AREEA examines a Fair Work Commission determination and explains why cutting corners in the dismissal process can be a costly oversight.
In a single member decision this month, Commissioner Cambridge found serious procedural flaws in an employer’s dismissal process, despite a valid reason to terminate an employee.
The Commissioner denied the employee’s request for reinstatement, instead ordering the employer pay more than $8000 in compensation.
Background
In this case Jarmain v Linfox Armaguard P/L [2018] FWC 3255 (14 June 2018), the employee was a casual Road Crew Member, providing secure monetary transportation services for Armaguard.
The employee’s dismissal centred around two separate complaints from retail customers of Armaguard.
The first complaint was made against the employee for being overly engaged in interaction and discussion with a client’s retail staff and customers. The complaint also requested for the Armaguard employee to conduct his duties quicker and more efficiently.
Another complaint followed only days later from a different client, citing the employee’s excessive time spent in their store exchanging phone numbers with a staff member and engaging in inappropriate discussions.
Both complaints were determined as wilful and deliberate breaches of the employer’s safety and security procedures.
The employee was told his conduct represented serious misconduct and was dismissed with no notice payable as he was a casual employee.
Reinstatement was sought by the employee as a remedy for his alleged unfair dismissal.
The decision
Commissioner Cambridge found that given the nature of the industry, which required the employee to be armed, the dismissal was “sound, reasonable and defensible”.
The employer’s initial dismissal process should have been relatively easy following a thorough investigation of both complaints and interviews of the complainants.
Once initial conclusions are drawn and allegations put to the employee, including prior notice of their nature, the employee is then invited to have a support person present during the process. Ideally, it should be considered whether the employee should be stood down with pay pending the outcome of a thorough, fair investigation.
However, in this case, it was found the employer’s response to the complaint significantly breached natural justice protocols and the requirements of the Fair Work Act.
Firstly, the employee was stood down without pay for a significant period, breaching the Enterprise Agreement (EA).
He was then asked to attend an interview without notification of what it concerned and his answers were recorded without consent.
At a second meeting three weeks later the employer then substituted the employee’s preferred support person.
“The employer selected the support person to assist the applicant during discussions relating to dismissal, and this had the practical consequence of refusing to allow the applicant to have a support person of his choice,” Commissioner Cambridge said.
The Commissioner also said a “fair and just procedure” would have afforded the employee an opportunity to respond to the circumstances of the complaint if given prior notice of the issues under investigation.
Given the details of the customer complaints were never properly articulated, the procedure was effectively an “ambush” of the employee, the Commissioner found.
Commissioner Cambridge said the employer’s investigation was deficient in not initially advising the particulars of the complaints before subjecting the employee to a recorded investigation interview.
“In addition, the unpaid suspension of the applicant during the employer’s investigation was contrary to the employer’s obligations imposed by the terms of the EA,” the Commissioner said.
Commissioner Cambridge said it was regrettable the employer’s investigation procedure was “infected with serious deficiencies” despite ultimately establishing the employee’s serious misconduct.
“The determination of the matter has involved a careful assessment and balance of all of the relevant factors, and, despite the existence of valid reason for dismissal, and by fine margin only, the important procedural deficiencies have rendered the dismissal to have been unreasonable,” the Commissioner said.
The deficiencies were described as “significant and important”, rendering dismissal “unreasonable and therefore unfair”.
Despite the employee seeking reinstatement, Commissioner Cambridge said it was not an appropriate remedy and considered compensation more suitable.
Implications
While it is pleasing the Commissioner rejected reinstatement given the seriousness of the breach in policy, the generous compensation is in addition to the significant burden of legal costs, resources and distraction for the employer.
AREEA members are advised to seek guidance in accordance to the differing circumstances of each case and to seek advice before implementing processes around dismissal.
It is critical in order to defend an unfair dismissal claim or claim heavy compensation that the reason for dismissal is both justified and undertaken with an open and procedurally fair process.
Furthermore, the Commissioner’s comments highlight the importance of seeking expert guidance during the dismissal process.
“Specialist assistance should have meant that the termination of employment letter included more accurate and specific articulation of the conduct of the applicant which represented the serious misconduct for which he was dismissed,” the Commissioner said.
For further advice about themes covered in this case summary, contact AREEA’s Principal Consultant based in AREEA’s Hobart Office, Bill FitzGerald.
