There is often confusion about what conduct constitutes ‘serious misconduct’ when engaging in disciplinary action or considering summary dismissal as the reason for termination of employment.

On occasion, the concepts of ‘inappropriate and unacceptable behaviour’ and ‘serious misconduct’ are muddled when a decision is made to terminate an employee’s employment.

Employers risk claims of unfair dismissal where an employee’s employment is terminated due to ‘serious misconduct’ although the employee’s actions fall short of the defined meaning of the term.


So what is ‘serious misconduct’?

‘Serious misconduct’ is defined in the Fair Work Regulations 2009 (Cth) (the Regulations) to have ‘its ordinary meaning’. More helpfully, however, regulation 1.07 provides that serious misconduct includes the following:

  • Wilful or deliberate behaviour which was inconsistent with the employment contract continuing;
  • Conduct which caused serious and imminent risk to health and safety;
  • Conduct which caused serious and imminent risk to the reputation or financial position of the business;
  • Theft, fraud or assault during the course of employment;
  • A refusal to carry out a reasonable and lawful direction’ and
  • Intoxication or impairment due to alcohol or illegal drugs such they are unable to perform work.

From the above, workplace violence, or assault will amount to serious misconduct, but other behaviour such as poor performance or unsatisfactory conduct would not be.


Serious misconduct and unfair dismissal

It is important that employers carefully consider the all of the circumstances of the alleged conduct where it is alleged that the employee’s conduct may amount to ‘serious misconduct’.

An employee’s employment may be summarily terminated (i.e. effective immediately and without notice) where the termination as the result of the employee’s serious misconduct.

In such circumstances, it is not uncommon for an employee to lodge an unfair dismissal application, submitting that the conduct did not actually amount to ‘serious misconduct’ as defined.

In the recent decision of Mr Ranjan Mohapatra v Acciona Energy Australia Global Pty Ltd t/as Acciona [2015] FWC 5976, the employee’s employment was summarily terminated after it was uncovered that he purchased items on the company credit card which were not covered by Acciona’s credit card policy. The employee sought reimbursement for the items which included massages, vitamins and bath mats.

The Fair Work Commission (FWC) held that there was a valid reason for the termination of employment and that the employee was not unfairly dismissed. Further it was held that in the circumstances, the termination of employment was a proportionate response to the employee’s misconduct – which amounted to serious misconduct.

Unless an employee’s action clearly fits within the definition of ‘serious misconduct’, an alternative course would be to terminate with notice (or pay in lieu) on the basis of the employee’s inappropriate or unacceptable conduct.