Misconduct — does it warrant summary dismissal?

Analysis

Misconduct — does it warrant summary dismissal?

Employers are sometimes faced with a situation which may warrant the summary dismissal of an employee.

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Employers are sometimes faced with a situation which may warrant the summary dismissal of an employee. In these circumstances, employers should be careful when considering such action.

Apart from the increased likelihood of an unfair dismissal claim by the employee, dismissal for misconduct can also mean the forfeiture of some or all of an employee's entitlements which may otherwise be due on termination of employment.

Industrial tribunals and some legislation have identified degrees of misconduct which may range in consequence from justifying a verbal warning to the summary dismissal of an employee.

What is misconduct?

There are usually two broad categories, misconduct and 'serious misconduct'. There is no overriding definition of what constitutes misconduct, however, reg 30CA of the Workplace Relations Regulations [Cth], defines 'serious misconduct' to include such actions as theft, fraud or assault by the employee while in the course of employment, the employee being intoxicated at work, or the employee refusing to carry out a lawful and reasonable instruction that is consistent with the employee's contract of employment.

Although this Regulation only applies to employees under a federal award, certified agreement or Australian Workplace Agreement (AWA), the various state jurisdictions have also generally determined such actions by an employee as serious misconduct. There are, however, other forms of misconduct which may effect the employee's employment which do not necessarily justify summary dismissal.

Forms of misconduct

Many awards and enterprise agreements provide that an employee terminated for reasons of inefficiency, neglect of duty, malingering or misconduct may preclude or alter the payment of certain entitlements on termination, eg pro rata annual leave. Despite such provisions, an employee may still be successful in claiming unfair dismissal.

The following are common examples of the types of actions by an employee which may be described as misconduct but would not usually justify instant dismissal.

Inefficiency or incompetence: Employers sometimes describe the dismissal of an employee for reasons such as incompetence or inefficiency, as 'misconduct', however, this would usually be appropriate only in the most extreme cases, such as incompetence resulting directly in the death or serious injury of a fellow worker. Where an employee is felt to be incompetent or inefficient it will usually be appropriate to proceed through a series of warnings prior to dismissal.

Malingering, neglect of duty or lateness: 'Malingering' is generally defined as 'to feign illness or other incapacity in order to avoid work or duty'. Malingering, neglect of duty or lateness are unlikely to be grounds for instant dismissal. However, the cumulative effect of these types of absence by the employee may provide the employer with a valid reason for dismissal. Such factors the employer would need to consider before dismissal in these circumstances include the length of the absence, the type of workplace, ie how important it is for the employee to be on time, and the reasons for the employee's lateness/absence.

Forms of serious misconduct

Actions by an employee which constitute 'serious misconduct' are usually those which warrant instant dismissal. The following are examples of the common reasons for instant dismissal and are specifically prescribed in the abovementioned federal Regulation:

Fraud, dishonesty, etc: The type of workplace and the gravity of the offence will usually be relevant as to whether an act of dishonesty justifies instant dismissal. For example, a bakery employee stealing a few bread rolls would perhaps justify a verbal warning, whilst serious fraud by a bank employee or accountant may justify instant dismissal.

Drunkenness/drug taking: The taking of drugs or alcohol at the workplace, or immediately prior to coming to work or during a break from work, may justify instant dismissal. Where the particular employee is required to drive or operate dangerous machinery then instant dismissal may be justified. In these circumstances, the employer should have a policy stating that use of drugs or alcohol before or during work will result in instant dismissal. In relation to other types of employees, eg. clerical, progressing through a series of warnings may be more appropriate. Under federal employment regulation, an employee is taken to be intoxicated if the employee's faculties are so impaired that the employee is unfit to be entrusted with the employee's duties.

Assault: In the absence of extenuating circumstances, industrial tribunals have viewed dismissal for fighting as justifiable. The extenuating circumstances may concern the circumstances under which the fight occurred as well as other considerations such as the length of service of the employee, their work record, and whether he/she was in a supervisory position. As to the circumstances of the fight, relevant considerations may include whether the dismissed employee was provoked and whether the act constituted self-defence.

Refusal to carry out lawful/reasonable instruction: As prescribed in the federal Regulation, an employee refusing to carry out a lawful and reasonable instruction that is consistent with the employee's contract of employment is regarded as serious misconduct. However, in the normal course of events, there are likely to be valid reasons for the employee's refusal to carry out an instruction such as industrial action, safety concerns, a personality clash, or lack of training. Where the employee has a reasonable reason for refusing an instruction, the employer should not dismiss the employee but discuss the refusal with the employee.

Health or safety of an employee: Only in extreme cases where an employee was wilfully or grossly negligent would summary dismissal be justified. In this circumstance, the employer should be confident the unsafe act did not occur as a result of the lack of safety in the system of work established by the employer.

Procedure before summary dismissal

A termination of employment, whether by serious misconduct or otherwise, might still be held to be unfair by an industrial tribunal if the process leading to the dismissal was manifestly deficient in offering the employee procedural fairness. However, any faults in the process need to be balanced against the seriousness of the allegations in the event they are proven. An employer should never instantly dismiss an employee in 'anger' no matter how gross the conduct of the employee. The following is a list of suggested actions an employer should carry out before an instant dismissal occurs:

  • Conduct a full investigation into the misconduct. An employer should make sure that the act of misconduct alleged did actually occur, and that the employee 'charged' was actually responsible. There may be mitigating circumstances.

  • While an employer should not rush in to an instant dismissal, neither should the employer delay the dismissal. A lengthy period between the act of misconduct and the dismissal would suggest the employer has condoned the act of misconduct. The employee should be informed of the reason for the delay. Where an alleged offence is particularly serious, suspension on full pay may be appropriate during this period.

  • Give the employee the opportunity to respond to be heard. This means providing the employee with precise details of the allegations against him or her. The employee should be allowed to be accompanied by a representative if the employee so desires.

  • Following the investigation and the employee's response, the employer should consider whether the offence is sufficient to justify instant dismissal.

  • Where instant dismissal is determined to be appropriate the employer should provide to the employee — (i) a written notice of termination; (ii) a brief written statement as to the reasons for termination, and (iii) payment up until the time of dismissal, plus any payments of accrued leave.

Onus of proof

Although an employee may be acquitted on police charges in criminal proceedings, the onus of proof in civil proceedings is based 'on the balance of probabilities'. The employer needs to prove that serious misconduct had occurred. For police pursuing a prosecution under criminal law, proof of the offence must be established 'beyond reasonable doubt'.

Accordingly, although a criminal prosecution against an employee might fail, the employer could still be successful in an unfair dismissal case if there is sufficient proof for one but not for the other. In obtaining the necessary evidence, the employer would have to ensure a proper investigation of the circumstances is undertaken.

Entitlement to long service leave

A common provision in long service leave legislation is the payment of pro rata long service leave where the employee is terminated by the employer for any reason other than 'serious and wilful misconduct'. This means an employee terminated by the employer for serious and wilful misconduct can forfeit their entitlement to long service leave under certain circumstances.

It should be noted that it is necessary for the misconduct to be both serious and wilful. It is a phrase as a whole that has to be considered. Therefore, an employee may still be entitled to pro rata long service leave when summarily dismissed for serious misconduct because of, for example, gross negligence, however the employee's actions may not be viewed by a tribunal as wilful.

Related

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Employee fairly dismissed for omitting facts of previous misconduct
 
Employer's right to respond in dismissals

 
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