxication.

Steps to address alcohol use in the workplace

In addition to mitigating workplace risk factors, employers should ensure that they have clear and detailed drug and alcohol policies which identify under what conditions an employee would be determined to be 'intoxicated'. Policies should also clearly spell out the consequences of breaching those conditions. 

Employers must ensure that any breaches of the policy are thoroughly and objectively investigated, and any required disciplinary action is taken swiftly. 

If you would like to know more about risk management and creating effective drug and alcohol policies, or you require assistance with investigating an incident involving an intoxicated employee, contact WISE today.

Gender Equality: How to Create a Win-Win in the Workplace

Vince Scopelliti - Wednesday, March 13, 2019

It can seem unbelievable that gender inequality persists in Australian workplaces in 2019. As well as the obvious human rights issues, some employers and managers fail to comprehend that a lack of gender equality can have measurable negative consequences for the organisation as a whole. 

Let's examine some of the alarming statistics around the situation for women in the workplace, the benefits of championing gender equality, and some of the more positive approaches that can be taken by organisations to create a win-win situation.

inequality - some sobering statistics

To fully understand gender inequality in Australian workplaces, it can help to absorb some of the bald statistics. Women across the Australian workforce are paid 15.3% less than men for equivalent work, and accumulate less than half the superannuation. They have a 50% chance of experiencing sexual harassment in the workplace, and the same odds of experiencing discrimination on the basis of being a parent! 

Barriers to gender equality in the workplace can be both subtle and not-so-subtle. Positional bias and diminished responsibility stem from the idea that only one gender or the other is 'right' for a job, such as reception work or heavy lifting. Subtler barriers see women being asked about family issues at job interviews - and yet not men. 

Other barriers include a lack of targeted support to help women overcome the promotional glass ceiling. For example, if the ability to act in higher positions, attend training or to network with stakeholders is not made sufficiently flexible for women in the workplace, then that glass ceiling will undoubtedly stay firmly in place.

WHy it's vital to rectify workplace gender inequality 

As indicated, these practices of gender inequality are deeply unacceptable on human rights grounds alone. Yet there is also a strong business case to be made for rectifying this situation and making gender equality a key component of business-as-usual. 

Firstly, fostering a level playing field in the workplace creates a sense of certainty and loyalty among all staff. The subsequent improvement in staff retention reduces the costs and inconvenience of rehiring and retraining. It also creates a more harmonious corporate environment due to reduced staffing changes. 

And - as if these benefits to business weren't enough - workplace gender equality enables longitudinal corporate knowledge to be more easily captured and retained. 

devEloping a high-quality business reputation

Reputational benefits also flow to those organisations that actively embrace equality for women in the workplace. For example, the prestigious Employer of Choice Awards in Australia recognises and promotes businesses that demonstrate practical gains in workplace gender equality. Reputational gains lead to the attraction and retention of high quality staff. 

fostering gender equality in your workplace

Many organisations have the best of intentions when it comes to improving gender equality. However sometimes it can be challenging to know where to start. A workplace audit of current equality initiatives can help to pinpoint any gaps - particularly between lip service and actual practice. From here, robust policies for parental leave and support, career assistance and flexible work arrangements can form an excellent base for the improvement of workplace gender equality on the ground. 

A strong framework for workplace gender equality

Being a leader in workplace gender equality brings considerable gains in employee satisfaction, reputation and the bottom line. It also works to lessen the chances of expensive claims being made on the basis of alleged gender discrimination. 

At WISE Workplace, we pride ourselves on the assistance that we provide to employers in their pursuit of excellence. We have the experience and governance expertise to help organisations remedy risks and work towards excellence in workplace gender equality. Get in touch if you would like to discuss the best ways to create equality in the workplace for women - and indeed for all employees.

Whistleblower Changes - Getting Your Policies Right

Vince Scopelliti - Wednesday, January 16, 2019

With the new changes to whistleblower legislation soon to be debated and enacted, it's essential to assess whether or not your business is compliant. An important part of ensuring compliance with the changes lies in the development of robust policies to protect whistleblowers. The Human Resources function has a central role in preparing staff for the new approach to whistleblowing in the workplace. 

