Australia: Sometimes dismissal for cheating an employer can still be unfair

Last Updated: 26 January 2013
Article by Charles Power

Most Read Contributor in Australia, September 2016

If an employer has information that it claims justifies dismissal of an employee and decides to dismiss before giving the employee an opportunity to respond to the information, the dismissal may be found by the Fair Work Commission (FWC) to be unfair. This will particularly be the case if the employee might have produced information that could have warranted a further investigation or even an outcome other than dismissal.

The case of Leimonitis & Hourigan v Qube Logistics (Vic) Pty Ltd ([2013] FWC 3)) concerned 2 night shift drivers summarily dismissed for alleged irregularities in timekeeping.

FWC found that on 3 occasions Hourigan clocked on for Leimonitis when he was late to work. This provided a valid reason for dismissing both of them, including Leimonitis because he accepted the action and took no action to correct it.

FWC made it clear that cheating on time cards is, if proven, a valid reason for dismissal of an employee. As Commissioner Bissett noted, the conduct "is dishonest and ... is theft (in the form of accepting money for work not performed)...The employer has a right to expect that employees will be honest in their timekeeping, that they will not claim time when they are not at work and that they will not assist another employee in doing this by clocking them on when they know they are not at work."

However, the following issues in the way the employer handled the investigation into Leimonitis' conduct made his dismissal unfair, according to the FWC:

  • Prior to dismissing an employee for dishonesty in timekeeping, the employer must afford the employees concerned natural justice – that is, give the employees an opportunity to properly respond to allegations against them. In this case, the employer relied on video evidence in deciding to dismiss, yet did not show the footage to the employees or give them time to gather any information that they might use to defend themselves. The employees claimed that they believed that they were paid from their rostered start time and not the time they actually clocked on, such that clocking on a bit early for another employee did not alter the time from which he was paid. If Leimonitis had been shown the video evidence it may well be that the employer could have, and would have, looked at his job sheets to determine if he was in fact at work when he said he was.
  • The employee was dismissed without notice or payment in lieu. This summary dismissal was an unduly harsh response to Leimonitis cheating the clock on 3 occasions.
  • The dismissal letter stated that the decision to dismiss was based on cheating on a regular and systematic basis – yet there was no evidence to support such a decision.
  • The employer did not strictly enforce start and finish times of the night shift drivers.

The FWC ruled that these issues arising from the manner in which the employer handled the dismissal of Leimonitis outweighed the valid reason for his dismissal. That is because a properly conducted process may have altered the outcome of the disciplinary process. If the employer had given Leimonitis an opportunity to gather and present his case, the employer would have investigated had undertaken a thorough investigation, properly put its claims against Leimonitis to him and given him an adequate opportunity to respond he would, in all likelihood, still have had his employment terminated.

Having found that the dismissal of Leimonitis was unreasonable and harsh, the FWC determined the amount of compensation that should be awarded. The FWC noted that cheating on timekeeping is a very serious matter that should not be treated lightly. Therefore Leimonitis would only have been employed for a further period of up to 2 weeks. The FWC awarded him one week's pay in compensation.

The FWC ruled that Hourigan's dismissal was not unfair, despite the procedural irregularities. On three occasions Hourigan clocked on Leimonitis when he knew Leimonitis was not at work. He had no reason or justification for doing so. There was no additional evidence that Hourigan could have raised in his defence. Therefore, the failure to give him an opportunity to respond to the reason for dismissal did not make his dismissal unfair.

Lessons for employers:

  • If you believe you have grounds to dismiss an employee for misconduct, be sure you have the evidence to support those grounds.
  • Don't exaggerate the grounds to the employee. In this case discussed above, the employer alleged dishonest timekeeping on a "regular and systematic basis for an extended period of time", yet it only had evidence of 3 occasions of abuse.
  • Give the employee an opportunity to understand the grounds that you claim justifies termination and the evidence you rely upon to support those grounds (although this may need to be balanced in cases where disclosure of evidence to an employee accused of misconduct may lead to risks that witnesses will be victimised).
  • Give the employee time to supply any information in his or defence before making any decision regarding dismissal or otherwise.
  • Don't summarily dismiss an employee unless the grounds warrant such action. If misconduct warrants dismissal, dismissal with a payment in lieu of notice will be the usual course.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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