In a recent case,[1] the FWC has sent a reminder that it is “not incumbent on an employer to take any particular steps” when carrying out terminations. The appropriateness of the steps taken in each case will depend upon the circumstances of the situation. However, in dealing with unfair dismissal applications, the FWC relies on the Fair Work Act 2009 (“FWA”) to determine whether a dismissal is harsh, unjust or unreasonable.

Factors that are considered include: whether the employer had a valid reason for dismissal; notification of that reason; and whether the employee was afforded the opportunity to respond before the employer made a final decision. The FWC must also consider any other relevant matters.

In this case, the FWC Full Bench quashed an earlier unfair dismissal decision by a senior member after the member had incorrectly assumed that the employee should have has the opportunity to provide a response to the employer about what disciplinary action should be taken. The employee was dismissed after he committed a series of serious safety and the company formed the view that the employee created a potentially life-threatening situation for himself and his co-workers.

In the initial decision, it was found that the company had a valid reason to dismiss the employee, but the dismissal was harsh, as it was “incumbent on the company to afford the employee an opportunity to make submissions to it on the proposed sanction of dismissal.”

The employer appealed the decision on a number of grounds, including that the Commissioner erred in failing to take into account and balance all of the relevant factors that determine whether a dismissal is harsh, unjust or unreasonable. It was also contended that the Commissioner erred in his conclusion that it was incumbent on the employer to hear submissions from the employee before imposing a sanction.

The Full Bench upheld the appeal and stated that, whilst the FWA directs the FWC to take certain matters into account in considering harshness, it does “not stipulate criteria that must be satisfied in order for a dismissal to be fair or unfair”. The commission considered that whether by saying it was ‘incumbent’ on the company to afford the employee an opportunity to make submissions to it on sanction, the commissioner meant only that it would have been appropriate for the company to do this, and this would have been a relevant consideration.

The FWC considered the statement of the Commissioner that it was “incumbent on” the employer to allow the employee an opportunity to have input to the sanctions, and whether this meant it was ‘necessary’ or ‘required’.  It was found that there was no such requirement and, while the FWA requires certain matters to be taken into account (e.g. a valid reason for dismissal, notifying the employee of the reasons for dismissal, affording the employee an opportunity to respond to allegations) they are not to be treated as compulsory criteria.

The Full Bench found that the Commissioner exercised his discretion in a manner which was not authorised under the FWA. As such, the decision was quashed, and the application was sent for re-hearing.

Lessons for employers

• During the dismissal process, the individual steps to be taken will depend upon the circumstances of the situation. However, it is vital that employers are familiar with the concept of procedural fairness and what is required.
• Follow a dismissal process closely. The FWC will consider whether the dismissal was harsh, unjust or unreasonable in light of how the process was handled.
• Ensure that the reasons for the dismissal are clearly communicated to employees and that they are provided with an opportunity to respond. This will allow for mitigating factors to be disclosed which might lead to a different course of action.
• Employers with less than 15 employees must consider the Small Business Code before they act to dismiss an employee.

 

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