Unauthorised phone recording held to be a valid reason for dismissal, despite being unknown at the time of dismissal

The recent decision of the Fair Work Commission (FWC) in Hong He v Federation of Ethnic Communities’ Councils of Australia [2023] FWC 1160 is, in our view, noteworthy for two reasons.

First, the FWC has confirmed that employees recording their employers without consent can form part of conduct which constitutes a valid reason for dismissal.

Second, the FWC has provided a reminder that conduct can constitute a valid reason for dismissal even if the employer only learns about the conduct after the dismissal.

Facts

The Applicant, Mr He was employed as a Policy and Project Officer at the Federation of Ethnic Communities’ Councils of Australia (FECCA).

Between 1 February and 14 February 2023, a series of events (fairly described by the employer as “a confusing series of events”) took place which resulted in Mr He no longer being employed by FECCA. There was, during this period, a live question as to whether Mr He had resigned or whether he was dismissed. However, once the matter was before the FWC, the parties chose to proceed on the basis that there was a dismissal.

Of the events which took place in this period, the following are particularly important:

• On 2 February 2023, Mr He and FECCA CEO Mohammad Al-Khafaji had a telephone conversation. Unknown to Mr Al-Khafaji at the time, Mr He’s wife overheard this call on speaker phone and recorded the call.

• On 6 February 2023, Mr He and Mr Al-Khafaji had a further telephone conversation. On this occasion, Mr Al-Khafaji specifically asked Mr He if he was recording the conversation and stated that he did not give permission for the conversation to be recorded. Mr He advised he was not recording the conversation, when in fact he was.

Mr He later brought unfair dismissal proceedings in the FWC.

Decision

In the course of the FWC proceedings, Mr He sought to tender the phone recordings as evidence. The FWC did not allow the tender of the recordings because it was clear they were made without the consent of Mr Al-Khafaji and contrary to the Listening Devices Act 1992 (ACT).

The main factor in dispute in the FWC proceedings was whether there was a valid reason to dismiss Mr He. In that regard, the FWC noted (citing earlier cases as precedent) that:

Where a dismissal relates to an employee’s conduct, the [FWC] must be satisfied that the conduct occurred and justified termination… The test is not whether the employer believed, on reasonable grounds after sufficient enquiry, that the employee was guilty of the conduct which resulted in termination.

In this instance, the FWC held that the fact Mr He had recorded the 6 February 2023 conversation without consent, and had lied to Mr Al-Khafaji about his recording, was a valid reason for his dismissal. The FWC held that Mr He’s actions ‘were contrary to his duty of good faith and fidelity, and undermined the trust and confidence required in the employment relationship.’ Importantly, the FWC was satisfied this was a valid reason even though the employer was not aware of the recording until it was revealed during the FWC proceedings.

The FWC went on to note that just because there is a valid reason for dismissal, this does not necessarily mean that the dismissal was fair. However, in this case, after weighing various other factors, the FWC determined that Mr He’s dismissal was indeed fair. His application was accordingly dismissed.

Take home messages

Although there are some minor differences in the law between jurisdictions, this case is a reminder that, generally speaking, any party must obtain consent before recording a private conversation.

This includes private conversations which take place in workplaces or otherwise between co-workers. This requirement applies equally to employers and employees. Merely wanting an accurate record of a conversation is generally not a lawful excuse to record a private conversation, without consent.

This case demonstrates that covert recording of meetings by an employee, in addition to being illegal, can constitute part of conduct which constitutes a valid reason for dismissal. However, it must be noted that it was only the 6 February 2023 recording (not the 2 February 2023 recording by Mr He’s wife) which in the FWC’s view formed the basis of the valid reason for dismissal. Further, Mr He’s additional conduct of lying directly to Mr Al-Khafaji after Mr Al-Khafaji’s express refusal of consent to being recorded was important in the FWC reaching the conclusion that Mr He had engaged in conduct warranting dismissal. Thus, readers should take care not to misinterpret this case as somehow demonstrating that unauthorised recording of a phone conversation is an automatic basis for dismissal.

The other noteworthy aspect of this case is that the conduct which, in the FWC’s view, justified dismissal was not known to the employer until after the dismissal. While the facts in this case are quite unusual, the case does in our view provide the more general lesson that investigations into an employee’s conduct should not stop just because the employee may have resigned or been dismissed. This is because, as this case demonstrates, any valid reasons for dismissal which the employer finds after resignation or dismissal may still be useful (or indeed critical) in any later unfair dismissal proceedings.

However, of course, employers should always ensure they have a valid reason and comply with all procedural fairness requirements before dismissing an employee.

For more specific information on any of the material contained in this article please contact Sathish Dasan on +61 8 8210 1253 or sdasan@normans.com.au, Chris Alexandrides on +61 8 8210 1299 or CAlexandrides@normans.com.au or Annabelle Narayan on +61 8 8210 1292 or anarayan@normans.com.au.