No policy = $100,000 fine

Earlier this year, a Victorian Magistrate’s Court handed down a $100,000 fine and a costs order against an employer in a decision which highlights the importance of having proper policies and procedures.

In this Employment Update we discuss two decisions that highlight the cost of not having proper policies, procedures, and training regimes in place.  We also outline the types of workplace policies and procedures we believe all businesses should implement as a bare minimum to avoid similar fates as the employers in these two cases.

The Victorian Magistrates Court Decision

Given it was a Magistrates Court decision, the available information on the first case is somewhat limited.  However, it is apparent that a worker made a number of allegations regarding conduct that occurred in the workplace. The allegations included that inappropriate comments were made by a director, and messages were sent, which pried into the employee’s personal life, and which included comments of a sexual nature.

It was found that the Employer had no formal system in place to prevent, manage, or respond to inappropriate workplace behaviours, due to an absence of:

• any relevant policy or procedure;
• a reporting process;
• documents or information for employees regarding definitions or characteristics of inappropriate workplace behaviour;
• documents or information for managers regarding such matters; or
• a process to investigate allegations of inappropriate workplace behaviour.

In determining an appropriate sentence for the Employer (who it seems did not attend the hearing), the Court noted (amongst other things) that the Employer had no system in place at all to address such allegations, and that the only thing in place were communal monthly meetings which in no way approached an appropriate system for dealing with these matters.

A fine of $100,000.00 was imposed on the Employer, along with an order to pay the Applicant $6,060.00 towards their costs.

What policies should an employer have?

As this case highlights, a failure to implement proper policies and procedures exposes employers to significant risk. At a minimum, we suggest that all businesses should have at least the following behaviour related policies:

• a Discrimination and Harassment Policy (incorporating provisions relating to sexual harassment and other sex or gender based offences);
• a Workplace Bullying Policy;
• an Email, Internet and Social Media Usage Policy (that links to the behaviours prohibited by your Workplace Bullying Policy and Discrimination and Harassment Policy); and
• a Grievance and Dispute Resolution Procedure.

Additionally, persons conducing a business or undertaking (“PCBU”) in Queensland are (as of 1 March 2025) required to have in place a Prevention Plan to manage the risks of sexual and gender-based harassment in the workplace.

To be clear, this is not a complete list of recommended policies and procedures, but represents the absolute bare minimum as to what an employer should have in place.  What other policies and procedures are required will vary from business to business, and according to its size, nature, and industry.

Is having a policy enough?

Another recent decision reiterates the need for employers to do more than just have appropriate policies and procedures in place.

In the recent case of Sydney International Container Terminals Pty Ltd v Craig Hancock (“Hancock”), an employee was terminated after breaching the employer’s drug and alcohol policy.  The employee was subject to a blood alcohol test, where he returned a blood alcohol content reading of 0.017, and in circumstances where the tolerated BAC limit was 0.00.

The employee subsequently made an unfair dismissal application.

During the hearing, the Fair Work Commission heard:

• That the employer’s policy, until very recently had allowed for a BAC reading of 0.02; and
• evidence from approximately 9 other employees that they were unaware of the BAC limit change.

The Commissioner found that the steps taken by the employer to inform employees of the change, including texting and emailing, were inadequate and not appropriate for employees who operate machinery and did not regularly use computers at work.

Whilst the Commission accepted that the employer had a valid reason for the termination, ultimately the termination was deemed to be harsh and unreasonable, and at least in part because the Commission was satisfied that the employee was not made aware of the change to the policy, and because inadequate training was provided in relation to the policy.

Ultimately, the employee was reinstated and received compensation by way of backpay (calculated at 50% of his earnings).

This case serves as a reminder that simply having policies and procedures is not enough.  Ensuring that policies and procedures (or changes to policies or procedures) are properly and effectively communicated to employees is essential.

We recommend that when new policies are introduced, or changes occur, employers should ensure that employees are given the opportunity to review those policies, and they should ‘sign off’ on having read and understood the policy (or changed policy).  Employers need to consider the appropriate way to provide training and education on policies, including with regard to the nature of the relevant workforce.

We also recommend that employers conduct regular ‘refresher’ training on their policies and procedures.   Refresher training should ideally be conducted at least every 12 months (or after a change or update to a policy) to ensure that recent evidence of training can always be provided.

Summary

As is evident from the cases discussed in this Employment Update, a business without proper behaviour-related policies, and grievance or complaint procedures, is a business that is carrying significant risk.  Furthermore, in Queensland, if you are a business that has not implemented the appropriate Prevention Plan to manage the risks of sexual and gender based harassment in the workplace, you are now in breach of your current legal obligations.

Finally, it is essential that businesses not only implement the proper policies, procedures and plans, but they must also ensure that their workforce is properly informed on those documents, and this can only be achieved through proper training (and then regular refresher training).

If you are at all in doubt about the policies, procedures, and plans that your business should implement, or you are not sure if your documents are properly protecting your business, please do not hesitate to reach out to our experienced employment lawyers.