When Ignorance Can Be a Defence: The Gap Between Company Policy and Reality
In business, there’s often a significant gap between what companies write in their policies and daily reality. Many organisations spend considerable resources developing comprehensive policies, only to leave them unimplemented, gathering dust on shelves or lost in computer systems. This creates an interesting legal paradox where ignorance, usually not accepted as a defence, can sometimes protect individuals and harm organisations.
The Basic Rule: Ignorance is No Excuse
We’ve all heard the saying that ignorance of the law is no excuse. This is true when it comes to actual laws; they’re in the public domain, published on government websites where anyone can access them. But when we’re talking about company policies that aren’t well communicated or implemented, the situation gets more complicated.
In my own experience, I can tell you that many times customers assure me they have policies and procedures in place. On further investigation, they do exist, but they’re not implemented. No one knows about them, and even the customer cannot recall where they’re located. So, they’re useless – wasted money. It leaves the customer without a leg to stand on if they want to discipline someone for actions that go against their values or the way they want their team to behave. How can they act on it when policies aren’t communicated, and teams aren’t trained on them?
When Ignorance Can Work as a Defence
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Poor Training and Communication
When companies have detailed policies but don’t train their staff or explain what’s expected, ignorance becomes a reasonable defence. Here are some common examples:
- A company has privacy policies but never trains employees on how to handle customer data. Or people openly discuss others personal matters without being informed that’s a breach of privacy.
- Written Safety rules exist, but workers are not told about them. And only shown how to follow them once when they start. They’re not trained and reinforced daily as part of toolbox talks.
- Sexual harassment policies exist but complaints are ignored or brushed away as banter and not discussed with the perpetrator as being inappropriate
In these cases, individual employees can argue they aren’t responsible for breaking rules. That they never knew existed or understood.
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Mixed Messages
Sometimes companies have strict written policies, but create a workplace culture that ignores or even encourages breaking those rules. When managers act one way, but the policy says something else. Employees can claim they followed what seemed to be the company culture.
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System Failures
When a company completely fails to put its own policies into practice, this can create doubt. About whether rule breaking was intentional or the result of a broken system. Examples include:
- Computer systems that don’t match the written procedures making them impossible to follow
- Work processes that contradict company policies
- Not having enough resources or time to follow the rules
What This Means in Practice
For Companies
Businesses face real risks when their policies are pieces of paper:
Legal Problems:
Courts might see the gap between policy and practice as proof of negligence. Which could increase liability rather than reduce it.
Regulator Issues:
Government regulators don’t like organisations that can’t show they’re following their own rules.
Workplace Culture:
Employees lose trust in management when policies are for show only but not reinforced.
For Employees
Workers in companies with poor policy implementation can do the following to protect themselves:
- Keep records of times when policies contradict actual practice or are impossible to follow. And discuss this with their supervisor or bring it up with senior management as an opportunity for improvement
- Ask for clarification. Especially when policies are unclear. Or seem to conflict with what you’re told to do
- Document what training you have or haven’t received on important policies
The Reasonable Effort Standard
Courts and regulators will investigate the efforts made to put policies in place. This includes:
- Recorded attendance at regular training programs
- Clear ways for people to ask questions about policies
- Systems to track and enforce rules
- Regular reviews and updates of policies
- Technology and processes that help people follow the rules. Rather than making it harder
What Companies Should Do
To avoid the problem of policies that don’t match reality:
Make Policies Easy to Find:
Everyone who needs to follow a policy should be able to access and understand it with ease
Train People:
Conduct regular training that’s relevant to each person’s job. With ways to measure if they learned anything
Make Systems Work Together:
Technology and work processes should support policies, not fight against them
Check How Things Are Going:
Regular audits to find gaps between what’s written and what’s happening
Keep Things Current:
Policies should change as the business and regulations change
The Bottom Line
While ignorance usually isn’t a legal defence, when organisations fail to put their own policies in place. It creates situations where individuals might not be responsible for breaking rules. But it’s limited protection and depends on the specific circumstances.
For companies, the message is simple:
Policies without proper implementation are useless. And they can create legal problems. As well as workplace issues that work against what you’re trying to achieve. The best protection is showing you’re committed to making policies a real part of how your organisation works.
The gap between what’s written down and what happens remains one of the biggest challenges in modern business compliance. Closing this gap takes ongoing effort, resources, and leadership. But it’s essential for both legal protection and having a well-functioning workplace.
Australian Legal Examples
The landmark case Commonwealth Bank of Australia v Barker (2014) HCA 32 demonstrates this principle clearly. Mr Barker was awarded substantial damages because CBA had not followed its own policies and procedures for redundancy compensation. While the High Court ultimately ruled on different grounds, the case highlighted how failing to follow internal policies can create significant legal exposure for organisations.
Beyond this high-profile case, the Fair Work Commission database contains thousands of decisions where employers have faced consequences for failing to follow their own procedures. Some common scenarios that lead to successful unfair dismissal claims include:
- Not following disciplinary procedures outlined in employee handbooks
- Failing to conduct proper investigations before dismissal
- Not giving employees opportunity to respond to allegations
- Skipping steps in following discipline policies and procedures rendering them unfair
These cases demonstrate that established procedures become legal obligations. Ignore them at your peril.
This reinforces the central point of this post; policies designed to protect organisations can become legal liabilities when poorly implemented, while potentially shielding individual employees who can legitimately claim ignorance.
Reference Links:
Fair Work Commission Decisions and Orders