We examine best-practice policy development for the support of whistleblowers in the workplace, including compliance hazards to watch out for as the new legislation takes effect. 

recapping the changes

We have previously examined the architecture of the new regime, due to be enacted in early 2019. The proposed changes to legislation emphasise the need to not only protect workplace whistleblowers when they speak up, but to penalise organisations that fail to provide protection from harm. As part of these new requirements, whistleblower policies must be current, workable and robust. Tokenist policies and procedures that fail to effectively protect whistleblowers are no longer acceptable. 

how can hr guide the process

The most important focus for Human Resources departments will be the development and maintenance of a whistleblower-friendly culture: This is a good news story, the government has recognised the importance of whistleblowers in the fight against corporate wrongdoing and has acted in a positive way to encourage and support this practice. 

In developing quality training, in-house publicity, policies and procedures, HR needs to ensure that they guide staff and management towards a more supportive and knowledgeable stance in relation to whistleblower protections. 

best-practice in policy design - are you compliant? 

In view of the legislative changes due to be delivered, organisations are clearly required to 'get their house in order' when it comes to the development and maintenance of appropriate policy instruments. It is not sufficient for example to have policies that merely provide lip service to the ideal of whistleblower protections. 

There must be clear and user-friendly mechanisms for anonymous reporting and disclosure - even if there is a mere suspicion of corruption, graft, fraud or other foul play in the organisation. 

Importantly, it is no longer necessary to approach a direct supervisor to report an issue - the new legislation reflects a growing understanding that ostracism and discrimination can and does occur if a whistleblower is limited in terms of reporting mechanisms. 

Now is the time to examine your organisation's policies around whistleblower protection, to establish if they comply with the widened scope of the new legislation.

compliance hazards to watch out for

In developing the mechanisms to protect whistleblowers, there are a number of potential pitfalls to be aware of. Firstly, organisations can be liable if they fail to prevent harm to a whistleblower as a result of workplace reprisal. Reporting structures must be watertight in terms of anonymity and discretion. The smallest leak can lead to significant emotional and career harm for those brave enough to blow the whistle. 

A second related hazard is policies that are too general to be of any real use to potential whistleblowers. Policy documents should clearly and distinctly answer the 'what, how, who, when' of whistleblowing; when time is of the essence, it is important that staff can act immediately with their concerns. Further, whistleblower policies and training should explain clearly to all staff the repercussions for any harm caused to a whistleblower due to their disclosure. The key is a strong culture, where encouragement and protection of whistleblowers is a core element of business-as-usual.

how WISE's grapevine hotline can help

WISE is well versed in the changes of the whistleblowing legislation, and has recently published a whitepaper that can help answer all your questions regarding these changes. In addition, we have a whistleblower hotline, known as Grapevine, which has been running since 2016. The service is entirely professional and anonymous, and available 24/7 to concerned whistleblowers.

If you would like to know more or would like a cost estimate to implement our confidential hotline in your workplace, contact WISE now. By including the Grapevine Whistleblower Service in your whistleblower policy framework, your organisation can go a long way to fulfilling its requirements under the new legislation.

Protecting Whistleblowers: Are You Ready for the Changes?

Vince Scopelliti - Wednesday, December 05, 2018

With new whistleblower protections to take effect in early 2019, it is essential that organisations understand the broad legislative changes to the Corporations Act 2001 due to be debated in Parliament. In addition to the requirement for formal mechanisms and strategies to protect and assist whistleblowers, both public and large private corporations will need to be able to 'spread the word' to staff in a practical way. 

Successfully embedding the changes to whistleblower protections into your organisation requires clear understanding, action and communication. With 2019 just around the corner, the time is right to ensure that you have all the information that you need to meet the new obligations.

WHat is the definition of a 'whistleblower'? 

Blowing a whistle has always been a common method for citizens to warn others of significant problems such as overcrowding, bad sportsmanship or dangerous waters. Whistleblowing has nevertheless developed some negative connotations in the corporate world. 

