When an employee in child-related work is charged with offences that prevent the employee from obtaining a working with children check clearance, employers can find themselves between a rock and a hard place.
Generally, the employer continues to employ the individual but suspends them or places them on leave, pending the outcome of the criminal proceedings. This is to guard against the risk of unfair dismissal proceedings being brought against the employer if the employment is terminated before the outcome of the criminal proceedings. But there are risks involved.
A recent decision of the Full Bench of the Fair Work Commission (FWC) on a preliminary jurisdictional point has provided some relief for employers in this position.
As you may be aware, it is a precondition for an employee bringing an unfair dismissal claim that the dismissal occurred ‘at the initiative of the employer’. In this case, the FWC ruled that the employment of a teacher who could not obtain a Working With Children Check Clearance (as required under the Child Protection (Working with Children) Act 2012 (NSW) (Working With Children Act)) could not continue as this would amount to illegality. Accordingly, while the employment had ‘terminated’, it was not a dismissal ‘at the initiative of the employer’.
Gerald Mahony was employed by the Catholic Education Office Sydney (CEOS) from 1986. In September 2012, he was charged with sexual assault. Mr Mahony pleaded not guilty, was granted bail and defended the charges. CEOS stood Mr Mahony down with full pay on 12 October 2012.
On 15 June 2013, the Working with Children Act commenced. From that date, Mr Mahony would not have been able to obtain a Working With Children Check Clearance and, as a result, could not engage (or be engaged by CEOS) in child-related work because he was (given the pending determination of the criminal charges in question) a ‘disqualified’ person within the meaning of the Working with Children Act.
On 20 November 2013 (with the criminal proceedings still unresolved), CEOS requested that Mr Mahony move onto voluntary leave without pay. Mr Mahony refused, asserting that CEOS had no right to suspend him without pay, despite CEOS offering to back-pay Mr Mahony’s earnings if he was acquitted. By letter dated 20 December 2013, CEOS stated that, in the circumstances, it ‘no longer will continue the employment relationship. I hereby advise that your employment is terminated…’. CEOS paid Mr Mahony in lieu of notice.
At first instance in the FWC before Commissioner McKenna, CEOS submitted that Mr Mahony’s contract was ‘frustrated‘ when the Working with Children Act commenced. Frustration of a contract occurs if performance of the contract becomes impossible for reasons outside the parties’ control, and results in the contract ending automatically. Commissioner McKenna found that Mr Mahony’s contract was not frustrated, and the employment could have continued after the commencement of the Working with Children Act, provided that Mr Mahony was not engaged in child-related work that involved direct contact with children. Accordingly, this was a case of dismissal at the initiative of the employer, and Mr Mahony’s claim could proceed.
On appeal on this fundamental jurisdictional point, CEOS changed its reason for arguing why the dismissal was not ‘at the initiative of the employer’. Rather than arguing that the contract terminated due to frustration, it suggested that the continuation of employment was not permissible as it would have amounted to illegality. The Full Bench accepted this argument, finding as a result that Mr Mahony’s employment was not terminated at the initiative of CEOS. Consequently, the Full Bench dismissed the unfair dismissal application.
The Full Bench did not explain how this finding is reconciled with the fact that, after the commencement of the Working with Children Act, Mr Mahony was employed for a little over six months before his employment apparently terminated. Perhaps this remains to be discussed in a future case…
Implications for employers
This case highlights how important it is for employers whose undertakings include child-related work to be familiar with the Working with Children Act (or similar legislation in other states and territories) and the offences which will cause employees to be ‘disqualified persons’. In the words of the Full Bench, an employer’s failure to do so could be ‘illegal on the part of the employer’. Looking from the positive angle, the decision supports employers who take child protection seriously. It is clearly acceptable to treat an employment relationship as terminated without needing to await a conviction, where an employee’s employment is rendered unsuitable as a result of child protection-related charges.
Dr Daniel White, Executive Director of Catholic Schools and legal representative of the Catholic Education Office, Sydney v Mr Gerald Mahony  FWCFB 4952