The Fair Work Commission has ordered the reinstatement of an employee who IBM sacked for defrauding the company by claiming 141 “per diem” accommodation expenses for nights when he was not actually away on business. Sounds like a pretty risk-free dismissal, right? Nope. Once again, the FWC has confirmed that having a “valid reason” for termination is not the only consideration an employer must take into account when dismissing an employee who is eligible to access the unfair dismissal jurisdiction.
The conduct occurred over 18 months when the Adelaide based employee was working on a project in Melbourne. When IBM raised the matter with the employee, he claimed he’d made an honest mistake, and immediately offered to reimburse IBM for the expenses.
The FWC determined that the employee had been fraudulent or, at the very least, grossly negligent with his reimbursement claims. That constituted a valid reason for termination. But then, the FWC ordered that he be reinstated, with back pay!
So where did IBM go wrong?
A quick chronology is the first clue. The conduct occurred between March 2011 and September 2012. The audit was conducted in May 2013. It was not until 8 November 2013 that the employee was asked to respond to the allegations. Shortly after, the IBM Disciplinary Action Review Committee found the allegations sustained and recommended termination. On 23 December 2013, the Managing Director agreed with the proposed termination. Christmas frivolities aside, it was still not until 21 January 2014 that IBM suspended the employee, and issued him with a show cause letter in relation to the proposed termination. The employee responded on 21 February 2014, and was eventually terminated with notice on 7 March 2014.
In addition to what the FWC described as the “extraordinary long delay” between the conduct and eventual termination, in considering whether the dismissal was “harsh, unjust or unreasonable” under the unfair dismissal statutory criteria, the FWC identified a number of other failures.
In particular, the FWC determined that IBM failed to give adequate weight to mitigating factors such as the employee’s otherwise unblemished 17 years of service and the fact that he offered to reimburse IBM; and that even after the investigation had concluded with a termination recommendation, it took IBM another month to suspend the employee, thereby contradicting its own claim that the company had lost trust and confidence in the employee.
Okay, so not great. But, in the face of such seemingly egregious conduct, the FWC really ordered that IBM not only give him his job back, but back pay him some lost wages to the date of termination too? Yup, welcome to the wonderful world of unfair dismissal.
It remains to be seen whether IBM will appeal the decision, but in the meantime, if you’re planning to sack a thief, take a global approach to whether it’s the right decision, and move fast!