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July 2020

Conflicts of interest can provide a valid reason for dismissal

Conflicts of interest can provide a valid reason for dismissal

The Case

Bertos v Northern NSW Football Limited (2020)

Northern NSW Football Limited (Northern NSW) employed Mr Bertos as Technical Advisor. Northern NSW is the governing body for football in Northern New South Wales and governs the National Premier League (NPL).

In December 2019, Mr Bertos was promoted to the position of Technical Director for a period of approximately 3 months. In that role, Mr Bertos:

  • provided advice and recommendations about matters that included the NPL;
  • was involved in youth development programs for clubs, which contributed to their eligibility to compete in the NPL;
  • had involvement in talent support programs in which the best players were sourced by clubs in the NPL; and
  • assessed the performance of clubs in the NPL at the Premier Club Skill Acquisition Program.

At the same time, Mr Bertos accepted a position as Head Coach of Weston Football Club (Weston FC), one of the clubs competing in the NPL. Mr Bertos did not disclose this secondary employment to Northern NSW.

When Northern NSW became aware Mr Bertos was also employed by Weston FC as a Head Coach, they raised with him the perceived and actual conflict of acting in both positions. Northern NSW indicated that it was concerned Mr Bertos would not be, and would not be seen as, impartial in his position of Technical Director. Additionally, the time taken to perform both roles was significant and could overlap. Northern NSW advised Mr Bertos to resign as Weston FC’s Head Coach. Mr Bertos refused, maintaining there was no conflict and he could perform both positions.

Thereafter, Northern NSW asked Mr Bertos to explain why his employment as Technical Director should not be terminated. At the end of that process, Northern NSW made the decision to summarily dismiss Mr Bertos on the basis of:

  • his conflict of interest in holding both the Technical Director and Head Coach positions simultaneously; and
  • his unwillingness to resolve the conflict by resigning as Head Coach of Weston FC.

Mr Bertos filed an unfair dismissal claim with the Fair Work Commission (FWC).

The Verdict

The FWC dismissed Mr Bertos’ unfair dismissal application.

The FWC found that:

  • there were conflicts in the hours of work required to perform the Technical Director and Head Coach roles;
  • to have an effective working relationship with the clubs in the NPL, Northern NSW had to be independent and be seen to be independent, and Mr Bertos undermined that by holding the position of Technical Director of Northern NSW and Head Coach of Weston FC;
  • Mr Bertos, in simultaneously holding both positions and refusing to resign as the Head Coach of Weston FC, was in breach of his contract of employment and his common law obligations not to act in conflict with the interests of his employer;
  • Mr Bertos had put his own interests and personal ambition ahead of the interests of his employer; and
  • summary dismissal was a proportionate response to Mr Bertos’ conduct, which was held to be repugnant to his relationship of employment with Northern NSW.

The Lessons

It is important that all your employment contracts contain an appropriate conflict of interests clause, which includes a requirement that employees disclose conflicts if they arise, to safeguard the employer’s interests.

These clauses act as disincentives for conflicts to occur and if they do occur, can assist you in enforcing an employee’s contractual obligations. If conflicts of interest arise, it is important that you raise them promptly with the relevant employee to determine if they can be overcome, or otherwise take action to protect your interests. You should seek appropriate legal advice before making a decision to terminate an employee’s employment in such circumstances.

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