Under suspicion: Commission finds employer’s suspicion of an employee’s misconduct was not a valid reason for dismissal

If considering taking disciplinary action due to an employee’s misconduct, it is critical that an employer makes a decision based on wrongdoing as opposed to a mere suspicion of wrongdoing. It may be first necessary to conduct an investigation in order to ascertain whether an allegation of misconduct can be substantiated before commencing disciplinary action.  

Termination of an employee’s employment on the mere suspicion of misconduct rather than any actual misconduct is likely to result in a finding of unfair dismissal, as seen in the recent decision of Gates v Blugibbon Pty Ltd [2021] FWC 6143.

The employee had been engaged for less than two years before he was dismissed by Blugibbon Pty Ltd (the Employer), a medical recruitment agency that engages and places medical practitioners into a variety of sectors.

In the course of the employee’s employment, he was provided with a work laptop which gave him access to a shared storage drive that contained various confidential documents and information of the Employer’s clients.

In early April 2021, the employee was given a warning about his performance and personal conduct. The employee subsequently went on sick leave for the remainder of the month and provided the Employer with medical certificates stating that he was unfit to work.

During the employee’s leave of absence, the Employer formed the view that the employee was planning on leaving his employment and that he was going to take the Employer’s confidential information. Acting on this view, the Employer took a number of steps to protect its confidential information, namely requesting that the employee return his work mobile and changing the password to his email account.

In late April 2021, the Employer received a report of abnormal download activities on the employee’s laptop. Given the employee was meant to still be on sick leave, the Employer assumed that he was using his laptop to copy its confidential information.

The Employer confronted the employee about its findings, to which the employee denied accessing the laptop while on leave. The Employer directed the employee to return his work laptop and conducted a preliminary search which confirmed that the laptop had been logged into several times while the employee was on leave and he had deleted a virtual disc application.

The Employer subsequently called and instead of putting the allegations to him, dismissed him for “serious misconduct” as a result of his dishonesty and unauthorised use of confidential information.

A week after the employee’s dismissal, the Employer engaged a cyber security specialist to examine the employee’s laptop and generate a report. It was the Employer’s intention to use this report in a NSW Supreme Court action to restrain the employee from disclosing or dealing with its data.

The employee made an unfair dismissal application before the FWC, on the basis that he was unfairly dismissed. The Employee submitted that he had accessed the work laptop while on leave to access personal files he stored on the laptop and to find HR policies relating to his employment.

Looking first to whether there was a valid reason for dismissal, the FWC accepted that for some businesses, cyber security is so sensitive that merely logging into a system at a time when the employee is not expected to work might constitute a valid ground for dismissal. However, the FWC did not accept that this level of security was necessary for the Employer’s business.

The FWC also stated that the employee did not transfer the files to himself prior to deleting them off the laptop and therefore, there was no evidence to suggest that employee had intended to maintain and use the files unlawfully.

The FWC therefore took the view that none of the reasons for employee’s dismissal constituted a valid reason for dismissal.

The FWC also found that the employee “was not awarded any procedural fairness in any way”, stating that the employee’s alleged conduct was not properly investigated, the employee was not notified of the reason for his dismissal and he was not given an opportunity to respond to the reason for dismissal.

While the Employer sought to rely on the cyber security report as their means of investigating the employee’s misconduct conduct, the FWC stated that its findings could not be used as evidence as it was conducted after the employee had been dismissed. The FWC also noted that the report itself only confirmed what the Employer already knew about the employee’s activities on the computer, but did not actually prove that the employee engaged in any wrongdoing (that is, taking its confidential information).

The FWC suggested that it would have been more reasonable for the Employer to suspend the employee and conduct a proper investigation into its suspicions rather than simply summarily dismissing the employee.  

The FWC was therefore satisfied that the Employer’s mere suspicion that the employee had engaged in misconduct did not constitute a valid reason for dismissal and the dismissal itself was procedurally fair. It was therefore held that the employee was unfairly dismissed.

In considering the appropriate remedy, the FWC stated that the employee would have likely worked for a further six weeks and therefore ordered the Employer pay $9,050.00 in compensation.

Lessons for employers

Investigations are an important tool available to employer when it is alleged that an employee has engaged in misconduct. As seen in this decision, this holds especially true where an employer may only have a suspicion of the misconduct and no actual evidence of wrongdoing. 

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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