Employers must be careful about what they say about employees, even after they stop working for them.

In Bowden v KSMC Holdings Pty Ltd t/as Hubba Bubba Childcare on Haig & Chapman (2019), a director of a Sydney childcare centre learned this the hard way when she sent an email to 35 parents after an employee left the company.

She wrote:

[The employee] – is unfortunately no longer with us due to disciplinary reasons. Whilst being good with the children in general, [he] was not truthful with us regarding his studies and some other issues, and I felt it was better for him to move on and possibly gain a bit more life experience. We wish him well in the future.

However, it turned out she wasn’t being truthful and the former employee successfully sued her for defamation. The District Court of New South Wales ordered her to pay him $237,970.22 in damages.

The court learned that the employee actually resigned because the employer had increased his rostered hours from part-time to full-time, which coincided with his TAFE schedule.

The employee only found out about the email when one of the parents who received it told him. The director had also telephoned another parent who used the employee as a babysitter to tell her “although [he] was really good with the children … he couldn’t be trusted fully”.

The employee claimed that the employer had defamed him by accusing him of:

• being dishonest;
• being untruthful about his studies and some other issues;
• being dismissed for disciplinary reasons;
• conducting himself in such a manner that a childcare centre terminated his employment; and
• being unfit to work in childcare.

When the employee handed in his notice, the director ordered him to be escorted off the premises by another staff member. He submitted that the director did this as she didn’t want him to tell parents of the children at the centre anything that conflicted with her construction of events. Judge Leonard Levy accepted this.

The court heard that the employee “felt ill” when he learned about the email and “needed medical and psychological help” to deal his depression that followed, causing him to withdraw from his TAFE course for a period of time.

Judge Levy rejected the director’s argument that the employee told her he had completed his TAFE course. He also rejected her argument that he had been deceptive as he failed to disclose babysitting for children outside of work hours, noting she could not substantiate that she had an “anti-babysitting policy”.

The director also failed in her cross-claim where she alleged that the employee was overpaid by $8.28 per hour for more than 1,000 hours.

Judge Levy said the director’s actions were “a callous defamation of a vulnerable young man”.

“[The former employee’s] character was seriously impugned in [the director’s] emails and his reputation suffered damage, both directly, in the eyes of the recipients, and by reason of the grapevine effect, which was evidenced by a child repeating the reputational slur that he was thought to be a liar.

“That damage to [the former employee’s] reputation was not intended to come to his attention. It only came to his attention by chance because one of the recipients was troubled by the publication and decided to share it with him after some deliberation.

“A direct grapevine effect of the defamation has been the fact that TAFE staff necessarily became involved in the case at the behest of [the employer], which has undoubtedly left a cloud over [the former employee’s] presence in the early childhood education sector to an unknowable degree.

“[O]ne of the untoward and disrupting effects of the email was that [the former employee] felt the need to pull out of his TAFE course and to delay the further pursuit of his studies. It took him some considerable time to obtain another part-time position in the childcare sector.

“Although the initial audience of [the director’s] publication was limited, the group to which [the employer] chose to send the emails was vital to [the former employee’s] advancement in his chosen career.

“They were in the locality where he lived, and the grapevine effect already had an adverse effect, as is evident from the comment made to [the former employee] by a child (who was not an intended recipient of the matter complained of, but who was nevertheless a number of a foreseeable audience) and some identified staff at TAFE, if not others.

“[The former employee] had to deal with those TAFE personnel who were aware of this litigation. It is important that [he] not remain the subject of the injurious shadow cast over him by the original defamation,” Judge Levy said.