Conduct

To determine a valid reason relating to conduct, the Commission must determine whether, on the balance of probabilities, the conduct allegedly engaged in by the employee actually occurred.[1]

The Fair Work Commission will not stand in the shoes of the employer and determine what the Commission would do if it was in the position of the employer.[2] The question the Commission must address is whether there was a valid reason for the dismissal.[3]

The test is not whether the employer believed on reasonable grounds, after sufficient inquiry, that the employee was guilty of the conduct.[4] The Commission must make a finding as to whether the conduct occurred based on the evidence before it.[5]

Inconsistent treatment of previous similar conduct by other employees in the workplace is an issue that can be relevant.[6]

An employee's dishonesty may constitute misconduct and a valid reason for dismissal.[7] However, dishonesty does not automatically make the dismissal of an employee one that is not unfair.[8]

A single foolish, dishonest act may not always, in the circumstances of a particular case, justify summary dismissal.[9]

The failure of the employee to follow the employer's lawful and reasonable directions can constitute a valid reason for dismissal.[10]

Fair Work Regulation 1.07 defines serious misconduct.[11] Serious misconduct is conduct that is wilful or deliberate and that is inconsistent with the continuation of the employment contract.[12] It is also conduct that causes serious and imminent risk to the health and safety of a person or to the reputation, viability or profitability of the employer's business.[13]

Serious misconduct includes theft, fraud, assault, sexual harassment, intoxication at work and the refusal to carry out lawful and reasonable instructions consistent with the employment contract.[14]

Where serious misconduct is alleged the test for a valid reason for dismissal does not change. The test remains whether the reason was 'sound, defensible or well founded'.[15] A valid reason for dismissal does not require conduct amounting to a repudiation of the contract of employment.[16]

Where an employee has been dismissed without notice (summary dismissal) for serious misconduct the Commission may find that, although there was a valid reason for the dismissal, the dismissal was harsh because summary dismissal was a disproportionate response.[17]

Where the conduct involves serious misconduct, the principle established in Briginshaw v Briginshaw[18] may be relevant:

The Briginshaw principle does not raise the standard of proof beyond the balance of probabilities.[21] The strength of the evidence needed to establish a fact on the balance of probabilities 'may vary according to the nature of what it is sought to prove'.[22] More serious allegations may require stronger evidence.

'It is only in exceptional circumstances that an employer has a right to extend any supervision over the private activities of employees.'[23]

The out of hours conduct must have a relevant connection to the employment relationship.[24]

Rose v Telstra[25] looked at relevant decisions on out-of-hours conduct and provides the following summary:

• 'The conduct must be such that, viewed objectively, it is likely to cause serious damage to the relationship between the employee and employer; or
• The conduct damages the employer's interests; or
• The conduct is incompatible with the employee's duty as an employee.'[26]

In cases involving out of hours conduct, it is not sufficient for the employer to simply assert that the conduct will in some way affect the employer’s reputation or compromise the employee’s capacity to perform his or her duties, there needs to be evidentiary material upon which a firm finding may be made.[27]

Conduct outside of work involving criminal offences does not, alone, warrant dismissal.[28] There still must be a relevant connection between the criminal activity and the employee's employment.[29]

However if the employee is unable to attend work for a significant period because they are convicted of a serious offence and imprisoned, then the contract of employment may be brought to an end by the operation of law due to frustration.[30]

Generally, in the absence of extenuating circumstances, a dismissal for fighting will not be viewed as harsh, unjust or unreasonable.[31]

Extenuating circumstances include:

• the circumstances in which the fight occurred, such as whether the dismissed employee was provoked or acting in self-defence
• length of service, including the work record of the dismissed employee, and
• whether or not the employee was in a supervisory position.[32]

The authorities are clear that the Commission must take into account all of the circumstances surrounding the incident and not merely establish who the aggressor was.[33]

Where the employee's conduct or capacity affects the safety and welfare of other employees the Commission may find that this is a valid reason for the dismissal.[34]

Fair Work Regulation 1.07 (which defines serious misconduct) may also be relevant when dealing with Occupational Health and Safety (OHS) breaches that amount to serious misconduct.[35]

The kind of conduct that is relevant need not only be wilful, malicious or intentional conduct, but conduct that can imperil or put other employees in the workplace in jeopardy.[36]

The Commission may take into account the following issues when determining whether there has been a breach of safety:

• the seriousness of the breach/incident
• company policies setting out safety procedures and consequences for breaches
• relevant OHS training by the employer
• whether the incident/breach was isolated or recurring in nature, and
• whether or not the employee concerned was a supervisor and expected to set an example.[37]

