Show Cause Letter Response

Published: 7 July 2021

Published: 7 July 2021
Andrew Anderson, Legal DirectorBy: Andrew Anderson

Do you need to respond to a show cause letter from your employer?

Get informed about how to make an effective reply.

If you have been issued with a show cause letter from your employer, you are likely facing disciplinary action, possibly even dismissal. It brings into focus just why it is so important to make make an effective reply to a show cause letter. In terms of how to respond, the options are not as limited as they may seem.

Each legal issue is unique. This information cannot – and is not meant to – substitute legal consultation. It is designed to outline information of a general nature to people who want to learn more about how to effectively respond to a show cause letter issued by an employer.

If you are being asked to ‘show cause’ why you should not face disciplinary action, contact Anderson Legal. This firm provides expert advice and representation.  Andrew Anderson is independently recommended as being among the leading white-collar crime, corporate crime & regulatory investigations lawyers in Australia. He has substantial experience in assisting employees at all levels to respond to show cause letters.

Show Cause Letters

What is a show cause letter?

A show cause letter is meant to provide an employee with an opportunity to explain (show cause) why they should not face disciplinary action within the workplace. A show cause letter issued by an employer should at least contain:

  • the potential disciplinary action (ie, dismissal) that may result if the employee does not ‘show cause’;
  • adequate details of the alleged underperformance, misconduct, or other issue giving rise to the potential disciplinary action;
  • any relevant workplace history or background (ie, previous warnings) the employer may take into account when deciding the appropriate action; and,
  • information about how and when the employee is asked to respond, as well as any other rules (ie, confidentiality) that may apply to the process.

Why do employers ask employees to ‘show cause’?

In Australia, employers may issue a show cause letter to ensure procedural fairness in a disciplinary process. The failure to give employees a chance to ‘show cause’ why the disciplinary action is unjustified can see decisions overturned or compensation awarded.

Under section 387(c) of the Fair Work Act 2009 (Cth), failure to give an employee a chance to respond to a workplace issue may be taken into account in determining if a dismissal was harsh, unjust or unreasonable. The law states:

387 In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the FWC must take into account:
  1. whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and…

The above section, as well as modern awards, enterprise agreements, contractual terms and workplace policies, may all influence how an employer asks an employee to show cause why disciplinary action should not be taken against them. The notion that employers should give employees an opportunity to respond to proposed disciplinary action is well established. With respect to a similar provision replaced by section 387 of Fair Work Act 2009 (Cth), it was said by Moore J in Wadley v YMCA Canberra [1996] IRCA 568:

“In my opinion the obligation imposed on an employer by that section has, for present purposes, two relevant aspects. The first is that the employee must be made aware of the allegations concerning the employee’s conduct as as to be able to respond to them. The second is that the employee must be given an opportunity to defend himself or herself. The second aspect, the opportunity to defend, implies an opportunity that might result in the employer deciding not to terminate the employment if the defence is of substance. An employer may simply go through the motions of giving the employee an opportunity to deal with allegations concerning conduct when, in substance, a firm decision to terminate had already been made which would be adhered to irrespective of anything the employee might say in his or her defence. That, in my opinion, does not constitute an opportunity to defend.”

As can be seen, employers have good reason to issue show cause notices before making disciplinary decisions, given the failure to do so can see decisions overturned and claims for damages being successful.

Who can issue show cause letters to employees?

Often, employees receive a show cause letter from their employer. Whether it be a manager or representative of human resources (people and culture), provided that person has been properly delegated to make the disciplinary decision, there are numerous people who may actually issue a show cause notice within a business or organisation.

Beyond an individual workplace, it is increasingly common for regulatory agencies, trade and professional bodies to also issue show cause letters. For example, a nurse may receive a show cause letter from AHPRA (Australian Health Practitioner Regulation Agency, or a teacher from the Queensland College of Teachers. Even holders of a positive notice for a Blue Card in Queensland may be issued a show cause notice if there is a change of circumstances that may affect the assessment.

No matter whether it is a show cause letter issued by an individual employer or a regulatory agency, all responses should be taken seriously because of the impact decisions that may follow can have on careers, reputations and livelihoods. It is for this reason that many people who receive a show cause letter get an employment lawyer to assist in formulating the response, given what is at stake.

When are show cause letters issued?

A show cause letter should be issued to an employee prior to a disciplinary decision being made by an employer or regulation agency. If a decision has already been made to discipline or dismiss the employee, then there is no real opportunity afforded to provide an explanation.

