Senior employee dismissed over confidentiality breach

'There were other options available to him before sharing confidential information with the client'

Senior employee dismissed over confidentiality breach

Employers have a duty to protect confidential information due to its importance in protecting the privacy of both employees and the company.

Confidentiality agreements among staff are legally binding documents to protect sensitive information, such as trade secrets or personal information.

Caselaw has explained that employers hold senior employees in higher regard due to their greater access to confidential information. They are expected to adhere to the strictest standards of confidentiality and privacy.

In a recent case from the Fair Work Commission, a senior employee claimed unfair dismissal after the employer alleged that he breached his confidentiality obligations for disclosing information to a client. The employee argued he was obligated to disclose the said information.

Background of the case

The senior employee worked as a strategic asset manager in a facility management services company. He was a senior team member who managed a contract with a client.

According to records, his employment contract listed general obligations to the employer and requirements prohibiting the disclosure of confidential information.

The employee had “a personal relationship” with a former employee who left the company in January 2022.

After a few months, the employee emailed the former colleague “a confidential version” of the services agreement with the client. The employer said this email was “in breach of the employee’s confidentiality obligations.” As a defence, the employee said he sent the email “so he could manipulate a graphic contained within the document.”

Later, the employee sent an email directly to the client “concerning the operation of the services agreement.”

The email advised the client that “certain contractor charge-out rates were above the ceiling threshold contained in the agreement … and the matter required further investigation.”

The employee argued that he was required under the services agreement “to alert the client of this issue,” but the employer said there was no such requirement. It said that he embarrassed the employer and that this conduct “was a breach of the obligations (express and implied) under his employment contract.”

The employer also argued that he “displayed a lack of truthfulness concerning disclosures about his relationship with the former employee, which was legitimately raised with him during his employment.”

It further said that it “lost trust and confidence in his ability to perform his role as a consequence of his actions.” Meanwhile, the employee argued that “he was responsible for data integrity,” which was “a data integrity issue, not a confidentiality issue.”

HRD previously reported on the case of an employee’s dismissal for misconduct after she disclosed confidential information that allegedly favoured another company.

However, in another case, an employee was awarded compensation despite copying confidential documents because the employer dismissed him without warning.

The FWC’s consideration

The commission questioned whether the employee’s particular communication with the client was required under the terms of the agreement.

It said that the “information about charge-out rates” did not amount to a data breach but said that his actions were “ill,” considering “a person of his experience and seniority.”

“There were other options available to him before sharing confidential information with the client,” the commission said, adding that the employee’s action “provided a proper basis for the employer to lose trust and confidence in his ability to adequately perform his role.”

As for sending a confidential document to a former employee, the FWC said there were “other options available to manipulate document that did not breach confidentiality obligations” and found his explanation “unconvincing.”

“The employee’s breach of confidentiality and poor exercise of discretion as an experienced and senior employee [is] a valid reason for dismissal,” the commission said.  

Thus, it found that his dismissal was not harsh, unjust or unreasonable.

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