Losing your job is difficult enough without needing to worry about whether your employer is attempting to rob you of your entitlements. In almost all cases, when an employee is terminated, an employer must pay out the employee annual leave, long service leave (if applicable) and in lieu of notice if they are not required to work out the notice. However, if an employee is terminated for alleged serious misconduct, an employer can withhold certain entitles such as payment in lieu of notice and potential long service leave.
However, some employers’ may be sneaky and try to label alleged conduct as serious misconduct in order to avoid paying out certain employee entitlements or to avoid paying out a redundancy. This begs the question, does an employees conduct or reason for their termination really deserve the label “serious misconduct”?
How to I determine if my conduct serious misconduct?
Fair Work Regulation 1.07 defines serious misconduct as conduct that is willful or deliberate and that is inconsistent with the continuation of the employment contract. This conduct may also be conduct that causes serious and imminent risk to the health and safety of a person or to the reputation, viability, or profitability of the employer’s business. Examples of serious misconduct includes theft, fraud, assault, intoxication at work and the refusal to carry out lawful and reasonable instructions.
When will my conduct constitute serious misconduct and meet this high bar to warrant summary dismissal? Where serious misconduct is alleged the test for a valid reason for dismissal does not change. The test remains whether the reason was ‘sound, defensible or well founded’.[1] The standard of proof for serious misconduct remains the balance of probabilities but ‘the nature of the issue necessarily affects the process by which reasonable satisfaction is attained’[2] and such satisfaction ‘should not be produced by inexact proofs, indefinite testimony, or indirect inferences’ or ‘by slender and exiguous proofs or circumstances pointing with a wavering finger to an affirmative conclusion.’[3]
Is your alleged conduct an isolated incident or a single mistake in which your dismissal would be arguably harsh? Are you even guilty of this alleged misconduct or do you have a justifiable defence for the allegations against you? If the alleged misconduct was an isolated incident in an otherwise faultless career, you may be eligible to lodge an unfair dismissal claim as your termination may be considered harsh in the circumstances.[4] Where an employee has been dismissed without notice (summary dismissal) for serious misconduct the Commission may find that, although there was a valid reason for the dismissal, the dismissal was harsh because summary dismissal was a disproportionate response.[5]
Serious Misconduct Fair Work
We provide examples of serious misconduct and Fair Work case examples.
Michelle Rawson v Mudgee Golf Club Ltd
In Michelle Rawson v Mudgee Golf Club Ltd,[6] the applicant was summarily dismissed for serious misconduct involving three primary incidents which involved, a threat to stab a fellow employee, alleged disrespectful behaviour towards a fellow employee and an allegation that the applicant had attempted to delete the employer’s Facebook account.
Upon careful analysis, the employer’s findings of serious misconduct were confirmed. The misconduct of the applicant which involved her unreasonable and aggressive workplace behaviour combined with conduct that intentionally sought to damage the business operation of the employer, was held to be misconduct that was plainly inconsistent with the continuation of employment, and it established valid reason for the dismissal of the applicant.[7]
However, the valid reason for dismissal was assessed by the Commission and evaluated against significant procedural errors which were evident in the manner that the employer determined and implemented the dismissal of the applicant.[8] Commissioner Cambridge held that although the applicant was dismissed for valid reason involving her serious misconduct, the significant procedural defects evident in respect of the determination and implementation of the dismissal of the applicant have rendered the summary dismissal to have been harsh and unreasonable. The applicant’s dismissal had been found to have been unfair in this instance.[9]
Scott Tracey v BP Refinery (Kwinana) Pty Ltd
In Scott Tracey v BP Refinery (Kwinana) Pty Ltd,[10] a BP Kwinana Refinery employee who, in September 2018, created a video using scenes from the German-language film Downfall, adding subtitles which referenced details known to those participating in negotiations for the refinery’s new agreement. The employee was terminated, and the original decision found the video was “offensive an inappropriate”. On appeal, the Full Bench found there was no valid reason for dismissal as it did not consider the video to be offensive or inappropriate in the circumstances.[11] The Full Bench took into account the employee’s unblemished work history, the industrial environment in which the conduct occurred, the employee’s contrition and the significant financial hardship on the employee’s family.
