A recent Fair Work Commission (FWC) decision has served as a reminder that evidence of a valid reason for dismissal discovered after the dismissal can be relied upon as a valid reason for the employee’s dismissal even though it was discovered after the fact.

When considering whether to dismiss an employee, employers must ensure there is a ‘valid reason’ for the dismissal. Without a valid reason, an employee may be successful in making an unfair dismissal claim, or even a general protections claim, relating to their termination.

Whether employers terminate an employee with notice (or pay in lieu thereof) or summarily dismiss them without notice, an employee must be terminated for a valid reason. Valid reasons can include:

• Repeated poor performance
• Inability to perform the employee’s role
• Redundancy
• Misconduct including serious misconduct.

A valid reason must be ‘sound, defensible or well founded’ and is not ‘capricious, fanciful, spiteful or prejudiced’.

However, sometimes employers fail to meet the above standard. At the time of termination, the employer’s reasons for termination may not be valid because of some deficiency.

For example, an employer might summarily dismiss an employee for serious misconduct without enough evidence at the time of the dismissal to justify a finding of serious misconduct. If an employer finds evidence later on that shows the employee had in fact engaged in conduct amounting to serious misconduct, the employer can retrospectively use the subsequent evidence to satisfy the FWC that the reason for dismissal was valid. Evidence of conduct amounting to serious misconduct which is discovered subsequent to the dismissal doesn’t have to relate directly to the conduct that the employee was terminated for. For example, if an employee was summarily dismissed for allegations of bullying and then the employer, after the dismissal was finalised, discovered that the employee had been stealing from the business, the evidence of stealing can be used in the employer’s defence of a FWC dismissal claim even though that was not the particular conduct the employee was originally dismissed for.

However, the FWC has drawn a line between subsequent evidence related to an employee’s conduct or capacity and other reasons for dismissal. In Ambrosio v Hybrid-Ag Pty Ltd [2025] FWC 266, the employee was dismissed due to redundancy. The employee made an unfair dismissal claim alleging that the employer did not genuinely make him redundant for a number of reasons. In the employee’s documentary evidence to the FWC, he included payslips for two other employees to substantiate his case. The employer asserted that:

1. there was no way for the employee to have obtained the payslips unless he had improperly used his position to gain access to the employer’s payroll records; and
2. the employee, in a serious breach of the terms of his employment contract, took copies of, and retained, confidential information about the employer’s business.

Deputy President Clancy agreed and found that the employee “breached an express warranty in his signed terms and conditions of employment, in that he copied and removed, without permission, documents relating to the business or affairs of the [employer]” and “that the employee breached the privacy of the two individuals to whom the payslips relate”.

The Deputy President went on to say that “[i]t is well established that facts in existence at the time of a dismissal, but not known to the employer at that time, may nonetheless be relied upon to justify the dismissal. I consider that Mr Ambrosio’s actions in relation to the payslips constitutes serious misconduct and equates to a valid reason for his dismissal” (footnote omitted).

Despite finding that copying and removing payslips from the workplace constituted a valid reason for dismissal, notwithstanding the conduct was only discovered during the FWC proceedings, the Deputy President said the subsequently discovered valid reason could not be relied on in this case because the original reason for dismissal didn’t relate to the capacity or conduct of the employee – the original reason for dismissal was redundancy. If the original reason for dismissal related to capacity or conduct, then this finding could have been relied on by the employer. Similarly, if there were deficiencies in the redundancy when observed at the time of dismissal but the employer discovered evidence justifying the redundancy later on, then the employer could rely on that to show the redundancy was a valid reason for dismissal.

Lessons for employers:

• Employees must be dismissed for a valid reason or employers risk an employee successfully making an unfair dismissal or general protection claim.
• A valid reason for dismissal is one that is ‘sound, defensible or well founded’ rather than a reason that is ‘capricious, fanciful, spiteful or prejudiced’.
• Evidence discovered after a dismissal can nonetheless be relied for proving there was a valid reason for the dismissal.
• A valid reason discovered after a dismissal must relate to the reason for the original reason for dismissal (e.g. subsequent evidence related to conduct can only be relied on if the original reason for the dismissal was also because of the employee’s conduct).

If you would like to discuss this or other workplace issues, please contact Andrew Bland or call 02 9412 3077.