Warnings, termination, unfair dismissal – It is important if as an employer you are going to rely on past warnings when terminating a employee, that the warning/s are relevant to the reasons for termination, failure to do so could see the Fair Work Commission hold the the termination was unfair as it did in the case of Taylor v Qube Ports P/L t/a Qube Ports (See below)

“The issue of tolerance of poor behaviour or performance is among the most delicate issues that managers and HR managers will face with employers weighing up questions of fairness, due diligence, productivity and workplace harmony – as well as legal aspects.

One potentially awkward scenario is when an employee has received official warnings that are dated or have expiry dates, that the employee duly sees out, only for the sub-par behaviour or performance to return soon after these dates.

The question is, how viable is it for an employer to refer back to expired warnings or a letter dated older than six month as grounds for further action or even dismissal?

It is important to remember if terminating or disciplining an employee not to confuse the purpose of warning letters, for example;

  • Previous warning letters that relate to behavioural issues or misconduct cannot relied on in cases of poor performance and vice versa.
  • If an employee breaches a safety guideline, process or procedure you cannot rely on a previous warning letters for unrelated behavioural or poor performance issues.”

Excerpt from the AWPTI Reasonable Management Action manual – http://awpti.com.au/reasonable-management-action-manual/

Warnings, termination, unfair dismissal – Taylor v Qube Ports P/L t/a Qube Ports

TERMINATION OF EMPLOYMENT – misconducts.394 Fair Work Act 2009 – application for relief from unfair dismissal

The applicant Mr Taylor was terminated for breach of a lawful and reasonable direction given by employer regarding loading of ship on 1 July 2016.

Evidence was provided that the applicant had received three prior warnings for threatening behaviour and failing to follow company procedure.

Mr Taylor submitted that on 1 July 2016 the breach was not deliberate and that he was under a lot of pressure that day. In response Qube argued that applicant’s submissions in relation to nature or quality of breach was irrelevant to question of valid reason and stated that that applicant knew about procedure and decided consciously and wilfully not to follow it.

The Commission found applicant breached company procedure and that he was familiar with it but as it was an isolated event and that it did not constitute a valid reason for dismissal and that the prior warnings were not relevant as they were dubious factually with dubious processes.

The Commission found in favour of the respondent that applicant’s previous warnings should be taken into account but only to the extent of whether or not the incidents (relating to the warning) had occurred but not relevance to the dismissal.  The Commission found dismissal was harsh, unjust or unreasonable, that reinstatement inappropriate. Compensation of $18,225.80 less taxation was ordered.

Link to case – https://www.fwc.gov.au/documents/decisionssigned/html/2017fwc2238.htm

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Workplace investigation substantive fairness

Workplace investigation substantive fairness – When considering whether a dismissal is unfair, the Fair Work Commission will have regard to two types of fairness – procedural fairness and substantive fairness.

Procedural fairness is about natural justice and the procedure followed by an employer when terminating an employee’s employment.

The second limb, substantive fairness, is focused on the objective fairness of the penalty applied in disciplinary action.

Substantive Fairness and the Fair Work Act

Under the Fair Work Act 2009, a dismissal will be unfair if it is “harsh, unjust or unreasonable”.

In deciding whether this is the case, the FWC must take into account a range of factors including whether there was a valid reason for the dismissal.  This evaluation of a valid reason for dismissal is where substantive fairness enters the unfair dismissal equation.

What is a valid reason?

A valid reason is a reason that justifies terminating an employee’s employment.

The case law says that valid reason should be “sound, defensible and well founded” and should not be “capricious, fanciful, spiteful or prejudiced” (Selvachandran v Peterson Plastics Pty Ltd (1995) 62 IR 371). Furthermore, a valid reason “must be defensible or justifiable on an objective analysis of the relevant facts” (Rode v Burwood Mitubishi Dec 451/99 M Print R4471 AIRC).

In essence, a valid reason can’t be manufactured by an employer, it must be based on objectively ascertainable facts and should be proportionate to the conduct or capacity issue in question.

Hanson v Precepts Services Pty Ltd [2017] FWC 1488 (Precepts Services Decision)

In a recent decision of the FWC, an employee was awarded more than $27,000 in compensation when his employment was terminated for reasons that were over inflated by his employer. The employee was accused of swearing at and intimidating a co-worker to such a degree that he was summarily dismissed.

