Employer fails in procedural fairness

04 November 2020

The Fair Work Commission found in a recent case that an employee was unfairly dismissed. The employer alleged the employee had stolen company property. However, it was later found that the investigation process lacked procedural fairness.

In issue

  • A recent decision reminds of the importance of procedural fairness in termination of employment and the need to substantiate misconduct has occurred. WesTrac Pty Ltd (WesTrac) terminated Mr Benjamin Hatch's (Mr Hatch) employment on the grounds of misconduct that Mr Hatch had the intention to steal from the company, despite Mr Hatch denying the allegation. The issue was whether Mr Hatch’s dismissal was harsh, unjust and unreasonable, or in other words, unfair.

The background

Mr Hatch was a full-time Field Services Technician at WesTrac based at the Bengalla mine site. It was highlighted in the decision that in the coal mining industry, there has been a zero tolerance policy towards on-site theft and WesTrac have implemented policies and procedures to address the issue. The procedure at the Bengalla mine when a worker has finished using an item or tool, is to return it to the return store bench or return store area.

WesTrac alleges the reasons for Mr Hatch’s dismissal included Mr Hatch having a poor employment history of breaching company policies, that Mr Hatch had a wilful and deliberate intention to remove struts from the return to store area and placing them in his vehicle, and that such conduct would create a risk to WesTrac’s business reputation.

However, on 20 April 2020, when WesTrac put the allegations to Mr Hatch, Mr Hatch denied he had any intention of stealing the struts, and that the reason he brought them back to his vehicle was to try and compare it to the struts on his ute. On 27 April 2020, Mr Hatch was notified of his termination.

The decision

In determining whether the decision to terminate Mr Hatch’s employment was unfair, section 387 of the Fair Work Act (FW Act) requires the Fair Work Commission (FWC) to take into account the following:

  • whether there was a valid reason,
  • notification of the reason,
  • having an opportunity to respond,
  • whether there is a refusal of a support person,
  • whether there have been prior warnings, and
  • any other matters the FWC considers relevant.

Where there are allegations of serious misconduct, or misconduct, the onus is on the employer to prove that the misconduct occurred on the balance of probabilities.

Deputy President Saunders (DP Saunders) found that Mr Hatch did not have the intention to steal the struts. The reasons for this finding included the consistency of Mr Hatch’s evidence, Mr Hatch’s ability to answer questions during his evidence before the Commission and that during Mr Hatch’s 12 years of employment, he had not been accused of stealing.

DP Saunders also found that WesTrac did not take further steps in obtaining a better understanding of the witnesses’ evidence where there were inconsistencies, and that assumptions and concerns should have been put to Mr Hatch for his response. Further, one of the persons involved in making the decision to terminate Mr Hatch’s employment was given inaccurate information to the effect that Mr Hatch did not provide an explanation for his actions in the meeting on 20 April 2020, when in fact, Mr Hatch did.

Based on the deficiencies in the investigation and ultimately the decision-making process, it was found that Mr Hatch’s dismissal was harsh, unjust and unreasonable. As a result, Mr Hatch received a remedy of compensation totalling $28,313.41.

Implications for you

It is important reminder for employers, organisations and decision-makers that there is no “cookie-cutter” formula when it comes to dismissing an employee for serious misconduct. It will depend on the circumstances and it is important not to proceed as if an outcome is a foregone conclusion. Ensuring adequate policies and procedures are in place, that steps are taken to investigate the matter and procedural fairness is given to the employee or person being investigated, it will assist in mitigating the risks associated with terminating an employee’s employment. Applying procedural fairness will provide a supportable termination.

Benjamin Hatch v WesTrac Pty Ltd [2020] FWC 5729 (27 October 2020)

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