Despite the need to guard against corruption and corporate wrongdoing, corporations have in the past done little to actively protect those who speak up from being harmed. The new regime, due to be enacted in early 2019, includes compensation for any whistleblower who suffers statutorily-defined 'detriment'. 

No longer will the definition of whistle blower be restricted to current employees: past and present contractors, workers, suppliers, family members and many other stakeholders can rely upon the new protections.

who the changes apply to 

The proposed changes to the Corporations Act 2001 will effectively ensure that large employers provide the incentive, means and protection for individuals to blow the whistle when corporate wrongdoing is suspected. The changes formalise the legal protections that have been available in a relatively piecemeal manner across time. 

The new regime will mandate that all Australian public companies, large proprietary companies, and registerable superannuation entities will have compliant whistleblower policies in place by early 2019. Further, it will be necessary to demonstrate that stakeholders can safely and anonymously exercise their right to blow the whistle on corrupt practices. 

reach of the new bill

The demands on corporations flowing from the changes to whistleblower laws via the Treasury Laws Amendment (Enhancing Whistle-blower Protections) Bill 2017 can certainly seem daunting. As an example, the new Bill requires that corporations provide clear, comprehensive and anonymous pathways for any staff or stakeholders who wish to report suspected wrongdoing. 

This includes demonstrating that policies and procedures designed to promote and protect whistleblowing are accessible by all stakeholders. Further, access to an anonymous helpline is crucial to ensure that parties can talk freely about any suspicions of wrongdoing. 

The reach of the new Bill includes the ability to look at past corruption and in some cases to award damages to workers or others who have suffered detriment in the past as the result of blowing the whistle.

next steps? 

In the short time remaining between now and when the new whistleblower changes come into being, it is essential that all relevant organisations audit their current practices relevant to the new Bill. To assist our clients in understanding the proposed changes, we have published a white paper, which is available for free download. 

One core offering that we provide is our industry-leading Grapevine Confidential Whistleblower Hotline. Staffed 24 hours a day, 7 days a week, Grapevine provides employees with the opportunity to make anonymous complaints to trusted and experienced operators. 

WISE has provided Grapevine since 2016, and the hotline enhances the way our clients manage their business, but also allows them be legally compliant with the new regulations. January 2019 is fast approaching. If you would like any additional information or an obligation free proposal, contact WISE today! 

How to Prepare for a Difficult Conversation

Vince Scopelliti - Wednesday, November 28, 2018

Engaging in a difficult workplace conversation is one of those tasks that most managers and business owners would prefer to avoid. Yet the reality is that from time to time, workplace behaviour or performance will be below par and will need to be addressed. 

The key to conducting a challenging conversation at work that is both professional and productive lies in thorough preparation - the three W's of when, where, and what.

WHen is the best time to have the conversation?

Timing is everything when preparing to discuss a difficult issue. Ask yourself a deceptively simple question - why am I instigating this particular conversation right now? If the answer is that you are annoyed, aggravated or otherwise emotionally charged by an employee's behaviour or performance, then this can often be a bad time to attempt a challenging conversation. 

Difficult conversations that are planned and delivered in a calm and considered manner have a much greater chance of producing desired outcomes. Conversely, conversations that are started impulsively, out of anger or frustration can often lead to later accusations of abuse and unfairness. This is particularly so where no warnings or offers of support are given. 

Putting difficult conversations off indefinitely is not productive either. This may create the impression that the conduct is tolerated or accepted. So, ask yourself - is now the right time?

where should i hold the difficult conversation? 

Much like timing, you should carefully prepare the venue for these challenging work conversations. One golden rule is - not in front of a worker's colleagues. Entering a work station and immediately delivering difficult words can be seen as disrespectful or even as an abuse of power. 

In some workplaces, it might be best to email the worker and request that they come to your office or a designated neutral space. Depending upon the gravity of the topic of discussion, it might also be suggested that the worker bring along a support person. 

When you are anxious about the need to have a difficult conversation, you might prefer to just go for it on the spot and begin, but take a deep breath and ensure that the venue is appropriate.

what is the topic of the difficult conversation?

