The Federal Court has held that a terminated employee is not entitled to retain documents after termination for the purposes of prosecuting a claim against the employer.
Armstrong World Industries suspended its CFO on account of bullying allegations and dismissed him eight days afterward. The CFO made a general protections claim under s 340 Fair Work Act 2009 (Cth). There was a conciliation conference to resolve the claim, to which the CFO took two folders of documents. Representatives from Armstrong observed that those folders contained its documents. When the conference failed to produce a settlement, the Fair Work Commission certified that the dispute could be litigated within a window of time.
Within three days left before that window closed, Armstrong World Industries sought an injunction for the destruction of its documents and their electronic copies in the possession of the CFO. In retaining those documents, Justice Beach found that the CFO had contravened s 183 of the Corporations Act 2001 (Cth), prohibiting the use of company documents for personal advantage. The CFO argued that the documents were necessary for the prosecution of his claim, but Justice Beach noted that the reverse-onus provisions of the Fair Work Act 2009 relieved him of an obligation to provide evidence. Nevertheless, the CFO could obtain access to the documents by legitimate means such as discovery.
Lessons for Employers
This decision gives employers a strong basis to request and recover documents from terminated employees and grounds to take back those documents notwithstanding any claim that might be required by the employee for the conduct of litigation. Furthermore, employers should note that such documents cannot be used by directors and officers against the company unless they are properly obtained.
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