Australia: Reputational risk – FWC upholds dismissal of employee who breached stay-at-home orders

Introduction

A recent decision of the Fair Work Commission (the "FWC") demonstrates that conduct by an employee which creates reputational risk can be a valid reason for dismissal.

In this case, an employee's attendance at a violent protest in breach of Victorian stay-at-home orders presented enough of a reputational risk to warrant his dismissal.

Facts

The applicant was a mobile crane operator whose employment was terminated following his attendance at the violent protest outside the office of the Construction, Forestry, Maritime, Mining and Energy Union (the "CFMMEU") in Melbourne on 21 September 2021 (although there was no suggestion that the applicant had engaged in any specific or violent behaviour at the protest). The applicant had been told he could go home as the site had been closed following government orders shutting down tearooms. The applicant continued to be paid by the employer for the rest of the day.

The applicant decided to attend the protest outside of the CFMMEU office, claiming that he did so to "find out what the CFMMEU was doing about the tearoom situation and to support his fellow construction workers" rather than to protest. Attendance at the protest was prohibited by the Victorian government's stay-at-home orders which were in force at the time. The applicant contended that he was not anti-vaccine and was not attending in protest of vaccine mandates. The applicant considered that there was no reputational risk to his employer as he was not dressed in company clothing and did not partake in the violence that occurred.

The employer became aware that the applicant had attended the protest after contacting another employee who had been seen on a video of the protest. The employer was concerned about reputational risk and considered that even though the employee was not wearing company clothing he was identifiable because other people at the protests would have recognised him as being employed by the company.

The following day, the managing director called the applicant and told him that he had breached the Victorian government's COVID restrictions by attending the protest, and that he should not have gone. The managing director noted that the applicant had been told to go home and was still being paid, even though he was not at work. The managing director ultimately dismissed the applicant without notice for alleged serious misconduct.

The applicant brought an unfair dismissal application on the alleged grounds that the employer did not have a valid reason to terminate his employment. The applicant contended that he was within his rights to attend the rally outside the CFMMEU office and had not engaged in any activity at the rally that would bring the employer into disrepute or attract adverse publicity. The applicant contended that his conduct could not be regarded as serious enough to warrant dismissal or summary dismissal, and that he was not notified of the reasons for his dismissal or given an opportunity to respond to the reasons for dismissal. The applicant claimed that he was entitled to be reinstated or to receive substantial compensation as a result.

The employer submitted to the FWC that it was untenable for the applicant to remain employed with the employer because he had broken its trust by attending an illegal protest which he had no right to be at given the COVID restrictions that were in place. The employer considered that the applicant had created reputational risk.

Outcome

The FWC rejected the applicant's contentions that he was within his rights to attend the protest and that he was there to simply find out about the tearooms rather than to protest them. The FWC found that the employer had a valid reason to terminate the applicant's employment as he had created reputational risk for the employer by attending the protest. Although no specific loss or damage had resulted, the FWC found that the managing director had a reasonable concern that the applicant's actions caused reputational risk, because his presence at the protest might have suggested to observers that the employer endorsed or acquiesced to his attendance at the protest.

In considering the procedural fairness of the dismissal, the FWC found that while the managing director had not provided the applicant with the reasons for the dismissal in detail, it did not warrant giving the applicant a more "fulsome" opportunity to respond to the reasons for dismissal. The actions which gave rise to the valid reason for the dismissal had already been substantiated and a more detailed investigation would not have led to a different outcome.

However, while there was a valid reason for dismissal, the FWC did not consider that the applicant's actions constituted serious misconduct. Although the applicant's conduct was deliberate, he had not directly defied a clear policy which prohibited his conduct. Instead, he had failed to have regard to his duty of fidelity to his employer by failing to think about the reputational risk of his conduct. In those circumstances, the FWC considered that compensation which reflected the notice period was sufficient and rejected the claim for reinstatement.

Key takeaways

• Breaches of government directions such as stay-at-home orders or public health orders can constitute valid reasons for dismissal.
• Conduct by any employee which creates reputational risk can also constitute a valid reason for dismissal, even if the no loss or damage is quantified.
• In some circumstances if an employee's conduct is serious enough and has been substantiated, it can overcome deficiencies in procedural fairness.
• Careful consideration needs to be given as to whether an employee's actual, proven conduct is sufficient to constitute serious misconduct before any decision is made to terminate the employment summarily.