Employee misconduct leading to unfair dismissal
Relevant to many of our members, the Full Bench of the Commission made a number of helpful observations about compliance with the Small Business Dismissal Code and provided a working example of how the Commission will approach deductions to an award of compensation for misconduct in the case of Butterfly Systems Pty Ltd [2021].
Facts
Butterfly Systems Pty Ltd, a hospital management software provider, unfairly dismissed an employee and the employee brought an unfair dismissal application, heard by the Commission.
The employer and employee had a disagreement over the phone on 24 March 2020. The employee submitted a formal request to take one day of annual leave via the employer’s HR system.
Despite the employer informing the employee there was a large volume of work, the employee submitted the formal annual leave request anyway. Right after submitting the request, the employee removed all contacts from the employer’s network, and ignored a phone call from the employer, as he regarded himself to be on annual leave.
Within two hours of this incident, the employer sent a text message to the employee, dismissing him from his employment and requested that he return all property to the employer as soon as possible. The employee responded to the text message and stated, ‘Okay, I’ll bring in the laptop tomorrow. I am on my annual leave today, stop calling me outside my business hours.’
The employer was a Small Business Employer within the meaning of the Act and was therefore the Act required the employer to follow the Small Business Dismissal Code.
At the time of dismissal, the employer incorrectly assumed that the employee’s misconduct amounted to abandonment of employment and fitted the definition of “misconduct’’.
The employee then filed an unfair dismissal application.
Initial Decision
In the first instance, the Commission held that the employer did not have a valid reason to immediately dismiss the employee for continuing to take the unapproved day off, and that the conduct of the employee, though unsatisfactory and unwarranted, did not amount to “serious misconduct”. The employee was awarded $35,000 in compensation, equal to 16 weeks of wages.
Due to the unsatisfactory and unwarranted conduct, the Commission decreased the sum from the equivalent of 16 weeks to 14 weeks. Although the Commission still maintained that the conduct did not amount to misconduct.
Full Bench Decision
On appeal, the Full Bench had to answer whether or not non-compliance with the Small Business Dismissal Code resulted in the absence of a valid reason for the dismissal, caused the absence of an appropriate reason for dismissal?
The Full Bench held this was not the case and:
“A refusal by an employee to comply with a lawful and reasonable direction will almost always provide a valid reason for dismissal in the sense of being well founded, sound and defensible.”
Although, the Full Bench found that summary dismissal was inconsistent with the circumstances, and that the employer had failed to meet procedural fairness resulting in the decision to dismiss being unfair.
The Full Bench acknowledged the conclusion of the Commission, that there was:
“no misconduct was in error and that the employee's misconduct plainly contributed to the employer's decision to dismiss him.”
Thus, the Full Bench stated that there needed to be a consideration of the ‘appropriate amount’, in which the compensation was to be reduced based on that of the misconduct.
Consequently, the employee’s misconduct resulted in an 80 per cent reduction in the award of compensation from 14 weeks of wages to 4 weeks of wages, and consequently from $35,000 at first instance to $7,384.62 on appeal.
Learnings from this case
This case demonstrates that applying the Small Business Dismissal Code effectively is difficult.
If you are looking to dismiss an employee, please contact the Workplace Relations team here at AMA Queensland for practical advice and guidance on (07) 3872 2222 or workplacerelations@amaq.com.au.
It is important that private practices minimise the risk of a successful unfair dismissal claim. Please attend our ‘Termination of Employment’ webinar on the 26 July 2021, from 10am to 12noon.
In this special extended webinar, we will look at the various reasons for terminating the employment of staff and the range of issues that arise during the termination process.