Reinstatement plus $50K compensation for Bank Manager fooled by scammers

Deputy President Asbury of the Fair Work Commission has ordered reinstatement for the Branch Manager of a Queensland bank who was duped into transferring $37,500 into a fraudster’s account during the frenzied early months of the COVID-19 pandemic, with the Deputy President having found in January, on balance, that dismissal had not been a valid response to the Branch Manager’s conduct. The employee was also awarded in excess of $50,000 compensation for lost earnings whilst her continuity of service will be retained.

The error which permitted the monies to be paid into a fraudulent account early in April 2020 occurred when email correspondence between the Bank of Queensland (BOQ) and a legitimate customer was intercepted by scammers, who, via a sequence of emails, submitted an amended invoice with alternative details for a Commonwealth Bank (CBA) account where the funds were ultimately deposited. The Branch Manager had commenced a period of annual leave around the same time the funds were transferred with the error having only been uncovered on 8 April, when CBA alerted BOQ that the nominated account in which funds had been deposited into was “suspected of being involved in fraudulent activity”. A process was set in place the next day to authorise CBA to attempt to recover the funds for BOQ. Later in the month, the Branch Manager was required to respond to emails and participate in meetings by teleconference during her leave period in order to detail her recollection of the events that led to the funds being transferred to the fraudulent account.

The Branch Manager participated in a formal meeting with her Area Manager on 6 May, at which time the Area Manager suggested the Branch Manager may wish to consider resigning, to avoid potential repercussions from an “industry reputational perspective” if she were to instead be terminated. The Branch Manager did not wish to resign and was stood down on pay following the meeting for an appropriate outcome to be determined.

The Branch Manager was notified of her termination on 8 May with her termination letter indicating the decision had been taken due to her having “breached significant Bank policies”; failing to identify a risk to a customer; and, failing to follow steps to protect the bank from the risk meaning the bank had lost $37,500. The letter also advised the Branch Manager would receive four weeks’ wages in lieu of notice.

In determining that the Branch Manager’s dismissal was unfair, Deputy President Asbury acknowledged a series of mitigating factors which diminished the gravity of the Branch Manager’s conduct, notwithstanding it was recognised the Branch Manager had engaged “in a pattern of behaviour and conduct that came close to crossing the line between carelessness and negligence”. In finding that dismissal was not a defensible or well-founded response to the Branch Manager’s error, the Deputy President noted the fraudulent emails had been difficult to distinguish from the correspondence of the legitimate customer and that the Branch Manager was not a trained lender nor was she “equipped to have undertaken the transfer”.

In addition, Deputy President Asbury accepted that staff levels in the branch were low at the time, meaning the Branch Manager was under increased pressure; other BOQ staff members had seen the fraudulent emails before the monies were incorrectly transferred but they too failed to recognise the risk; and, it was unchallenged that the Branch Manager was genuinely remorseful and expressed regret for the loss suffered by the bank.

Having found the dismissal to be unfair, the Deputy President settled on reinstatement being appropriate after concluding the Area Manager’s claim, that he could no longer trust the Branch Manager to properly carry out her role, lacked merit. Instead, the Deputy President noted the Branch Manager had been long-serving and possessed an otherwise “excellent work record”, adding that her performance review which occurred immediately prior to the events which led to her dismissal had been “overwhelmingly positive”. Deputy President Asbury agreed the Branch Manager deserved to be “strongly censured” for her conduct but assessed she would be able to be closely monitored and supervised upon return to her position, as operational changes had occurred since her departure meaning an additional Manager and part-time lender were now employed in the branch.

Although only $7,500 of the original $37,500 was able to be recovered, the Deputy President was satisfied that the Branch Manager “did not behave in a manner that was dishonest and nor did she benefit in any way from the erroneous transaction”. In light of the fact the Branch Manager had experienced great difficulty securing alternative employment since her dismissal, Deputy President Asbury also awarded $54,482.28 compensation, comprising of $48,282.83 (gross) in wages and $6,200.36 in superannuation. The Branch Manager’s continuity of employment is also to be maintained.

Smith v Bank of Queensland Ltd [2021] FWC 4 (4 January 2021); Smith v Bank of Queensland Ltd [2021] FWC 2060 (19 April 2021)