The Fair Work Commission (FWC) has upheld the unfair dismissal claim of three former employees of Toll who resigned after they misappropriated work uniforms, finding that a dismissal had occurred despite the letters of resignation tendered and ordering the employees be reinstated and compensated for lost remuneration.

Implications for employers

When dealing with employee misconduct, employers should be mindful of the available disciplinary options. While employers may wish to take a strong stance on misconduct and “send a message” to other employees, any response taken must be proportionate to the alleged misbehaviour.

Employers should also be mindful of the relationship between employees and their apparent advocates. In this case, the union representative did not accurately represent the interests of its members by advocating the benefits of resignation, and this was a key reason they were found not to have resigned.

Background

On 6 October 2014, in the course of their shift working as dockhands, three Toll employees discovered a partially open cardboard box, containing a number of employee uniforms. The employees removed several items of clothing (two Toll vests, a Toll jacket and a Toll beanie) and this removal was captured on CCTV footage. One of the employees wore an item of clothing removed from the box when leaving the site that day; the employees also attended work the next day wearing the appropriated uniform clothing.

Toll became aware of the misappropriation and commenced investigative and disciplinary procedures. Through an organiser the Transport Workers’ Union (TWU) made a proposal to Toll for an agreement allowing the employees to resign their employment (without first consulting the employees). After a meeting with Toll management, the employees met with the TWU organiser and wrote their letters of resignation on paper supplied by the TWU organiser in the words dictated by him. During this meeting, the TWU organiser was dismissive of the employees’ ability to continue in their employment, informing them that Toll intended to sack them and “call the coppers”. Upon receipt by Toll of the employees’ letters of resignation, the employees were provided termination pay statements and escorted from the premises.

The employees alleged that they had been dismissed, despite their letters of resignation, and that the dismissal was unfair.

Decision

The FWC found that the employees had been forced to resign their employment because of the course of conduct engaged in by Toll, even with the involvement of the union representative, and that this was accordingly a dismissal within the meaning of the Fair Work Act 2009 (Cth) (Act).

In coming to this decision, the FWC considered a range of factors including the lack of prior poor performance or disciplinary action for misconduct of any kind by the employees, that the TWU organiser strongly advocated both to Toll and to the employees that resignation was the best option, that it was suggested that their resignation would preclude police involvement and dismissal, that access to and availability of work clothing was often “informal” and the employees’ intentions appeared to be honest (as manifested by the fact that they wore the clothing during their work at Toll in full view of Toll’s personnel and surveillance system).

The FWC referred to Victorian Association for the Teaching of English Inc v Debra De Laps[2014] FWCFB 613 (de Laps) and its approval of the statements in O’Meara v Stanley Works Pty Ltd (O’Meara) that:

In determining whether a termination is at the initiative of the employer an objective analysis of the employer’s conduct is required to determine whether it was of such a nature that resignation was the probable result…

The FWC then turned to whether the dismissal was unfair, and concluded that it was as there was no “valid reason” for dismissal. The FWC took into account the circumstances of the case, particularly that the items in question were work clothing, that the clothing was worn at work, that the box in question was partially open, and addressed to their place of work (albeit to a specific person) as well as the circumstances in which work attire was usually provided. The FWC noted that as the actions could not appropriately be described as dishonest, and could not be characterised as theft, the ground upon which a dismissal would have been based was not valid. The FWC further rejected that appropriating clothing for work, without following the proper procedure, was a valid ground for dismissal because of the genuine belief, held by the employees, in the availability of the clothing for their work.

The FWC further found that the termination was harsh. It was considered that even had there been a valid reason for the dismissal, the employees’ conduct would more properly be characterised as a failure to follow the required procedure for acquiring uniform work clothing. Dismissal was, accordingly, disproportionate where a warning was not issued. Relevantly, the FWC drew attention to the applicable enterprise agreement which required counselling services be provided in situations of unacceptable performance (though not in situations of “gross misconduct warranting summary dismissal”).

The FWC therefore considered reinstatement to be the appropriate remedy. The FWC did not accept Toll’s submission that reinstatement was inappropriate because they no longer had “trust and confidence” in the employees, finding that trust and confidence had not been undermined to the degree necessary to deny reinstatement. The FWC further ordered that Toll make payment for lost remuneration to the two employees who had not been able to subsequently find work (but not to the third employee who had found work four weeks after he was dismissed). The FWC ordered this amount be reduced to 75% of what they would otherwise have received (less any income earned) due to the circumstances.

Amiatu v Toll Ipec Pty Ltd [2015] FWC 3924 (11 June 2015)