Legal, People & Human Resources

Toyota worker awarded $68,000 in compensation after being sacked over allegations of inappropriate workplace relationships

Dominic Powell /

A former worker at Toyota Australia’s paint shop has been awarded nearly $70,000 in compensation after the Fair Work Commission found he was unfairly dismissed over allegations of inappropriate personal relationships with other workers.

The employee worked as the general foreperson at Toyota’s paint shop in the production and quality subdivision and had been employed there for more than 20 years. The employee was also the Australian Manufacturing Workers’ Union delegate for the site, and was therefore in numerous positions of power and authority.

The Fair Work Commission heard that, in 2015, a number of rumours began circulating about the employee’s “girls”: a number of young female temporary fixed term employees (TFT) at the shop who the employee allegedly had relationships with. This included one TFT who’s ex-husband also worked at the paint shop, leading to concerns from Toyota’s HR manager about the power imbalance between the two.

In early 2016, an anonymous whistleblower at the paint shop contacted Toyota’s HR about numerous allegations of misconduct between the employee and this female TFT.

After significant back and forth between the employee, the union, and Toyota’s lawyers, the company dismissed the employee, claiming he “improperly exercised the power and authority held” in his position, and “fostered an exclusionary culture” within the paint shop.

It was alleged that the employee heavily favoured the female TFT due to the two having a personal relationship, including by granting her leave she was not entitled to, and renewing her temporary contract numerous times due to their personal relationship.

Additionally, numerous allegations were laid against the employee regarding a separate female employee, who he reportedly spent time with in the “group room with the lights off”, where they would remain for 30-40 minutes. Fellow employees also alleged the female employee would say, “I know how big you’ve got”, to the employee, allegedly in reference to his penis.

However, the dismissed employee denied both counts of improper conduct, saying for the first female TFT, he granted her leave before the two had entered into any sort of personal relationship.

In the second set of allegations, the employee concluded that he had been in the group room with the female employee on one occasion he could remember and that the lights were off, however, he claimed: “visibility was good”.

Allegations “largely unsubstantiated”

In here decision, Fair Work Commissioner Katrina Harper-Greenwell found the dismissal of the employee was unjust and unreasonable, because, in her view, the evidence given by the numerous other employees was “largely unsubstantiated” and she questioned the credibility of a number of witnesses.

While the Commissioner found the claims about the employee spending time with another female employee in the group room with the lights off were substantiated, she said she was “not satisfied that there is sufficient evidence to establish that there was anything inappropriate about this relationship”.

“There is simply no evidence, beyond the suspicions of other employees in the [paint shop], to support an assertion that [the female employee] had a special relationship with [the dismissed employee],” Harper-Greenwell said.

As for the issues with the relationship with the young female TFT, the Commissioner found the dismissed employee had not granted her leave unreasonably due to the female employee’s current “hardship case”. She also found the dismissed employee had not renewed her contracts unreasonably.

“Having considered each of the matters specified … I am satisfied that the dismissal of [the employee] was unjust and unreasonable. [Toyota] did not have a valid reason for the dismissal of [the employee] and, in light of the numerous mitigating factors, [his] dismissal was particularly harsh,” Harper-Greenwell said.

The Commission ordered Toyota to pay $68,350 in compensation to the employee. The employee had sought to be reinstated in his position at the paint shop but the Commissioner found it would not be appropriate to do so.

“I accept that relationships of a personal nature form within the workplace, [but] it is concerning that [the employee] was engaging in a relationship of a personal nature with a TFT employee that he was responsible for supervising without disclosing this to management at [Toyota], particularly in light of the significant difference in their positions,” she said.

Greater evidence needed when serious allegations arise

Speaking to SmartCompany, Trent Hancock, a partner with law firm McDonald Murholme, says the significant penalty awarded in the case was likely due to the employee’s 27-year-long tenure at Toyota, and his significant salary of more than $135,000.

Reflecting on the case, Hancock advised SME owners to ensure they have strong evidence before dismissing employees over allegations of “serious misconduct”, as the Fair Work Commission will require a significant standard of proof.

“Toyota did have sufficient evidence, including witness evidence, to convince the Commissioner that at least some of the allegations were substantiated or partially substantiated. However, the Commissioner was not convinced that the allegations that were substantiated were serious enough to warrant termination,” he says.

“Given that the standard of proof is ordinarily heightened when allegations of serious misconduct are involved, employers should always ensure that they have strong evidence before dismissing an employee.”

Hancock complimented Toyota’s use of an external investigator in the case and further warned SME owners to be careful of making accusations against employees when it comes to delicate topics such as workplace relationships.

“SME owners should be mindful however that it is not unlawful for employees to have personal relationships in the workplace. In fact, in Victoria, it is unlawful to treat an employee unfavourably because of that employee’s lawful sexual activity,” Hancock says.

“Personal relationships can, however, become problematic when they begin to impact upon the decision making process within an organisation.”

In a statement to SmartCompany, a Toyota spokesperson said the company “takes compliance with our code of ethics and workplace relation policy, along with the health and wellbeing of all employees, very seriously”.

“We won’t be commenting on the matter further,” the spokesperson said.

NOW READ: Law changes needed to fix ‘illogical’ unfair dismissal decisions, says former Fair Work vice-president Graeme Watson

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Dominic Powell

Dominic is the features and profiles editor at SmartCompany.

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