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Employer ordered to pay maximum compensation following “entirely unjust” disciplinary process


Knives Out

The Fair Work Act 2009 (Cth) (FW Act) requires that employers comply with a number of procedural elements in a disciplinary process prior to making a decision about whether an employee’s conduct or behaviour warrants disciplinary action.

The Fair Work Act 2009 (Cth) (FW Act) requires that employers comply with a number of procedural elements in a disciplinary process prior to making a decision about whether an employee’s conduct or behaviour warrants disciplinary action.

One of the most important elements is providing the employee an opportunity to respond to allegations of misconduct before the final decision is made.

In the recent decision of Robertson v Imperial Mushrooms Pty Ltd [2021] FWC 1332, the Fair Work Commission (FWC) was critical of an employer who adopted an “entirely unjust and unreasonable” disciplinary process which included the absence of any opportunity for the employee to respond before making the decision to terminate her employment.  

The employee had been engaged as a Mushroom Picker for Imperial Mushrooms Pty Ltd (the Employer) which required her to use various tools such as a knife and blade to harvest mushrooms. At the end of each shift, employees were required to return these tools to a designated spot and then the employer would conduct an inventory check to make sure that nothing was missing.

In August 2020, when conducting the inventory check, the Employer identified that the employee had not placed her knife back onto her allocated hook. When the Employer contacted the employee that evening, she suggested that she might have mistakenly put it in the wrong section.

The Employer then made numerous attempts to contact the employee the next day (on her rostered day off) in an effort to locate the knife but was unable to reach her. The Employer considered that the missing knife represented a contamination risk and so it had to check all of the product that had been prepared by the employee to ensure that it had not been placed with the product. The knife could still not be located.

When the employee commenced her next rostered shift, she successfully located the knife which had been placed on the wrong hook.

The employee was then called into a meeting and was asked about the circumstances surrounding the missing knife and its subsequent discovery. At the end of the meeting, the Employer informed the employee that she was stood down and was to attend a secondary meeting to discuss her employment.

At the secondary meeting, the employee was handed a pre-prepared letter of dismissal which stated that her conduct had caused serious and imminent risk to the health and safety of a person and to the reputation, viability and profitability of the business. The Employer considered the incident constituted serious misconduct and therefore summarily dismissed the employee.

The employee lodged an unfair dismissal claim stating that the reasons for her termination of employment did not constitute a valid reason for dismissal.

Ultimately, the FWC agreed with the employee, finding that the Employer had mischaracterised the employee’s unintentional, negligent actions as serious misconduct.

The FWC stated that had the negligent action of the employee been intentional, this would have likely constituted serious misconduct. Additionally, the FWC considered that the Employer’s process for checking product in the event a tool had been misplaced removed the possibility of serious and imminent harm to a person or its business.

While accepting that the employee’s unintentional negligence warranted some form of disciplinary action, the FWC found that the disciplinary process adopted was “grossly disproportionate” to the conduct itself, which was nothing more than an unfortunate mistake.

The FWC was also critical of the Employer for not providing the employee with an opportunity to respond to the allegations against her and found it “akin to the Commission preparing the unfair dismissal Decision before conducting a Hearing”. The FWC stated that the secondary meeting was a “perfunctory, mechanical event” that involved the employee being told of her dismissal and then provided with the pre-prepared termination letter.

The FWC therefore found that the dismissal was unfair because the employee’s conduct was not a valid reason for her summary dismissal and that the dismissal was harsh, unjust and unreasonable.

In determining the appropriate compensation to be awarded to the employee, the FWC considered that the employee would have likely remained employed for a further five years. Accordingly, it ordered payment to the employee of six months’ compensation (the maximum amount) totalling $19,240.00.

What can your business learn from this decision?

When commencing a disciplinary process, employers must provide employees with an opportunity to respond to the allegations against them before the final decision is made.

As demonstrated in this case, the failure to provide the employee with an opportunity to respond or explain their conduct or behaviour, may not only lead to a finding that a dismissal was unfair but will also prevent an employer from making a properly informed decision about an appropriate disciplinary penalty.

Information provided in this blog is not legal advice and should not be relied upon as such. Workplace Law does not accept liability for any loss or damage arising from reliance on the content of this blog, or from links on this website to any external website. Where applicable, liability is limited by a scheme approved under Professional Standards Legislation.

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