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The Fair Work Commission (FWC) has reminded employers about the duty to afford procedural fairness to employees prior to dismissal.

In Armour v Mader Contracting Pty Ltd [2023] FWC 1034, the employee was employed as a heavy diesel mechanic for the labour hire employer and had been hired by a client to work at its mine in the Northern Territory.

On his return home, airport x-ray screening uncovered two shifter tools in the employee’s backpack after having checked them out from the client’s warehouse two days earlier. The client conducted an investigation and banned the employee from working at the mine.

The employer subsequently summarily dismissed the employee for engaging in theft. 

The employee lodged an unfair dismissal application with the FWC alleging that there was not a valid reason for his dismissal and that he was not provided with procedural fairness.    

The employee claimed that there was no valid reason for dismissal as the employer had assumed, based on the client’s incident report that he had intended to steal the tools but that this assumption could not be proved. Rather, the employee’s evidence was that he had forgotten to return the tools to the warehouse before leaving the mining site and that there was no reason for him to risk his employment by attempting to take the tools as they were common, cost less than $100 and he already owned a set.

As to the denial of procedural fairness, the employee submitted that he did not know that his employment was at risk and did not know the reason for his dismissal until after the employer advised him of the termination of his employment.

The employee contended that the employer had simply followed the client’s direction that it no longer wanted him on site and did not put him on notice that his employment was at risk. The employee claimed that he was not asked to provide responses as to why his employment should not be terminated.

The employer submitted that the employee engaged in serious misconduct and that the logical conclusion given the events that occurred was that the employee engaged in theft. In particular, the employer argued that the employee had opportunity to return the tools to the warehouse before he left the site, given he had checked them out three days earlier and claimed that they were the wrong size for the job.  

As to procedural fairness, the employer submitted that the employee had the opportunity to respond in phone calls to managers after the incident, but he was not honest or forthcoming until after he was advised that the incident was being treated as theft. The employer also submitted that the employee was aware before his dismissal of the investigation and that his employment was at risk.

The FWC found that there was no evidence that could support a finding that the employee had intentionally stolen the tools and as such did not engage in serious misconduct. However, the FWC was satisfied that there was a valid reason for the employee’s dismissal arising from the conduct as he was in breach of the client’s policy which required tools to be returned to the warehouse.

Notwithstanding that there was a valid reason for dismissal, the FWC found that the employer had not complied with its obligations to provide the employee with procedural fairness prior to dismissing him. In particular, the FWC found that:

• The employer did not notify the employee that it was considering terminating his employment and only informed him that the client had banned him from their site;
• The employer only notified the employee of the reason for dismissal at the time of the dismissal;
• The employer’s correspondence with the employee concerned obtaining information about the incident and could not be considered an opportunity to respond to the reason for dismissal;
• The employer did not provide the employee with the opportunity to explain why his employment with their business should not be terminated.
• The employer relied upon the employee’s explanation to the client and relied on this as the basis to terminate his employment.
• The employer did not conduct its own investigation and relied on the client’s investigation into the incident.

Accordingly, the FWC was satisfied that the employee was unfairly dismissed.

‍Lessons for employers

In this matter, the FWC noted that the employer had a responsibility to provide the employee with a procedurally fair process prior to terminating his employment. Procedural fairness requires employers to:

1. put the employee on notice that their employment is at risk and the reason prior to the dismissal; and
2. provide the employee with the opportunity to respond to the reason.

For labour hire employers, this decision reiterated that employers conduct their own disciplinary process relating to employee incidents at client sites.

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