Termination for serious misconduct

An employer is permitted to instantly dismiss an employee when their actions amount to serious and willful misconduct. Serious misconduct can severely damage the employment relationship and indicate that the employee no longer wishes to be bound by the employment contract. Typically, this kind of conduct includes theft, fraud, assault, intoxication at work and actions that put other employees and the business itself at risk.

However, the tricky part for employers is knowing when an employee’s actions constitute serious misconduct, and when they don’t. Employers will need to assess the seriousness of the conduct in the circumstances and determine whether the punishment fits the crime. Employers also need to ensure that in all situations they follow a reasonable disciplinary process. Otherwise, employers run the risk that any dismissal will be harsh, unjust and unreasonable.  

The importance of procedural fairness has been a hot topic as of late and even when facing misconduct, employers are urged to follow a fair and reasonable dismissal process. In a recent FWC[1] case, compensation was awarded to a shoe store manager in an unfair dismissal claim despite the fact his conduct was described as retail ‘mortal sin’. The Platypus employee was dismissed for serious misconduct following allegations of misusing his ‘family’ discount when he applied it to his friend. He then failed to process the transaction and accord for the $220 until a week later. The employee also breached the company’s layby policy by beginning to wear shoes he had on layby, even though the payment remained outstanding. 

The FWC criticised Platypus for mis-categorising the conduct and for how they handled the situation. It was agreed that misusing the discount was not deliberate misconduct and that wearing the shoes on layby was, at worst, a “minor infraction” because of the approval he was given by the previous store manager. However, his excuse for failing to record the transaction and account for the $220 was less than satisfactory and failed to win over the commissioner. Nevertheless, Platypus made several procedural errors in their dismissal including luring him to their first meeting under false pretenses, refusing to allow for a support person and having a predetermined view of his guilt. Had it not been for the few procedural errors, the dismissal would most likely have been justified due to his sneaky mishandling of the cash.  

This case affirms how employers are often quick to incorrectly categorise an employee’s wrongdoings as ‘misconduct’.  While it may be obvious an employee’s actions are punishable, employers must still consider the surrounding context of the situation and any mitigating factors. Above all else, employers should ensure that they follow the proper procedure and give the employee an opportunity to give their version of events.

Lessons for employers

  • Ensure all allegations are promptly and thoroughly investigated. Inaction or ignoring the conduct may result in a compromised process if disciplinary action is eventually taken.  
  • Tell the employee they are required to attend a meeting to discuss concerns about their conduct and advise them they are entitled to bring a support person
  • At the meeting you should present the evidence of misconduct and allow the employee an opportunity to respond to the allegations made against them. .
  • After the meeting, if it is determined that the alleged misconduct is serious enough to justify instant dismissal, hand the employee a termination letter stating the reasons for the dismissal.
  • Remember procedural fairness must be afforded to all employees.



An employer has a right to summarily dismiss an employee for willful and serious misconduct.  However, they must still follow a dismissal process and afford procedural fairness, otherwise the employee may be successful in an unfair dismissal claim even though there was a valid reason for the dismissal.  


[1] Joshua Jimenez v Accent Group T/A Platypus Shoes (Australia) Pty Ltd [2016] FWC 5141 (5 August 2016)


Andrew Bland


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