Are You Serious? Serious Misconduct, Why It’s Important To Get It Right

Working as a business operator, you always want the best employees at your side. A good team is often critical for the ongoing success of a business.

However, it’s almost guaranteed that at some point, one or more members of staff will drop the ball, whether its through carelessness, callousness, or even just having a bad day. Whilst in most cases, a standard disciplinary and a warning can put any missteps to bed, occasionally employers may be faced with a situation where an employee, knowingly, recklessly or even deliberately does something so serious that they face the possibility of termination on the basis of serious misconduct.

When that happens, it is vital that business owners get their process right. Long gone are the days of ‘sacking on the spot’. In fact, recent case law highlights that it’s not enough to know some actions/behaviours warrant termination: Business owners need to be able to prove it.

Serious Misconduct, just what is it?

Serious misconduct is specifically defined under the Fair Work Regulations into one of two categories:

1.      Wilful and Deliberate Conduct inconsistent with the continuation of employment; or

2.     Conduct that causes Serious and Imminent risk to:

a.     The reputation

b.     Viability, or

c.      Profitability of a business

What amounts to Serious Misconduct can vary. The regs provide a few examples of conduct that fits this mould. This includes:

• Assault
• Intoxication at work (drugs or alcohol)
• Theft
• Fraud (or other serious misleading forms of conduct)
• Sexual harassment
• Refusing to carry out a lawful and reasonable instruction that is consistent with the employee's contract

Recent case law highlights the expanding nature of this definition. Examples such as deliberately extending hours (Jackie Du v Aus Post) out of hours conduct (Lattouf v ABC) and other cases highlight this expansion.

Proving Serious Misconduct

However, Employers must be careful when alleging and actioning Serious Misconduct, as the implications for terminating (or even issuing a first and final warning) may be action in the Fair Work Commission if an employer cannot successfully establish the serious nature of the conduct.

Whilst it is easy for employers to assume the conduct is serious (i.e. an employee is rude to the boss, refuses to do a job, or lies on a document), the onus lies on the employer, not the employee to establish that the conduct is serious.

Broadly known as the Briginshaw Principle, the employer needs to establish, to a civil standard (balance of probabilities) that the action/conduct:

• Is serious enough that it is inconsistent with continual employment/has implications on safety, reputation, business viability/profitability
• Is something to which the employee knew was one or more of these things (or was reckless to this); and
• The Employee understands the impact, breach and outcomes for such an offence

It is vitally important that an employer prove this through an appropriate disciplinary process. Simply assuming that the offence will be regarded as serious because ‘its obvious’ won’t suffice, and employers need to do the work to ensure that this is provable.

Proper Process for Serious Misconduct

Below is a step-by-step guide to undertaking serious misconduct disciplinary process:

1.      DO NOT AUTOMATICALLY TERMINATE

a.     Whilst the term ‘Summary Dismissal’ is often used in such processes, this refers to forgoing the notice period applied in standard employer directed terminations. Substantiating Serious Misconduct forgoes the notice process, but it is important a business go through process first, as if challenged, the onus is on Employer to prove (not the employee)

2.    Suspension from Duties

a.     Whilst some actions may warrant automatic suspension from duties (i.e. a violent incident), it is important that you back this up in writing.

b.     You May Have to Pay: Unless your contract specifically outlines non-payment for suspension, in most cases, an employer directed suspension of this type will require an employee to be paid wages for the absence. This can rub an employer the wrong way, but it is legally required in most instances.

3.    The Lead Up Process

a.     As with all Disciplinary Process, an appropriately drafted invite to disciplinary needs to be provided, and needs to contain:

i.                 A Summary of the allegation/s

ii.                The relevant breaches of the law and/or policy

iii.              The potential outcomes (including summary termination);

iv.              The opportunity to respond during the meeting; and

v.                The reasonable opportunity of a support person

4.    The Disciplinary Meeting

a.     During the meeting, an employer needs to establish:

i.                 That the employee is aware of the allegation

ii.                That they understand the seriousness of the allegation

iii.              That they understand the potential impact to the business/employee

b.     The employee needs to be given reasonable opportunity to respond, and consideration needs to be given as to their answer.

c.      In most cases, an outcome shouldn’t be decided during the meeting, and an employer should take a chance to review all evidence before delivering the final decision

d.     Most importantly, notes should be taken, as these may be required should the employee wish to challenge any final outcomes/decisions

5.    The Outcome

a.     Not every Serious Misconduct meeting will result in termination. In some instances, an employee:

i.                 May be given a first and final written warning

ii.                May need additional questions asked based on responses; or

iii.              If evidence is insufficient to establish liability, may not ultimately receive any further action

b.     Employers also need to be aware that:

i.                 Decisions made for one employee may be taken into account if same or similar conduct is undertaken by another employee (precedent)

ii.                Additional actions may be required if liability is established, but termination is not the outcome (such as movement of departments, shift schedules etc).

Key Takeaways

Serious Misconduct should never be taken lightly. The consequences for getting the determination, and/or the process wrong, can have serious consequences for your business.

For more information on serious misconduct, please contact our Employee Relations (ER) Advice team via phone on 9016 9000 or email on [email protected].