Employers beware – don’t get stuck with a $400,000 order!

 

Have you got an employee that you’d rather not have?  Have you thought of terminating that person’s employment?  How good would it feel to be able to get rid of an employee and then tell all of your customers and clients how useless that employee was?  Are you prepared to deal with the consequences of those actions?

 

A 2019 decision in the NSW District Court ought to serve as a warning to all employers.

 

A young man by the name of Matt was working for a child care centre.  He was working part-time and studying at the same time.  It got to the point where Matt’s studies were being impacted by the hours he was working so he decided to give his employer notice of his intention to resign.  During the notice period, the employer decided to end the employment and waive the notice period.

 

The employer then decided to send the following email to 35 parents whose children attended the child care centre:

 

‘[Matt] is unfortunately no longer with us due to disciplinary reasons. Whilst being good with the children in general, Matt was not truthful with us regarding his studies and some other issues, and I felt it was better for him to move on and possibly gain a bit more life experience. We wish him well with his future.’

 

Clearly, Matt was not impressed with the email and started a defamation claim against his employer.  Matt said that the statements contained in the email meant that Matt was dishonest. 

 

The employer pleaded a defence of ‘qualified privilege’.  In other words, the employer claimed that he was entitled to send the email because he had a duty to let the clients know that Matt was no longer working in the child care centre.

 

The Court did not agree with the employer stating:

 

  • The clients have an interest in knowing the employee left, but not the reasons for termination;
  • The content of the email was not reasonable given the evidence that the employee had initiated the termination by tendering his resignation; and
  • The employer acted maliciously as they he did not give the employee the opportunity to comment on the email before it was sent.

 

The Court found that the comments were defamatory and awarded the employee $237,970 in damages plus costs.  In total the employer may have to pay more than $400,000 to the employee.

 

 

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