A substantial and wilful breach of a policy will often, if not usually, constitute a valid reason for dismissal.[38]

However a finding that an employee has failed to comply with policies and procedures does not mean that a dismissal is not harsh, unjust or unreasonable. In each case all of the circumstances must be taken into account.[39]

If widespread breaches of policy occur without an employer response then this weighs against a decision that the dismissal was justified and not harsh, unjust or unreasonable.[40]

It is not sufficient to find that there is a valid reason for an employee’s dismissal simply because someone has lost trust and confidence in an employee’s ability to perform their role. There needs to be sufficient evidence and reasoning to support this loss of trust and confidence.[41]

Valid reason due to conduct

Poor attitude and behaviour

Kolodka v Virgin Australia Airlines Pty Ltd t/a Virgin Australia [2012] FWA 7828 (Smith DP, 12 September 2012).

The employer dismissed the employee for poor behaviour and having a poor attitude towards his team members, customers and supervisors.

It was found that there was a valid reason for the employee's termination due to the employee's conduct.

Various conduct issues – lateness, not wearing personal protective equipment

Aperio Group (Australia) Pty Ltd (T/a Aperio Finewrap) v Sulemanovski [2011] FWAFB 1436 (Watson SDP, McCarthy SDP, Deegan C, 4 March 2011), [(2011) 203 IR 18].

The employee had a long history of performance and conduct related issues, including unauthorised absences, non-compliance with OHS and other company policies and late attendance. The employer gave multiple warnings and conducted several counselling sessions.

It was found that the employee's misconduct was a valid reason for the dismissal.

Recklessness and carelessness in causing forklift accident

IGA Distribution (Vic) Pty Ltd v Nguyen [2011] FWAFB 4070 (Boulton J, O'Callaghan SDP, Ryan C, 9 September 2011), [(2011) 212 IR 141].

The employee was terminated for causing a forklift to collide with another forklift. It was found that, due to the seriousness of the conduct and the possible health and safety risks caused by the incident, there was a valid reason for the dismissal.

Note: However it was found that, notwithstanding the finding of a valid reason for dismissal, the termination was harsh and unjust because the employer was wrong in accusing the employee of deliberately causing the accident.

Social media – Facebook

O'Keefe v Williams Muir's Pty Ltd T/A Troy Williams The Good Guys [2011] FWA 5311 (Swan DP, 11 August 2011).

The employee made negative and threatening comments about a colleague on Facebook. The Commission held that threatening another work employee is a serious issue and one which would not be tolerated in any workplace. The manner in which the threat was made and the words used provided sufficient reason for the respondent’s dismissal of the applicant on the grounds of serious misconduct.

Drinking alcohol while on lunch break

Selak v Woolworths Limited [2008] AIRCFB 81 (Watson VP, Cartwright SDP, Foggo C, 8 February 2008), [(2008) 171 IR 267].

The employee, a store manager, was terminated for consuming two beers on his lunch break. The employer had an explicit policy that no alcohol was to be consumed during work hours. It was found that this was a valid reason for his dismissal.

Drinking alcohol while on lunch break

Agnew v Nationwide News, PR927597 (AIRC, Rafaelli C, 11 February 2003).

Leave to appeal refused in PR936856 (AIRCFB, Harrison SDP, Ives DP, Bacon C, 27 August 2003), [(2003) 126 IR 461].

The employees were terminated after it was discovered they were drinking alcohol during their lunch break. It was found that a breach of the policy was a valid reason for the dismissal.

However, it was held dismissal was harsh in all of the circumstances when taking into account recent policy change, inconsistent enforcement of the policy and the employees' period of service.

Dishonesty in disciplinary interview

Streeter v Telstra Corporation Limited [2008] AIRCFB 15 (Acton SDP, Cartwright SDP, Larkin C, 24 January 2008), [(2008) 170 IR 1].

The employee engaged in sexual intercourse in a hotel room in front of colleagues. Her colleagues complained about her behaviour to the employer. After a number of interviews, the employee conceded that such activity did take place. The Full Bench found on appeal, in a majority decision, that the employee's dishonesty throughout the investigation amounted to a valid reason for her dismissal.

