Dismissed for serious misconduct, will I lose my entitlements?
We are regularly asked if I’m dismissed for serious misconduct, will I lose my entitlements? It’s little known that if you are dismissed for serious misconduct, some employment benefits could be at risk. If an employer terminates an employer, the employee’s termination payment may consist of notice or long service leave. This depends on the dismissal circumstances. In all instances, annual leave entitlements must be paid upon termination.
If an employer dismisses an employee for serious misconduct, the employee is summarily dismissed and will receive no notice pay and potentially no long service leave pay. This depends on what Australian state they are located in. (LSL is state-based legislation).
Dismissed for serious misconduct
When an employee is dismissed on the grounds of serious misconduct, the employer doesn’t have to provide notice of dismissal. Further, all states except Victoria withhold any pro-rata long service leave entitlement if the employee has been dismissed for serious misconduct. This is before the period of service when they can take leave.
Consequently, some employers may label alleged misconduct as “serious misconduct”. This is to avoid paying out certain employee entitlements or notice pay. Employees are increasingly dismissed for minor bullying and harassment allegations that are now characterized as misconduct to avoid paying notice, redundancies and long service leave so be careful.
Fair Work Regulation 1.07 defines serious misconduct as conduct that is willful or deliberate and inconsistent with the continuation of the employment contract. This conduct may also be conduct that causes a significant and imminent risk to a person’s health and safety or to the reputation. The employer’s business viability or profitability. Examples of serious misconduct include theft, fraud, assault, intoxication at work, and the refusal to carry out lawful and reasonable instructions.
Valid reason applies in serious misconduct circumstances
Where serious misconduct has been alleged the test for a valid reason for dismissal does not change. The test remains whether the reason was ‘sound, defensible or well founded’. The standard of proof for serious misconduct remains the balance of probabilities. However ‘the nature of the issue necessarily affects the process by which reasonable satisfaction is attained’ and such satisfaction ‘should not be produced by inexact proofs, indefinite testimony, or indirect inferences’ or ‘by slender and exiguous proofs or circumstances pointing with a wavering finger to an affirmative conclusion.’
If the alleged misconduct was an isolated incident in an otherwise faultless career, you may be eligible to lodge an unfair dismissal claim. Be aware of the very strict 21 days to do so). This is because your dismissal may be considered harsh in the circumstances. Where an employee has been dismissed without notice (summary dismissal) for serious misconduct the Commission may find that, although there was a valid reason for the dismissal. In turn, the dismissal was harsh because summary dismissal was a disproportionate response.
Unfair dismissal case
In the unfair dismissal case of Adam Jolley v Cannon Hill Services Pty Ltd, an employee was dismissed for theft. This is after he stole a can of Coke from the vending machine located on site. When confronted about his actions, there was no deception or dishonesty on the part of the employee. he admitted to taking a can of coke with a likely value of $2 or $3. The employee did indicate that he had lost money many times to the same vending machine over a period of time without recompense. The employee was dismissed summarily for serious misconduct regarding the alleged theft.
Ultimately, Commissioner Simpson held that there was a valid reason for dismissal for theft but overall, the dismissal was harsh given the mitigating circumstances. The employee was honest, and forthcoming and expressed remorse immediately. This matter was distinguished from the facts in the unfair dismissal case of David Thomas and Frederick (Junior) Faamausili Ailua v Virgin Australia Airlines Pty Ltd t/a Virgin Australia. Where the ground crew for Virgin stole two packets of cigarettes from a cargo shipment that was damaged and partially open after a flight. Both staff in that matter denied stealing the cigarettes and continued to deny doing so.
The Commission found them to have stolen cigarettes. The Commission pointed to their deception and dishonesty in the following findings:
“ In my view, Virgin’s evidentiary case provided a sound, logical and rational foundation for the Commission. To be satisfied that the applicant’s denials of involvement in the theft, cannot be accepted. Obviously, neither applicant pleaded the severity (harshness) of their dismissal in the context of a theft amounting to just two packets of cigarettes, valued at probably less than ~$50.00 total. To have done so, would be to contradict their consistent line that they had not done anything wrong and had neither stole, nor received stolen freight.
Whether it was a relatively small value theft or something more substantial, is really not the point. Theft is theft – no matter the value. However, had the applicants not been untruthful during their investigation and in their evidence before the Commission and in Mr Thomas’ case, his self-serving concoction of invention, I might have put their conduct, particularly in Mr Faamausili Ailua’s case, down to a stupid and very bad error of judgment.
By not admitting their conduct, I am reminded that it is often not the conduct itself that determines one’s fate, but the subsequent attempt at cover-up. Nevertheless, regrettably, the applicants have ‘made their bed and must now lie in it’. I am satisfied the allegations against the applicants have been proven. I turn now to the matters the Commission is required to take into account under s 387 of the Act”.Commissioner Simpson of the Fair work Commission
Acknowledgment by the Commissioner
Commissioner Simpson acknowledged that there was no deception or dishonesty on the part of Mr Jolley. Once he was confronted with his actions in taking the can of Coke. Mr Jolley owned up to taking a can of Coke with a likely value of $2 or $3 in circumstances where he had lost many times that amount to the same vending machines over a period of time without recompense.
Long and unblemished period of employment, what does it matter?
Further, Mr. Jolley had a long and unblemished period of employment with the employer. Commissioner Simpson acknowledged that it is significant that Mr. Jolley was dismissed just prior to completing ten years of service. This negated his eligibility for long service leave which would result in a substantial loss to him were the decision to terminate him on the basis of misconduct remain undisturbed. This was given the long service leave provision in the Industrial Relations Act 2019 (Qld).
One instance of misconduct in nearly 10 years of otherwise unblemished service
Ultimately, Commissioner Simpson held that Mr. Jolley had engaged in one instance of misconduct. This was in nearly 10 years of otherwise unblemished service which in its proper context was a one-off opportunistic and momentary lapse of judgment. All overtaking the can of Coke without paying for it. It was out of character for him and occurred in circumstances where it was the last working day before the plant shut down. The vending machine door was left open. He had on multiple previous occasions paid money for an item from one of the vending machines without obtaining that item because of some operational fault in the vending machines.
Commissioner Simpson held that Mr. Jolley’s dismissal was harsh and, on that basis, unfair. Mr. Jolle was awarded $28,280.00 gross and in respect of his withheld long-service leave, Commissioner Simpson held,
“Whilst not strictly a matter for the Commission in the course of the matter it was common ground that in the event of a determination that his termination was unfair, Mr Jolley would be entitled to payment of pro rata long service in accordance with the long service leave provisions of the Industrial Relations Act 2019 (Qld)”.Commissioner Simpson
Conclusion for serious misconduct, will I lose my entitlements
Being dismissed, sacked, or terminated for serious misconduct can be devastating. Reputational damage, loss of entitlements, ability to get other work. Don’t leave this type of dismissal unchallenged. You don’t know where you end up in life. Many government agencies and councils will not employ you if you are sacked for serious misconduct.
I hope this brief article “serious misconduct, will I lose my entitlements?” has been helpful. These are stressful times. If you are facing dismissal you want every dollar you can get and are entitled to. If you have any questions you’re welcome to give us a call. All Fair Work Australia matters (FWC), sacked from work, regardless of the circumstances, call us.
1800 333 666, it’s free, we work in all states, including Victoria, NSW, QLD