Employee sacked for refusing to answer questions

The termination of an employee has been upheld by Fair Work Australia (FWA) after the employee refused to answer questions about a potential conflict of interest.

During his employment, the employee conducted a trucking business carting concrete for his employer’s business rival. Upon discovering the employee’s activities, the employer made several requests for information about the possible conflict of interest. The employee, however, refused to respond to the employer’s requests.

In determining the matter, FWA found there had been no breach of the employee’s common law obligation to avoid conflicts of interest between his personal interests and those of his employer. FWA said that more would be needed to find the employee breached his common law obligation to the employer, such as evidence that he actually provided confidential information to the competitor – mere apprehension that the employee will act in a manner incompatible with his duty to his employer would not be sufficient.

FWA also found that the employer could not rely on a breach of their Code of Ethics in circumstances where a complex policy document was distributed “by email without any steps being taken...to ensure that employees actually understand the Code...”

However, FWA did find that the employer was entitled to ask the employee the questions it did and to require him to respond. FWA also found that the employee was "wrong in concluding that his business dealings were none of [the employer’s] business".

FWA found that, in circumstances where the employer had a genuine "albeit arguably misguided" concern about a potential conflict of interest and the employee refused to respond to those concerns, there was a valid reason for the termination of the employee’s employment.

Key Points: Whilst there is a common law duty on all employees to avoid conflicts of interest between their personal interests and those of their employer, employers must not act upon suspicion or rumour alone that an employee will act in a way inconsistent with that duty. This case also reinforces the necessity for adequate induction and training on workplace policies in order to ensure that they can be enforced.