Flawed investigation results in maximum unfair dismissal payout

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Flawed investigation results in maximum unfair dismissal payout

In a recent Fair Work Commission case, Commissioner Cambridge has exercised the rare discretion of awarding a terminated employee the maximum allowable compensation under the legislation amounting to twenty-six (26) weeks’ pay. That decision was based upon the dual factors of a flawed investigation and a response deemed excessive in relation to the employee’s alleged conduct.

The employee had been employed as a mushroom picker/harvester for approximately 15 years on a farm in Greater Western Sydney prior to her termination on 20 August 2020. The employer’s business supplies mushroom to major Australian supermarket chains and independent grocers and has over 40 permanent staff. Accordingly, they have quite strict food standard requirements that employees are required to follow.

Until February 2020, the employee worked without any recorded complaint or issue regarding her conduct or performance. However, she had received several counselling and warnings in the subsequent months relating to failing to follow policies and procedures, arguing with a supervisor, and a late notice of impending absence.

The catalyst for her termination was an incident that occurred on 16 August 2020. Each mushroom picker is allocated three hand tools, including a numbered knife. At the end of their shift, the employees are required to wash their tools and return them to their respective numbered hooks. On this occasion, at the end of the shift, the employee’s knife could not be located, despite both her and her supervisor conducting a brief search.

On the following day, the employee was not rostered to work. As the missing knife represented a contamination risk, established procedures were enacted that involved a process check of all the product that the employee had processed. The process was successfully completed within 2-3 hours, and the product released to customers.

Upon her return to work on 18 August 2020, the employee found her knife, which she had incorrectly placed on another hook. She informed the Harvesting Manager and continued her normal duties. At around 3 pm, she was called to a meeting with the Manager and the HR Manager, asked about the circumstances of the missing knife, and provided with a stand-down letter and a notice to attend a meeting two days later.

At the subsequent meeting on 20 August, she was handed a pre-prepared letter of dismissal and her employment terminated. The letter stated that the missing knife caused serious and imminent risk to health and safety, damaged the reputation and viability of the business, and represented a failure to carry out a lawful and reasonable instruction.

Commissioner Cambridge, in his decision, ruled that the dismissal was invalid. As he noted in regard to the employee’s conduct,

it was clear that the employer mischaracterised the conduct of the applicant to be serious misconduct in circumstances where no such finding could be properly made…the disciplinary action of dismissal was grossly disproportionate to the conduct of the applicant”.

He noted that other employees had committed the same mistake without the same consequence and that the employer had established procedures to deal with just such situations.

He further determined that the investigation process was flawed, including that the employee had not been afforded the opportunity to have a support person at the initial meeting, nor afforded a reasonable opportunity to respond to the show cause letter, stating,

“the dismissal involved an entirely unjust and unreasonable process including the absence of any opportunity for the applicant to be heard before the decision to dismiss was made”.

Accepting submissions from the employee that reinstatement was impractical, based upon key factors including her lengthy service, relatively unblemished employment record, and the lack of intentional or negligent misconduct, granted her the maximum allowable compensation amounting to $19,240.

R v Imperial Mushrooms Pty Ltd [2021] FWC 1332 (19 March 2021)

For queries about misconduct, investigations, 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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