In some cases, a show cause letter is provided by an employer or regulator at the conclusion of a workplace investigation into the allegations contained in the show case letter. An investigation may be done by staff within a workplace, or an external investigator may be appointed to carry it out. If a workplace investigation is unfair, it can jeopardise the fairness of the entire process and lead to decisions that rely on it being overturned.

In some cases, show cause letters are issued at a point when it is difficult for an employee to respond within the timeframe given. It could be for reasons of ill-health, inability to access a particular lawyer in time, or some other reason. In circumstances when an employee finds themselves unable to respond in the time afforded by the employer or regulator, it is sometimes possible to get an extension to allow for sufficient time to respond.

How are responses to show cause letters used?

If an employee provides a response to an employer in an attempt to show cause why disciplinary action should not be taken against them, it may be used in a number of ways. Clearly, its primary purpose is to convince the employer to make (or not make) certain decisions. So it is expected that it would be used by an employer and considered before any action against the employee is taken.

The response may also be used later by an employee (and employer, for that matter) if there is litigation about a disciplinary decision, such as in an unfair dismissal claim before the Fair Work Commission. If an employee raises a number of issues in their response, which can be shown to have been wrongly disregarded or not considered by the employer, it may strengthen the claim that the disciplinary decision was unfair.

Show Cause Letter Response Options

There are many different approaches a person may take when faced with the need to provide a reply to a show cause notice. In some cases, there may be multiple strands to a response with each having a distinct purpose but combine to work together. Often the work of an employment lawyer in assisting people to provide an effective response involves both challenging the allegations or procedural fairness as well as engaging in ‘without prejudice’ negotiations to quickly resolve the issue. Each case is different, which is why anybody seeking personalised advice about a specific situation should consult a lawyer. Anderson Legal provides a free consultation to individuals facing employment law issues, such as for executives or employees who have been issued a show cause letter.

Challenging the show cause letter

Before an employee can effectively respond to a show cause letter, they need to know certain things about what is being alleged. For that reason, it may be necessary to seek further and better particulars of the complaint made against the employee, or to be provided with certain evidence. Without knowing the relevant times, places, and circumstances surrounding what is alleged, it can be difficult to provide an effective response.

A workplace may also have policies and procedures, or other rules, which set out how a complaint or grievance ought to be raised with an employee. If the employer breaches its own policies in issuing a show cause letter, there can sometimes be good reason to argue that procedural fairness has not been afforded and that any adverse decision made in relation to the employee will be open to challenge.

Experience shows that it is important not to overlook the compliance of the employer with their own policies and procedures. Failing to properly challenge issues of this kind during the process of responding to a show cause letter can make it harder to raise at a later point, such as following a decision to dismiss the employee.

Challenging the allegations

Generally, it is inappropriate for an allegation to be substantiated simply because the person accused could not disprove it. If the employer substantiates an allegation it should be because the employer is satisfied that the allegation is proved, having regard to all the relevant information.

When there has been no comprehensive investigation into the facts underlying the allegations, an employee may provide an explanation for the conduct or capacity issue being raised. In some cases, employers may simply be unaware of the full context in which an issue emerged, or that there there are additional facts that undermine the complaint or grievance.

Challenging allegations requires a focus on two issues: credibility and reliability. In essence, credibility concerns honesty whereas reliability may be different. An allegation may be honestly raised, but it may depend on a person who is mistaken or other evidence shows to be wrong.

One of the important roles of an employment lawyer assisting someone to provide a show cause letter response is to identify, as early as possible, the relevant information or evidence that validates the explanations of their client. The reason it is important to do it as early as possible is to ensure relevant witnesses are interviewed while matters are freshest in their mind, or to prevent other evidence being lost or destroyed.

Initiating ‘without prejudice’ negotiations

Initiating confidential ‘without prejudice’ negotiations with an employer is something generally undertaken by a lawyer acting on behalf of an employee. Power imbalances may otherwise impede discussions between the employer and employee, particularly at a time when an employee is facing a disciplinary process.

The purpose of ‘without prejudice’ negotiations between employers and employees is to resolve an active or potential dispute as quickly as possible. When confidential negotiations end in a commercial agreement, real benefits can be achieved for both employers and employees, particularly in terms of managing reputational risks.

While confidential negotiations are not always possible or appropriate, their use as a complementary strategy in trying to resolve disputes can see quick resolutions to situations that may otherwise take months to resolve through litigation. Handled incorrectly, allegations of contract breaches, among others, can be made.

