Around the Watercooler – Disclosing the reason for dismissal

Gone are the days, it seems, that an employer can dismiss an employee and then send an office-wide email to give the gossip.
Under the Privacy Act 1993, Information Privacy Principle 11 (“Principle 11”) protects against the disclosure of an individual’s personal information except in specific circumstances.  This principle also applies to any disclosures made by an employer regarding an employee. 
When an employee is dismissed for misconduct or poor performance, employers may be tempted to send an email out to the rest of the staff to explain why the employee was dismissed.  This might to be remind staff of the expected standards of performance and behaviour, or to demonstrate that these standards will be enforced.  However, the Privacy Commissioner’s decisions indicate that the reason for an employee’s dismissal must be treated as that employee’s personal information.  As such, the reason for an employee’s dismissal will likely be protected from disclosure under Principle 11.
Privacy Commissioner decisions
In 2018, the Privacy Commissioner considered a case where an employee was dismissed after drugs and drug paraphernalia was seen in the employee’s car, which was parked in the company carpark[1].  After dismissing the employee, the employer emailed over 100 staff informing them that the employee had been dismissed after being found with illicit drugs, and that the employer had been working with the employee regarding performance-related concerns prior to this incident.  The employer argued that this was not an unauthorised disclosure, as the drugs had been found by another employee who had taken photos and showed it to other staff.  As such, most, if not all, of the staff were already aware of the employee’s drug possession.  The employer also stated that it had strict policies on drugs and alcohol in the workplace, so disclosure was justified.
In making its decision, the Privacy Commissioner observed that Principle 11 was concerned with the disclosure of personal information, not with the prior knowledge held by the recipient of the information.  None of the exceptions under Principle 11 related to the recipient’s prior knowledge or state of mind.  As such, the employer’s email to staff constituted an unauthorised disclosure of the employee’s personal information, and the employee suffered significant humiliation as a result of the disclosure.
While this decision makes it clear that explicit disclosure of personal information will be in breach of Principle 11, it is important to note that the Privacy Commissioner has also accepted that disclosure can occur through actions or implication.  In one case, a debt collection agency had been attempting to contact a woman at her workplace[2].  The agency could not reach the woman, so it left its name and contact details with one of the woman’s co-workers.  As the agency’s name clearly associated it with debt collection, the Privacy Commissioner determined that by simply leaving its name with the woman’s co-worker, the agency had disclosed her personal information.  It was clear that the woman’s co-workers would be able to recognise that the woman had been contacted for debt collection.
As such, it is important for employers to carefully consider any disclosure of an employee’s personal information, especially if the employee has been dismissed.  As the latter decision indicates, a mere implication of the reasons for the employee’s dismissal may be sufficient to constitute an unauthorised disclosure.
For Employers
Whenever an employer is making any disclosures of an employee’s personal information, it is best to first obtain the employee’s consent to the disclosure.  However, in situations where the employee has been dismissed, obtaining consent for disclosure will likely be an issue.  In such a scenario we recommend a benign statement that the employee has left their employment with the company, followed by any operationally pertinent information.  For example:
“[Employee name] has left his employment with us.  Please refer all customers and suppliers to [another employee]”

Author: William Buckley, Barrister 

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