The ABC’s leadership fiasco has lessons for HR - HRM

By Alan J. McDonald

The firing of the ABC’s managing director Michelle Guthrie, and the subsequent fallout, has been the story of the week. But beyond the headlines are lessons for HR.

The termination of the ABC’s managing director Michelle Guthrie this Monday has grown from what the organisation no doubt hoped would be a relatively quiet decision into a spiralling catastrophe. It’s already caused the chairman of the board – the very board that sacked Guthrie this Monday – to voluntarily resign.

From an HR perspective, the case has important lessons. It could also have lasting consequences for employment law cases, according to McDonald Murholme managing director Alan McDonald. By being forced to reveal private information about the lead up to the termination, the ABC have exposed themselves to potential legal recourse for terminating her employment unlawfully, he says.

Keeping good records

The termination of a staff member, especially a high ranking one, is rarely a snap decision and it’s legally fraught to make it one. So there’s usually a trail of digital communication that reveals some of the deliberation that happens before a termination and the initial reasons why it became desirable.

This is a basic reality and the way to manage it is as straightforward as it is ethical. Organisations must ensure that every termination is being carried out for appropriate reasons and the decision to terminate is arrived at in a deliberate and measured fashion.

In the ABC’s case, Guthrie was ostensibly being fired for her performance. She has made her own feelings about the matter clear in a statement. “While my contract permits the Board to terminate my appointment without cause and with immediate effect, I believe there is no justification for the Board to trigger that termination clause. I am considering my legal options.”

It’s possible she has legal recourse, even given that clause, if the ABC is found to be dismissing her unfairly, or for protected reasons. Sometimes the contract isn’t enough, especially if information comes to light that seems to reveal a questionable, unspoken motive for the dismissal.

Performance

According to a Sydney Morning Herald report, Milne asked her to resign after a Canberra ball on 12 September. “Sources close to Guthrie say the former Telstra executive nominated her ‘leadership style’ as the main stumbling block,” says the report.

In lieu of resigning, Guthrie said she would go through executive coaching. But Milne then informed her that low staff morale, trips she was taking to Singapore for family and business reasons, and negative feedback from her colleagues were further reasons for her to leave.

In a typical employer/employee relationship, before any termination for reasons of underperformance, it’s best to have an initial meeting to inform a staff member about their low performance. As lawyer and author Jeremy Stretten wrote for HRM: “Make it clear in the meeting that if their conduct doesn’t improve, you may have to dismiss them. Ensure that this notice is in writing. Post meeting, have the employee think about how they’re going to improve, and then both parties should sign an improvement plan to set the employee back on track.”

Guthrie’s willingness to work on improving as recently as earlier this month, if proven true, would not bode well for an employer in a typical unfair dismissal hearing. It gives the impression she didn’t have an opportunity to turn things around.

It’s best to have regular check-ins to make sure the underperforming employee is on track with their improvement plan to demonstrate that the problem is ongoing, says Stretten. Otherwise they have grounds to claim that the issue is resolved. Only after continuing low performance should you terminate the employee.

Communication of dismissal

The decision to not provide much context to a termination announcement is always risky, as it encourages speculation from the staff and the public. Yet this is what the ABC did. In the media statement announcing the departure of Guthrie, the ABC declined to provide details.

This approach is especially odd considering the highly politicised position of the organisation. It created an information vacuum that many were eager to see filled. And it eventually was filled – by journalists.

The most troubling reports said that Milne – a friend of former Prime Minister Malcolm Turnbull – wanted Guthrie to dismiss senior journalists the government had problems with. According to the Sydney Morning Herald, Guthrie copied an email of such a request into a document that was presented to the board days before she was sacked.

“The matter is extremely serious because, if proven, that would be a breach of the ABC’s Charter by Turnbull and the head of the ABC,” says McDonald.

“Obviously there is usually an email trail leading to the dismissal of a senior employee,” says McDonald. “Unless the courts have access to that email trail to determine the lawfulness of the dismissal is not possible. However, in too many cases the email trail is not produced and employees lose out as a result.”

The overall impression many took from this is that Guthrie was fired not for performance, but instead for her refusal to carry out questionable directions.

Milne said he handed in his resignation for the good of the broadcaster. He denies any wrongdoing, and claims the reports about his behaviour are inaccurate. “I have never sent an email to Michelle Guthrie or anybody else that says you must sack Emma Alberici or Andrew Probyn [two senior ABC journalists] or anybody else,” he told the 7:30 report.

A unique organisation?

This situation might seem unique to an organisation like the ABC, which has a specific charter and relationship with the government, but it’s not. Whether it’s inappropriately firing someone for a sexual harassment claim, or doing so because they informed a public authority of your discriminatory hiring practices, terminating employees to cover up or continue unethical behaviour can happen anywhere.

Until a full investigation is completed, we won’t know if this is what exactly has happened at the ABC. But a lot of damage has already been done. So the final lesson for anyone in business might be that it takes precious little for things to spin out of your control. The gap between a dismissal and a resignation can be less than a week.

Reference: ‘The ABC’s leadership fiasco has lessons for HR’, HRM, Thursday 27th September 2018.