Evidence before the FWC established that the employer condoned the use of “robust language” in the workplace and the managing director in particular was guilty of using such language and having frustrated outbursts. The employer had not taken action against other employees for their colourful language in the past and consequently, the employee had been judged by a different standard to others.

The FWC held that there was not a valid reason for the dismissal because the employer’s reasons were not justifiable. It had overstated the gravity of the conduct, especially with regards to the workplace culture, and therefore the conduct was not objectively serious enough to warrant summary dismissal.

This case demonstrates that consistency in decision making and a regularly monitored culture in a workplace can impact on the existence of a valid reason.Link to case – https://www.fwc.gov.au/documents/decisionssigned/html/2017fwc1488.htm

Applying objectivity

As mentioned above, affording an employee substantive fairness involves a degree of objective analysis. The reasons for dismissing an employee must be able to be substantiated on objective facts. This can sometimes be a challenge when there is a high degree of tension, emotion and pressure when dismissal is being contemplated.

Before making any final decisions about disciplinary action, employers should take a step back and think critically about the reasons they considering taking that action. Did the conduct alleged actually happen? Was the employee’s behaviour serious enough to warrant dismissal? Does the employee actually lack the capacity to perform their role?

Dawson v Qantas Airways Limited [2017] FWCFB1712 (Qantas Decision)

In this case, the employment of a long serving flight attendant was terminated because he stole miniature bottles of gin from his employer’s stock and lied about how the alcohol came into his possession.

In determining whether there was a valid reason for the employee’s dismissal the Full Bench of the FWC commented that it was required to consider the entire factual matrix,

“The Commission must determine on the evidence before it whether the Applicant did in fact remove the alcohol from the aircraft and whether he subsequently misled and deceived the Respondent as to how and why the alcohol came into his possession. Only if this can be shown on the evidence can the termination be considered valid.”

Ultimately, the Full Bench found that the evidence established that the employee had stolen the alcohol then lied about it and there was, therefore, a valid reason for the termination of his employment that was objectively justifiable.

Applying objectivity is about understanding the reasons for dismissing an employee without emotions or strong opinions getting in the way.

In the Qantas Decision, the reasons were the employee’s theft and dishonesty, which were able to be substantiated by evidence gathered by the employer. The reasons were not capricious, fanciful, spiteful or prejudiced because they were not conflated or manufactured in anyway.

Contrast this to the Precept Services Decision where the reasons for dismissing the employee were overstated and not objectively justifiable, resulting in a finding that the punishment did not fit the crime.
Link to case – https://www.fwc.gov.au/documents/decisionssigned/html/2017fwcfb41.htm

Lion Dairy and Drinks Milk Limited v Norman [2016] FWCFB 4218 (Lion Dairy Decision)

In this case, the employee’s employment was terminated because he could no longer perform the inherent requirements of his role.

The employee was involved in a skydiving accident and sustained some serious injuries. When the employee was ready to return to work, he saw two doctors who gave differing opinions about his fitness to return to his role. The employer preferred the view of the doctor whose opinion was that the employee would not be able to perform all the duties that he had before his injuries. On that basis, his employment was terminated and he later made an unfair dismissal application to the FWC.

The FWC Full Bench held that there was a valid reason for employee’s dismissal in that the he could not perform the requirements of his role.

The Full Bench said that employers are entitled to rely on expert medical evidence available to them and that, in this case, the employer was within its rights to prefer the medical evidence of one doctor over another.

The Full Bench commented that a reason based on medical evidence will usually be one that is sound, defensible and well-founded, and thus a valid reason for the purposes of the FW Act.

This case demonstrates that the nature of the material relied upon by an employer can be a significant factor in assessing whether a valid reason exists and whether an employee has been afforded substantive fairness. Link to case – https://www.fwc.gov.au/documents/decisionssigned/html/2016fwcfb4218.htm

Lessons for employers

Substantive fairness should be applied by employers when making any decision about a disciplinary penalty. Those making the decision, including whether to terminate employment, should consider whether there are objectively ascertainable facts to justify the penalty and whether the “punishment fits the crime”.

Originally published by Shane Koelmeyer  – Director at Workplace Law

AWPTI – workplace investigation Sydney and through-out NSW, QLD and Victoria.
Workplace training national wide

Misconduct investigations, bullying investigations, harassment investigations & sexual harassment investigations, complaint investigations, grievance investigations, discrimination investigations