Australia: Harsh, unjust or unreasonable: is the unfair dismissal regime broken?

We are familiar with the long standing approach of industrial tribunals in determining whether an employee's dismissal was unfair. You examine if there was a valid reason for dismissal, whether a fair process had been followed and look at the personal circumstances of the employee to form an impression if, overall, the dismissal was unfair.

As was stressed by the Fair Work Commission in B, C and D v Australian Postal Corporation t/a Australia Post [2013] FWCFB 6191, a case involving the access, storage and sending of pornography, there are no hard and fast rules:

... it remains a bedrock principle in unfair dismissal jurisprudence of the Commission that a dismissal may be "harsh, unjust or unreasonable" notwithstanding the existence of a "valid reason" for the dismissal.

The biggest problem with this scheme is the uncertainty it brings for business, and the "message" it can send to misbehaving employees. So much is obvious from the recent Full Bench decision in Mt Arthur Coal Pty Ltd t/a Mt Arthur Coal v Goodall [2016] FWCFB 5492. In this case, the employee made deplorable comments about colleagues in breach of policy but was reinstated.

This decision adds weight to an argument that the unfair dismissal scheme is broken in that the framework for assessing whether a dismissal was unfair does not gel with what is expected of a prudent employer. The scheme needs refinement to deal robustly with inappropriate behaviours that threaten the cohesion and wellbeing of workplaces.

The facts

Mr Goodall had five years unblemished service. He was trained in the Code of Conduct that prohibited behaving in a way that was "offensive, insulting, intimidating, malicious or humiliating" and making "jokes or comments about a person's race, gender, ethnicity, religion, sexual preference, age ...". Despite such training, Mr Goodall made derogatory remarks about a colleague's sexuality and offensive remarks about Muslims.

Mr Goodall said he was just "mucking around" and it was "just blokes having a laugh". As to his offensive remarks about Muslims, he showed little remorse. Mr Goodall said he did not consider the matter serious and the investigation was "BHP's way of pissing people off and stripping morale off us". Mr Goodall was dismissed.

Mr Goodall was reinstated to his job. Despite a valid reason for dismissal, the dismissal was harsh, including because his comments were "towards the lower end of the scale", as Commissioner Saunders said. BHP appealed, urging the Full Bench:

[Mr Goodall's] bigoted conduct was, and is, reprehensible in the workplace. Whatever his personal opinions, his bigoted incitement of derogatory views of Muslims in the workplace calls for a proper expression of opprobrium by the institution that is the peak industrial tribunal in Australia.

BHP argued comments which vilify persons of different religions or sexuality should not be assessed on a scale of seriousness.

The Full Bench was divided

The majority of the Full Bench said the discretion to find a dismissal unfair is broad and some latitude must be given to the Commissioner. It said, "[t]he conclusion that Mr Goodall's dismissal was harsh does not on its face appear to be surprising, outlandish or counter-intuitive". It was acceptable to assess the seriousness of the conduct, the Full Bench concluded. BHP's appeal was dismissed.

The dissenting decision of Commissioner Johns speaks volumes:

[91] This is not a case of a difference of degree, impression or empirical judgment. There is extensive literature about the effects of discrimination, including in the workplace. Making jokes or comments that are inherently Islamophobic and homophobic is likely to negatively affect the mental health of people in the workplace ranging from anxiety to depression...
[92] It is for this very reason that Mt Arthur has a Code of ... Conduct that expressly prohibits behaving in a way that is "offensive, insulting, intimidating, malicious or humiliating"... In implementing the policy ... and conducting training ... Mt Arthur was fulfilling its obligations as an employer under ... legislation to ensure that its workplaces are free of discrimination and harassment.
[93] In the face of a substantial and willful breach of that policy, Mt Arthur took the matter seriously, and ultimately concluded that it was a valid reason for termination ... Requiring Mt Arthur to reinstate Mr Goodall in this context is plainly unjust. Mt Arthur took decisive action to eliminate Islamophobia and homophobia in its workplace. It should have been commended for its action, not punished by being required to take Mr Goodall back.
[94] In my opinion the comments categorised as crude, lewd and sexist comments were downplayed in their characterisation... The Commissioner failed to properly characterise the (so called) crude, lewd and sexist comments as homophobic.
[95] Further, the Commissioner failed to attach an appropriate level of seriousness to these homophobic comments in circumstances where Mr Goodall directed them at a particular individual ... In this context, a finding that the "conduct was towards the lower end of the scale of seriousness" cannot, with respect, be taken seriously.
[98] When the crude, lewd and sexist comments are properly characterised any suggestion that they are at the "lower end of the scale of seriousness" is, with respect, irrational.
[99] Turning then to the Islamophobic comments the Commissioner could have taken "judicial notice" of the psychological damage caused by the same....
[100] When Mr Goodall's deeply offensive and Islamophobic comments are properly considered, ... [t]he subsequent down-grading of the gravity ... beggars belief. The fact that Mr Goodall was motivated by prejudice should have been an aggravating factor.

What does it all mean?

The comments were deliberate and offensive for which Mr Goodall showed limited remorse. Mr Goodall was trained to not engage in such behaviour. Other than supporting the employer's decision, any other outcome creates uncertainty for business and sends the wrong message to employees, including the victims of such conduct.

Such an outcome, as in this case, lends support to an argument that the unfair dismissal system is broken. The community would expect a prudent employer to deal with such inappropriate behaviour. Should the test simply be: what is the correct and preferable decision? No need for the uncertainty generated by concepts of fairness and harshness.

For supporters of the regime, it would be hard to resist the call to refine the system to require the Commission to have explicit regard to the legal obligation of employers to regulate inappropriate behaviours and supporting employers in the enforcement of appropriate standards of conduct. Such considerations, made mandatory, may achieve a fairer go all round.

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions