Employee dismissed for approving baseless overtime payments – is there misconduct?

'Any reasonable, intelligent person… would've seen the hours were significant,' says employer

Employee dismissed for approving baseless overtime payments – is there misconduct?

Correct overtime payment is crucial since it ensures employees are properly compensated for their additional work.

Not only is it an important legal requirement because failure to comply can result in hefty fines, but it’s also vital for employers to maintain a healthy and profitable business.

In this case, an employee was dismissed for misconduct because he was held “negligent” and “careless” after approving overtime payments to a worker who was not entitled to them.

Background of the case

The employee was a consultant medical oncologist employed by North Metropolitan Health Service in Western Australia since 2003 and was head of the department from 2007 to 2013.

In 2019, the Corruption and Crime Commission ruled that another department employee committed serious misconduct for “unsubstantiated” overtime payments. The employee was employed as a clinical trials manager but was hired on the consultant’s initiative as an independent contractor.

Between 2019 and 2020, the employer investigated the consultant’s participation in paying these overtime payments and the subsequent contract.

The employer considered the following allegations:

“That the consultant had failed to exercise an ‘appropriate level of oversight’ and ‘scrutiny’ in relation to the payment of the overtime payments to the worker, constituting a breach of discipline contrary to WA’s Health Services Act 2016 as the consultant was negligent or careless in the performance of his functions; and

“That the consultant ‘breached his duty of fidelity’ and ‘good faith’ to his employer when he approved the engagement of the worker on a contract which was detrimental to the employer, constituting a breach of discipline under Act as the consultant committed an act of misconduct.”

The consultant was dismissed, and he appealed against it before the Public Service Appeal Board.

HRD previously reported about a recent Fair Work decision, where the manager claimed forced resignation after questioning the employer’s “tips” policy.

The parties’ arguments

The parties in the North Metropolitan Health Service case agreed that the period in question was between November 2014 and November 2017.

The consultant denied that he had oversight of the worker, “and if he did, argued that he was not negligent or careless.”

He submitted that he was “only the worker’s manager at the time; that he was the department head and denied that the approval of the overtime was not his role or responsibility; and that he did not have any training or an understanding of the approval of overtime.”

Meanwhile, the employer argued before the Appeal Board that “any reasonable, sensible, intelligent person reviewing the overtime forms would have seen the hours worked were significant.”

As for the allegation that he hired someone who was “detrimental” to the employer, the consultant said that “he believed he had the authority to approve the contract and that the engagement was vital to the function of the clinical trials unit.”

However, the employer argued that the consultant “engaged the worker under the contract to allow the achievement of higher earnings than she would have been entitled to as an employee, to the detriment of the employer.”

Finally, the consultant said that “the allegations were made out,” and that he only deserved a reprimand, not dismissal.

The decision

The Appeal Board found the employer was able to substantiate the allegations.

It said that the consultant was in “a supervisory position” to the worker and that he was “approving payment of overtime in circumstances where he had not properly reviewed the amount of overtime claimed, the reasons for the overtime or whether the overtime had been worked at all, and this amounted to negligence and carelessness in the performance of his functions.”

The Appeal Board also found that the consultant negotiated the contract terms despite knowing he lacked the authority to do so.

It also said the consultant “approved overtime while being aware he did not have authority, and knowing the worker was not entitled to overtime.”

The Appeal Board noted that the appellant failed to take responsibility for his actions and considered that termination of employment was a fair penalty in the circumstances.

Thus, it sided with the employer in his dismissal, finding that he engaged in serious misconduct after approving substantial overtime payments of over $244,000 to a worker who was not entitled to overtime, breaching his duty of fidelity and good faith.


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