The Full Bench found it was reasonable for Telstra to conduct the investigation given it appeared the employee’s activities had caused difficulties at her work and were likely to cause difficulties at her work in the future. In the circumstances, the Full Bench also held that the questions Telstra asked the employee were reasonable. The Full Bench found the employee needed to be honest with Telstra during the investigation, notwithstanding the inherently personal nature of her activities, so that Telstra could determine and take appropriate action to deal with the difficulties. The employee’s dishonesty during the investigation meant Telstra could not be confident the employee would be honest with it in the future. The relationship of trust and confidence between Telstra and the employee was, thereby, destroyed.

Transmission of pornographic emails

Flanagan v Thales Australia Ltd t/a Thales Australia [2012] FWA 6291 (Bull C, 7 September 2012).

The employees accessed pornographic material via work email accounts in breach of a company policy. It was held that this was a valid reason for dismissal.

Note: Due to the lack of procedural fairness in the termination process, it was ultimately found that the dismissals were harsh, unjust or unreasonable.

Dishonesty – co-worker stealing

Woodman v The Hoyts Corporation Pty Ltd, PR906309 (AIRCFB, Giudice J, Watson SDP, Grainger C, 11 July 2001), [(2001) 107 IR 172].

The employee was dismissed for allowing a colleague to take an item from the Candy Bar without paying for it and for lying to management when questioned about the incident. It was found that, notwithstanding the size of the theft, covering it up amounted to serious misconduct and a valid reason for the dismissal.

Note: It was ultimately found that the termination was harsh due to deficiencies in the dismissal process.

Breach of policy – dress code

Woolworths Limited (t/as Safeway) v Brown, PR963023 (AIRCFB, Lawler VP, Lloyd SDP, Bacon C, 26 September 2005), [(2005) 145 IR 285].

The employee was dismissed from his employment as a butcher for refusing to remove his eyebrow ring while at work.

It was found that the employee refused to comply with a lawful direction of his employer and this was a valid reason for dismissal.

Breach of policy – gambling

Atfield v Jupiters Limited trading as Conrad Jupiters Gold Coast, PR925334 (AIRC, Hodder C, 10 December 2002), [(2002) 123 IR 273].

Leave to appeal was refused in PR928970 (AIRCFB, Giudice J, Lawler VP, Foggo C, 19 March 2003), [(2003) 124 IR 217].

The employee, a manager working for a casino, was dismissed for serious misconduct for placing a bet at a TAB within the casino complex. It was found there was a valid reason for the dismissal.

Note: Despite a finding that there was a valid reason for the dismissal, in all of the circumstances the dismissal was found to be harsh.

Serious safety breach – forklift

Parmalat Food Products Pty Ltd v Wililo [2011] FWAFB 1166 (Watson VP, Sams DP, Asbury C, 2 March 2011), [(2011) 207 IR 243].

The employee was dismissed for breaching health and safety policy when he placed his arms, head and torso under an unstable load on a forklift. It was held that this was a valid reason for dismissal.

Serious safety breach – rail

Gottwald v Downer EDI Rail Pty Ltd [2007] AIRC 969 (Richards SDP, 30 November 2007).

The employee was dismissed for a health and safety breach after a rail car that he had been working on rolled into a workshop. It was found that the employee's conduct was of the kind that could imperil or put other employees in the workplace in jeopardy and was a valid reason for dismissal.

Note: The notice of termination and the reasons given in the disciplinary meetings for the dismissal were unclear and ineffective and therefore, ultimately the termination was harsh.

Improper use of work information

Applicant v Australian Federal Police [2012] FWA 1352 (Harrison SDP, 19 April 2012).

Permission to appeal was refused in [2012] FWAFB 6949 (Watson VP, Sams DP, Deegan C, 24 August 2012).

The employee was dismissed for breaching the employer's code of conduct by requesting a colleague investigate her ex-husband's financial affairs.

It was found that this breach constituted a valid reason for dismissal.

Fighting/assault

DP World Sydney Ltd v Lambley (2012) 222 IR 277

Appeal to the Federal Court dismissed in [2013] FCA 4 (10 January 2013).

The employee was dismissed for serious misconduct for assaulting another employee. The Commission held fighting in the workplace usually amounts to a valid reason for dismissal, as an employer has every right to establish policies against fighting and to ensure compliance with those policies by dismissing employees who are found to have engaged in fighting unless there are extenuating circumstances.

Breach of policy – offensive email

Anderson v Thiess Pty Ltd [2015] FWCFB 478 (Ross J, Hatcher VP, Simpson C, 30 January 2015).

The employee was dismissed after sending an offensive email in breach of the employer's workplace policies. It was held that this amounted to a valid reason for dismissal, in particular as the email was one which vilified persons of the Muslim faith and had caused offence.

