In George Mihalopoulos v Westpac Banking Corporation T/A Westpac Retail and Business Banking. (U2014/9618) [2015] FWC 2087. HAMBERGER, SDP. 5 MAY 2015, The FWC agreed with Westpac that a manager having an office affair with a subordinate was a conflict of interest and dishonest.

 

The dishonesty arising from the applicant’s denial to his manager that there was a relationship and only when the relationship soured and an AVO was issued, that management were made aware of the issue.

 

Westpac followed due process in this matter, ensuring that all requirements under the FWA were complied with:

 

  • Letter advising the applicant of a meeting and the allegations and that he could bring a support person).
  • The meeting provided the applicant with an opportunity to respond to the allegations.
  • A further “show cause” letter was sent to the applicant, providing him with a further opportunity to respond.
  • The applicant was then dismissed “with payment in lieu of notice” for serious misconduct.

 

In considering his decision, the Commissioner stated:

 

Employers cannot stop their employees forming romantic relationships. However, in certain circumstances, such relationships have the potential to create conflicts of interest. This is most obviously the case where a manager forms a romantic relationship with a subordinate – especially where the manager directly supervises the subordinate. It is virtually impossible in such circumstances to avoid – at the very least – the perception that the manager will favour the subordinate with whom they are in a romantic relationship when it comes to issues such as performance appraisals, the allocation of work, and promotional opportunities.

 

Employers have a reasonable expectation that employees will disclose any potential conflicts of interest, so that they can be appropriately managed. The obligation of the applicant with regard to disclosing potential conflicts of interest was referred to in his contract of employment and the respondent’s conflict of interest policy.

 

The applicant should have disclosed his relationship with Ms A – at least from the time they moved in together – to Mr Fedder. This would have enable the respondent to put in place appropriate arrangements to manage any potential conflict of interest.

 

The issue of dishonesty cannot be separated from the conflict of interest. The applicant had a duty to disclose his relationship with Ms A to his manager even before Mr Fedder asked him about it. This failure to disclose was greatly compounded when he lied to Mr Fedder about the relationship.

 

I find that the applicant’s failure to disclose his relationship with Ms A, especially when combined with his dishonesty in lying to his manager about the affair on two separate occasions, constitutes a valid reason for the applicant’s dismissal.

 

“There is no doubt that the effect of his dismissal has been particularly serious for the applicant – especially as he has spent virtually all his working life with the respondent. However, I do not agree that the factors referred to by the applicant outweigh the seriousness of his misconduct.

 

“It is important to acknowledge that the applicant held a senior position which required a high degree of honesty and personal integrity. His behaviour – in failing to disclose his relationship with Ms A and then (twice) lying about it to his manager – fundamentally undermined the trust and confidence which is at the heart of the employer-employee relationship.

 

“Having considered and weighed up all the relevant factors, I am not satisfied that the applicant’s dismissal was harsh, unjust or unreasonable. The application is dismissed.”

Greg Reiffel Industrial Relations & Human Resources Consulting has been providing the following services to businesses for over 30 years:

 

  • General HR and IR advisory service.
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Contact Greg on 0438 906 050 or mailto: greg@gregreiffelconsulting.com.au.