Unfair dismissal case reheard! for non-existent policy breach

An unfair dismissal case involving an employee who was dismissed for breaching company policy will be reheard by the Fair Work Commission (FWC), it was decided last month. The reason? The employee breached a non-existent company policy. The employee, who worked for international payments company OzForex, was alleged to have not followed proper procedure regarding a fraudulent transaction that took place on the company’s digital trading platform.

However according to the Fair work, OzForex got it all wrong by dismissing him for serious misconduct. Let’s take a closer look at this unique and interesting case – John Patrick Bracken v OzForex Limited [2022]. And later in the article, we’ll explain the rules around breaching company policies and when such breaches can be considered fair grounds for dismissal.

Foreign exchange dealer gets unwittingly entangled in fraud

As an international payments company, OzForex is regulated by the Anti-Money Laundering and Counter-Terrorism Financing Act 2006. This means it must have strict measures in place to identify and mitigate the risk of money laundering on its digital foreign exchange platform. In 2014, foreign exchange dealer John Patrick Bracken commenced working for OzForex. And as part of his employment contract, he was required to comply with the company’s policies and guidelines.

These policies ensured employees complied with OzForex’s strict legal obligations to prevent money laundering. In April 2021, OzForex noticed that a $23,000 fraudulent transaction took place on its trading platform. The transaction was initiated by a client that was under Mr Bracken’s responsibility.

Employee is dismissed for serious misconduct

OzForex launched an workplace investigation into the fraud. It deemed that while Mr Bracken wasn’t involved in the fraud, he hadn’t followed company policy in relation to the transaction. In May 2021, OzForex summarily dismissed Mr Bracken for serious misconduct.

He subsequently lodged an unfair dismissal application with the Fair work. However, his dismissal was upheld during his Fair work hearing in April this year. Given the commercially sensitive nature of the fraud, Mr Bracken’s FWC hearing was subject to a confidentiality order.

Employee appeals his unfair dismissal decision

Mr Bracken then launched an appeal to the decision, claiming that he hadn’t been afforded “the Common Law Right of Procedural Fairness.” He claimed he was denied certain rights, including not being given sufficient time to review evidence put forward by OzForex. He also claimed that the Fair work Commissioner in charge of his hearing was biased.

Mr Bracken also claimed that the Commissioner’s reasoning for justifying his dismissal was based on a “significant error of fact.” Namely, that OzForex had no policy or procedure concerning the nature of transaction that took place, which Mr Bracken was said to have breached.

FWC bench agrees employee breached non-existent policy

Reviewing Mr Bracken’s appeal, the Fair work appeal bench dismissed all of his claims except one. It found that “the Commissioner had made the error of fact alleged by Mr Bracken.” Namely, that he had breached a non-existent policy.

In fact, OzForex itself even admitted that “there was no written policy or procedure” of the nature that “the Commissioner found Mr Bracken had breached.” OzForex, however, claimed that this error didn’t matter as Mr Bracken had contravened the requirements of his employment in other respects.

Fair work orders unfair dismissal rehearing

But the Fair work bench also found that the Commissioner had erred by basing his decision on these other policy breaches outlined by OzForex. “In his consideration of the valid reason question, the Commissioner identified seven ‘examples’ of misconduct relied upon by OzForex,” said the bench.

The problem with that, however, was that the Commissioner deemed that these other examples “cumulatively constituted a valid reason” for dismissal, along with Mr Bracken’s contravention of the non-existent policy. This meant that if Mr Bracken was dismissed for breaching a non-existent policy, it’s possible that none of the other examples of misconduct may, on their own, constitute a valid reason for dismissal.

The Fair work bench therefore quashed the original decision by the Commissioner to uphold Mr Bracken’s dismissal. He will therefore have his unfair dismissal case reheard by the Fair work Commission.

Does breaching company policy always lead to a fair dismissal?

Generally, breaching a company policy can be fair grounds for dismissal. This could include breaching, for example, an employer’s code of conduct, health and safety policy, or bullying and harassment policy.

If the breach amounts to unlawful conduct, for instance in the case of bullying or discrimination, an employee’s dismissal can be considered fair. It can also be considered fair if the policy breach resulted in the employee disobeying a lawful and reasonable direction of their employer. Or if the employee substantially and willfully breached a policy.

However, the dismissal of an employee for breaching a policy can be considered invalid if:

• The policy is not legal and or reasonable.
• The policy isn’t related to the subject matter or nature of the employer’s role.
• The employer didn’t take measures to ensure the employee was aware of the policy.

