Unfair dismissals: Do not pass “Go!”, salary caps and employees behaving badly
Listed below are some of the more salient points from recent interesting decisions concerning unfair dismissals and the indexing of the salary cap:
Do not pass “Go”
Fair Work Australia (FWA) has held that it can strike out an unfair dismissal application as having “no reasonable prospects of success” at a preliminary stage if it was to form the view that the application has insufficient weight and quality of evidence to succeed after a hearing. In such a case, the ex-employee has to provide an outline of his or her case that is sufficient for FWA to form a preliminary view as to whether the case has sufficient substance to be permitted to go to trial.
FWA adopted these principles in a case concerning an employee whose employment had been terminated after an investigation found that the employee had engaged in conduct with sexual connotations and recounted sexual experiences to other employees, uninvited.
FWA found that the employer’s investigation was thorough, fair and balanced, and that the employee’s account of events was “very unconvincing”, and therefore struck out the application without proceeding to a full hearing.
Employers need to raise the issue of “reasonable prospects” at an early stage in an appropriate case, to take advantage of this option.
The Salary Cap
The current threshold for unfair dismissal claims for non-award employees is an annual remuneration of $113,800 (from 1 July 2010, indexed annually).
“Remuneration” means wages or salary, salary-sacrificed amounts, and the value of non-monetary benefits (agreed, or established by FWA, if feasible), but does not include statutory superannuation, bonuses or commission where the amount cannot be determined in advance, or reimbursements such as expenses
Bad Behaviour by Employee Reduces Compensation
The unfair dismissal provisions include a provision allowing FWA to reduce compensation when a dismissed employee has engaged in misconduct.
In a recent FWA case, an employee of a transport company was found to have overcharged customers, and to have kept the profit to subsidise staff social events. The employer botched the investigation by conducting cursory interviews, failing to tell the employee that he was entitled to have a support person attend the disciplinary interview, and dealing inconsistently with other employees involved (one was warned, one was promoted and some suspicions were not pursued at all). In the circumstances, FWA held that the employee had not been given “a fair go all round”.
However, FWA held reinstatement would be entirely inappropriate as a remedy, because the relationship of trust had been destroyed by the employee. Further, any amount of compensation would have been modest at best: and the employee’s misconduct allowed FWA to reduce the compensation to nil.
Employee misconduct may relieve you of any liability to pay compensation for a dismissal that is found to be unfair. However, the other lesson is that it is important, even in what may appear to be cut-and-dried situations, to follow a rigorous and consistent process of investigation, in order to be seen to treat the employee fairly and therefore deter any claim and avoid the complications of a hearing such as the one that arose in this case.
If you would like further information, contact Stephen Booth, 9895 9222 (direct) or sbooth@colemangreig.com.au