6 June 2013 What to avoid when terminating employees

By Laura Sowden, Solicitor

In Brief  

There are several actions which Employers need to be aware can get them into trouble regarding terminating an employee and any subsequent employee claim to the Fair Work Commission. Remember a claim for unfair dismissal is an accessible and cheap process for many employees which can end up costing employers time if not money.  



1. Have a Social Media Policy

Employers need to be careful when applying standards of behaviour to employees outside of the workplace. It is also important if employers want to restrict adverse comments on social media about their organisation that they implement a social media policy. When holding employees accountable employers must ensure they do so fairly and consistently.

Glen Stutsel v Linfox Australia Pty Ltd [2011] FWA 8444

In this case the employer terminated the employee for serious misconduct following the employee and friends making racially derogatory and sexually discriminatory comments about managers on his Facebook page. The employee claimed that another person had posted the sexual comments and that his privacy settings were set at maximum, meaning they were not publicly accessible.

It was significant that the employee believed his Facebook comments could only be seen by himself and those he accepted as friends. Further it was relevant the employee did not realise he could delete the comments of others made on his Facebook page.

The sexual comments about one manager were not made by the employee and the Commission considered it strange to hold the employee accountable for the comments of others. The Commission concluded the employee was not guilty of serious misconduct and there was no valid reason for termination. It was relevant no other employees who made derogatory comments were the subject of any sanction by the employer. The Commission concluded he had been unfairly dismissed and ordered he be reinstated. The employee also received lost wages following termination.

The Commissioner noted that the employer did not have a social media policy providing guidance on appropriate social media commentary and use and stated not having such a policy was not sufficient. The case is currently the subject of an appeal.

2. Make sure it is a Genuine Redundancy

Employers who fail to observe the Fair Work Act 2009 (Cth) (the Act) requirements relating to redundancies can find themselves exposed to unfair dismissal claims. A recent decision before Fair Work Australia (now the Fair Work Commission) highlights the legal requirements under the Act that employers will need to consider, when proposing to terminate due to redundancy.

Horn v Mastermyne Engineering Pty Ltd [2012] FWA 10846

The employee claimed he had not been made genuinely redundant on the basis that; there was no consultation or any demonstrated effort to identify alternative positions in the employers business; following the employees termination his duties were allocated to other employees not qualified to undertake the work; and the employer subsequently advertised positions the employee was qualified for.

The employer submitted the employee's role was no longer required to be undertaken by anyone due to changed operational requirements, in response to a downturn in the coal industry. Senior Deputy President Richards considered that it did not matter whether the employer redistributed the employee's former duties to other employees, who were not qualified, as that was a matter for the employer.  He reconsidered that had it not been for the financial circumstances that led to the sizing review, the employee would in all likelihood have remained an employee of the company.

The employer established they had investigated the availability of alternative positions in the employers group of companies; however, those investigations were unsuccessful. The positions advertised after the employee was terminated, were for fitters undertaking underground work – something the employee did not meet the regulatory requirements for. Richards SDP determined that there was no obligation on the company to overcome the difference in skill and experience by retraining.

Richards SDP noted that the employer had held a "pre-start meeting" with employees at which the organisation review was explained, the memorandum of that meeting was publicly available and employees had been invited to proffer suggestions to offset, avert or mitigate the proposed changes. In this context Richards SDP found the employer had complies with the consultation provisions of the relevant Award.

Richards SDP concluded that the employee had been made genuinely redundant and the employees application was dismissed.
For further information on redundancy see our article on Redundancy and for the full case details see our article here.

3. Use a system of employee warnings

Employers must be careful to undertake performance management procedures such as communicating expectations and issuing warnings properly and ensure they document such a process. If an employer does not do this they may face difficulties if that employee is later terminated for poor performance and brings an unfair dismissal claim.

Moumtzis v Dolina Fashion Group Pty Ltd [2013] FWC 501

The employee in this case was terminated on the basis she was unfit for her position as a designed of women's clothing. The employer had informed her she had not achieved the profit margins of the business and was purchasing expensive fabrics.

The employer did not put forward any evidence concerning discussions had prior to the termination and as such Vice President Watson was left to consider the uncontested evidence of the employee. After that discussion the employee was not given a chance to respond to the claim she was not performing.  VP Watson did not consider that a perception the employee was not performing when on her evidence she did not have any KPI's, budgets or annual reviews amounted to a valid reason for termination.

The evidence did not establish that the employee had been warned of any unsatisfactory performance prior to the termination. The fact there was no valid reason for termination, no chance for the employee to respond and no prior warnings led to the conclusion the employee was dismissed unfairly. VP Watson ordered the employer pay the employee 22 weeks pay as compensation.

