All employers will have circumstances arise where there is debate about the appropriate response. Sometimes employee misconduct is so clear-cut that it warrants an investigation and disciplinary action being taken. At other times, conduct falls within a “grey area”. How an employer responds to these conduct issues is an important element of establishing and maintaining a strong workplace culture. Is it also a relevant consideration in unfair dismissal claims. 

In unfair dismissal claims, having a “valid reason” to dismiss an employee is not enough to demonstrate that a dismissal is fair. Employers must also consider a range of factors, including the workplace culture and conduct tolerated in the workplace, past conduct warnings and an employee’s personal circumstances.  

A recent Fair Work Commission (“FWC”) decision highlighted the relationship between these issues in decision making. 

The background 

The case involved a pilot with 27 years of service. The employee made disparaging remarks to a colleague about her superior including, “he hates women”, “he is clearly having marital problems”, and “he is obviously fighting with his wife”. 

The employer suspended the employee, investigated the matter, and subsequently dismissed her for serious misconduct. In doing so, the employer relied on previous warnings including one issued 11 years earlier. 

What the FWC said 

The FWC agreed that the employee’s conduct breached the employer’s Harassment, Discrimination and Workplace Bullying Policy, and found the misconduct warranted censure and was a valid reason for dismissal. 

However, the FWC criticised the employer for several reasons, including: 

• failing to address similar workplace conduct issues; 

• relying on 11-year-old warnings (as historical warnings carry less weight and are difficult to rely on to justify termination of employment); and  

• procedural issues in the investigation as there was a failure to fully comply with steps in the enterprise agreement. 

Despite these criticisms, the dismissal was not unjust or unreasonable.  

The dismissal was found to be “harsh” due to the employee’s 27 years of service, her age and the financial impact on her family given she was the sole income earner. The FWC ordered the employee’s reinstatement despite the employer arguing that the trust in the employment relationship had broken down. 

Key takeaways for employers 

The case highlights several important lessons for employers, but perhaps the most important is the central role that workplace culture plays and the need for employers to have that culture at the centre of decision making. An employer will find itself in difficult territory when facing an unfair dismissal if it condemns certain conduct but overlooks similar conduct of others.  

Every organisation will have conduct issues that occur, some will warrant disciplinary action while others fall into a grey area. Proactively addressing cultural issues as they arise, and clearly setting expectations, gives employers a strong framework to manage employee conduct, particularly where the behaviour does not clearly breach a law or policy but still raises concerns. You can read more about the importance of workplace culture in our article here.