Can an Employee be Terminated without Proper Warning?

The Fair Work Act 2009 (Cth) (“FWA”) and the Fair Work Regulations 2009 (Cth) (“FWR”) set out what an Employer must do when they wish to terminate the employment of an Employee. For small businesses, an Employer will be required to comply with the Small Business Fair Dismissal Code. This means that, when choosing to let an Employee go, an Employer may be required to comply with the FWA, FWR, the relevant Award and the terms of any employment contract if applicable.

In some instances, however, the Employer may need to take immediate action by summarily dismissing an Employee without notice. Generally, an Employee will be summarily dismissed, without notice, due to their performance or behaviour.

A vast majority of unfair dismissal claims are founded on the basis that the Employer dismissed the Employee unfairly or that the dismissal was harsh, unjust or unreasonable. The FWA protects Employees from termination without warning by allowing them the right to make an unfair dismissal remedy application with Fair Work Australia. These applications, however, must be lodged within 14 days of the dismissal coming into effect.

In unfair summary dismissal claims, the Employee will often claim that there was no serious misconduct on their part to warrant an immediate dismissal or that there was some other unwarrantable reason for the dismissal. As there are these rights and remedies available to Employees, an Employer must be able to prove that there was serious misconduct to warrant an immediate dismissal. The existence of an employment contract or other written policies will assist an Employer with their defence. By establishing that the Employee was bound by certain contractual obligations it will assist the Employer in demonstrating the serious misconduct of the Employee.

The FWA requires serious misconduct on the part of the Employee or a serious breach by an Employee of either an express or implied term of the employment contract in order for a summary dismissal to be deemed lawful. A summary dismissal will be deemed fair where the Employer has reasonable grounds to conclude that the Employee’s conduct was significantly serious to justify an immediate dismissal.

The types of serious misconduct that would justify summary dismissal include:
• Wilful or deliberate behaviour by an Employee that is inconsistent with the continuation of the contract of employment;
• Engaging in conduct that causes serious and imminent risk to the reputation, viability or profitability of the Employer’s business;
• Engaging in conduct that is a serious breach of occupational health and safety procedures;
• An Employee engaging in theft, fraud or assault in the course of employment;
• An Employee being intoxicated while working. Here, the threshold is that the Employee is so impaired that they are unfit to be entrusted with their duties;
• An Employee failing or refusing to carry out a lawful and reasonable instruction that is consistent with the Employee’s contract of employment.

The FWA or FWR do not provide for the degree of misconduct that is required to justify an action of immediate termination without notice and rather the facts and circumstances of each individual case need to be analysed. There have been many cases, however, heard before the Federal Court of Australia in relation to the degree of misconduct. The Court takes the position that the conduct of the Employee must be judged as serious enough that summary
dismissal is the only option.

On the other hand, the Small Business Fair Dismissal Code deems a summary dismissal fair when the Employer believes on reasonable grounds that the Employee’s conduct is sufficiently serious to justify an immediate dismissal.

A recent decision of Fair Work Australia provides an example of the type of conduct that would result in a summary dismissal. In that matter, an employee was summarily dismissed as a result of misusing personal or sick leave.

The Employee had booked flights to travel interstate without having applied or been approved to take annual leave. On the eve of her departure the Employee consulted a doctor and obtained a medical certificate for the days that she would be away. She then called in sick and provided the medical certificate to her Employer.

The Employer was aware of the Employee’s travel arrangements as she had printed her airline tickets at a work printer, where her Employer had seen them. Further, while the Employee was absent from work, the Employer reviewed her emails and hard drive and noted emails relating to the proposed trip which had been intentionally deleted.

When the Employee returned to work and was questioned about her absence, she failed to provide a reasonable explanation and was summarily dismissed due to her deceitful conduct.

Fair Work Australia upheld the dismissal and found, applying the requirements under the Small Business Fair Dismissal Code, that it was fair for the Employer to dismiss the Employee in circumstances where the Employer believed on “reasonable grounds – going fundamentally to good faith, fidelity and trust – that the Employee’s conduct was sufficiently serious to justify immediate dismissal”.

If you are an Employer or Employee experiencing difficulties in relation to work related issues, such as a summary dismissal and require further information or assistance please feel free to contact our office so that we may assist you with your matter.