AMMA employee relations consultant Estha van der Linden evaluates a recent Fair Work Commission decision in which Commissioner Cambridge suggests that termination of an employee without notice is not justified where the employee’s conduct amounts to ‘gross negligence’ as opposed to ‘serious misconduct’.

Mr Matthew John was employed by Star Pty Limited as a security officer at the organisation’s casino in Pyrmont.

In an incident which took place in April 2013, a minor gained entry to the casino by using a friend’s Learner Driver Licence. When Star conducted an investigation into how this event occurred, CCTV footage showed John asking for the minor’s proof of identification but not looking up to examine her face when viewing the licence.

John was called to a meeting to explain his conduct. He accepted fault but cited mitigating circumstances saying there was a lack of support at the entrance point, too many people were trying to go in, the team leader was absent and that he had asked for further assistance, which had not been provided. Subsequently, John’s employment was summarily terminated for failing to conduct a proper identification check.

The Decision

Commissioner Cambridge agreed with the employee that he had engaged in conduct which was, at worst, negligent, and certainly did not rise to the threshold of gross negligence. There were also a number of procedural defects in his termination and therefore the summary dismissal was held to be unfair.

Although the relevant conduct only amounted to negligence, Commissioner Cambridge delivered some interesting remarks upon the concept of “serious misconduct”.

At common law, an act of gross negligence which causes substantial loss or damage to an employer can present a valid basis for terminating without notice. However, in Commissioner Cambridge’s view, the statutory position under the FW Act – which asks the question, ‘was the dismissal fair?’ – is different to common law.

At the centre of Commissioner Cambridge’s reasoning were the terms of the Small Business Code.

Under the Code “[i]t is fair for an employer to dismiss an employee without notice or warning when the employer believes on reasonable grounds that the employee’s conduct is sufficiently serious to justify immediate dismissal. Serious misconduct includes theft, fraud, violence and serious breaches of occupational health and safety procedures”.

Although the Code only applies to “small businesses”, (fewer than 15 employees) Commissioner Cambridge found that “the Code may be modifying the common law position regarding summary dismissal for negligent rather than intentional action”.

Commissioner Cambridge ruled that the term “serious misconduct” as used in the Code, does not include conduct which amounts to negligence – even if, the negligence is considered “gross negligence”. The Commissioner primary reason for this was that the language used in the Code entails an element of wilfulness. Negligence, on the other hand, is characterised by lack of care.

Commissioner Cambridge said (although he did not cite any specific authorities), “Courts and Tribunals appear to be gradually casting off the proposition that negligence would justify summary dismissal, as it represents an outdated concept which was established upon the principles which applied during the era of the master and servant relationship.”

Read the case here: John v The Star Pty Limited [2014] FWC 543

Implications

Employers are expected to provide training, resources and other assistance to employees if they engage in careless conduct. Although Commissioner Cambridge was only commenting on the relationship between gross negligence and serious misconduct, it brings to question whether negligence can be a reason for summary termination under the Fair Work Act 2009. This case may be the first in a series of decisions that change the concept of summary dismissal as we know it.

If you’d like advice or information about workplace relations issues including dismissal, negligence and misconduct, please contact your local AMMA office to speak to one of our workplace relations experts.