Failure to follow procedural fairness likely to end in terminated employees receiving compensation

Failure to follow procedural fairness likely to end in terminated employees receiving compensation

A recent case before the Fair Work Commission again highlights the need for employers to ensure that employees suspected of misconduct are given ample opportunity to respond to allegations before any decision is made to terminate their employment. Failure to do so is likely to result in the employee being granted compensation or, in some situations, reinstated to their former role.

The case involved the dismissal of an employee ‘SR’ by Johns Lyng Services Pty Ltd (JLS), a company that delivers specialist construction, building and support services.

SR was employed by JLS as the OHS Manager Victorian Insurance Brands from 2 March 2020 until his dismissal on 27 July 2021. He was dismissed for three reasons: sending inappropriate texts to the Victorian State Manager, promoting and operating his own business, and neglecting his duties on two days immediately prior to his dismissal.

Commissioner Leyla Yilmaz determined that each of the three allegations were substantiated.

Regarding the text messages, with suggestions regarding the Victorian State Manager’s wife, Commissioner Yilmaz found that on the balance of probabilities, SR had sent the messages.

Regarding promoting and operating his own business, she found that SR had an email to JLS’ business partners suggesting the company was encouraging them to use a demolition company as a preferred contractor. Not only was this untrue, but in fact, the demolition company was owned by SR. As the Commissioner noted, “the email was a breach of his contract of employment and his common law duties of fidelity and good faith”.

Regarding the neglect of his duties on 23 and 26 July 2021, Commissioner Yilmaz accepted that SR had performed very little work for JLS over that period.

The primary issue for Commissioner Yilmaz was the method by which SR was terminated.

On 27 July 2021, SR was contacted by his manager and asked to attend a meeting to discuss “some issues and concerns”. No other details were provided.

In addition to SR and his Manager, JLS’ Chief Operating Officer, whom SR had never met, also attended. Faced with the allegations and subsequent denials by SR, the mood of the meeting escalated, and after approximately 15 minutes of discussions, SR was terminated.

As the Commissioner noted regarding the meeting,

“(SR) was quite agitated and defensive, while (the COO) was frustrated and bothered by the responses. Given the serious nature of the allegations and the breadth of evidence against (SR), an opportunity to digest the allegations and show cause why he should not be dismissed would have been a more appropriate and fair dismissal process”.

Further,

“…the meeting of 27 July 2021 failed to provide (SR) a fair opportunity to genuinely take into account the allegations and evidence against him in relation to the three reasons that led to his dismissal. He was also denied the opportunity to give due consideration to this information before responding, and John Lyng subsequently denied itself the opportunity to give genuine consideration to (SR’s) responses”.

After determining the dismissal to be procedurally unfair, Commissioner Yilmaz considered what compensation would be appropriate in the circumstances. In her view,

“Had (SR) not been dismissed on 27 July 2021, his employment would likely to have continued for a period of no more than one week, to cover a reasonable period for (SR) to be provided with the relevant evidence against him to have regard to it before responding. Having observed (SR’s) conduct during the course of the hearing and his failure to acknowledge any responsibility for his actions, notwithstanding the passing of time, it is unlikely that in spite of the stated intention to consider options, that any option other than dismissal would have occurred”.

The Commissioner ordered JLS to pay one week’s wages amounting to a gross sum of $1,634.62.  

SR v John Lyng Group (U2021/7270) 16 February 2022

For questions about misconduct, procedural fairness, implied duties of employment, or other employment questions, please contact Dean Cameron at Workforce Advisory Lawyers – We Know Employment Law on 1300 WAL LAW, 0417 622 178 or via email to dean.cameron@workforceadvisory.com.au

Disclaimer: This information is provided as general advice on workplace relations and employment law. It does not constitute legal advice, and it is always advisable to seek further information regarding specific workplace issues. Liability limited by a scheme approved under professional standards legislation.

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