This again might seem like a question that has a simple answer. It might seem obvious to you that the problem is bad performance, bad behaviour - or both. Such general labels however can appear to be an attack on the person, with no real way for them to reply in a meaningful way. And broad admonitions to 'shape up or ship out' are not only unproductive performance guidance - they can be seen as real threats to a worker's employment and do not meet the requirements of reasonable management action. 

Try to have a basic agenda prepared and distil the 'what' of the discussion into two or three clear and succinct points. 

For example, the conversation might cover a tangible issue such as the three late starts since last Thursday; the 30% dip in sales since June; the four separate reports of disrespectful behaviour in the workplace. Specificity assists in driving a conversation that is fair, transparent and likely to deliver a sustainable outcome. 

Choose words which are neutral and not emotionally laden. Avoid descriptive words such as appalling, dreadful, bad or shocking. Try to be rational, measured and neutral in your language and approach. If you are able to deliver a clear and rational statement of what the employee has failed to do or what they have done wrong and invited a response, you are well on your way to having an open discussion and finding a resolution. 

And lastly - listen! A conversation, by definition, involves two or more people. Don't be tainted by pre-judgement.

DIFFICULT CONVERSATIONS AS PART OF THE PERFORMANCE MANAGEMENT PROCESS 

Humans avoid conflict. We are community-based creatures and prefer to have things just tick along nicely. Yet these difficult conversations are important, having the overall goal of improving performance, getting to the bottom of troubling issues and smoothing the rougher edges of behaviour. 

Acting in anger is inadvisable, as are publicly-heard conversations and sweeping accusations. Clear guidelines for such communication should be set out in the organisation's policies and procedures, with training and resources available to assist. 

Should your difficult conversation form part of a performance management process, make sure that you are adhering to your organisations' relevant policies and procedures. This may include drafting a performance improvement plan if informal performance counselling is not effective. 

Without these structures, organisations are left open to complaints of unfairness or a failure to take reasonable management action. 

Expert help in getting it right

The reality is that difficult conversations are inevitable in the workplace, and it is important that they are conducted well. At WISE, we specialise in the management of workplace behaviour. We can investigate matters of misconduct, resolve conflict through mediation and provide consultation services for effective people governance. Call us at any time to discuss your requirements.  

Procurement and Corruption - The Warning Signs

Vince Scopelliti - Wednesday, October 31, 2018

Effective procurement requires the ability to foster productive relationships and to secure the best possible terms within a contract or project. However, there can be a fine line between savvy negotiation and a gradual descent into corrupt and/or fraudulent behaviour. 

Despite robust legal and policy requirements relating to procurement activity, fraud is nevertheless an ever-present problem within the supply chain sector. We examine some of the danger signs of corruption to consider within any procurement arrangement.

procurement fraud

Corruption and fraud go hand in hand. In procurement work, tender processes can be circumvented or omitted altogether, documents altered subtly to benefit internal operatives, and bids and contracts massaged to create mutually beneficial gains. Fraud can begin with lazy practices or commercial white lies, growing to a tipping point where procurement officers enable a status quo of daily corruption. By favouring existing contractors or accepting inducements to deal with others, procurement divisions can become riddled with fraudulent and self-serving behaviour.

red flags of corruption 

So what are some of the conditions that enable procurement fraud? Time and money lie at the heart of procurement activities, and both can usefully serve as red flags for possible corruption. Shorter-than-usual timeframes for tender processes can be a tell-tale sign of a strategy to reduce competitive bids and give favour to a particular supplier. 

Similarly, the acceptance of a higher bid with no meritorious justification can and should ring alarm bells. Other red flags include: poor communication protocols regarding procurement management; a lack of well-documented processes and outcomes concerning payment agreements and project costings.

a complex framework

In NSW, the procurement policy framework provides an extremely complex set of legal, governance and administrative requirements around procurement activities. 

While this has brought various authoritative sources of information into one structure, the framework does place considerable administrative demands on staff at the coalface. 

Management should understand and champion the framework, providing effective training and support to staff around ongoing issues of transparency and integrity.

