Serious Misconduct - Summary dismissal

Serious misconduct - In light of the Ivance Cuculoski v Australian Transit Group T/A Buswest [2020] FWC 3361 (30 June 2020) decision at the Fair Work Commission, I think it's time to review Serious Misconduct and Summary Dismissal. Full case here

Summary dismissal is dismissal without notice. It does not require advance notice to the employee and wages are only paid to the time of dismissal. An employer has a legal right to summarily dismiss an employee without notice for serious misconduct or other conduct which justifies such dismissal.

Employers should always think very carefully and thoroughly consider the options before making a decision to immediately or "summarily" dismiss an employee. For summary dismissal to be lawful there must have been a breach by the employee of either an express or implied term of the contract of employment that is serious enough to necessitate an employer to undertake an action of summary dismissal.

What does the FWC say about serious misconduct?

Under the Fair Work Act an employer can instantly terminate an employee's employment where the employee has engaged in 'serious misconduct'.  In such circumstances the employer will have to establish that the employee has in fact engaged in serious misconduct and the employer will still need to follow a certain procedure to afford the employee natural justice.

The Fair Work Regulations define 'serious misconduct' as follows:

  1. Wilful or deliberate behaviour by an employee that is inconsistent with the continuation of the contract of employment; and
  2. conduct that causes serious and imminent risk to:
    1. the health or safety of a person; or
    2. the reputation, viability or profitability of the employer's business.

The Regulations also list the following conduct as being deemed serious misconduct:

  • the employee, in the course of the employee's employment, engages in theft, fraud or assault.
  • the employee being intoxicated at work.
  • the employee refusing to carry out a lawful and reasonable instruction that is consistent with the employee's contract of employment.

I recommend before summary dismissal action is taken employers do the following:

  • Investigate the matter carefully to ensure that you have enough information and evidence upon which to make your decision. If the presence of the subject employee in the workplace causes concern consider suspending them until the conclusion of the investigation.
  • Review the employee’s record. Does this person have a long history with the company? Is this person a first or repeat offender? These are matters that could be taken into account.

Summary dismissal of a long standing employee with a good or unblemished record can be problematic. Your options should be carefully considered

  • Review your options. Would dismissal with notice be a better option? What are other options - demotion, counselling or training?
  • Don’t allow the fact that you may save some money by summarily dismissing an employee to affect your judgement. This course of action could be more costly in the long run.
  • Resist the temptation to ‘make an example’ of instances of employee negligence with summary dismissal. It is always best to ensure that disciplinary action is fair and thorough and that the outcome is proportionate to the conduct that has occurred.

Here are some cases that highlight differing views of summary dismissal:

In Bruce v AWB Ltd [2000] FCA, the Federal Court of Australia stated that mere misconduct is not considered as sufficient grounds to warrant immediate dismissal. For a summary dismissal to be lawful the employee's conduct must be judged serious enough that summary dismissal is the only option.

In Concut Pty Ltd v Worrell [2000] HCA 64, Kirby J stated that it is "only in exceptional circumstances" that an employer is entitled to dismiss an employee summarily. His Honour went on to state that generally, acts of dishonesty of similar conduct that destroys the mutual trust between the employer and employee fall within the class of conduct which would allow a lawful summary dismissal.

In Smith v Aussie Waste Management Pty Ltd [2015] FWC 1044 (Smith), the FWC ruled that swearing at a managing director during a heated phone call was not sufficient cause for summary dismissal. The FWC ruled that the conduct was not 'sufficiently insubordinate' for him to be dismissed because the conversation was not overheard by other employees, meaning it had not undermined the managing director's authority in the workplace.

On the other hand:

In John Pinawin t/a RoseVi Hair Face.Body v Edwin Domingo [2012] FWAFB 1359 the Full Bench accepted that the summary dismissal of a hairdresser whose work performance was adversely affected by his drug use was fair, but warned the same conclusion would not necessarily be reached in all cases of out-of-hours misconduct - an issue on which the Full Bench made some interesting observations that pertain to all employers.

In Lloyd & Co Pty Ltd v Shuttle ([2016] FWCFB 144) the employee had sent a series of emails to other staff members that were highly critical and disparaging of the managing director.

The Commission ruled that the managing director’s feelings of betrayal as a result of the employee’s personal hostility and disloyalty were reasonably held. The managing director had direct evidence of disloyalty in the form of the emails

As you can see summary dismissal is not cut and dry, I recommend careful and expert investigation of misconduct incidents that could result in summary dismissal. The peace of mind of getting it right outweighs the cost of an expert investigation.

Need help - Contact Australian Workplace  Training & Investigation - enquiries@awpti.com.au

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