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Sink or Swim: FWC Confirms Higher Standards for Senior Employees in Workplace Conduct

Writer's picture: Naomi Shivaraman Naomi Shivaraman

What standards of behaviour are expected from senior employees?


The answer is quite a lot – according to a recent Fair Work Commission (FWC) decision. In the case of Paul James McAllister v Ahoy Club Fleet Management Pty Ltd [2024] FWC 2651, the FWC found that employers are entitled to holding senior employees to higher standards of conduct, particularly regarding loyalty, trustworthiness and honesty.


This decision centered around the termination of the employment of Paul James McAllister (the Applicant), who was employed by Ahoy Club Fleet Management Pty Ltd (the Respondent) and who was the Master on a charter yacht with twelve guests and seven crew members on board at the time of its collision.


The Applicant lodged an unfair dismissal application with the FWC to challenging the termination of his employment and seeking a remedy for unfair dismissal pursuant to section 394 of the Fair Work Act 2009 (Cth).


Ultimately, the FWC found that the Applicant’s dismissal was not harsh, unjust or unreasonable, and the matter was dismissed. However, this matter provides some key insights in respect of the expectations employers can have of senior employees to model exemplary behaviour, adhere to workplace policies, and maintain professional integrity in their roles.

 

Facts of the case


During its voyage, the yacht collided with the outer Hayman Island Port Channel Marker, causing $150,000 worth of damage to the yacht. Video evidence of the collision revealed a deck hand narrowly avoiding being crushed between the yacht and the channel marker.


Video evidence also captured the Applicant at the helm of the vessel distracted by his phone and a vape, a clear breach of his responsibilities. Additionally, the Applicant failed to follow safety procedures by allowing a guest to remain unsupervised on the bridge, switching off the radar as the vessel entered Hayman Island waters, leaving the bridge without appointing a helmsman after the collision, and failing to comply with the emergency plan post-collision, including sounding the alarm and checking on the crew and guests.


When the Yacht Manager conducted an investigation into the accident, the Applicant attributed the collision to several contributing factors, including the nighttime darkness, distraction by a guest, fatigue and wind or logistical conditions.


Ultimately, the Applicant’s actions in the collision were deemed serious misconduct pursuant to regulation 1.07 of the Fair Work Regulations 2009 (Cth) and his employment was terminated.


The Respondent argued that the Applicant’s employment was lawfully terminated due to substantial and willful breaches of both the employment contract and company policies, asserting that these breaches constituted valid grounds for dismissal, particularly given the Applicant’s failure to provide sufficient explanations to mitigate serious safety breaches.

 

Employer’s expectations


Notably, in the FWC’s decision, Deputy President Cross made it clear that employers are entitled to hold employees in senior positions to higher standards. Having higher expectations of senior employees was deemed “uncontroversial”.


In this matter, the Applicant’s employment contract outlined the considerations of loyalty, trustworthiness and honesty. The Applicant’s employment contract also provided that the Applicant’s duties would be set out in the Safety Management System Manual and further, the Applicant was bound by the International Regulations for Preventing Collisions at Sea, which includes collection procedures.


Deputy President Cross stated that the employer was entitled to expect these considerations from the Applicant, even in the event these considerations were not explicitly outlined in the Applicant’s employment contract.

 

Termination procedure


After the collision, the Respondent told the Applicant that his employment would not be terminated and that an investigation would commence. The Applicant was offered a chance to provide a statement in respect of the collision.

Subsequently, when the Applicant phoned the Yacht Manager to enquire about upcoming work, the Yacht Manager advised the Applicant by phone that his employment was being terminated effective immediately due to safety breaches, failure to implement the safety management system, and gross negligence associated with the collision.


Between the provision of the Applicant’s statement and the termination of the Applicant’s employment, the Applicant was not given any opportunity to respond to the allegations that led to the termination of his employment.

Deputy President Cross reinforced a previous finding of the Full Bench of the FWC that procedural faults must be considered in light of the following questions:


(a) Did the seriousness of the misconduct outweigh any procedural faults?; and

(b) Would the procedural faults have affected or altered the ultimate outcome of the dismissal?


The FWC held that despite there being a procedural defect in the termination procedure, that the termination was still lawful due to the “severity and sound basis of the reasons for his dismissal” and the fact that the Applicant’s response would not have affected the Respondent’s decision to terminate the Applicant’s employment. In making this determination, the FWC considered the small size of the Respondent’s business and the lack of access to dedicated human resource managers.

 

Takeaways


Ultimately, this case makes it clear that senior employees, which could include senior managers, executives, and recently promoted individuals, are held to a markedly higher standard of behaviour than that of more junior employees. The case reinforces the importance of maintaining high standards of conduct and professional integrity, especially for those in leadership roles.


Further, this case makes it clear that despite a procedure in a dismissal process being insufficient, this is not enough to make the dismissal unfair.

 

The legal team at BlackBay Lawyers can provide specialised and detailed advice in respect of unfair dismissal matters and the application of the Fair Work Act 2009 (Cth) for both employers and employees. If you require legal advice, please feel free to contact our team for a confidential discussion with one of our solicitors.


The content in this Article is intended only to provide a summary and general overview on matters of interest. It is not intended to be comprehensive nor does it constitute legal advice. It should not be relied upon as such. You should seek legal or other professional advice before acting or relying on any of the content.





Profile of Sally Westlake, BlackBay Lawyers Associate.

ABOUT THE AUTHOR


Naomi Shivaraman  has been an award winning journalist and producer for 25 years. She joined BlackBay as the team’s Legal Affairs Strategist, a role created to utilise her combined legal and media strategy skills, helping clients and stakeholders navigate the court of public opinion.


Not only does she assist the team in a paralegal capacity on complex litigation matters, but she also provides reputational, media and communications counsel. For the past few years, Naomi has combined her law studies with a full-time career. Naomi will finish her Bachelor of Laws degree at Macquarie University next year.



 

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