Employers: Are your directions lawful and reasonable?

The obligation of an employee to follow a lawful and reasonable direction from their employer lies at the heart of the employment relationship. It follows from the ‘master and servant’ relationship from which modern employment derives and has been considered extensively by the courts.

Examples of directions which the courts have considered to fall within the “lawful and reasonable” definition include: a direction to answer questions honestly in respect of employment related matters; directing an employee to leave the premises; a direction to not use a particular supplier; a direction to a manager to dismiss another employee.

With advances in technology, workplaces are changing at a rapid rate and the manner in which work is performed is also changing. Business are looking for ways to improve performance and efficiency and embracing technological advances is one way this is occurring. However, this can result in unexpected consequences.

In Jeremy Lee v Superior Wood Pty Ltd [2019] FWCFB 2946, the Full Bench of the Fair Work Commission determined that a direction given to an employee to provide his fingerprint – his biometric data – was not a lawful and reasonable direction from the employer, and consequently the employee’s refusal to comply with the new company policy was not a valid reason for his dismissal.

Background

Jeremy Lee was employed as a casual General Hand at the Superior Wood Pty Ltd sawmill in Imbil, Queensland for a little over three years.   In late 2017 Superior Wood announced the introduction of fingerprint scanners which were to be used for recording employee start and finishing times and linked directly to payroll. Employees were advised in late October 2017 that they were required to register their fingerprints in the new system and from that point on, start using fingerprint scanners to register their attendance at work. Mr Lee was directed to attend a meeting to register his fingerprints on 1 November 2017. He attended the meeting but did not provide his fingerprints. He continued to work and used the existing sign in/out book to manually record his attendance.

At a meeting with Superior Wood management held the following day, Mr Lee outlined his concerns, particularly in relation to the control of his biometric data and the inability of Superior Wood to guarantee that no third party will have access to, or use of, his data once it was electronically stored. Mr Lee subsequently reiterated these concerns to Superior Wood in writing.

After a seven week trial, the fingerprint scanners were formally introduced on 21 December 2017. Superior Wood developed a policy on the use of the scanners which was introduced on 2 January 2018. Mr Lee maintained his refusal and continued to use the manual sign in/out process.

Mr Lee was issued with a verbal warning for refusing to use the scanners on 9 January 2018. This was followed with formal written warnings on 11 January and 17 January. In these written warnings, Mr Lee was cautioned that continual refusal to use the fingerprint scanner, and thereby failure to comply with the policy, would result in the termination of his employment.

After further attempts to try to resolve the issue to a mutual satisfaction failed, Mr Lee’s employment was terminated on 12 February 2018.

First Instance decision

Following his termination, Mr Lee made an unfair dismissal application to the Fair Work Commission.

After a hearing, The Commissioner presiding over the matter dismissed the application for unfair dismissal and ruled that while Mr Lee was entitled to withhold his consent, in doing so he failed to meet a reasonable request to implement a fair and reasonable workplace policy. As such, there was a valid reason for the dismissal and that it was not harsh, unjust or unreasonable.

That decision was appealed to the Full Bench of the Fair Work Commission.

Full Bench decision

The Full Bench of the Fair Work Commission heard the appeal from the first instance decision in March 2019 and handed down its decision on 1 May 2019.

The Commission noted that at the heart of this matter was Mr Lee’s claim of ownership of the biometric data contained within his fingerprint. The Commission confirmed that his fingerprint was “sensitive and personal information” as defined under the Privacy Act 1988, and that Superior Wood was not entitled to require he provide that information. As such, his dismissal based on a refusal to provide it was invalid.

The Commission confirmed that the policy itself did not form part of Mr Lee’s employment contract. It stated that as the policy came into existence well after his employment started and since there was no evidence that Mr Lee agreed to have the terms of his employment altered so as to incorporate the policy’s terms into it, it did not form part of his employment contract.

Therefore, the question to be determined is whether the direction to comply with the policy and use the fingerprint scanners to sign in and out of work each day was a reasonable and lawful direction.

For a decision to dismiss an employee to be considered valid, it must be based on a reason that is sound, defensible or well founded, and not capricious, fanciful, spiteful or prejudiced.

In this particular case for the fingerprint scanning technology to be used, employees had to provide their fingerprint data to Superior Wood for electronic storage. The terms of the Privacy Act require that consent must be given by the employee before collection of this data can occur. The Privacy Act requires this consent in order to protect individual privacy from unlawful or arbitrary interference.

The Commission determined that the Privacy Act – and the Privacy Principles thereunder – applied to Superior Wood in connection to the collection of the fingerprint data. Therefore, consent to the data collection by the employees was required.

Mr Lee was directed by Secure Wood to consent to the collection of the biometric data  (ie his fingerprint) and he did not consent as he was directed. The Commission found that the direction to submit to the collection of his fingerprint data in circumstances where he did not consent to that collection was not a lawful direction. The Commission further stated that any ‘consent’ that Mr Lee might have given once he was told that he faced disciplinary action (including dismissal) would likely have been cancelled by the threat and would not have been genuine consent.

Mr Lee’s appeal was upheld. The matter has been remitted to the Commissioner for a determination on remedy.

Take home messages

There are a number of take home messages for employers from this decision.

Directing an employee to provide consent is not likely to be a lawful or reasonable direction. Inherent in the right to consent is the counteracting right to refuse consent. As the Commission noted, any direction to provide consent, particularly when done under the threat of disciplinary action, is unlawful and the consent which follows is not genuine consent.

As technologies such as fingerprint scanners become increasingly common, it is imperative that employers comply with the terms of the Privacy Act 1988, and the associated Privacy Principles.

For employers seeking to implement a new policy it is important to keep in mind that the terms of that policy do not necessarily or automatically form part of the employment contracts of your employees. As such, a breach of any new policy does not automatically equate to a breach of employment contract.

If you have any questions in relation to the issues raised by this article, please contact a member of our Employment Law team.

This article was written by Senior Associate, Adam Crichton

Practice Area: Employment

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