The company alleged serious misconduct
In a recent case, the District Court of New South Wales considered an employee dismissed just two days before he was set to receive a six-figure redundancy payment. The dismissal came after the company alleged the employee had credited personal travel expenses to his corporate card. The Court ultimately found in the employee’s favour and awarded him almost $300,000 in damages.
Background
Gregory Sherry was employed at Toyota Motor Corporation Australia Limited (“TMCA”). His role saw him travel within Australia to deliver training to service advisors. In 2017, Mr Sherry was advised that he would be made redundant and receive a payment of $379,268.10 in March 2018.
In January 2018, Mr Sherry travelled to Melbourne on a business trip. He booked his air travel, car hire and accommodation through TMCA’s travel booking system. Following his trip, TMCA discovered that, due to his failure to disclose his travel expenses monthly, Mr Sherry had incurred an outstanding balance of over $20,000. This realisation prompted TMCA to commence an investigation into Mr Sherry’s expenses.
On 28 March 2018, two working days before Mr Sherry was due to receive his redundancy payment, TMCA summarily dismissed him. The company submitted its dismissal was justified on several grounds related to his January trip, which included that Mr Sherry had deliberately booked a larger room and that he stayed an additional night that was not business-related.
The Hearing
The Court considered whether TMCA was entitled to summarily dismiss Mr Sherry. TMCA alleged that Mr Sherry had booked a larger-than-necessary room to accommodate his family, who travelled with him. In contrast, Mr Sherry asserted that the room he selected was the only one offered to him by TMCA’s system and that he was unaware it was a suite until he arrived.
The Court accepted Mr Sherry’s evidence, noting that TMCA chose not to verify whether Mr Sherry’s submissions were true, even though it was “uniquely placed” to do so. It held that, in breaching TMCA’s accommodation policy, Mr Sherry had acted “ineptly but not dishonestly or even unethically.” Regarding the additional night, the Court accepted Mr Sherry’s statement that he was uncertain of his finishing time on his last working day, which provided a legitimate reason to justify staying an extra night.
Judgment
Ultimately, the Court was not satisfied that Mr Sherry had engaged in serious misconduct and held that TMCA was not justified in summarily dismissing him. It awarded Mr Sherry $298,958.70 in damages.
Key Takeaways
- Employees must abide by company procedures with regards to travel and other business expenses
- To avoid confusion, employers should review and approve an employee’s travel arrangements prior to the business trip
- Employers should not assume that an employee has abused their expenses without sufficient evidence
- An employee must have committed serious misconduct in order to justify a summary dismissal
