Former Australia Post CEO Christine Holgate is considering legal action against her former employer, over her departure from the publicly-owned organisation. The action comes after an ongoing dispute between Holgate and Australia Post. While Australia Post denies the allegations, this case serves as an important reminder to employers of what can go wrong in handling the resignation of senior employees.
The dispute arose after Holgate was publicly chastised for gifting four Cartier watches worth a total of $20,000 to staff members for completing a project. Holgate claims that she was “unlawfully” stood down from Australia Post following “an instruction from the Government”, that Australia Post refused to respond to her until she made a public statement and that she was “publicly hung and humiliated” over the scandal. Ms Holgate has reportedly given Australia Post until 5 May 2021 to have a mediation with her about her departure, following which she will “consider her legal options”.
What are the ordinary risks to a business in managing the departure of a senior employee?
Managing the departure of a senior or executive employee can be particularly challenging.
Senior employees are usually likely to seek legal advice about their departure and tend to be longstanding employees with strong relationships in the business. These factors increase the risk of:
- reputational damage to the business amongst your clients, suppliers and potential employees;
- reduced staff morale, gossip and the creation of factions/silos within the workforce; and
- employment related claims including breach of contract and restraints of trade, discrimination and breaches of occupational safety and health duties in relation to bullying.
What can employers do to reduce the risks?
The risks of managing the exit of a senior employee can be effectively reduced by:
- Making sure you are familiar with the employee’s contract including any unpaid bonuses, the business’ right to terminate the contract and relevant notice periods.
- Confirming the reason(s) for the employee’s dismissal in writing.
- Seeking advice about the risks and best strategy to manage the exit, including whether negotiating a mutual exit subject to a deed containing obligations around confidentiality and non-disparagement would assist to protect the business’ reputation and the employee’s interests.
- Documenting everything – ideally in file notes and letters, but at least in a diary note or a memo on your phone.
- As a best practice:
- Make sure you have a clear reason for dismissal that is serious enough to justify dismissal, documented and backed by evidence.
- Following a proper documented process including giving the employee an opportunity to respond with enough details of their misconduct to allow them to do so.
- Considering the employee’s responses and their personal circumstances before you make your decision.
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