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Spreading rumours not a valid reason for dismissal

Spreading rumours not a valid reason for dismissal

An employee who was sacked for having allegedly spread rumours and breaching a confidentiality agreement has won her unfair dismissal claim, being awarded almost $13,000. 

The employee worked as a restaurant manager from 2013 to 2018 when her employment was terminated on the grounds that she had allegedly breached the confidentiality provisions contained within her employment agreement. 

The employee received an email from her manager providing four weeks’ notice and stating that her position was being terminated due to financial difficulties the company was facing. She subsequently received another email from her manager two weeks later advising that she was being summarily dismissed because she and a colleague had allegedly spread rumours amongst customers about the restaurant closing and employees being terminated.  

The employee was not provided with an opportunity to respond to the allegations, and no formal investigation was undertaken by the employee. The employee challenged the allegations on the basis that she was reportedly not at work at the time that the alleged rumours and comments were made. 

in contrast, the employer argued that the employee had breached the confidentiality clauses by starting rumours about the financial position of the company. They employer further argued that her termination occurred due to a change in her position classification and duties which would be contrary to her 457 visa requirements. 

The employer failed to provide any substantive evidence of the employee’s alleged misconduct and was unable to prove that she had breached the company’s confidentiality policy. The Fair Work Commission favoured the employee’s arguments and found that the employer did not have a valid reason for dismissal, and that through failing to follow due process, they had failed to provide procedural fairness. The Fair Work Commission found that the dismissal was harsh, unjust or unreasonable, and compensation of almost $13,000 was awarded to the employer. 


s387 of the Fair Work Act 2009 provides that a dismissal will be unfair where it is harsh, unjust or unreasonable. In order to determine this, the commission will consider factors including:

  • whether there was a valid reason for the dismissal,
  • whether the person was notified of the reason for the dismissal,
  • whether the person had an opportunity to respond, and
  • any other matters that may be deemed relevant. 

Prior to terminating the employment of an employee, it is recommended that you contact us on 1300 720 004 or via email at [email protected] to discuss the process that is to be followed so as to minimise any potential risks.

Information in HR Advice Online guides and blog posts is meant purely for educational discussion of human resources issues. It contains only general information about human resources matters and due to factors such as government legislation changes, may not be up-to-date at the time of reading. It is not legal advice and should not be treated as such.

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