31/03/2014

The Fair Work Commission has recently held that an employee terminated for gross negligence was unfairly dismissed as the termination was disproportionate compared to the conduct.

The case involved a security officer who allowed an underage person into licensed premises.  The suggestion was that the employee’s actions were a gross dereliction of duty and warranted summary dismissal.

In fact ‘gross negligence’ is not a legal basis for termination. So the Commission had to decide whether the alleged ‘grossly negligent’ conduct was akin to “serious misconduct”, which is a basis for summarily dismissing an employee.

The Commission heard evidence that the allegations were put to the employee as part of a meeting in which he was terminated and he was not given adequate time to consider the allegations and to properly respond.

The Commission held that the actions described as ‘gross negligence’ were not akin to serious misconduct as the employee’s actions lacked a “guilty mind” or any deliberate or wilful misconduct.  The Commission decided that the summary termination of the employee was therefore unfair, unjust or unreasonable.

The claim for unfair dismissal by the employee was therefore successful and the Commission ordered the employee be reinstated and paid his lost wages.

The Commission stated:

“In this instance, it was unusual to find that the reason for summary dismissal was an act of negligence, rather than some deliberate, wilful misconduct. In general, a summary dismissal will usually be implemented in circumstances where an employer believes that an employee deliberately committed an act of serious misconduct.”

On the issue of whether the provisions of the Small Business Fair Dismissal Code should be applied to this circumstance, even though the employer was a large corporation, the Commission said:

“the Code would generally require that a small business should implement summary dismissal only where the employer is satisfied that the actions of the employee are intentional, rather than negligent or incompetent. Logically, the mens rea [mental element of intent] prerequisite for summary dismissal as I describe it, would apply to large businesses, perhaps with a greater degree of stringency and satisfaction.”

The Commission held the performance of the employee’s duty “did not represent such gross, grave, serious or significant departure from the standard of care” which would have been a ground for summary termination.

The Commission said the employer should have instead issued a warning, conducted 1, 3 and 6 month reviews and implemented a coaching procedure.

What does this decision teach us?

1. Employers of all sizes should follow due process in managing employee performance issues.
    
2. Employees need to be given an opportunity to respond to allegations about misconduct.
    
3. Employers should ensure that the action taken against the employee is proportionate to the alleged misconduct.
    
4. Employers can summarily terminate employees where the misconduct has an element of intent and is therefore not just negligent by amounts to ‘serious misconduct’.

If you have any questions in relation to this article or need advice on managing employee performance issues please call us on (02) 8296 6222.