Note: However it was found that, notwithstanding the finding of a valid reason for dismissal, the termination was harsh and unreasonable because of its consequences for the employee's personal and economic situation and that it was not reasonably open to the employer to conclude that the misconduct was wilful.

Failure to follow lawful and reasonable directions

Grant v BHP Coal Pty Ltd [2014] FWCFB 3027 (Richards SDP, Asbury DP, Booth C, 18 June 2014).

Decision at first instance [2014] FWC 1712 (Spencer C, 14 March 2014).

The employee was on extended sick leave whilst receiving treatment for a shoulder injury sustained in the course of his duties. After a lengthy absence from the workplace following surgery, the employer required the employee to attend its nominated medical specialist for a functional assessment test before being assigned duties. The employee did not attend the medical appointment, nor the rescheduled medical appointment.

The employee was dismissed for failing to follow lawful and reasonable directions to attend a medical appointment, as well as his refusal to participate in the disciplinary investigation. At first instance the Commission found this a valid reason for dismissal and the application was dismissed. This decision was affirmed on appeal.

Employee conflict

Lumley v Bremick Pty Ltd Australia t/a Bremick Fasteners [2014] FWCFB 8278 (Hatcher VP, Gostencnik DP, Ryan C, 5 December 2014).

An employee was dismissed after an ongoing workplace conflict with a colleague could not be resolved. Both employees received written warnings and mediation was conducted by the manager. After further altercation, and a final warning, the employee challenged the employer to sack her.

At first instance the Commission found that the dismissal was for a valid reason, soundly based on the conduct of the employee. This was confirmed on appeal, where the Full Bench found that the conflict had put the employer in an 'impossible position, irrespective of who was at fault'. Permission to appeal was refused.

NOT a valid reason due to conduct

Failing to comply with restricted duties

Perry v Coffs Ex-Services memorial and Sporting Club Ltd [2009] AIRC 777 (Thatcher C, 18 August 2009).

The employee was injured at work and consequently placed on a return to work program involving restricted duties. The employee was found to be carrying two trays of empty wine glasses above the weight restriction specified in her return to work program.

It was found there was no valid reason for the employee's dismissal.

Swearing/bad language

Symes v Linfox Armaguard Pty Ltd [2012] FWA 4789 (Cargill C, 8 June 2012).

Appeal to Full Bench dismissed in [2012] FWAFB 7877 (Kaufman SDP, Smith DP, Lee C, 12 September 2012).

The employee was dismissed for misconduct after he swore at a manager and then punched a noticeboard.

It was found that although swearing was inappropriate and unwarranted in a workplace, it was tolerated by the employer. It was held that the employee's behaviour did not provide a valid reason for dismissal.

Failing to report other employee's dishonesty

Crockett v Vondoo Hair t/a Vondoo Hair [2012] FWA 8300 (Sams DP, 9 October 2012).

The employer accused the employee of witnessing another employee stealing clients for her own personal business and of supplying client details to that other employee.

It was found the employee was denied procedural fairness because the employer failed to properly investigate the matter and give the employee an opportunity to respond to the allegations. The Commission found that there was no valid reason for the dismissal.

Fighting/assault

Dewson v Boom Logistics Ltd [2012] FWA 9027 (Cambridge C, 24 October 2012).

The employee was dismissed for serious misconduct involving physical assault upon another employee.

It was noted that the employer in this case did not satisfy 'even a basic level of proof' that the employee committed the assaults. It was held that there was no valid reason for the dismissal.

Shortcomings in reporting an injured patient

Lengkong v Bupa Care Services Pty Ltd t/a Bupa Morphettville [2012] FWA 3737 (O'Callaghan SDP, 1 May 2012).

The employee was dismissed for serious misconduct after a complaint was made about an injury suffered by an elderly resident under the employee's care.

It was found that, even though the employee may not have properly investigated or reported the incident, this was an oversight and did not negatively affect the resident's welfare or compromise the employer's position. It was held that there was no valid reason for the termination.

Allegations of misappropriation and fraud

McKerrow v Sarina Leagues Club incorporated T/A Sarina Leagues Club [2012] FWA 1251 (Asbury C, 21 February 2012).

The employee was dismissed for misappropriation of club funds and fraud. The employer alleged that she made payments out of the employer's funds to a different organisation and attempted to hide the transaction when the other organisation returned the money.

