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Procedural fairness rules despite serious misconduct

AREEA’s principal employee relations consultant based in Hobart, Bill FitzGerald, reviews a recent unfair dismissal case which, if handled correctly by the employer, would have averted an order for nearly $12,000.

Bill FitzGerald
Bill FitzGerald


IN the decision  Kaibel v CKI People Pty Ltd [2015] FWC 4220 (29 July 2015) handed down by Commissioner Hampton of the Fair Work Commission, an employee of people development and change consultancy CKI People allegedly breached company policy by copying files to a personal hard drive without authorisation.

Based on a report conducted by an IT specialist engaged to investigate the employee’s conduct, CKI People concluded that the employee had attempted to steal the employer’s intellectual property and that there appeared to be no valid reason as to why she would do this.

The employer alleged it was for use in the employee’s own business.

The employer summarily dismissed the employee by letter and without further investigation. The employee argued that she was not provided the opportunity to explain the reason for copying the files, which she claims in her statement was to have remote access to information on projects she was working on at the time.

The ruling

After reviewing extensive evidence, Commissioner Hampton found that there was a valid reason for termination, based on the breakdown of trust and confidence in the employee and also that she could not provide a genuine reason for copying the files.

However, Commissioner Hampton found that the summary dismissal was harsh and not consistent with the Small Business Fair Dismissal Code, justifying an order for substantial compensation based on her long service.

“I have found a valid reason for dismissal; albeit on a narrower basis than contended by CKI, Commissioner Hampton said.

“I have also found that there was poor judgement exercised by [the employee] in the liberties taken with the employer’s IP and there was some conduct not consistent with policy requirements, but the demonstrated misconduct fell short of serious misconduct warranting immediate dismissal.”

Commissioner Hampton noted that as outlined in s.381 of the Fair Work Act 2009 ‘procedural unfairness is an important consideration, given the provisions of the Act but does not necessarily mean that the dismissal was unfair’.

“The procedures and remedies referred to in paragraphs (1)(b) and (c), and the manner of deciding on and working out such remedies, are intended to ensure that a “fair go all round” is accorded to both the employer and employee concerned,”  Commissioner Hampton quoted from the Act.

CKI was ordered to pay the employee $11,505 in compensation plus superannuation.

Implications for employers

This case reinforces the need to avoid acting hastily in the discipline or termination of an employee, even when there is evidence of serious misconduct. Employers should follow a proper investigation and disciplinary process in every situation.

There is no defensible concept of instant dismissal as multi-tests prescribed in the Fair Work Act require a reasonable process even if the circumstances appear to be obvious.

AREEA recommends employers take the following steps when faced with such a situation:

  1. Advise the employee that an incident(s) has been identified which can be deemed to be serious misconduct but a final determination will not be made until an investigation is concluded.
  1. Stand the employee down (usually with pay) and confirm they should be available for interview at short notice.
  1. Expedite an investigation and determine outcomes.
  1. Put forward allegations arising from the outcomes and allow the employee to provide responses.
  1. Take time to consider the responses before deciding on appropriate disciplinary action.

To speak further with Bill FitzGerald about how to handle a similar situation in your business, contact AREEA’s Hobart office on (03) 6270 2256. Alternatively click here to contact an AREEA employee relations consultant in your state.

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