Australia: A valid reason to dismiss is not always enough

Last Updated: 18 June 2018
Article by Michael Selinger and Michael Hope
Most Read Contributor in Australia, September 2018

Having a valid reason for dismissal was not enough to save two employers from being found to have unfairly dismissed their workers in two recent Fair Work Commission (Commission) cases.

The cases serve as a reminder to employers that procedural fairness must be afforded to employees at all stages of the termination process, which includes:

  • providing allegations of wrongdoing in writing for an employee to review (and being prepared to rely on these allegations or investigation reports as evidence in a trial)
  • independently verifying the allegations of misconduct
  • giving an employee the opportunity to respond to allegations of misconduct
  • notifying an employee of the reason for dismissal prior to terminating their employment
  • offering an employee a support person at interviews relating to investigations and disciplinary action.

Jacqueline Waite v Serco Australia Pty Ltd T/A Serco Australia Pty Ltd [2018] FWC 3113

Facts

In this matter a security guard who was photographed sleeping during a shift brought an unfair dismissal claim against her employer, Serco Australia Pty Ltd (Serco).

During a night shift at the Royal Brisbane and Women's Hospital the security guard fell asleep at various intervals for the majority of the shift. The other security guard on duty that night took photographs of Ms Waite asleep with an iPad on her lap. These images were passed on to the manager of the security guards and an investigation ensued.

Ms Waite was called to an interview whereby she was misleadingly told by management that they had been informed of the misconduct by a nurse at the hospital who had reported that Ms Waite was sleeping and using an iPad throughout the shift. The employee responded to this claim by stating she was "nodding sleeping" throughout the shift and was only using her iPad to complete mandatory Serco training modules. Serco informed the employee that an investigation report would be compiled and the results of this investigation would be communicated to the employee at a later date.

At the second meeting the human resources manager informed Ms Waite that the claims of wrongdoing had been substantiated. At this meeting Ms Waite was shown the photos for the first time and was informed of the actual source of the allegations, being the other security guard on the shift.

Serco found that the recount of events provided by the employee in the first interview was inaccurate and therefore determined that Ms Waite was to be dismissed on the grounds of serious misconduct and dishonesty.

Decision

Ms Waite had requested a copy of the investigation report in the lead up to the second meeting, but her request was denied. Deputy President Asbury found this to be procedurally unfair:

"Ms Waite was dismissed for reasons relating to her conduct. The failure by Serco to notify her of all of those reasons meant that she was not given an opportunity to respond to all of the allegations, particularly in relation to her honesty."

Because Ms Waite was not given a copy of the investigation report before the first interview, it was found that: "Ms Waite's ability to respond to the allegations was hampered given the reliance placed on that report by those who determined to dismiss her."

The Commission found the dismissal unfair and Ms Waite was awarded compensation of $6,758.

Mr Alan Cheek v ELB Pty Ltd T/A ELB Australia [2018] FWC 2198

Facts

In this case Mr Alan Cheek was employed as the NSW Project Manager by ELB Pty Ltd, a contracting company in IT equipment installation.

The employee was issued with a formal warning letter on 17 November 2017 which set out unsatisfactory conduct such as a failure to respond to directions, failure to meet deadlines and inadequate communication with clients and management.

On 20 December 2017 the employee was terminated and paid one weeks' pay in lieu of notice. The employee had only worked 13 days between the warning and the termination due to taking sick leave and pre-arranged annual leave.

The Commission found that the Human Resources Manager had not independently verified the complaints made about the employee, to which Commissioner Riordan found: "I have taken into account that Ms Hawes made no attempt to investigate, clarify or substantiate any of the responses made by the Applicant to answer the allegations except by going back to the person who made the original allegations... This lack of independent process identifies a flaw in the investigation."

Further, the reasons given for the dismissal in the termination letter were inconsistent with the unprofessional conduct cited in the warning letter.

Decision

The Commission found that the employer's failure to provide the employee with an opportunity to respond to the allegations made in the warning letter in writing constituted the dismissal as unreasonable.

In determining the damages Commissioner Riordan provided an account of what the employer should have done to ensure the termination was procedurally fair. Commissioner Riordan found the employer should have done the following:

  • issue a 'show cause' letter to the employee on the date of the termination, allowing him to provide a response to the misconduct
  • provide a reasonable amount of time to respond to the 'show cause'
  • investigate the employee's response to the show cause letter, interviewing relevant witnesses
  • organise a subsequent meeting and have given sufficient time to the employee to organise a support person.

The Commissioner found that because several of the claims of unprofessional conduct were substantiated during the proceedings that the employer did in fact have a valid reason for dismissal. However, because the employee was not provided procedural fairness during the termination process the employee was awarded nine days pay, which Commissioner Riordan found was the additional time the employee would have remained employed if the employer had provided procedural fairness in the termination process as set out above.

Lessons

These cases demonstrate that having a valid reason to dismiss is only one factor that is considered in unfair dismissal claims and the Commission will not hesitate to award judgments in favour of the applicant where the employment was terminated in a manner that is not procedurally fair.

  • Notifying an employee of the reason for dismissal & giving an employee the opportunity to respond

Both cases demonstrate the importance in providing written allegations of misconduct to an employee and providing sufficient time for the employee to respond. Even where the evidence of misconduct or even serious misconduct is compelling, as was the case in Serco, the employer should not let their standards slip, as they are still held to a high standard by the Commission.

  • Statutory right to a 'Fair go all round'

Section 381 of Fair Work Act 2009 (Act) sets out that one of the objectives for the unfair dismissal provision of the Act is that employees are entitled to a 'fair go all round'. This has been interpreted in such a way that conduct by the employer which is dishonest or deceptive in the dismissal process will often lead to a finding of unfair dismissal.

This was demonstrated in the Serco case, where the employer informed the employee of the misconduct they were being investigated for, but gave a false source and did not inform the employee of the evidence they held. While the Commission has found that an employer does not necessarily have an obligation to inform an employee of the maker of a complaint, in Serco it was found that being deceptive about both the maker of the complaint and the evidence they held (photographs) was a bridge too far.

This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.

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Authors
Michael Selinger
Michael Hope
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