Whether the termination of an employee’s employment was procedurally fair or unfair forms the basis of the unfair dismissal jurisdiction under the Fair Work Act 2009 (Cth) (FW Act). Employers can often put themselves at risk of unfair dismissal claims when procedural fairness is not provided to employees during disciplinary action and / or the termination process.
What is procedural fairness?
The term “procedural fairness” is often used interchangeably with “natural justice” and generally means that an employee is given the opportunity to defend themselves and raise any mitigating circumstances before a decision is made.
In practice, in the disciplinary and / or termination processes, affording procedural fairness usually involves:
It is particularly important in providing procedural fairness that the employer does not skip or rush a step, or form an early view about the employee’s guilt or innocence, and carry that through the process. Accordingly, the final decision to terminate the employee’s employment should not be prematurely or hastily made.
Case Study - Jimenez v Accent Group T/A Platypus Shoes (Australia) Pty Ltd [2016] FWC 5141
For example, in Jimenez v Accent Group T/A Platypus Shoes (Australia) Pty Ltd [2016] FWC 5141, the employer summarily dismissed the Store Manager for what it said was serious misconduct.
The Fair Work Commission (the Commission) held that the termination procedure followed by the employer was “manifestly erroneous” and made, what should have been a fair dismissal with notice, an unfair dismissal.
The employee was invited to a meeting at head office which, as noted by the Commission, he was led to believe was about good news. At the meeting, the employee was actually advised about fraud and theft allegations against him and was asked to provide written responses to those allegations.
The employee was then required to attend a further meeting where his responses were reviewed. After just a 20 minute break in that meeting, the employee was advised that his employment was terminated without notice and was given a termination letter. Amongst other things, the termination letter referred to the Applicant attending the meeting with his solicitor, when in fact he attended with a friend as his support person.
The Commission found that the employer had already formed a view about the guilt of the employee because the employee was deliberately misled about the nature of the first meeting which was actually a “show cause” meeting, and because the termination letter which was handed to the employee after a short break was clearly pre-prepared. For the Commission, the content of the letter indicated that the employer had formed a view about the allegations it was meant to be evaluating.
Relevantly, the Commission stated: “The concept of the need to provide an opportunity to respond to potential reasons for dismissal...is fundamentally predicated upon the decision-maker approaching the issues under consideration with an open mind such that the opportunity represented some practical and realistic potential to persuade the decision-maker to a particular view.”
As a result, the employer was ordered to pay one week in compensation to the employee.
In an unfair dismissal application the Commission will consider the process the employer took when terminating the employee’s employment and the criteria for “harsh, unjust or unreasonable” including:
Case Study - Jan v NRS Engineering Solutions Pty Ltd [2017] FWC 1500
In Jan v NRS Engineering Solutions Pty Ltd [2017] FWC 1500, the security guard employee was told his employment was terminated because the host employer no longer wanted him on site after some items were taken.
The employee claimed that he was only told by text message why he was dismissed after making enquiries with his employer.
The Commission accepted the evidence of the employee that he was not told of the reason for the termination of his employment or provided an opportunity to respond to the allegation.
The Commission ordered the employer to pay the employee compensation.
Case Study - Moore v Specialist Diagnostic Services Pty Ltd T/A Dorevitch Pathology [2016] FWC 5910
Similarly, in Moore v Specialist Diagnostic Services Pty Ltd T/A Dorevitch Pathology [2016] FWC 5910, the Commission considered that the employer’s conflicting reasons for the termination of the employee’s employment impacted on the procedural fairness afforded to the employee as she was not given the opportunity to respond.
Case Study - Drysdale v John L Pierce Pty Ltd [2017] FWC 1251
Conversely, in Drysdale v John L Pierce Pty Ltd [2017] FWC 1251, the employer’s termination process was held to be fair by the Commission.
In that case, a fuel delivery driver was terminated without notice for breaches of the employer’s mobile phone and safety policies relating to the unloading of fuel.
The Commission found that there were valid reasons for the termination of his employment and after going through each of the factors above, the Commission was satisfied that the employee was afforded procedural fairness during the process leading to the termination of his employment. The Commission dismissed the unfair dismissal application.
Closing Comments
Other aspects for employers to consider include:
For employers, a failure to provide procedural fairness to an employee may result in a finding by the Commission that there was a valid reason for the termination of the employment but it was nevertheless harsh, unjust and unreasonable because of the lack of procedural fairness.
What’s Next
Next in our series of “Employment Law Essentials”, we will discuss substantive fairness in the disciplinary and termination process and how the Commission will consider substantive fairness in unfair dismissal applications.
