In brief: The Fair Work Commission has provided further guidance on the matters that will be considered in assessing the harshness of an employee's dismissal. Senior Associate John Naughton and Lawyer Laura Miller report.

HOW DOES IT AFFECT YOU?

  • Employers must act promptly to investigate allegations against employees, and, where serious allegations are made, consider appropriate steps, such as suspension, during the investigation.
  • An employee must be provided with an appropriate length of time to respond to a show cause notice, having regard to the length of time taken by the employer to conduct any investigations, and an employer must genuinely consider any response provided by the employee.
  • Even where the employer has a valid reason for dismissal, the dismissal can still be unfair, especially if the employee has a long period of service.

Background

IBM terminated the employment of Mr Camilleri for breaching policies by making inappropriate expense claims. The claims were:

  • 141 daily allowance claims for days he was not in Melbourne on IBM business;
  • air travel to the Gold Coast from Melbourne for a personal trip; and
  • using his personal credit card to make payments for accommodation that should have been placed on an IBM credit card.

These expense claims were made between October 2011 and September 2012. Mr Camilleri's termination eventually occurred after extensive investigation, consultation and a show cause process, which only began in May 2013.

Mr Camilleri brought an unfair dismissal claim against IBM alleging that the expenses claimed were an honest mistake without intent to defraud IBM. He also argued that the process followed by IBM was unfair.

The decision

The Fair Work Commission found that Mr Camilleri's failure to comply with policies in respect of his substantial daily allowance claims was of such a magnitude as to constitute a valid reason for termination of his employment.5

Despite this, the Commission considered that Mr Camilleri's dismissal was unfair. The Commission placed significant emphasis on Mr Camilleri's long unblemished record of service with IBM and his offer to reimburse the company for the inappropriate expense claims. In considering the harshness of the dismissal, the Commission also highlighted:

  • the short period of time that Mr Camilleri was afforded to respond to IBM's show cause notice, in view of the significant length of time taken by IBM to investigate the allegations against him;
  • that the decision to terminate had been pre-determined before Mr Camilleri's show cause response and was only provided to the primary decision maker in summary form;
  • the extraordinarily long delay (of nearly three years) between the first inappropriate claim and termination of his employment; and
  • the failure of IBM to take any action to suspend Mr Camilleri pending conclusion of its investigation did not reconcile with IBM's position that it had lost trust and confidence in him.

The Commission followed earlier authority and ordered Mr Camilleri's reinstatement, observing that as long as restitution of the amount inappropriately claimed was made, IBM's lack of trust and confidence in Mr Camilleri was not enough to deny the primary remedy.