Leading Through Uncertainty: When Trust Is the Risk

Let’s talk about trust, accountability, and what happens when the employment relationship breaks down, not because of proven misconduct, but because trust and confidence have irreparably eroded.

In the workplace, trust isn’t a luxury, it’s the foundation of the employment relationship. 

This is especially true in roles requiring autonomy, access to sensitive information, or operation within safety-critical or high-compliance environments. Think mining, logistics, finance, or even remote and hybrid roles; these positions demand consistent integrity and a high degree of mutual confidence.

But what happens when that confidence is shaken?

Consider this scenario:

• An employee is issued a lawful and reasonable direction in accordance with company policy or procedure.
• The employee refuses to comply.
• There may be no definitive proof of misconduct, but the refusal raises serious concerns and leaves material doubts unresolved.

In such cases, it is not the absence of proof that becomes central, it's the presence of unresolved doubt that undermines the very basis of the employment relationship.

When an employee’s actions (or inactions) create a climate of uncertainty, especially in trust-reliant roles, an employer may lawfully determine that the employment relationship is no longer tenable. The inability to rely on the employee, whether due to noncompliance, evasiveness, or a lack of accountability, can itself constitute a valid reason for dismissal.

Trust Breakdown and the Legal Framework

 Under Section 387 of the Fair Work Act 2009 (Cth), the Fair Work Commission considers whether a dismissal was harsh, unjust, or unreasonable. This includes evaluating:

• Whether there was a valid reason related to the employee’s conduct or capacity,
• Whether the employee was notified of the concerns and given a chance to respond,
• Whether the dismissal process followed principles of procedural fairness.

Importantly, the Fair Work Commission provides that reinstatement is the primary remedy in unfair dismissal claims. However, reinstatement may not be ordered where the employer can demonstrate that the trust and confidence essential to the professional relationship have been irreparably damaged. In such cases, even if no definitive misconduct is proven, the employment relationship may be considered beyond repair, and termination justified.

Questions for Employers to Ask

• Does the role require a high level of independence, procedural compliance, or safety sensitivity?
• Did the employee’s conduct raise genuine concerns about reliability, honesty, or accountability?
• Can the employment relationship realistically continue in the absence of mutual trust?
• Would ongoing employment present operational, reputational, psychosocial or cultural risks?

 Why This Matters

The breakdown of trust, particularly in roles where operational risks are high, can be a valid basis for dismissal.

However, employers must ensure:

• A procedurally fair process is followed;
• Concerns are clearly communicated and documented;
• The decision is based on a genuine assessment of risk, capacity, and viability; and
• The rationale for termination is anchored in business needs and aligned with legal obligations.

 In Summary

In roles built on trust, unresolved doubt, or loss of confidence, even without conclusive proof, may justify termination. But this cannot be done arbitrarily.

Employers must demonstrate:

• A legitimate and rational basis for their concerns,
• That efforts were made to resolve the issue or restore confidence,
• That termination was the only reasonable option remaining.

 Trust, once broken, is difficult to rebuild. In some roles, it may not be possible at all.

#WorkplaceLaw #TrustAndConfidence #FairWorkAct #RemoteWork #UnfairDismissal #HRLeadership #ProceduralFairness #EmployeeRelations #MagneticPeople #HR #ER #IndustrialRelations #HRConsultant