"You're fired!" When can you sack someone without notice?

Employment Law Column - 24 January 2017

It's a brave new world.  Donald Trump, the former reality TV star, has become the 45th President of the United States.  He has come a long way from being known for the catchphrase "You're fired!", which was regularly used to hand down a summary execution of a wannabe Donald Trump or a hapless celebrity.  Unfortunately, as much as managers might think (or hope) that they can also fire underperforming or misbehaving employees on the spot, the law does not normally allow for such immediate decisions to be made.

Australian employment law provides a number of protections for employees from unfair or unlawful dismissals.  This is why the act of terminating a person's employment can often take weeks, or even months, as an employer strives to ensure that a fair and lawful process is followed.  Businesses also often take these steps to ensure that any "fallout", by way of employee claims, is minimised.

However, there are some occasions when an employee's misconduct is so serious that immediate dismissal is justified.  Even then, an employer cannot jump to conclusions.  Employment legislation gives specific examples such as theft, fraud, assault, being drunk at work (e.g. the good old Melbourne Cup lunch), or failing to follow an employer's lawful and reasonable instruction.  But it is not always easy to determine if an employee's actions actually constitute "serious misconduct" in the eyes of the law.  For example, what if an employee:

  1. performed burnouts in the business's driveway, intimidated a customer, and made "rude and aggressive gestures" towards the workplace's security cameras;
  2. verbally abused a colleague on the phone, because she had dared to call him while he was on a rostered day off;
  3. left a voicemail containing "colourful" language on a colleague's phone;
  4. was a competitive rifle shooter who attended work with a high-powered weapon and was showing it off to colleagues in the workplace's car park, which led to the police being called; or
  5. was a bouncer who allowed an underage girl to enter a casino, having only briefly inspected her Learner Drivers Licence?

All of these examples are similar to recent cases before the Fair Work Commission, in which the relevant employers had summarily dismissed the relevant employees for serious misconduct.  In the first two cases, the Commission found that the offending conduct did constitute serious misconduct.  However, in the last three cases, the Commission found that the employer had overreached, and that summary dismissal was not justified in the circumstances. 

So when does misconduct become "serious" misconduct?  It can be helpful to consider the following questions.  If these questions are answered mainly in the positive, the more likely it will be that summary dismissal may be justified.

  1. Was the misconduct wilful or deliberate?
  2. Was the misconduct inconsistent with the continuation of employment?
  3. Did the misconduct cause a serious and imminent risk to other people's health and safety?
  4. Did the misconduct cause a serious and imminent risk to the reputation, viability, or profitability of the business?
  5. Has the misconduct permanently destroyed the relationship of trust and confidence between the employer and employee?

In the end, each instance of misconduct has to be considered on a case by case basis, and it should not be assumed that a finding of serious misconduct will be made.  As tempting as it might be to "shortcut" the dismissal process, it can ultimately lead to more time and money being expended if the dismissal is litigated.  It can also damage your business's reputation, internally and externally, if it is perceived to have overreacted in the circumstances.  It is better to act carefully and thoughtfully prior to termination, than to try to clean up the messy aftermath of any unjustified summary dismissals.  "You're fired", at least in Australia, really does only work as a catchphrase on reality TV.


This article is part of a regular employment law column series for HRM Online by Workplace Relations & Safety partner Aaron Goonrey and Lawyer Luke Scandrett.  It was first published in HRM Online on 24 January 2017. The HRM Online version of this article is available here.



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