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
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
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
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Long experience representing many of Australia's leading employers has taught us that in employment litigation the identity of an employee's representative is a major factor in how employee litigation runs.
Australian employees receive certain entitlements (such as annual leave and superannuation) where contractors do not.
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