Seeking to reach a mutual agreement or negotiated settlement generally requires a clear understanding of your legal rights, obligations and options. Agreements of this kind often involve certain guarantees, indemnities or waivers, which can have real consequences when breached. For this reason, ‘without prejudice’ negotiations should always be handled with care and through lawyers.

Amongst the most important advice an employment lawyer can provide in the context of a workplace dispute is whether or not there is scope to resolve the dispute in a way that suits the interests or priorities of their client. Prior to consulting with a lawyer, people are often unaware of the full extent of their options, which, if not exercised at the right time, can be lost.

Accepting / disputing proposed disciplinary action

In some instances, an employee may simply accept their conduct fell below the appropriate standard, or that their performance needs to improve. When there is no dispute that there is a conduct or capacity issue that needs to be addressed, it may be critical to address the proposed disciplinary action. For example, the show cause letter may suggest that termination of employment is being contemplated in circumstances where such a decision would be harsh, unjust or unreasonable. In such cases, outlining why a lesser disciplinary decision, such as the initiation of a performance improvement process, may be appropriate.

Examples of what may be raised if the allegations are accepted include the following:

  • Workplace issues that have caused or contributed to the conduct or capacity issue in question. This may relate to issues such as workplace bullying, discrimination, harassment, or some other issue with a causal connection;
  • External explanations for why the conduct or capacity issue in question occurred. This may include mental health issues, personal issues that have arisen, or other events that place the concerns of the employer into proper context;
  • Information that may add to the reasons why a particular disciplinary action (ie, written warning rather than dismissal) is appropriate in all the circumstances. An example of this kind may be an exemplary work history that shows the conduct or capacity issue raised is out of character; and,
  • Any insight, training or programs that may be, or have been, undertaken to address the conduct or capacity concerns of the employer.

Effective Responses to Show Cause Letters

The primary object of a response to a show cause letter is to persuade. To persuade your employer (or a regulator) about why your response should be accepted. If the objective of the employee is to keep their job, then the aim is to prevent a dismissal decision. Sometimes the objective is multi-layered, or shifts over time.

Employment lawyers help people to respond to a show cause letter by assisting the employee to be clear about their objective or objectives. Whereas some people worry about the ‘look’ of engaging a lawyer over a workplace issue, it is a mindset that can disadvantage an employee who is having decisions made about their legal rights, entitlements and interests. Many people choose to get a lawyer to help them respond to a show cause letter because the applicable laws and rules may not be clear, the evidence and arguments are contested, or there is a real need to do all that is possible to prevent a particular outcome from occurring.

Sometimes generic advice suggests to “never apologise” or to keep a response “succinct”. In some cases, it could be the right approach. In others, it may be downright dangerous and counterproductive. That is why instead of people thinking about template “do’s and don’ts”, adopting an approach driven with persuasion in mind is likely to be more useful. In some cases, a lawyer may send more than one letter to an employer in response to a show cause notice, given ‘without prejudice’ correspondence may also be exchanged.

There are a number of hierarchical models of communication that may be adopted as a guide to persuasive communication. Lawyers often adopt an IRAC formula when analysing legal issues, whereas marketing experts may be more familiar with the AIDA formula. Such models can be useful in thinking about how to structure a response to a show cause letter, although caution should be exercised whenever seeking to follow any communication model.

Make the message clear, immediately

It can assist to make your message clear upfront. If a person cannot clearly articulate what they are saying or seeking, the person on the receiving end of the message may also fail to be clear about what is intended.

For example, provided the circumstances called for it, a lawyer may open a show cause response letter in this way:

We act for your employee, [INSERT NAME]

With respect to the show clause letter received by our client, we provide the following response on their behalf.

It is disputed that the allegation against our can be properly substantiated on the evidence. In all of the circumstances, it would be appropriate to take no further action with respect to this matter. In particular, we wish to make clear that any decision to dismiss our client would be harsh, unjust or unreasonable.

An opening, of the kind outlined above, makes clear what will follow in the remainder of the response: There is a dispute. There is a dispute about the need for any disciplinary action. In particular, there is a dispute about the possibility of dismissal on any view of the matter.

An opening that sets out the issues clearly will grab attention. The rest of the response should be devoted to convincing the reader that those statements are, indeed, correct.

Outline what allegations or issues are accepted or rejected

It is a common – and understandable – mistake that people make when acting for themselves to not properly acknowledge when mistakes were made. Sometimes, there is no way around it – a mistake occurred. In other cases, when misconduct or other disciplinary issues are raised, they are fully disputed.

