In articles and presentations on unfair dismissal the importance of procedural fairness is a recurring theme.

This reflects sections 387 (b) and (c) of the Fair Work Act 2009 (Cth) which stipulate that, in considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the Fair Work Commission (FWC) must take into account whether the employee was notified of the reason for dismissal and was given an opportunity to respond to any reason related to their capacity or conduct.

As such, there is an understandable perception that where there is significant failure of procedural fairness it is axiomatic the FWC will find the dismissal unfair.

The recent FWC decision of Carmelo Sapienza v Cash in Transit Pty Ltd T/A Secure Cash (U2017/8576), however, provides some hope for employers that even where there is a manifest failure to afford procedural fairness the dismissal might not necessarily be held to be unfair.

Before embarking upon an examination of the case itself, there is a very important point to be made at the outset (which will be repeated below): the best way employers can put themselves in the strongest position to defend unfair dismissal proceedings is to provide employees with procedural fairness, even in circumstances where the situation appears to be "open-and-shut". This decision might provide some comfort where, for whatever reason, an employer has not afforded procedural fairness (or there have been serious procedural deficiencies) in the course of a termination and is facing an unfair dismissal claim or the threat of one.

THE SAPIENZA DECISION

The applicant, Mr Sapienza, was employed by Secure Cash (and its predecessor entity) as a banking courier. This position involved visiting clients' premises, taking their surplus cash and banking it on their behalf.

Mr Sapienza's employment with Secure Cash was terminated summarily on 18 July 2017 by way of letter.

The termination letter relied upon three complaints against Mr Sapienza.

Mr Sapienza denied the first two complaints in toto, adding that he was unaware of these complaints until he received the termination letter from Secure Cash.

Given the absence of contradicting evidence from Secure Cash (which did not appear at the final hearing) the FWC held that these denials from Mr Sapienza should be accepted and that neither of these two complaints constituted a valid reason for termination.

The third complaint, on which this case turned, was of a more serious nature. Secure Cash received a written complaint from a client, a ladies clothing shop, which made a series of allegations against Mr Sapienza. These allegations became the basis for the third complaint.

The first allegation was that he said to a female staff member:

"When will you be leaving your boyfriend so we can run away together?"

Mr Sapienza denied making this statement.

The second allegation was that Mr Sapienza told staff members they were good looking and asked one eighteen year old employee for her telephone number. Mr Sapienza also denied this.

Mr Sapienza also denied saying to young female employees that he had dated girls of their age. In his denial Mr Sapienza stated that he is a forty-eight year old male with no interest in women who are eighteen.

Mr Sapienza's denials to these three allegations were accepted by the FWC.

It was also alleged that in the course of collecting the banking Mr Sapienza told two female team members they had missed his birthday and, while leaning over the counter putting his cheek up to the faces of the women, asked:

"Where is my kiss?"

It was alleged that in the course of kissing his cheek the young women advised that they felt uncomfortable and pressured to do so.

The employees of the store also alleged that Mr Sapienza got physically close to them, put his arms around the waist of a staff member, placed his hand on a staff member's hip and would hug staff when he was leaving the shop.

Mr Sapienza's response in the FWC to these allegations was that after getting to know the staff of the shop well he did hug female staff on arriving and leaving the premises. He said they also hugged him. He conceded he may have put his arm on the hip of an employee but had no specific recollection of this. He accepted that he may have asked the female employees for a kiss. He said this request was a product of his "cheeky nature and tendency to joke around".

As with the other two complaints, he said the first time he had ever heard of the various allegations that comprised the third complaint was when he read the termination letter.

As such, he was never afforded an opportunity by the employer to put his response to the complaints. The explanation he gave to the FWC for his conduct was that he was Italian and therefore accustomed to giving and showing affection. To illustrate his demonstrative, tactile nature he recounted the story that he kissed his father every time he saw him until he passed away.

He said he hugged staff at other client premises although they were, by his estimation, in their forties rather than eighteen. Mr Sapienza said he believed the physical encounters were consensual and friendly. If he had thought otherwise, he would have stopped doing it. He said there was no "sexual connotation" in his conduct.

