No show cause: Employer’s lack of procedural fairness rendered the dismissal of his employee harsh

Under the Fair Work Act 2009 (Cth) (FW Act), whether an employee’s dismissal was procedurally fair is a key factor in determining whether the dismissal was unfair. Procedural fairness requires an employee be given an opportunity to respond to or explain an allegation put to them by their employer. The employer must consider that response or explanation before deciding the disciplinary penalty – eg: a warning, or termination of employment.

In Bostock v Austmont Pty Ltd [2022] FWC 1185, despite finding that the employee’s response was unlikely to have changed the employer’s decision to terminate the employment, the Fair Work Commission (FWC) upheld an unfair dismissal claim on the basis that the employee was not afforded procedural fairness.

Background

The employee was employed as a full-time factory foreman for Austmont Pty Ltd (the Employer). As a result of an anonymous and unsubstantiated complaint against the employee in March 2021, the employee became unwell and took leave from April 2021.

The employee lodged two workers’ compensation claims, one of which included a claim of psychological injury caused by the Employer.

The Employer dismissed the employee on 10 February 2022, on the basis that he was unable to perform the inherent requirements of his role. At the time of dismissal, the employee was unable to return to work due to a persistent medical condition.

The employee submitted that his dismissal was unfair because: -

  • The Employer was the cause of his mental illness, which led to his inability to perform his role; and
  • He was bullied by the Employer.

The employee lodged an unfair dismissal application.

In relation to whether there was a valid reason for the dismissal, the Employer relied on an October 2021 medical report which indicated that the employee was suffering from serious depression and would be unable to return to work.

While the FWC was satisfied that the Employer had a valid reason for dismissing the employee on the basis of the employee’s incapacity, it was of the view that the lack of procedural fairness weighed in favour of finding the dismissal to be unfair.

Specifically, the FWC noted that the Employer failed to notify the employee of the reason for his dismissal before dismissing him with immediate effect. As a result, the FWC found that employee was not given the opportunity to respond.

The Employer submitted that it was reasonable to assume that providing an opportunity to respond was unnecessary given that:

  • The employee could not return to his role due to medical reasons;
  • The employee had not responded to previous correspondence; and
  • Any response from the employee would not have changed the outcome of the decision to dismiss him.

While agreeing that providing the employee with an opportunity to respond may not have changed the outcome of the decision to dismiss, the FWC found that the opportunity to provide responses still should have been given to the employee.

Considering that the employee had served 33 years with the Employer, the FWC noted that it would have been appropriate to provide him with notification of the intention to end his employment based on medical advice and provide him with the opportunity to respond. This failure to do this rendered the dismissal of the employee harsh.

Turning to the remedy, had the Employer undertaken a show cause process the FWC found that it would have likely confirmed the employee’s incapacity to return to work and would have only extended his employment for another two weeks. 

The FWC considered that two weeks compensation at the employee’s usual weekly wage was appropriate compensation. However, after taking into account the workers’ compensation payments received by the employee, the FWC ordered the Employer to pay the employee $407.20 (gross), being the difference between his usual weekly wages and the weekly workers compensation received by the employee.

Lessons for employers

In any disciplinary or show cause process, employees must be provided with the allegations that are of concern to the employer and afforded the opportunity to respond to the allegations before a decision is made as to a disciplinary penalty. This is essential to demonstrate that the employer has considered any information provided by the employee when deciding what the appropriate disciplinary penalty is.

Shane Koelmeyer is a leading workplace relations lawyer and Director at Workplace Law. Workplace Law is a specialist law firm providing employers with legal advice, training and representation in all aspects of workplace relations, employment-related matters and WH&S.

02 9256 7500 | sydney@workplacelaw.com.au

Information provided in this blog is not legal advice and should not be relied upon as such. Workplace Law does not accept liability for any loss or damage arising from reliance on the content of this blog.

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