A recent decision of the Appeal Bench of the Fair Work Commission (FWC) has confirmed the importance of a fair and balanced investigation to successfully defend a claim for unfair dismissal, and challenged the assumption that reinstatement is only ordered in exceptional circumstances.
In Ryan Wilks Pty Ltd v Puszka  FWCFB 3323, an employee was summarily dismissed from her employment for serious misconduct after becoming drunk at a farewell function hosted by a client and vomiting on the floor. While the employee admitted to the drunkenness and having vomited on the floor, she denied making disparaging comments about the client’s employees and sexually propositioning one of them, conduct of which she was also accused of.
At first instance, the FWC found that the employer’s flawed investigation into the allegations led it to erroneously conclude that the employee had engaged in all aspects of the alleged misconduct, and the employee was dismissed on that basis. Specifically, the employer relied on hearsay evidence in order to make the decision, and disregarded the fact that the person who was allegedly sexually harassed denied that it had happened.
Ultimately the FWC held that the nature and severity of the actual misconduct could not provide a sound, defensible or well-formed reason for the dismissal.
Commissioner Cambridge noted:
“Frankly, if one act of inoffensive drunkenness at an after work function provided valid reason for dismissal, I suspect that the majority of Australian workers may have potentially lost their jobs.”
Reinstatement was ordered by the FWC on the basis that the dismissal was harsh, unjust or unreasonable. Importantly, the FWC remarked that notwithstanding the tension between the employer and employee caused by the legal proceedings, there must be a genuine loss of trust and confidence such that the employment relationship should not be re-established. In this case, the fact that the employer allowed the employee to continue to work unrestricted from the day of the function on 25 July 2018 until she was summarily dismissed on 2 August 2018, weakened the employer’s argument that reinstatement was not appropriate.
Lessons for employers
This case highlights the importance of a fair and balanced investigation process where an employer is considering dismissing an employee, and provides helpful insight into instances where the FWC will not consider there to be a genuine loss of trust and confidence within the employment relationship.
When considering termination, employers should:
- be sure to have robust investigation procedures embedded within the organisation;
- be sure to follow any investigation procedures to ensure procedural fairness;
- consider whether it is necessary to appoint an external body to investigate the misconduct (particularly where the investigation involves assessments of hearsay evidence and credibility); and
- rely on factors beyond any tension caused by legal proceedings to establish a lack of trust and confidence within the employment relationship.
How we can help
When and how to dismiss an employee can be a tricky road to navigate. Moores can assist you in determining whether the actions of an employee warrant a verbal or written warning, a final warning or dismissal on either a summary basis or with notice. For assistance with workplace relations matters, please contact Practice Leader, Skye Rose or Lawyer, Bree Coram on 03 9843 2100. Alternatively, fill out the enquiry form below for more information.