Solutions to fraud and corruption

Establishing the right culture is the number one weapon against corruption. This includes fostering a work environment where transparency and integrity are at the core of business-as-usual. Staff training should be in depth and ongoing, with refreshers provided at regular intervals. Organisations need to audit and assess current internal controls, taking nothing for granted when designing mechanisms for combatting fraud. 

Anti-corruption controls already in place must be monitored for strength and efficacy at regular intervals. When red flags go up, a fraud response plan should be accessible, relevant and understood by the entire procurement division. Further, a thorough knowledge of current and potential suppliers should be developed and maintained, including detailed information on supplier capacity and sub-contracting. 

Perhaps most importantly - yet often overlooked - the procurement process itself must be monitored each step of the way, both for individual contracts and in terms of ongoing operations within the procurement division. A further enhancement possibility exists within business analysis programs; harnessing the power of data can provide an incredible means of monitoring procurement processes, picking up any suspicious activities through detailed analytics.

hear it on the grapevine

Grapevine is owned and operated by WISE Workplace. In 2016, we launched Grapevine to enhance the way our clients manage their businesses. The Grapevine Confidential Whistleblower Hotline provides employees with a safe and secure environment to report misconduct, enabling insightful management of complaints and the ability to bring about real cultural change and reduce risk. 

The Grapevine call centre is located in Queensland and staffed by trusted and experienced operators. The call centre is manned 24/7 and receives over 1,000 calls per week. For a free quote, call WISE today. And should you wish to learn more about methods for assessing potential fraud within your current procurement practices, we will be happy to assist.  

Creating a Safe and Healthy Workplace For All

Vince Scopelliti - Wednesday, October 24, 2018

Developing a positive working environment where all employees are supported is key to looking after the mental wellbeing of your staff, and freeing them up to be their most productive selves. 

A safe and healthy workplace is one which is inclusive and caters for the needs of all workers. According to the Australian Human Rights Commission (AHRC), a two-fold approach where the development of long-term policies is coupled with direct support services for workers is most effective. 

Let's take a look at the elements of a positive workplace, how to minimise potential risks to the wellbeing of your workers and what types of policies are crucial. 

characteristics of a safe and healthy workplace

By taking steps to improve the working environment, not only is the office a more pleasant place for everybody to be, but the risk of workers suffering from or exacerbating a pre-existing mental health condition is reduced. 

A safe and healthy workplace is one that offers:

  • The opportunity for staff to take regular rest breaks.
  • Minimal requirements to work overtime or have too high a workload, or at the very least adequate division of labour to minimise the impact of excessive workload on staff. 
  • Workplace mentoring and support programs.
  • Flexible work hours where required. 

COmmitment to a strategy for creating a healthy working environment 

It is not simply enough to announce your intention to foster a supportive, healthy and safe workplace - instead, a proactive strategy needs to be designed and implemented. 

In practice, this is likely to include commitments from all areas of the business to:

  • Ensure that policies, mission statements and procedures are designed and published (and easily available to all staff)
  • Implement the strategies and ensure that the commitment is not simple lip service - for example, ensuring that flexible arrangements are actually offered, not just promised. 
  • Consult with workers as to what they consider are essential elements of a safe and healthy workplace. 

Minimising potential hazards and risks

When formulating strategies, it is important to consider whether there are any hazards or risks to the mental health of your staff that could derail the improvements being implemented. 

Risks to look out for include:

  • Poor management, including lack of control and a failure to provide recognition or reward.
  • Workplace conflict (whether between peers or in the chain of command). 
  • Bullying or harassment.
  • Excessive workloads and stress.

When staff are feeling overwhelmed because of difficulties with their work itself, the likelihood of having a healthy and safe workplace is far lower.  

proactive measures to achieve a healthy workplace

One of the most important elements of creating a safe and healthy workplace is having adequate policies and procedures in place. In practice, this will mean policies relating to:

  • A commitment to a safe and healthy working environment
  • Confidentiality, mental health training and general mental health guidelines
  • Anti-discrimination
  • Harassment and bullying
  • Reasonable adjustments to help workers who are struggling with mental health issues. 

By having these policies in place, and ensuring that they are adhered to, all staff are able to be supported and an inclusive workplace is encouraged. 

Where to get assistance

If you are interested in improving your workplace, we can help you formulate the right policies and procedures. Talk to our team today. 

Managing Mental Illness in the Workplace

Vince Scopelliti - Wednesday, October 17, 2018

What can employers do to support and effectively manage employees who may be struggling with their mental health?

With an estimated one in five Australian adults suffering from a mental illness in any given year, this is becoming an increasingly important question for organisations to answer. 

From talking to an employee with a mental illness to addressing performance concerns, here's how employers can help support workers with mental health issues. 

how to talk about mental illness with a worker? 

Employers can't be expected to be experts, but when speaking with an employee about a mental health issue, it is helpful to have a basic understanding of the condition in question. This might include any symptoms, specific terms that relate to the condition and types of medications the employee is likely to be prescribed. 

How conversations are framed is crucial - employers should refer to employees as 'having' mental health conditions, as opposed to 'being' schizophrenic or depressed. Employers should also understand the difference between episodic and chronic mental health issues. 

Prior to conversations with employees about their mental health, employers need to ensure that they are prepared, have planned what they wish to discuss and offered the employee the opportunity to bring a support person with them. Employers may also make use of the assistance of a qualified mental health professional when approaching these meetings. 

concerns regarding an employee's mental health

While a physical injury might be obvious, it can be much more difficult to determine if an employee is struggling with their mental health. It is important for employers to remember that there isn't always an obligation for employees to disclose their mental health status. 

In these circumstances, an employer concerned about an employee's mental health can speak confidentially with them and advise them that they may be able to access support from a formal Employee Assistance Program (EAP). The employer may also wish to ask whether there is anything that they can do to modify or improve the workplace to assist the staff member. 

what to say to other employees

If an affected employee has volunteered details of their mental illness, and has agreed to disclosure, employers may wish to sensitively and respectfully disseminate information about the specific condition, or even arrange for mental health specialists to attend the workplace and provide information. 

Employers must not breach an affected worker's privacy and disclose matters that are personal to them. On some occasions, however, an employee's mental health condition may potentially impact other colleagues, or health and safety and must be disclosed. 

When a disclosure has been made, employers need to ensure co-workers:

  • Are supported in relation to any increased workload arising from their colleague's absence;
  • Have their concerns addressed and discussed in an appropriate forum;
  • Are offered access to internal or external counselling services;
  • Are protected from possible harm. 

Making reasonable adjustments

Workers who are struggling with mental health issues may find that they are able to contribute in a much more substantial way if their employer is prepared to make reasonable adjustments. These could include:

  • Flexible working hours or working from home arrangements
  • Moving an employee's physical location (i.e. into a quieter area, closer to a window, away from a co-worker who is triggering their condition)
  • Permitting employees to record meetings or take electronic notes if they are concerned about their memory. 

Addressing performance concerns

When an employer has concerns about an employee's capacity or capability to perform their duties, it is appropriate to apply the organisation's standard performance management system, and provide support to assist the employee. This support should be offered regardless of whether or not the employee has disclosed a mental health condition. 

Employers should consider:

  • Personal circumstances that may contribute to a worker's performance issue, as would be the case for all workers; 
  • Whether a mental illness may be contributing to the poor performance;
  • The seriousness of the performance concern (as for more serious matters, such as violence, there may be no option but to take strong disciplinary action regardless of whether there is a reason, such as a mental illness); 
  • Whether the performance concern relates to a key part of the job or whether reasonable adjustments can be made;
  • Encourage and enable the worker to discuss the performance concerns and whether there are any health issues that may have impacted on their performance. 

If the concern doesn't resolve and the adjustments don't work, employers may need to revisit the issue at a later date. 

If you'd like more information, check out our series of articles on this topic, starting with Mental Health in the Workplace. WISE can also assist with drafting and implementing policies and guidelines around disclosure, reasonable adjustments and speaking to colleagues about mental health.