If possible, it is important to be clear about what is disputed and what is not. In some cases, it is not possible, but in most it is. The reason it is important is that it will mark out the boundaries of how any disciplinary decision will be made. If you dispute everything, everything is an issue. Narrowing the points in dispute can be a source of strength. One important matter employees often overlook in responding is raising wider issues that may have contributed to, or are at least relevant to, the allegation.

In addressing the issues accepted or rejected, it may be crucial to detail the information, witnesses or evidence that may tend to support the claims made. Moreover, it can be important to outline any procedural flaws or issues of non-compliance by the employer or regulator. Without being able to explain the detail of the issues in a manner that attracts the interest of the decision-maker, the response to the show cause letter may be ineffectual.

Convincing responses are credible and reliable

A convincing response to a show cause letter is both credible and reliable. While credibility concerns honesty, reliability may be different. An allegation may be honestly raised, but it may depend on a person who is mistaken or other evidence shows to be wrong. Equally, where a person can be shown to have lied about a particular issue, their honesty may be called into question to the point they have no credibility, even if the information they provide seems otherwise reliable (accurate).

Disputes regarding factual issues, such as whether allegations are truthful (ie, can be substantiated), must come down to an assessment of the credibility and reliability of the evidence. It means that if witnesses are not interviewed, evidence is not provided, information is not gathered, a distorted view may prevail. In the case of an employee being asked to show cause, an employer relying on information that is not credible or reliable may see a job lost unnecessarily.

The task of convincing the decisionmaker of a particular view of the facts will depend on a range of factors. Who has the burden of proof? What is the standard of proof? Why should a piece of evidence be accepted or rejected? When responding to a show cause letter, employees often have a range of factors on their side. They can be important to highlight.

In responding to a show cause letter, care should be taken to gather the necessary information and present it in the most persuasive manner possible. This may mean calling into question the credibility and reliability of evidence relied on by the employer, and emphasising the reasons other evidence should be accepted.

Identify the appropriate action to follow

In responding to a show causing letter, it may be important to state what action should be taken by the decision-maker. For example, if the ultimate position is that no further action should be taken, then that should be made clear. Alternatively, an employee may accept that a conduct or capacity issue has been demonstrated, such as to warrant disciplinary action, but suggests a particular sanction (ie, warning letter, performance improvement plan) is appropriate.

Identifying the appropriate action to be taken helps draw a line in the sand. It may be a dispute about whether disciplinary action of any kind is warranted. Or, it may be limited to the type of disciplinary action to be taken. Identifying the appropriate action to follow in many cases can narrow the issues in dispute.

Disputing Disciplinary Action

Following a show cause letter response, disciplinary action may be taken. It may be disappointing, even devastating. While some people may seek to engage a lawyer at that point “if the worst happens”, it often becomes harder, not easier, to change the outcome the farther things are along the road. For this reason, people who think they may need legal assistance about a show cause letter are often best served by getting legal assistance sooner rather than later.

If an adverse decision is made against an employee, they may have a number of different claims they may wish to pursue, depending on the circumstances of the case. Obviously, it is in the interests of the employer to appropriately consider the reply to a show cause letter, lest it result in unnecessary legal disputes.

If a disciplinary decision is made and is then disputed, an individual may have a range of possible actions available to them. This includes unfair dismissal claims, discrimination claims, and breach of contract claims.

Unfair Dismissal Claims

Unfair dismissal claims arise under the Fair Work Act 2009 (Cth), which covers the vast majority of employees across Australia through the National Employment Standards (NES). Unfair dismissal claims have a strict 21 day time limit to be lodged. In cases where an employee is eligible to make a claim, and the dismissal is harsh, unjust or unreasonable, a claim may be successful before the Fair Work Commission.

Discrimination Claims

Discrimination claims may be brought under anti-discrimination laws enacted by the Commonwealth or State, depending on the nature of the alleged discrimination. In Queensland, complaints may be initially referred to either the Queensland Human Rights Commission (QHRC) or the Australian Human Rights Commission (AHRC).

Breach of Contract Claims

Breach of contract claims are less commonly instituted in Australia, due to the availability of other, faster remedies through alternative processes, such as unfair dismissal claims. Unlike unfair dismissal claims, breach of contract claims often have legal costs consequences, where legal costs often follow the event. This means that if a party (employer or employee) loses a breach of contract claim, they may not only be required to pay their own legal costs but at least part of the costs of the other side. For this reason, breach of contract claims are generally only brought where there is no other reasonable alternative and it is considered there are strong prospects to litigate a claim.

Responding to a Show Cause Letter - Employment Lawyers Queensland - Anderson Legal