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Toxic Workplace Cultures – Beyond the Fair Work Act

  • Legal Development 26 May 2021 26 May 2021
  • Asia Pacific

Earlier this month, the Fair Work Commission handed down its decision in Mr Matthew Thompson v 360 Finance Pty Ltd [2021] FWC 2570 (Thompson v 360), which involved a Finance and Insurance Consultant who had been summarily dismissed after posting offensive memes on his personal Facebook account. Although the decision appears, at first instance, to relate to a straightforward application for an unfair dismissal remedy, Thompson v 360 highlights the importance of taking proactive steps to implement a positive and safe workplace culture – even in industries which are considered to have more ‘robust’ workplace cultures.

Thompson v 360

Matthew Thompson (Mr Thompson) was a Finance and Insurance Consultant at 360 Finance Pty Lt (360) and had been employed by 360 for approximately 7 years before he was summarily dismissed for posting the aforementioned memes. One was a sexual innuendo that referenced one of his female colleagues (and included a photo of her), while the other used explicit language to allude to the negative response to the first meme, after Mr Thompson was directed to take it down.

Importantly, Mr Thompson never denied posting the two memes. Rather, he argued that in the context of the work environment at 360, his dismissal was harsh, unjust or unreasonable. Specifically, Mr Thompson argued that “all sorts of conduct” was permitted by management, which took a “hands off” approach. This conduct included:

  • Circulating racist and sexist emails around the office;
  • Giving racist Secret Santa gifts to colleagues;
  • Sexual harassment of staff, which extended to public groping;
  • Ableist nicknames being given to a member of staff with a speech impediment;
  • Disseminating rumours and gossip, including regarding inter-office relationships;
  • Use of explicit, aggressive or abusive language, directed at both staff and clients; and
  • Attending a strip club as an after party venue to the office Christmas party. 

Mr Thompson admitted some involvement to the conduct set out above but maintained that since he had started with 360, management fostered and condoned a workplace culture in which “the electronic and verbal communication between staff members ran the full gamut of offensiveness, and included sexist, racist, ableist, sexually explicit and homophobic remarks”.

In his decision, Deputy President Lake accepted that even though the culture at 360 “fell considerably short of the standards expected of a workplace”, Mr Thompson’s conduct in posting the memes was sufficiently serious and inappropriate enough to justify the termination of his employment. The highly problematic workplace culture at 360 was no defence to Mr Thompson’s actions.

However, despite dismissing Mr Thompson’s application, Deputy President Lake remarked that the way Mr Thompson had been given several warnings in respect of other misconduct he had engaged in during his time at 360 “may have caused some opacity in the mind of [Mr Thompson] as to the consequences of his conduct”. That is, the workplace culture had nurtured a sense of skewed decision-making which contributed to Mr Thompson’s (erroneous) belief that there was no harm in posting the offensive memes on his Facebook.

Consequences of Toxic Workplace Cultures – WHS Prosecutions 

The workplace culture described in Thompson v 360 clearly falls on the extreme end of the spectrum in terms of how problematic and rampant the various behaviours were. This kind of working environment creates the perfect conditions for risks to manifest with respect to psychological health and safety.

Psychological health and safety has been growing as a concept that is worthy of attention not only by businesses, but by regulators. Instances of bullying and harassment have now found their way out of industrial tribunals and are being seriously investigated by work health and safety regulators in the Australia jurisdictions.

By way of example, in 2019 the South Australia Employment Tribunal charged and fined a number of parties involved in a bullying incident where a first-year apprentice was squirted with flammable liquid and set alight by two other workers (one of which was a supervisor).[1] Specifically, the parties who were charged under the Work Health and Safety Act 2012 (SA) were:

  • Tad-Mar Electrical Pty Ltd, the person conducting the business or undertaking, which was fined $25,000 (reduced to $15,00 for its plea of guilty);
  • The supervisor, Jeffrey Rowe, who was fined $20,000 (reduced to $12,000 for his plea of guilty); and
  • The main assailant, Luke Chenoweth, who was fined $35,000 (reduced to $21,000 for his plea of guilty).

Another recent example is the prosecution of Monjon (Australia) Pty Ltd (Monjon) and its director, company secretary and manager, John Bernard Moncrieff (Mr Moncrieff) under the Victorian Occupational Health and Safety Act 2004 (Vic) for Mr Moncrieff’s pattern of bullying behaviour over the span of 16 months, which included:

  • Using degrading, offensive, abusive and discriminatory language to speak to employees, and encouraging other employees in management roles to do the same;
  • Making inappropriate physical contact with employees;
  • Making sexual comments towards female employees; and
  • Threatening employees that he would be able to cause harm to them through his wealth, connections and involvement with an organisation referred to as ‘the Brotherhood’.

Multiple employees experienced stress, anxiety, post-traumatic stress disorder and depression as a result of Mr Moncrieff’s conduct. Both Monjon and Mr Moncrieff were charged and pled guilty. Monjon received a fine in the amount of $97,000 and Mr Moncrieff received a fine of $19,250.

Key Takeaways

What is important in the above three examples is that in all instances, it was the business that was also responsible (and in the latter two examples, responsible under work health and safety laws) for the failure to ensure that the problems with the problems with the work culture had been remedied. As we can learn from the Thompson v 360 example, where the workplace culture had gone largely unchecked for several years, a problematic workplace culture can create opacity around misconduct and whether the behaviour is truly a problem that needs to be addressed. That is, an escalating pattern where offensive behaviour is normalised can create moral ‘blinders’ for employees and management, who lose sight of healthy boundaries and appropriate behaviour in a workplace context.

This, in turn can create negative consequences, first and foremost, for employees and their mental health. It can also create a problem for businesses in terms of how they are discharging their duties under work health and safety laws, which extend to both physical and mental health.

Employers need to ensure that they take tangible and practical steps to ensure that a healthy and safe workplace culture is implemented in the workplace. These steps may include:

  1. Creating clear policies for areas where there may be some ambiguity, such as working from home and social media use. Clearly setting out expectations and healthy boundaries for these areas should be done from the outset.
  2. Ensuring that there is a procedure / system in place to receive, investigate and respond to complaints regarding bullying, harassment or other inappropriate behaviour in the workplace. This system should encourage feedback as it will the most timely way in which businesses can identify emerging problems. Genuinely engaging with employee feedback in a structured way will allow a business to ensure that they are taking steps to eliminate or minimise any risks to psychological health and safety.
  3. Conducting meaningful and productive reviews in relation to workplace culture by using indicators backed by empirical studies such as Psychosocial Safety Climate, rather than solely relying on ad hoc feedback.

[1] Martyn Campbell v Tad-Mar Electrical Pty Ltd [2019] SAET 225; Martyn Campbell v Luke Chenoweth [2019] SAET 181 and Martyn Campbell v Jeffrey Rowe [2019] SAET 104.

End

Additional authors:

Miriam Asar, Associate

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