Employers are increasingly being held responsible for strict enforcement of personal conduct rules. The FWA's recent decision informs employer action, to ensure compliance with the Fair Work Act dismissal regime.

Fair Work Australia decision

On 21 September 2012, Fair Work Australia rejected an unfair dismissal application relating to an employer's decision to dismiss an employee, following allegations by a co-worker of harassment and misconduct of a sexual nature. Mr Timothy Graham, a part time employee, was dismissed by the Bankstown District Sports Club on the basis of contravention of the Club's Code of Conduct policy. FWA's decision to uphold the Club’s findings reinforces fundamental obligations of employers, to take action in providing a safe environment for workers.


The FWA considered the following:

  • the criteria for "harshness" in determining an unfair dismissal applications alleging "harsh, unjust and unreasonable" action by an employer
  • interpretations of workplace harassment and the degree of misconduct required to evidence a breach of personal conduct policies
  • the validity of employer action in investigating allegations and enforcing policies

Valid reasons for dismissal

Mr. Graham claimed that the Club's decision was "harsh, unjust and unreasonable". In determining whether Mr Graham was unfairly dismissed, FWA balanced key considerations regarding the "harshness" of the decision and reconciled procedural safeguards against the individual facts of the case. In doing so, the FWA contemplated valid reasons for dismissal.

The FWA accepted the co-worker's evidence of harassment and upheld the Club's findings that four of the five allegations of harassment had been sufficiently substantiated. The allegations involved inappropriate comments relating to the co-worker’s virginity and sexual orientation, singling out and intimidation of the worker, and inappropriately approaching the worker whilst the investigation was being conducted by human resources.

Moreover, FWA noted that the validity of reasons would be objectively determined and was not limited to the reasons given by the Club. Taking in to account the notification given to Mr. Graham and the opportunity to respond, FWA was satisfied that there was sufficient compliance with procedural safeguards and ultimately that there was a valid reason for the dismissal.

Workplace harassment

The FWA considered the alleged harassment and noted that it is the impact of the behavior, whether intended or not, that was relevant to its determination. Whilst the FWA accepted that Mr Graham did not intend harm, it was satisfied that the effect was to cause "feelings of discomfort, embarrassment and anger". Consistent with Australian Human Rights Commission standards and relevant case law, the conduct was held to satisfy definitions of sexual harassment.

Notwithstanding the co-worker’s failure to immediately report the harassment, the Club relied upon a failure to comply with its Workplace Bullying Prevention Policy to support its defence. The Club argued Mr. Graham had breached his employment agreement which incorporated the policy, arguing the conduct was damaging and had a negative effect on the safety and welfare of another. In all the circumstances, FWA rejected the application and held Mr Graham’s values were contrary to contemporary norms of acceptable workplace behaviour.

What steps should employers take?

Employers should ensure:

  • code of conduct policies are incorporated in the terms of individual employment agreements and employees are made aware of them
  • management should take responsibility and consistently adopt policies to embed a positive workplace culture
  • employees should be given training about policies and procedures
  • if there are complaints about the breach of policies then proper and timely investigations should be undertaken

Failure by an employer to take the appropriate precautions could potentially expose an employer to claims by disaffected employees.