Can you be dismissed for minor breaches of a policy?

A minor breach of company policy is very unlikely to lead to a valid dismissal. However, persistent minor breaches can be fair grounds for dismissal. This was demonstrated in the unfair dismissal case Hanson v Rhino Rack [2019]. The case involved Cameron Hanson, who worked as a store person in the Western Australian warehouse of adventure equipment provider Rhino Rack. The company had a number of policies and procedures in place that required employees to:

• Not smoke on the Rhino Rack premises unless in the designated smoking area while on a lunch break.
• Refrain from eating or drinking anything other than water in the warehouse.
• Hang a safety chain across the warehouse door to ensure no unauthorised entry.
• Only take breaks according to the warehouse schedule.

Mr Hanson, who commenced working at Rhino Rack in 2017, was made aware of these policies at the time as they were written in his employment contract. His contract stated that a “breach of a policy or procedure may result in the termination of employment.”  But in 2018, Mr Hanson’s manager noticed that he was repeatedly breaching the aforementioned policies. He had also been turning up to work late. Mr Hanson was formally warned by his manager for these breaches.

Employer continues breaching policies

Mr Hanson may have been warned multiple times, but this didn’t stop him from breaching Rhino Rack’s policies. The final straw came when Mr Hanson told a new employee not to hang the chain across the warehouse door – a directive that the employee reported to his manager.

Rhino Rack thereafter commenced disciplinary proceedings against Mr Hanson for the persistent breaches of company policy. The company issued him with a show cause letter outlining the policy breaches and asking Mr Hanson to respond to the allegations. It also explained that Rhino Rack was contemplating dismissing him from his employment.

Mr Hanson is dismissed for policy breaches

In his response, Mr Hanson said that “for the most part I can’t say I’m innocent.” He also said that the policy breaches weren’t intentional, but rather the result of his habits. Based on Mr Hanson’s repeated policy breaches and failure to take responsibility for them, Rhino Rack decided that his employment was no longer tenable.

Mr Hanson was dismissed effective immediately and given two weeks pay in lieu of notice. He subsequently lodged an unfair dismissal application with the Fair work Commission.

The Fair work rules on the unfair dismissal case

The Fair work Deputy President was tasked with deciding if Mr Hanson’s persistent breaches of Rhino Rack’s policies were a valid reason for dismissal.

Mr Hanson argued to the Fair work Commission that he hadn’t breached the policies, and that if he had, it wasn’t on purpose. He also claimed that the policies weren’t that important. Also, that he was only obliged to “try to follow company policy, not to actually follow it.” Mr Hanson also claimed that he had been dismissed for “petty reasons” as a result of a “vendetta against him” on the part of his manager.

Deputy President finds the dismissal was valid

However, the Deputy President found Mr Hanson wanting in regard to following Rhino Rack’s policies. He was satisfied that the policies were reasonable and lawful, and that Mr Hanson was, or should have been, aware of them. He also found that Mr Hanson repeatedly breached the policies despite multiple warnings.

The Deputy President conceded that Mr Hanson’s multiple breaches of company policy “may not in isolation have justified his dismissal.” However, he was satisfied that his persistent policy breaches demonstrated a “repeated disregard” for Rhino Rack’s lawful and reasonable policies, procedures and directions.

Deputy President finds disciplinary process was fair

The Deputy President also ruled that the disciplinary process put in place by Rhino Rack was procedurally fair. We’ve previously written about the importance of procedural fairness in unfair dismissal cases. Often, the failure to provide procedural fairness can lead to the Fair work ruling that a dismissal was unfair.

But in this case, the Deputy President found that Mr Hanson had been given:

• Written notice of the reasons for his dismissal.
• A chance to respond to the allegations made against him.
• The option to have a support person present during his disciplinary process.

The Deputy President thereby ruled that Mr Hanson’s dismissal wasn’t harsh, unjust or unreasonable, and was therefore valid.

Conclusion to: Unfair dismissal case reheard! for non-existent policy breach

Have you been dismissed for breaching company policy?

If you feel you’ve been unfairly dismissed for breaching company policy, A Whole New Approach can help. We’re Australia’s leading workplace mediators and commentators with extensive experience in helping workers seek redress through the FWC. We are proud of our staff and the outcomes they get for our clients. All workplace harassment, serious misconduct and related issues give us a call.

Over the last two decades, we’ve helped over 16,000 workers make unfair dismissal claims. Call us today on 1800 333 666 for a free and confidential conversation.

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