As noted above, the FWC found the first two complaints in the termination letter did not constitute a valid reason for termination. In respect of the third complaint, the presiding member of the FWC in this case, Deputy President Bull, stated:

"I find that the admission by Mr Sapienza that he did hug and ask for a kiss from women as young as 18 years was sufficient to substantiate that the respondent had a valid reason for the applicant's termination of employment. Despite Mr Sapienza's explanation that his conduct was due to his Italian heritage and being of an affectionate nature, the actions were improper, unprofessional and naive, to say the least."

While Deputy President Bull held Mr Sapienza had been notified of the reasons for termination in the termination letter, he noted Mr Sapienza was not provided with any opportunity to respond to those reasons, as he was summarily terminated without even the opportunity of a conversation with Secure Cash.

As a result, Deputy President Bull observed the dismissal of Mr Sapienza was "seriously lacking in procedural fairness".
Notwithstanding this, however, the termination was found not to be harsh, unjust or unreasonable. This finding was on the basis of Mr Sapienza's admissions in respect of his physical contact with the young female staff of the shop.
Deputy President Bull stated:

"This conclusion is reached having regard to the considerable age difference between Mr Sapienza and the female employees. The explanation provided by Mr Sapienza of showing affection due to his Italian heritage fall short of justification for such behaviour towards otherwise unrelated persons. This is a complete and distinct difference from how one may conduct themselves with physical familiarity towards friends or in a family environment."

His Honour continued:
"If Mr Sapienza did not know or appreciate that it is inappropriate asking 18 year old females for a kiss and indulging in the practice of hugging as a greeting or goodbye, which may not be reciprocated willingly by much younger persons, he ought to."
The serious deficiencies in procedural fairness were reconciled with the finding the dismissal was not unfair as follows:
"I have considered the clear procedural deficiencies involved in Mr Sapienza's dismissal and the fact that he was unemployed for a 2 month period, viewed against his limited service with the respondent and the nature of the conduct in regard to the third complaint, which to his credit Mr Sapienza accepted some of which did occur."

In short, the gravity of the admitted conduct was such that it outweighed the manifest lack of procedural fairness

CONSISTENT APPROACH – PROCEDURAL FAIRNESS V SERIOUSNESS OF CONDUCT

This decision is not an aberration or outlier. A similar approach has been adopted in other FWC cases. One example is Michael Albert v Alice Springs Town Council (U2016/10304).

In this decision Commissioner Wilson surveyed relevant authorities and distilled the two questions that will be posed in such cases:

"The Commission has also held, in relation to matters of misconduct generally, that in circumstances in which procedural faults are established that two questions arise for consideration; did the seriousness of the misconduct outweigh any procedural faults and would the procedural faults have affected or altered the ultimate outcome of the dismissal?"

Commissioner Wilson found that the very high reading on a drug test returned by an employee who operated heavy machinery performing safety-critical work gave the employer a valid reason for termination. Although the employee was not provided the opportunity to respond to that reason, the seriousness of the conduct outweighed the procedural faults and even if those procedural faults had been remedied a different outcome would have been unlikely. As a result the dismissal was held not to be unfair.

DOES PROCEDURAL FAIRNESS REALLY MATTER?

A superficial reading of these decisions might lead to the conclusion that procedural fairness doesn't matter, particularly where the employer is confident serious misconduct constituting a valid reason for termination can ultimately be proven before the FWC.

It would be unwise, however, for employers to use these decisions as a reason to cut corners on procedure. Procedural fairness is a factor the FWC must consider in all unfair dismissal cases relating to performance or misconduct. There are numerous examples where employers have come unstuck due to deficiencies in procedure, even where an employee has, on the face of it, engaged in conduct that would safely justify termination. Rather than rolling the dice and hoping for the best, employers would be better served providing employees with an opportunity to fully respond to allegations, properly considering any response given and then making an informed decision on outcomes based on that response.

The value of these cases is to show that hope may not be lost for an employer when these steps haven't been taken and there are procedural deficiencies. While they might provide a way to paper over the cracks, they don't reflect best practice in effecting dismissals.

For further information please contact:

Michael Byrnes, Partner
Phone: + 61 2 9233 5544
Email: mjb@swaab.com.au

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.