As HR departments increasingly employ automation to streamline day-to-day tasks, some employers are turning to precedent software to draft letters to employees ─ including in relation to the termination of their employment.
In a recent case, Rebecca Whiffen v Sense Rugby Pty Ltd [2023] FWC 2516, the Fair Work Commission dealt with whether a failure to warn an employee that her behaviour could result in dismissal was a breach of the Small Business Fair Dismissal Code (Code).
Interestingly in this case, the letters sent to the applicant before her termination were drafted by a HR software program.
The Commission determined that despite the existence of a valid reason for dismissal, the dismissal was unfair as the process adopted and letters drafted by the HR software program were deficient in that they did not comply with the Code.
Overview of the decision
Ms Rebecca Whiffen commenced proceedings against Sense Rugby Pty Ltd (Sense Rugby) for unfair dismissal under s 394 of the Fair Work Act 2009 (Cth).
Ms Whiffen was dismissed by Sense Rugby for refusing to follow managerial directions relating to her role and responsibilities.
Ultimately the Commission determined there was a valid reason for dismissal. The issue that remained was one of procedural fairness.
Sense Rugby relied on a subscription-based HR software program known as "Happy HR" for several policy documents, and drafting the warning letter and subsequent termination letter to Ms Whiffen.
The Commission found that whilst Sense Rugby gave Ms Whiffen a written warning about her conduct in relation to "not completing set processes as required", it never told her in writing that she was at risk of being dismissed if there was no improvement in her conduct (which was a requirement under the Code). It was held that:
"The closest the business came was telling Ms Whiffen that her failure to follow instructions would lead to 'performance management', was 'serious' and could have 'serious consequences'. This was not sufficient for the purposes of consistency with the Code because it did not raise the prospect of dismissal directly."
Commissioner McKinnon considered the following conduct fatal to Sense Rugby's defence of the claim:
- the lack of HR expertise and human oversight of the HR software, which precluded tailored and accurate advice in the letter; and
- non-compliance with the internal code of conduct and performance management policy which were also developed by the Happy HR software.
To be compliant with the Code, the Happy HR populated letter should have included explicit language when warning of termination.
Lessons for employers
This case serves as an important reminder that human oversight remains essential when using software that produces warning letters or termination documents. Reviews should be conducted to ensure that documents comply with relevant laws and accurately reflect employee entitlements.
The risk of having non-compliant termination documents is that in the event an employee brings a claim, they may be successful in arguing that their dismissal was harsh, unjust or unreasonable given the procedural deficiencies ─ as illustrated by this case.
For more information about employers' obligations in relation to warning letters and termination documents, please contact our experienced employment and workplace team.
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