In a recent Fair Work Commission (FWC) decision, Senior Deputy President Jonathon Hamburger warned employers to avoid having a ‘knee-jerk reaction’ in relation to an employee’s alleged conduct, and reinforced the importance of properly investigating alleged conduct before taking disciplinary action in relation to an employee.  In this particular case, an apprentice employee was dismissed when his employer became aware that he had been charged with a serious criminal offence outside of his employment.

The FWC found the employee’s dismissal to be unfair because of the failure of the company to put sufficient thought into retaining the employee and to establish a relevant connection between his criminal activity and his employment.  The FWC ordered the company to pay the employee compensation equivalent to six weeks’ wages.

What happened?

The employee was an apprentice butcher at the company’s retail butcher store, and was in the third and final year of his apprenticeship at the time of his dismissal.

The employee was charged with being an accessory after the fact to murder and taken into custody.  His family then contacted the company to advise them that the employee was unable to attend work for that reason.  A director of the company subsequently spoke to the employee’s mother and expressed his concerns about the impact of the employee’s criminal charge on the company’s business. 

A few days after the employee was charged and detained in custody, the director advised the employee’s mother verbally the employee’s employment was being terminated on the basis that other employees would resign if the employee continued to be employed by the company and that customers would boycott the retail store, impacting on its profitability.

What did the FWC decide?

The FWC found that the company’s concerns for its business, employees and customers were justified, given the company’s small retail presence in regional New South Wales, the employee’s aggressive behaviour prior to his arrest and the fact that the employee worked with sharp knives.  However, while the employee’s conduct could be said to be ‘grave’, it did not constitute serious misconduct.

The FWC found that while the dismissal was valid, it was inconsistent with the Small Business Fair Dismissal Code (with which the company was required to comply) due to the process that was adopted by the company to effect the employee’s dismissal.  SDP Hamburger considered that the director had a knee-jerk reaction to the news that the employee had been charged as an accessory to murder, fuelled by reports of customer and employee dissatisfaction, and proceeded to terminate on that basis.

The FWC also held that the company failed to establish a relevant connection between the employee’s criminal conduct and the employee’s employment.  While the employee’s actions contributed to his dismissal, SDP Hamburger said ‘there is no presumption that a criminal conviction alone is a valid reason for termination of employment, particularly where the criminal offence was committed outside of work’.

The FWC also placed weight on the fact that the employee was more than two-thirds of the way through his apprenticeship at the time of dismissal and the company had ‘barely turned its mind’ to retaining the employee, which contributed to the employee being denied procedural fairness.

Having regard to the unusual combination of circumstances, the FWC found the employee’s dismissal to be harsh and unjust, but not unreasonable.  Reinstatement was found to be inappropriate, and compensation was therefore ordered.

Lessons for employers

Although this case involves a rather unusual set of facts, it illustrates that employers need to approach alleged employee conduct in a careful and considered manner, including by conducting a thorough investigation into the alleged conduct before making any decisions regarding disciplinary action.