Does serious misconduct still require a reasonable opportunity to respond before termination of employment? 2 prime ways to mitigate risk and liability

A question asked many times by clients is when a scenario involving serious misconduct is put to us – can we now terminate their (the employee’s) employment?  Our response (with some adjustment) is usually – “of course you can – you are the Employer, however the key question really is – what would happen if you had to explain your actions to a Judge or a Commissioner – what would they say according to law?”

What is Serious Misconduct?

Serious Misconduct is defined by the Fair Work Regulations – this legislation alongside relevant case law considers serious misconduct to be:

  • Theft
  • Assault
  • Fraud
  • Intoxication at work
  • Refusal to carry out lawful directions
  • Risk to health and safety
  • Damage to reputation, viability or reputation of the Employer
  • Conduct causing repudiation of the employment contract

The Risk in Terminating Employment for Serious Misconduct (without procedural fairness)

It is completely understandable for an Employer to immediately terminate the employment of an employee who has engaged in obvious serious misconduct.  However the Fair Work Commission, Queensland Industrial Relations Commission, Federal Court and other Courts and Tribunals are littered with cases where the Employer had a valid reason for the dismissal but the lack of procedural fairness had become their undoing.

Take a recent case of Nathan MacDonald v Whitehaven Coal Mining [2021] FWC 838 this involved an employee dismissed for a serious safety breach.

In summary:

  • The employee was driving a light vehicle on the mine’s haul road
  • a water cart at an intersection placed their indicator to turn right – as a result the employee assumed they would turn right
  • the employee approached the intersection on this assumption but due to the water cart stopping abruptly a near incident occurred
  • the employer asserted that the employee had breached the safety rules by failing to make positive communication to the water cart when he was within 50 metres of it
  • a show cause letter was provided setting out a direction to explain why termination of employment should not be given considering the safety breach
  • The union representing the employee requested a 2 business day extension to prepare response
  • The request was rejected as there was concern that they did not was drag the matter out over the weekend
  • The employee’s employment was terminated shortly after

In this case the Commission ultimately found there was a valid reason for the dismissal.  However, it took issue with the rejection of the extension of time to provide a response.  Holding that it was unreasonable to do so and not doing so led to procedural fairness issues.

25 weeks pay was ultimately awarded to the employee.

2 Prime Ways to Mitigate Risk and Liability

  1. Provide reasonable opportunity to respond – it is tempting for any Employer to feel that serious misconduct that is so obvious or even evidenced should be straight forward. However requests for an extension of time (if reasonable) should be granted. It does mean the matter may drag on for a short period of time but the case of Whitehaven Coal Mining may well have turned differently if the extension of time was granted.
  2. Don’t be afraid to slow down the process – providing proper procedural fairness is best practice for many reasons. Importantly it provides the employer the ability to obtain information about the allegations.  There may well be contrition, mitigating factors (such as personal issues or even illness), partial denial, complete denial or even further misconduct.  Whatever the response this information provides an employer further ways to mitigate risk and liability.

Are you about to terminate an employee for serious misconduct – discuss the implications with an Employment Lawyer first - give NB Lawyers – Lawyers for Employers a call and we can offer an obligation free consultation to work through some of the steps worth taking.  Reach out via service@nb-lawyers.com.au or +61 (07) 3876 5111 to book an appointment.

If you got value out of this article email service@nb-lawyers.com.au or click on this link to subscribe to our value added newsletter. 

Written By 

Jonathan Mamaril 

Director

NB Lawyers – Lawyers for Employers 

jonathanm@nb-lawyers.com.au 

+61 (07) 3876 5111 

 

Jonathan Mamaril leads a team of handpicked experts in the areas of employment law and commercial law who focus on educating clients to avoid headaches, provide advice on issues before they fester and when action needs to be taken and there is a problem mitigate risk and liability.  With a core value of helping first and providing practical advice, Jonathan is a sought after advisor to a number of Employers and as a speaker for forums and seminars where his expertise is invaluable as a leader in this area as a lawyer for employers.

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