26 April 2022
A recent decision of the Fair Work Commission (Commission) has affirmed the importance of giving employees (subject to termination) a genuine opportunity to respond, even where the reasons for dismissal are valid.
To ensure that the dismissal of employees does not contravene the provisions of the Fair Work Act 2009 (Cth) (Act), employers should ensure that:
Mr Simon Ronchi (Ronchi) commenced employment with Johns Lyng Group (Johns Lyng) on 2 March 2020 as an OHS Manager. On 27 July 2021, Ronchi was dismissed from his employment following a meeting with Daniel Venditti and Lindsay Barber, members of Johns Lyng senior to Ronchi (Meeting). It was accepted that the termination of Ronchi at the Meeting was not premeditated.
Johns Lyng submitted, and it was accepted, that the reasons for dismissal were valid and included (Reasons):
To determine whether Ronchi had been unfairly dismissed, the Commission had to determine whether the decision was harsh, unjust or unreasonable, taking into account the factors contained in section 387 of the Act. Particular attention was paid by the Commission to the reasons for dismissal, the opportunity for response and the perceived conflict of interest in performing express and implied contractual duties.
The Commission held that although the Reasons were valid, Ronchi had been unfairly dismissed by Johns Lyng as he was not given a fair opportunity to consider the allegations and evidence against him, before a decision was made to terminate his employment.
It was held that the reasons were valid as:
However, the Commission accepted that although Ronchi was notified of the reasons for dismissal at the Meeting, it was not satisfied Ronchi had been given “a genuine opportunity to consider the seriousness of the allegations or the breadth of the evidence against him”. However, the Commission did consider that Ronchi’s lack of regard for his common law duty of fidelity and good faith, and his contractual obligations to Johns Lyng, afforded weight to the validity of the reasons for dismissal.
Despite this, it was ultimately held that a reasonable opportunity had not been afforded to Ronchi in responding to the notice of disciplinary action, and an order was made in his favour.
In recognition of Ronchi’s conduct however, the Commission did not consider that Ronchi’s employment would have extended further than seven days, even if Ronchi had been afforded a reasonable time to respond. Accordingly, the Commission ordered that Ronchi be paid one week’s wages, amounting to $1,634.62. The Commission did not award compensation for shock or distress suffered by Ronchi, and otherwise did not find the factors in section 392(2) of the Act considerable enough to constitute a basis for further compensation. Reinstatement to his role was not pursued by either party, nor considered appropriate by the Commission.
Notwithstanding the very limited compensation awarded, the failure to give a fair opportunity to respond led to a substantial diversion of resources, and the risk of reputational damage. Prior advice might well have avoided those outcomes.
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Authors: Andrew Knott & Emily Trompf
The information in this article is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this article is accurate at the date it is received or that it will continue to be accurate in the future.