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Employee awarded compensation despite sexually inappropriate behaviour

AREEA’s Tasmanian principal employee relations consultant Bill FitzGerald, examines a recent unfair dismissal decision where the Fair Work Commission  found dismissal to be harsh and awarded compensation, despite the employee engaging in sexually inappropriate conduct.

IN a recent unfair dismissal decision, the FWC awarded the applicant just over $2000 in compensation and superannuation, on the grounds his dismissal was ‘harsh’ and on a ‘fine balance’.

In what may have some employers scratching their heads, the conclusion that his dismissal was harsh and justified compensation came despite the FWC also finding he had ‘acted inappropriately’ and that his employer had grounds to have ‘lost confidence’ in him.


In this case the employee posted sexually inappropriate messages on his Facebook page, tagging fellow employees.

Significantly, during the investigation the employee was directed in writing not to have any contact with other employees but openly flouted that direction and sent SMSs to one of the other employees involved and further referred to his manager in a sexually derogatory way.

According to the decision, the employee had amassed 18 years’ service and in that period had a long history of playing ‘pranks’ and ‘practical jokes’ on colleagues, and ‘exposed his colleagues to humiliation and potential ridicule at work’.

A conflicted decision

Commissioner Bissett found the employee ‘did not display an appropriate standard of conduct in his dealings with his colleagues or his employee and that his conduct provided a valid reason for his dismissal’.

She further concluded that his actions:

  • had the potential to harm the reputation of his employer and adversely impacted the health and safety of fellow employees;
  • provided grounds for the company to have ‘lost confidence’ that the employee would ‘not continue with such conduct; and
  • provided grounds to reduce his compensation by 80 per cent, removing any amount for humiliation and distress.

Despite these conclusions about his behaviour, Commissioner Bissett found ‘on fine balance’ that his termination was harsh because it was disproportionate to the gravity of the misconduct. In making this finding she considered his family responsibilities and lack of history of misconduct.

The Commission effectively found that despite the harshness of the dismissal the employee’s subsequent actions during the investigation meant that the employment relationship had broken down and compensation would be notional rather than substantive.

Full decision: Michael Renton v Bendigo Health Care Group, [2017]FWC 921, 20/2/2017

Practical implications for employers

This case highlights two important practical issues when dealing with terminations:

  1. Firstly, the need to have in place and well-communicated, a social media policy which outlines how inappropriate posts may impact adversely on the business and the implications in the event of breach of this policy; and
  2. Secondly, the need to have a professional, robust investigation process in place which includes the appointment of a competent and independent investigator and the communication of the process, highlighting the need for confidentiality and prohibition in contacting witnesses.

Given this is a complex and often risky area of the Fair Work Act for employers, AREEA advises members seek professional advice from your local AREEA office.

Policy implications

Returning to balanced termination of service laws is an important reform priority currently being advocated by AREEA.

This case continues a long and disturbing trend whereby members of the Fair Work Commission are finding terminations to be ‘harsh’ and rewarding compensation and/or reinstatement, despite also finding clear misconduct and inappropriate behaviours by the terminated employee.

While compensation was nominal in this case, AREEA argues that when a valid reason for termination is found, employers should not have to bear any costs or process delays brought upon by speculative and/or frivolous claims.

This type of decision does not inspire employer confidence in Australia’s employment system that reasonable and valid decisions of managers and business owners will be supported by a practical and balanced workplace tribunal.

For more information, contact AREEA principal employee relations consultant Bill FitzGerald on (03) 6270 2256.

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