“Serious misconduct” a grey area

by Stephanie Zillman17 Apr 2012

A recent decision by Fair Work Australia (FWA) has shed light on the workplace watchdog’s approach to unfair dismissal cases arising from alleged “serious misconduct”. Contrary to popular belief, employers may not realise that “serious misconduct” is not a term that is up to the interpretation of the individual employer; and that misconduct in itself is not necessarily the basis for dismissal, but must be accompanied by appropriate investigations.

FWA overturned the dismissal of a supermarket store manager who was summarily dismissed for taking $41.52 worth of groceries from the store without paying, and awarded more than $15,000 in compensation. At the end of a Friday shift, the store manager bought some groceries but realised he didn’t have his wallet, asked the cashier to “suspend” the sale until he returned on Monday, and then forgot to pay. He was subsequently suspended and ordered to attend a disciplinary meeting, where he was summarily dismissed for theft and dishonesty.

In the subsequent unfair dismissal hearing brought forward by the store manager, Commissioner Ian Cambridge said that the removal of groceries could be a sackable offence – especially as a manager is expected to set a standard for other employees – but there was not even a “basic level of proof” that the store manager had deliberately acted dishonestly or knowingly committed theft, and management didn’t conducted a proper investigation. Cambridge said in his judgement that a “proper, comprehensive and balanced” consideration should have been provided before dismissing the employee.

The misconduct, he said, should have been dealt with as soon as it emerged, the decision to terminate employment without notice was too harsh as there was no proof of dishonesty, and the behaviour could more appropriately have been treated with a warning or dismissal with a notice period.

The case again affirms that misconduct in itself is not necessarily the basis for dismissal, but must be accompanied by appropriate investigations. Workplace law expert Saul Harben from Clayton Utz says while employers may feel justified in summarily dismissing employees when they make what is seen as a serious mistake that hurts their business, the employer might be the one in the wrong.

Lessons for employers

When it comes to the FWA determining whether or not an employee's actions constitute misconduct warranting summary dismissal, the arbitrator will look to previous cases in order to evaluate whether the requisite degree of seriousness is involved – and according to Harben the emphasis is on "serious". A single act by an employee rarely constitutes “serious misconduct” for the purposes of the Fair Work Act, unless it involves conduct that is criminal in nature, or that puts the safety and welfare of other staff or clients at risk, he said.

On this basis, it is important for employers to step back and objectively consider whether an employee's act of perceived misconduct is serious enough to warrant dismissal, or whether it would be better dealt with through a written or verbal warning, or counselling.

Harben said dismissal procedures must be fair to all employees, and should include elements such as giving the employee an opportunity to respond to an allegation before the decision is made to dismiss them. This allows the employee to have a support person present at any meeting and, if the employee is dismissed, providing a letter of dismissal which clearly sets out the reasons, can make a substantial difference to an employer’s ability to defend against an employee’s claim that their dismissal was unfair.


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  • by Kate Connellan 21/04/2012 6:01:37 PM

    This is an interesting one.
    Just prior to starting on the waterfront, an employee was sacked for stealing a trolley used for moving heavy parts around. The value of the trolley was around $20. The MUA negotiated a reinstatement for him. Many employees told me about it when I started and were furious that he had not remained sacked. I have to agree with his reinstatement though - I doubt it would ever have stood up at FWA.
    Although he was universally recognised on site as being a poor employee, who was partial to misconduct, in his 20 years with the company he had never been counseled! FWA could reasonably have said that this employee 'had a clean record'. The value of the trolley was also minor and nothing in comparison with 20 years of solid service.

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