These cases illustrate that although your employer may allege that your conduct constitutes serious misconduct and is worthy of summarily dismissal, your dismissal may still be harsh, unjust or unreasonable due to a myriad of mitigating factors.
Employer’s Avoiding Paying Notice on Termination
When an employee is terminated on the grounds of serious misconduct, the employer doesn’t have to provide any notice of termination. Thus, by labelling the reason for termination as serious misconduct, an employer does not have to pay the employee in lieu of notice. The minimum entitlement to notice period is stipulated under the NES standards.[12] Your employment contract may stipulate a notice period greater than the NES Minimum but nevertheless, this is not payable upon termination for serious misconduct.
However, the employer does have to pay the employee all outstanding entitlements such as payment for time worked, annual leave and sometimes long service leave (depending on your state or territory), regardless of the reason for termination. Please note this is only a guide and the Fair Work Commission does not deal with entitlement related matters. For detailed knowledge regarding your final pay out, please contact the Fair Work Ombudsman.
Long Service Leave and Serious Misconduct
A common component of an employee’s termination pay is long service leave, if it is applicable. However, state specific legislation dictates that if an employee is terminated for serious misconduct, long service leave can be withheld and not paid out to the employee on termination. All states except Victoria withhold any pro-rata long service leave entitlement if the employee has been dismissed for serious misconduct prior to reaching the period of service when they are able to take the leave. To find out your long service leave entitlements in your particular state, please consult the State specific legislation or the Fair Work Ombudsman.
Resources & Guides for Employees
- Unfair Dismissal Victoria – Find everything you need to know about Unfair Dismissal in Victoria.
- General Protections Victoria – When it comes to General Protections this is your definitive guide.
- Workplace Advice Victoria – Offering leading advice, take a look at how we support employees.
- Constructive Dismissal Victoria – Forced to resign? Have you fallen victim to constructive dismissal and/or constructive bullying?
References
[1] Selvachandran v Peteron Plastics Pty Ltd [1995] IRCA 333 (7 July 1995), [(1995) 62 IR 371 at p. 373]; cited in Annetta v Ansett Australia Ltd, Print S6824 (AIRCFB, Giudice J, Williams SDP, Cribb C, 7 June 2000) at para. 10, [(2000) 98 IR 233].
[2] Briginshaw v Briginshaw [1938] HCA 34 (30 June 1938), [(1938) 60 CLR 336].
[3] Ibid., [(1938) 60 CLR 336] at pp. 362‒3].
[4] Gasz v Mobil Refinery Australia Pty Ltd (AIRCFB, Watson SDP, Hamilton DP, Lewin C, 1 August 2005), [17]; Streeter v Telstra Corporation Limited [(2008) 170 IR 1]; [2008] AIRCFB 15, [27].
[5] Potter v WorkCover Corporation, PR948009 (Ross VP, Williams SDP, Foggo C, 15 June 2004) at para. 55, [(2004) 133 IR 458]. See also Annetta v Ansett Australia Ltd, Print S6824 (AIRCFB, Giudice J, Williams SDP, Cribb C, 7 June 2000) at para. 10, [(2000) 98 IR 233].
[6] [2021] FWC 1171.
[7] Ibid at [87].
[8] Michelle Rawson v Mudgee Golf Club Ltd [2021] FWC 1171 at [87].
[9] Ibid at [89].
[10] [2019] FWC 4113.
[11] Scott Tracey v BP Refinery (Kwinana) Pty Ltd [2020] FWCFB 6388.
[12] See Fact Sheet – Workplace Entitlements: Notice of Termination and Redundancy Pay.
