Legal, People & Human Resources

Worker wins $30,000 in compensation after being wrongfully accused of stealing $7,000 in long service leave

Dominic Powell /

An employee at a Melbourne-based car repairs business has been awarded $30,700 in compensation after the Fair Work Commission found she was unfairly dismissed over allegations of taking too many weeks of long service leave.

The worker was employed in an administrative position by Metropolitan Taxi Club Incorporated, and had been since August 2007. In mid-July 2017, the worker requested, and was given, some annual leave from her employer to visit her mother, who was sick and living in the Philippines.

According to the worker, her boss also asked her to calculate how much long service leave she was owed and take it in addition to her annual leave. Despite advising her employer that she was not entitled to her long service leave until August, the worker calculated what she believed to be her entitlement and prepared a cheque for her employers, which they all signed.

On coming back to work in August, the worker was then advised by the business that she was still on paid leave and should not be at work. Two weeks later, the business sent the worker a letter in which it summarily dismissed her, accusing the worker of “dishonest conduct” and stealing $7,400 from the business.

The business believed the worker had paid out an excess of long service leave payment to herself. It claimed she had intentionally done so and therefore had stolen money from the company.

In the case, the business argued the employee had taken leave to which she was not entitled, based on advice from an accountant, who allegedly found the employee had claimed an excess of 168.75 hours of long service leave and further hours of annual leave.

However, despite the Fair Work Commission deducing there were errors in how the employee calculated her long service leave entitlements, it concluded she did not do it intentionally. The employee argued the employer had agreed to her long service leave claim and signed the cheque approving it.

Furthermore, documents from the employer attached to the notice of dismissal provided to the employee also miscalculated the amount of long service leave the company claimed the employee was entitled to. The documents incorrectly stated the employee’s commencement date of employment, and had further discrepancies around the employee’s rate of pay.

The business owners blamed these inaccuracies on their accountant, but the Commission found no evidence of the accountant being at fault.

“Unfortunately there is no evidence before the Commission on what was asked of the accountant (who was approached some time after [the employee] went on leave but prior to her return on 23 August 2017), how the inquiry came about, what information the accountant had to work from or why the accountant used the figures he or she did,” Commissioner Michelle Bissett stated.

“Given the discrepancies in employment dates, calculation dates and the rate of pay at which the leave was paid compared to the rate at which the overpayment is calculated, the lack of any evidence from the accountant is fatal to the reasonableness of the enquiries made by [the business].”

Unsatisfied that the business owners undertook a “reasonable investigation” and with no evidence that the employee’s conduct was serious enough to justify summary dismissal, the Commission found in the employee’s favour, ordering the business to pay compensation of $30,705 for lost wages, plus 9.5% in lost superannuation.

“A substantial helping of carelessness”

Speaking to SmartCompany, workplace lawyer Peter Vitale says the entire decision is “riven with a lack of attention to detail” from both the employer and employee.

Vitale believes there are numerous points at which both the employer and employee faltered in this case, but stresses that employers should always conduct careful investigations when assessing potential employee misconduct to “make sure the evidence really does support the finding”.

“In this case, the Commission found the employer had not quite joined the dots,” he says.

“For both the employer and employee, there was a substantial helping of carelessness going around.”

Vitale believes this highlights the need for SMEs to get advice on tricky issues like long service leave, rather than leaving it to the employee to calculate and potentially get wrong.

“From the employee’s perspective, the ides you would be left to calculate your own leave entitlements and write your own cheque really leaves it open for you to be criticised down the track. Employees would be well advised in that case to ask their employers to have it calculated by someone independent,” he says.

“This also highlights the need to not rush to assumptions in cases where serious allegations of dishonesty are involved. It pays to take the time to ensure your allegations are carefully investigated.”

SmartCompany contacted Metropolitan Taxi Club but the business declined to comment.

NOW READ: Victoria passes new long service leave legislation: What your small business needs to know

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Dominic Powell

Dominic Powell is the lead reporter at StartupSmart.

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