When can deficiencies in a termination process result in an unfair dismissal finding?

When a dismissal relates to employee conduct, the Fair Work Commission (the Commission) must be satisfied that the conduct occurred, and it justified the termination (see our checklist for employers considering dismissal here).

In 2024, the Commission has delivered two decisions highlighting how deficiencies in an employer’s termination process can render a dismissal ‘unfair’ even where there may have been valid grounds for the dismissal.

Decision #1 – Dismissal for Alleged breach of Alcohol and Drugs policy

An Assistant Manager (the Employee) of a mixed farming company was dismissed for alleged misconduct when he was alleged to have arrived late to work under the influence of alcohol. The Employee denied being under the influence and made an unfair dismissal application to the Fair Work Commission under s.394 of the Fair Work Act 2009 (Cth).

Background

The Employee was made aware from 7:43pm the previous evening that he would be required to attend work at 7:00am the next day. He arrived late for work after being contacted by the farming company’s General Manager. It was alleged that the Employee was under the influence of alcohol when he started work which would have constituted a breach of the company’s Alcohol and Drugs policy. The General Manager sent the Employee home, and later that day, emailed him about taking that day as leave.

The following day, the Employee was dismissed by the farming company’s General Manager for alleged misconduct:

• an alleged breach of the company’s Alcohol and Drugs Policy and associated breaches of safety obligations
• being late to work on the prior day, and
• being disengaged and not wanting to be at work.

The Employee was paid two weeks wages in lieu of notice for termination.

Findings

The Commission found:

• that the Employee was aware of and had signed the farming company’s Alcohol and Drugs policy which made it clear that “It is forbidden for any employee to start work or return to work whilst under the influence of alcohol or drugs”
• the Employee’s performance assessment template in the prior quarter had identified a required outcome to be “Being mindful of not having a big night with alcohol before a workday …”
• the Employee consumed a substantial amount of alcohol during the prior evening at his local pub, on the way home and when at home, and it was found likely that he consumed 12 to 15 standard drinks
• there was insufficient evidence to conclude that the Employee was “under the influence of alcohol” when he arrived at work, and he consistently denied this allegation in the termination meeting held the following day, and during cross-examination in the Commission. In addition, the General Manager allowed the Employee to drive home from the worksite despite the allegation that he was “under the influence of alcohol”.

In regards to termination, the Commission found:

• the termination letter was slightly ambiguous in terms of the reason for the dismissal
• based on the evidence, the Commission was not satisfied that the Employee attended work under the influence of alcohol meaning he did not breach the Alcohol and Drugs Policy, or the WHS Policy
• being late for work, disengaged or not wanting to be at work were not valid reasons for dismissal because these allegations alone would not have led to his dismissal if the alleged policy breach had not occurred
• Termination was found to be unfair.

Lessons for Employers

The Commission stated it may have been possible for the farming company to lead expert evidence regarding the Employee’s likely blood alcohol reading when he arrived at work based on the number of drinks he admitted consuming, but there was no such evidence produced. In addition, it was highly unlikely the dismissal would have been found unfair if it had been established that the Employee was under the influence of alcohol when he attended work, given that farms are amongst the most dangerous types of workplaces, and it is undoubtedly a very serious matter to attend this type of workplace under the influence of alcohol or drugs.

The question of whether the alleged conduct took place and what it involved is to be determined by the Commission based on the evidence in the proceedings. The test is not whether the employer believed, on reasonable grounds after sufficient enquiry, that the employee was guilty of the conduct which resulted in termination, but rather the evidence provided to substantiate that the conduct occurred.

Decision #2 – Dismissal for ongoing harassment

A casual bar attendant’s (the Attendant‘s) employment at a large leagues club (the Club) was terminated for ongoing misconduct towards four of its female employees. The Attendant brought an unfair dismissal application in the Commission following his dismissal. He denied some of the conduct and otherwise alleged that there was no valid reason for his termination and no proper investigation into the staff complaints.

Background

The Attendant alleged to have breached the Club’s values, Bullying and Harassment Policy, and Sexual Harassment Policy. The conduct included verbal altercations with co-workers and inappropriate sexual comments directed towards female staff, some of whom had complained about the employee.

Findings 

The Commission determined that the termination was unfair, stating that the Club had failed to:

• provide the Attendant an opportunity to respond to any valid reason for termination during a ‘dismissal meeting’; as the decision to dismiss him had in fact been made before the meeting
• put any formal allegation to the Attendant – other than vague assertions regarding several instances of conduct – in order for him to respond
• provide the Attendant with any evidence obtained during the Club’s investigation into his conduct for him to consider and reply to prior to his dismissal
• warn the Attendant, prior to the dismissal meeting, that his employment was at risk and be given an opportunity to show cause as to why he should not be terminated
• notify the Attendant about the extent of his conduct that was being investigated or considered as possible reasons for his dismissal, and
• give notice to the Attendant that it was alleged that his conduct constituted misconduct or that it constituted a breach of his contract of employment or any policies, let alone advising what specific policy or contractual terms he was alleged to have breached.

Lessons for Employers

The Commission accepted some of the Attendant’s alleged conduct was proven and the Club had provided a valid reason for dismissal. In addition, the Commission described the Attendant of having a pattern of inappropriate behaviour that provided a sound, defensible and well-founded reason to dismiss him, and that it was a proportionate response to the gravity of the conduct.
However, because the Club’s “deficient, ad hoc” dismissal processes resulted in a lack of procedural fairness to the employe the Attendant was successful in proving unfair dismissal in the Commission.

Summary

A seemingly small oversight can have significant impacts on the outcome of whether a dismissal is unfair, unjust or harsh.

Contact us for advice and assistance in relation to any complaint or misconduct, including conducting investigations, as well as advising on termination process and unfair dismissal claims. By contacting us at the earliest opportunity and before any decisions are made, we can help you protect your interests. We can also review policies to ensure best practice and deliver training to staff, to ensure your business is protected.