4. Termination without an investigation is dangerous

Employers must be careful to document carefully an investigative process particularly if it may have disciplinary consequences such as termination. It is also important to warn employees that conduct may lead to dismissal. The below case demonstrates that following proper procedures in the investigative stage and in terms of disciplinary action is important and that serious conduct will empower an employer to act.

Read v Gordon Square Childcare Centre Inc T/A Gordon Square Early Learning Centre [2012] FWA 7680

In this case an employee at a childcare centre was the subject of a parental complaint. A parent complained that their child was left unattended when upset by the employee, was not given breakfast and on another occasion had been allowed to play with electrical outlets. This complaint was investigated by the childcare centre management.

That investigation concluded that the employee had admitted she left the child unattended and that this was a failure to supervise and a breach of childcare regulations and that this was deemed misconduct which was not compatible with the employee's employment continuing with the employer. The employee was summarily dismissed on the basis this constituted serious misconduct.

It was significant that the employee was not warned that her conduct could result in termination. Commissioner Bissett concluded the employee did leave the child unattended and unsupervised. This was a breach of the National Law and the centres Supervision Policy. Comm. Bissett also accepted that the employee had previously allowed children to pay under her reception desk where there were wires.

The employee was informed that her non supervision of a child was the reason for terminating her employment. The childcare centre afforded the employee procedural fairness in the process of investigation because they had presented the allegations, allowed her to respond and then made a finding which was in turn communicated to her. The employee was also allowed a support person at both meetings with the employer. While previous discussions about performance did not constitute warnings ultimately the Comm. concluded the summary dismissal was fair.

5. Don't be too pedantic

Employers need to be careful that they do not apply standards or policies in a way which is unnecessarily picky. The Commission will look at the circumstances and may apply a more liberal approach to the situation.  In the below case the employer held onto a nonexistent distinction between a medical certificate and a medical diagnosis and also implemented their policy with a little too much vigour considering the employees medical condition.

Taleski v Virgin Australia International Airlines Pty Ltd T/A Virgin Australia [2013] FWC 93

The employee brought an unfair dismissal claim following his termination for not complying with a direction. The employee was a flight attendant and was subject to a style guide outlining acceptable hairstyles. The employee grew his hair long initially to honour his dead mother and kept his hair long after he developed body dismorphic disorder. 

The employee provided as many as 8 medical certificates concerning his receiving treatment for body dismorphic disorder. The employer took issue with the fact that various medical certificates did not actual contain a diagnosis. The employer then took the employee off flight duties as he did not comply with the style guide.  

The employer gave the employee notice of termination and following the employees complaint the Human Rights Commission conciliated the matter. The employee returned to work and wore a wig to satisfy the style guide while flying. The issue continued however the employer later terminated the employee on the basis he had not complied with a requirement for a timeframe, a treatment plan (which he had in fact supplied) and was not complying with the style guide.

The Commissioner concluded the employee had provided documentation regarding his condition through the 8 medical certificates and explained the reason his hair was long and uncut. The employee had worn a wig and thus had complied with the style guide to the best of his ability. There was no valid reason for termination and no chance for the employee to respond to the issues raised in termination letter.

The dismissal was harsh, unjust or unreasonable and the Commissioner ordered reinstatement and that the employer maintain the continuity of service and recognise the employees period of continuous service.

6. Attend Fair Work Commission Proceedings

If a former employee brings a claim before the Fair Work Commission, employers cannot afford to ignore such a claim. Regardless of size, time and resources employers who ignore a claim run the risk of the Commission making adverse findings against them in their absence.

Bargmann v Stilnovo Pty Ltd T/AMurano and Gullotti [2013] FWC 1080

In this case concerning an unfair dismissal the respondent employer did not attend the scheduled telephone conference. Following the conference the responsible commissioner, Deputy President McCarthy wrote to the employer concerning why they did attend. No response was received from the employer.

DP McCarthy then issued directions requiring the employer to provide an outline of submissions and any witness statements. No submissions or witness statements were provided. On that basis DP McCarthy accepted the applicant employee's evidence unchallenged and found that the employee had been unfairly dismissed. Compensation in the amount of $3000 was awarded to the employee.

7. What does this mean?

Employers need to be careful in the way they act regarding employees they are terminating or considering termination in order to avoid several of the situations above. The core theme of all the above is to think first and act second, employment law is a difficult territory and as an accessible jurisdiction for employees, employers would be wise to be vigilant.
If you would like further information or some advice about your own situation please contact Laura Sowden.

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This article is not legal advice and the views and comments are of a general nature only. This article is not to be relied upon in substitution for detailed legal advice.

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