The Fair Work Commission (the Commission) has ordered an employer to pay its former apprentice six weeks' wages in compensation after it summarily dismissed him for being charged with being an accessory to a murder.

The decision 

In a recent unfair dismissal application Deeth v Milly Hill Pty Ltd [2015] FWC 6422 (28 October 2015), the Commission found an apprentice butcher’s alleged conduct, while ‘grave’, fell short of ‘reasonable grounds on which to base a finding of serious misconduct’ and therefore could not justify immediate dismissal.   Importantly, in reference to the apprentice’s out of hours conduct, the Commission found that the employer failed to establish a relevant connection between the apprentice’s alleged criminal activity and his employment.

At the time of his dismissal, the apprentice was only ten months short of completing his three-year apprenticeship at his employer’s retail butcher store located in a country town of New South Wales. 
The day following the apprentice’s arrest, his father advised the butcher shop’s manager the apprentice would not be attending work because he was in police custody.  The next day the apprentice was granted bail and released from custody.

Following the apprentice’s release from custody, the employer contacted the apprentice’s mother and raised concerns about the impact of the criminal charge on the business.  The next day, the employer advised the apprentice’s mother the apprentice was terminated.

The employer contended that before terminating the apprentice’s employment, it had evidence that customers would boycott the butcher store, and its other employees would resign, if the apprentice returned to work. 

The employer therefore argued that, as the apprentice’s conduct caused serious and imminent risk to the reputation, viability or profitability of its business, it was able to dismiss the apprentice summarily for serious misconduct.

Outcome of decision 

The Commission found that whilst the offence with which the apprentice was charged was not a violent one, the offence to which he was charged as an accessory certainly was.

Whilst that meant there was a valid reason for dismissal, the Commission said the dismissal was inconsistent with the Small Business Fair Dismissal Code due to the deficiencies in the employer’s handling of the pre-dismissal process.  In particular, the employer failed to conduct a reasonable investigation into the matter to determine whether the dismissal was ‘reasonable’.

The Commission considered whether, at the time of the dismissal, the employer held a belief that the apprentice’s conduct was sufficiently serious to justify immediate dismissal and whether that belief was based on reasonable grounds.  This second element incorporates the concept that the employer has carried out a reasonable investigation into the issue.  It is not necessary to determine whether the employer was correct in the belief that it held; only that it was reasonably held.

Whilst the Commission accepted the director believed there would be a serious impact on the business justifying immediate dismissal, it determined the director had a ‘knee-jerk reaction’ to the news the apprentice had been charged.  There were no reasonable grounds on which to base a finding of serious misconduct because he did not conduct a reasonable investigation into the matter.   While the Commission was satisfied that some customers and employees told the business they would not be happy if the apprentice continued to work for the employer, this was not a reasonable investigation. 

When determining if the dismissal was harsh, unjust or unreasonable, the Commission considered the fact that:

  • the apprentice was not at work at the time of the actions that led to the criminal charge
  • the employer’s butcher store is a relatively small operation in a country town
  • there was significant publicity in the local media about the apprentice which may have caused the public to believe that he was in fact the person charged with murder (instead of accessory to murder)
  • the apprentice had, while at work, threatened aggression a few weeks before being charged, and
  • the apprentice’s work involves the use of sharp knives. 

The Commission accepted the process by which the dismissal occurred was ‘at best deficient’.  
While there was insufficient evidence to constitute serious misconduct, the Commission found the apprentice’s actions contributed to his dismissal.  He was awarded only six weeks’ wages in compensation.

Key lessons for employers

Importantly, the Commission emphasised there was a valid reason for dismissal ‘only because of the peculiar combination of circumstances’, highlighting there can be no presumption that a criminal charge or conviction alone is a valid reason for terminating employment, especially when the alleged crime is committed out-of-hours.  There must still be a relevant connection between the criminal activity and the employee’s employment for a valid reason to exist.

Employers should proceed with utmost caution when dealing with any employee who has been charged with or convicted of a criminal offence or otherwise alleged to have engaged in improper out-of-hours conduct.   No matter what criminal activity or conduct has occurred, the employer must:

  • hold a belief, on reasonable grounds, that the employee’s conduct was sufficiently serious to justify immediate dismissal
  • ensure the employee is afforded procedural fairness by conducting a proper investigation into the matter and providing the employee an opportunity to respond to the matter before a decision is made to take disciplinary action, and
  • at all times throughout the investigation and disciplinary process, adhere to its discipline and termination policies.