Forming a view during an investigation as to the significance of findings and likely sanctions against an employee is just common-sense

A recent decision of the Full Bench of the Fair Work Commission (the Full Bench) has further clarified the obligations of employers to conduct procedurally fair investigations into employee misconduct.

An appeal to the Full Bench was lodged by BHP Coal against the decision of Commissioner Booth in which BHP Coal was found to have unfairly dismissed an employee, Jason Schmidt, on the grounds that he was not provided with a genuine opportunity to respond to the reasons for his dismissal relating to his conduct.

Commissioner Booth had found Mr Schmidt’s dismissal to be harsh and unjust on the basis that BHP Coal had firmly decided early in the investigation that Mr Schmidt would be dismissed for misconduct and would not be moved by anything that he might say in response.

However, the Full Bench (Vice President Watson, Deputy President Hamilton and Commissioner Johns) disagreed with Commissioner Booth in this respect and provided a useful exposition of the nature of an employer’s obligation to provide an employee an “adequate opportunity of defence” before they are dismissed for reasons related to their conduct or performance.

The Full Bench affirmed an earlier decision of the Full Bench, Royal Melbourne Institute of Technology v Asher [2010] FWAFB 1200 as authority for the proposition that the criteria for assessing whether a dismissal was harsh, unjust or unreasonable need to be applied in a practical, consistent and common-sense manner. Moreover, when an employee is given an opportunity to answer allegations of misconduct, such an opportunity must be genuine and the employer must have regard to any responses and keep an open mind.

Keeping an open mind, however, does not mean that an employer is “expected to have no leanings or inclinations as to the likely sanction against the employee”. Indeed, the Full Bench held that “it would be usual and proper for an employer to form a view about the significance of the findings to possible disciplinary action” when an investigation has uncovered behaviour which does not meet performance or conduct expectations.

Ultimately, the Full Bench found that Mr Schmidt was given a genuine opportunity to respond to the reason for dismissal related to his conduct and the order of Commissioner Booth was quashed. The matter is listed for further hearing before the Full Bench later this year.

What does this decision mean for employers?

  • Employers are under an obligation to take reasonable steps to investigate allegations of misconduct.
  • Employees should be given a fair chance to answer any allegations and provide an account of their conduct at all stages of the process.
  • Employees do not need to take up the opportunity to respond, as long as it has been afforded.
  • Employers should have regard to any response that is provided and keep an open mind in relation to possible disciplinary action.
  • It is nevertheless appropriate for an employer to have “leanings and inclinations” as to the types of sanctions that would be appropriate in the circumstances..