Where an employee engages in conduct that an employer considers not only justifies dismissal but warrants summary dismissal, it is important to consider whether summary dismissal could make the termination harsh, unjust or unreasonable.
In recent months, the Fair Work Commission (Commission) has found a number of employers’ decisions to summarily dismiss employees for serious misconduct to be unfair. This has been the case even when there has been a valid reason for termination.
This article discusses three recent decisions by the Commission. Two of these cases involve an employer responding to serious misconduct allegations with summary dismissal. The third case is one where an employer opted to terminate an employee with payment in lieu of notice, even though it was satisfied that serious misconduct had occurred.
- Three recent cases in the Fair Work Commission have emphasised the need to be very careful when summarily dismissing employees.
- Summary dismissal must be in response to sufficiently serious and wilful misconduct.
- To minimise risk, it may be preferable to terminate employees with notice, unless a clear case of serious misconduct has occurred.
TREEN V ALLWATER - ADELAIDE SERVICES ALLIANCE1
Mr Treen, an employee of Allwater, was summarily dismissed for leaving a voicemail on a colleague’s phone calling them a “f– –king scab” during a period of industrial action. Allwater was found to have properly investigated the matter, and no issues of procedural fairness were raised at the hearing.
However, among other things, Mr Treen argued that his dismissal was unfair because:
- he had a near unblemished seven year record of service at the company;
- his age (50) and skill base made his prospects of finding alternative work limited; and
- Allwater applied an inconsistent disciplinary outcome in this case when compared with similar previous matters.
The Commissioner found that there was a valid reason to terminate Mr Treen’s employment but not by way of summary dismissal. Allwater’s disciplinary outcome was held to be a disproportionate response to conduct that was, as the Commissioner described it, “out of character”. The decision further relied on the fact that Mr Treen’s good service and work performance did not appear to be considered by Allwater when dismissing him.
The Commissioner also referred to other examples of disciplinary matters involving threatening or aggressive language by Allwater employees. In two previous cases, Allwater gave both employees final written warnings. Given the similarity, it was found that these examples were inconsistent with the approach taken in Mr Treen’s case.
The Commission ordered that Mr Treen be reinstated.
WATERS V GOODYEAR AUSTRALIA PTY LIMITED2
In July 2015, Mr Waters’ friend, Ms Keenan, attended his workplace carpark with a high-powered rifle in the boot of her car. Mr Waters is an internationally renowned competitive rifle shooter and the purpose of the visit was to obtain Mr Waters’ advice on an accessory Ms Keenan had recently purchased. A passer-by noticed their suspicious behaviour and called the police. Police attended the scene shortly afterwards, but ultimately did not charge Mr Waters with an offence.
Goodyear then investigated the incident. At a formal disciplinary meeting in August, Mr Waters brought senator David Leyonhjelm (a pro-gun advocate) as a support person.
In late-August 2015, Goodyear summarily dismissed Mr Waters. The letter of dismissal set out various aspects of the alleged misconduct that arose from and followed the incident. The crux of Goodyear’s argument was that Ms Keenan introduced a dangerous weapon and ammunition to the workplace, and that this danger was facilitated by Mr Waters.
The Commissioner held that whilst there was a valid reason for dismissal, Mr Waters should not have been dismissed without notice. The Commissioner first found that Mr Waters’ actions constituted a “serious error of judgment”, in particular that:
- Mr Waters must have turned his mind to the reasonable risk that the rifle would be present; and
- in any case, Mr Waters failed to act decisively when Ms Keenan presented the rifle in the Goodyear parking lot, for example, by immediately returning it to its carry bag.
The Commissioner, however, did not view Mr Waters’ conduct to be sufficiently serious to justify summary dismissal and held that:
“[none] of the formulations of the alleged misconduct, when properly considered, can be held to have involved a wilful and deliberate attack upon the employment relationship.”
In regards to the appropriate remedy, the Commission found reinstatement to be inappropriate, and instead awarded Mr Waters over $8,000 in compensation.
GREGORY V QANTAS AIRWAYS LIMITED3
Mr Gregory, a Qantas pilot, was dismissed for groping a female crewmember’s breast during a stopover in Santiago. After an investigation concluding that Mr Gregory had committed wilful and serious misconduct, Qantas elected to terminate his employment immediately but still paid him notice, rather than summarily dismissing him.
The proceedings had a “somewhat lengthy history”. The judgment at first instance dismissed the unfair dismissal application. On appeal, a Full Bench of the Commission refused leave to appeal. The current decision was the result of a full Federal Court decision remitting the matter to the Full Bench of the Commission for reconsideration.
Throughout the proceedings, Mr Gregory’s claim had consistently been that his actions were because of a spiked drink in Santiago which he said explained the high-level of alcohol and cannabis in his system. At trial, he put forward expert evidence to support his theory of events. The Commissioner did not expressly refer to this evidence in his dismissal of Mr Gregory’s defence at first instance.
After a Federal Court ruling that there had been an error of law in the first FWC appeal decision, Mr Gregory again attempted to argue that the Commissioner’s decision involved a significant error of fact.
The Full Bench affirmed that the Commissioner was entitled to reject Mr Gregory’s assertion that his drink was spiked. The Bench said that there was no error in following the “better view” which was that Mr Gregory had “made a significant error of judgement earlier in the evening which has established his personal culpability for the sexual harassment”.
Another critical holding by the full bench was its confirmation of the Commissioner’s finding on harshness. It found no error in his reasoning that Mr Gregory’s long-standing, unblemished employment did not outweigh the seriousness of his conduct, and found that the dismissal was not a harsh, unjust or unreasonable response.
However, had Qantas not elected to provide Mr Gregory with notice, there is a real possibility that this would have tilted the scales in Mr Gregory’s favour.
The bottom line
When should you summarily dismiss?
Unless it is a well-established case of wilful and serious misconduct, you should consider providing notice or paying employees in lieu of notice at termination.
Employing this strategy may reduce the risk of the Commission finding the termination “harsh” and substituting your decision with its own.
However, in certain circumstances, there may be a policy or strategic reason to terminate summarily without notice, and each case should be considered on its own facts.
How do you determine harshness?
Whether a decision is “harsh” often involves considering the personal and economic situation of the employee. These circumstances are balanced with the seriousness of the misconduct alleged.
An employee’s personal and economic situation may not be apparent to you at the time of your decision to terminate. The most common way for an employer to be made aware of these factors is by seeking a response to a show cause letter. However, even if this is not the case, an employee can still rely on their situation to demonstrate harshness at a later date.
What are some examples of “serious misconduct”?
Some examples of serious misconduct are found in the Small Business Fair Dismissal Code. The code provides that serious misconduct includes situations where an employer believes on reasonable grounds that the employee:
- was stealing money or goods from the business;
- defrauded the business;
- threatened the employer or other employees, or clients, with violence, or actually carried out violence in the workplace; or
- committed a serious breach of occupational health and safety procedures.