Avoid Making Emotional HR Decisions in the Heat of the Moment

September 25, 2017

A Real Estate Agency has snatched defeat from the jaws of victory after they made an emotional decision to summarily dismiss an employee via text message despite the employee facing the prospect of dismissal due to redundancy. The case is a salutary lesson for Real Estate Agencies to avoid making important staffing decisions when emotionally charged and without knowing all the facts.

Bradley Scott Carlin-Smith v Neirbo Real Estate Pty Ltd T/A Homes Group Estate Agents:

On 1 March 2017 Mr Carlin-Smith, a Real Estate Agent and Officer in Effective Control, was advised his position would be made redundant and was offered two alternatives for redeployment- both appeared highly unattractive and appear to have been designed to push the employee out the door.

However, the very next day, Homes Group Estate Agents allegedly became aware of a number of matters relating to the employee’s conduct, including misrepresenting himself as having ownership in the business to suppliers, accepting secret cash payments and making unauthorised financial offers. Some of the allegations had pretty flimsy evidence supporting them.

After making the decision that these were serious allegations the Director of Homes Group Estate Agents made numerous attempts to call Mr Carlin-Smith to get him to explain himself. Unfortunately the calls were ignored which seemed to further enrage the Director.

What followed next was series of heated text messages. Tension quickly escalated and within a very short period of time Homes Group Estate Agents went from:
1:01pm: “tried calling…please respond asap”
1.43pm: “you have abandoned your employment” and “you are stood down pending investigation”
2:02pm: “you are terminated effective immediately for misconduct and insubordination”.

The Fair Work Commission found Homes Group Estate Agents could be said to have “genuinely held a belief” the conduct was adequately serious to justify immediate dismissal. However, that belief was not based on “reasonable grounds” as none of the matters had been subject to any sort of investigation and none of the allegations had even been properly put to the employee for his response. The lack of investigation and deficiencies in evidence led to a finding the Agent was unfairly dismissed.

Lessons learnt:

Emotions often run high when faced with evidence one of your employees has potentially engaged in unprofessional or fraudulent conduct. This is the case in any business, however becomes particularly apparent in Real Estate Agencies where a tight-knit team are considered/treated like family and an employee’s unscrupulous actions really hit home.

In such situations we too often see any degree formal process fly out the window, and along with it a clearly winnable case and the business reputation.

How to protect your business:

No matter how serious the allegations and how convincing the evidence, think to yourself, does this need to happen straight away? Is pushing the employee straight out the door without any degree of investigation worth the risk of having my business name plastered over the internet?

Whilst in this case only two weeks’ compensation was ordered as the Commission found the relationship would not have continued much longer, the bigger risk is to your business reputation. FWC decisions are publically available records that put openly criticise your employment practices and actions.

Emotions can run high, however stop, reflect and take a considered approach. Take the time to utilise specialist advice, such as from professional bodies in your industry or employment law specialists before taking action. Small steps like this will ultimately act protect your business’s financial interest, and brand name.

Bradley Scott Carlin-Smith v Neirbo Real Estate Pty Ltd T/A Homes Group Estate Agents (U2017/3183).