It was found that the employee was guilty of an error of judgment in paying the amount to the other organisation, however it was done for a purpose consistent with the objects of the employer and the employee held a reasonable belief that the amount would be repaid. Therefore, there found to be no valid reason for dismissal.

Alleged failure to follow employer's lawful and reasonable direction

Schreier v Austal Ships Pty Ltd, Print N9636 (AIRC, O'Connor C, 19 March 1997).

Leave to appeal refused in Print P3975 (AIRCFB, Ross VP, Drake DP, Dight C, 13 August 1997).

The employee was dismissed for performance issues and failing to follow a lawful instruction. The employer had directed the employee to attend 15 hours of training outside of work hours and the employee refused to do so.

It was found that this did not amount to a valid reason for dismissal.

Criminal matters – theft of alcohol

Black and Santoro v Ansett Australia Limited, Print S3905 (AIRC, Drake SDP, 20 March 2000).

The employees were dismissed for serious misconduct arising from the theft of beverages.

It was considered that, where the alleged commission of a crime is relied upon as a reason for dismissal, the standard of proof requires more than 'mere conjecture, guesswork or surmise'. On the evidence that existed at the time of the dismissal, it found that there was no valid reason for the terminations.

Employer used illegally obtained evidence to support allegation of theft

Walker v Mittagong Sands Pty Limited T/A Cowra Quartz [2010] FWA 9440 (Thatcher C, 8 December 2010).

The employee was accused of stealing oil from the employer. After becoming suspicious that the theft had occurred, the employer searched for and took samples of oil from the employee's vehicle without the employee being present. It was held that this evidence could not be used to prove the misconduct and therefore there was no valid reason for the dismissal.

The Commission found that the utility and container were clearly the personal property of the employee. By reaching over to touch the container the employer technically committed an act of trespass. By opening the bottle and removing some oil he committed an act of larceny (stealing). Simply put, he did not have the authority to search the employee's property and take the oil, and his actions were unlawful. The evidence obtained in consequence of that unlawful act includes the custody of the purported sample and the analysis thereof by the analytical laboratory.

Refusal to follow company policy

Lee v Superior Wood Pty Ltd [2019] FWCFB 2946 (Sams DP, Gostencnik DP, McKinnon C, 1 May 2019).

The applicant was employed as a casual general hand. A new company policy introduced fingerprint scanners to record work site attendance. The employees were advised to register their finger prints to record site attendance.

The applicant submitted that biometric data is sensitive personal information under the Privacy Act 1998 (Cth) and the employer was not entitled to require that information. The employer addressed the applicant’s concern by providing a document from the supplier explaining the nature of the data collected. The employer issued the applicant with a verbal warning and written warnings due to his non-compliance with the new company policy. The applicant was subsequently dismissed because of his refusal to use the biometric fingerprint scanner.

The Full Bench found that the applicant was unfairly dismissed and held that the direction to comply with company policy was unlawful (because it was in breach of the Privacy Act), and that the applicant was entitled to refuse to follow the direction.

Loss of trust and confidence

Mammarella v Department of Parliamentary Services [2019] FWC 6340 (Harper-Greenwell C, 11 September 2019).

The applicant was employed by the Victorian Department of Parliamentary Services as an Electoral Officer. The applicant had management and control of the assets within the electoral office, and his role was to represent the Member of the Victorian Legislative Council for Western Metropolitan Melbourne, Mr Eideh, in the wider community.

In September 2017 the Independent Broad-based Anti-corruption Commission (IBAC) commenced an investigation into allegations of fraudulent work practices in the electorate office where the applicant worked. An audit of the electorate office was conducted by the Department of Parliamentary Services in November 2018. In December 2018 the applicant was charged with criminal offences in relation to the IBAC investigation. Following the audit the applicant was advised that there was a loss of trust and confidence in his ability to perform his role and he was subsequently dismissed.

Giving consideration to Byrne and Crozier, the Commission accepted that the applicant was a person of interest in the IBAC investigation, involving allegations of fraudulent and corrupt behaviour. However, whilst the Commission accepted that Mr Eideh may have lost trust and confidence in the applicant, it is not sufficient to find that there is a valid reason for dismissal simply because someone has lost trust and confidence in an employee’s ability to perform their role. The Commission held that there needs to be sufficient evidence and reasoning to support this loss of trust and confidence. The Commission noted that as at the time of the submission there had been no findings made in relation to the criminal charges against the applicant. The Commission found that there was no valid reason for the applicant’s dismissal without being able to establish adequate reasons and found that the applicant’s dismissal was unjust and unfair.