This is an extract from an interesting decision of the Fair Work Commission determining that there was a valid reason for the dismissal but that it was relevantly unfair because of the employer’s failure to provide notice or pay in lieu.
“Proportionality
[132] This submission is based in part on the proposition that as there was no intention to deceive or mislead the client, dismissal was a disproportionate response. This submission is supported by my finding that, in the wake of the January 2024 incident, Mr Carmody sought to take on board what had occurred and had himself proposed some differently documented procedures. Nor do I have any doubt from the evidence before me that Mr Carmody was a conscientious professional who took his job seriously and sought to do no wrong to the client.
[133] However, I do not consider that the absence of an intention to deceive or mislead materially mitigates the failures of duty. A material breach by Mr Carmody of a fundamental element of his employment obligations does not require hostile intent. Its seriousness is to be assessed against the nature of the conduct in the context of Mr Carmody’s employment responsibilities as a professional project co-ordinator performing quality control work.
[134] I have found those failures of duty to have struck at the primary responsibilities Mr Carmody owed with respect to his role. I have found a serious lapse of professional judgement, occasioned by a failure to take due care and to resolve anomalies by reference to raw data from laboratory testing, to have occurred.
[135] Mr Carmody also submits that dismissal was a disproportionate response because the failure of duty in August 2024 was an isolated incident amongst thousands of reports he issued in the course of his employment.
[136] There is some force in this submission. Mr Carmody was in fact required to issue hundreds of reports on sample testing each shift, amounting to many thousands over the course of his employment. Aside from the report of 28 August 2024 (and the report that was the subject of the January 2024 incident) there is no evidence that Mr Carmody otherwise failed in his duties.
[137] Given that the objectively required standard of performance is competence and not perfection, there is some attraction to the submission that allowance must be made for infrequent error, and that making such allowance in the context of his employment as a whole would render Mr Carmody’s dismissal harsh.
[138] However, harshness itself is not to be narrowly considered by reference to a singular consideration alone. All relevant factors require consideration in determining whether a dismissal, objectively considered, is harsh. This is because the objects of Part 3-2 Division 2 (Unfair Dismissal) of the FW Act are to ensure a ‘fair go all round’ to “both the employer and the employee”.
[139] In this matter, there are material countervailing factors. These include:
• the seriousness of the failures in the context of the importance of the role of a quality control officer and the reports they certify. With respect to the report of 28 August 2024, competent professional judgement was not exercised by Mr Carmody. Even allowing for human error, the test results reported were not the product of effective quality control;
• whilst the failures concerned an individual report to a client, the failures were not singular; they were multiple (not noticing a customer standard and extreme moisture reading; transposing plainly incorrect data; and making an estimate of scientific properties without having carefully examined the raw data for a solution). These failures compounded each other;
• the failures in August 2024 occurred in the context of a broadly similar failure in January 2024 following which counselling was provided;
• the failures were avoidable had Mr Carmody taken steps consistent with the counselling provided; and
• Mr Carmody was an experienced professional who had worked in both laboratory and quality control roles, completed appropriate training in company expectations and procedures and, at the time of recruitment, held himself out as having specialist skills with respect to data analysis.
[140] I take into account that no formal warning was on Mr Carmody’s record and that the counselling in January 2024, whilst direct and relevant, was informal and undocumented.
[141] I agree that the dismissal of Mr Carmody for isolated albeit serious errors, even taking into account that he was an experienced professional scientist, was a heavy sanction. However, whilst it was open for Bureau Veritas to have taken a different view and retained his services by applying a lesser sanction (such as a final warning), and some employers may well have done so, the loss of trust and confidence was not unreasonably based. It is well established that the Commission does not stand in the shoes of an employer and decide what they could or should have done.45 This is a decisive consideration in this matter. The issue is whether what Bureau Veritas did (dismissal) was, considered overall and objectively, harsh, unjust or unreasonable; not whether a lesser sanction would have been a more reasonable course. I conclude that dismissal, in the overall circumstances, was reasonably open to the employer and accordingly the dismissal was not harsh, unjust or unreasonable.
[142] Having regard to both the considerations in favour and against a finding of harshness, I do not find that Mr Carmody’s dismissal was harsh on the ground that it was a disproportionate response.
Notice
[143] I have found that the conduct was a valid reason for dismissal but lacked the necessary level of intent or disregard for the client’s interests to be serious and wilful misconduct.
[144] I have found the conduct to have been a serious lapse of professional judgement, occasioned by a failure to take due care and to resolve anomalies in test results by reference back to raw data from laboratory testing.
[145] This being so, I consider that summary dismissal was objectively unfair. The failure to dismiss with notice renders the dismissal harsh, but for that reason only. I note that clause 4.2(b) of Mr Carmody’s employment contract permitted Bureau Veritas to dismiss summarily on grounds which include circumstances where an employee’s conduct compromises the “reputation or commercial viability” of the business.46 Whilst it is reasonably arguable that Mr Carmody’s conduct had the potential to jeopardise the relationship between Bureau Veritas and its client BHP (and thereby its reputation), clause 4.2(b) deals only with legal rights, not fairness. Whilst it may have been lawful for Bureau Veritas to dismiss summarily under the terms of the employment contract, I have concluded that it acted harshly in doing so.
[146] Accordingly, I find the dismissal to be harsh on the basis (and only on the basis) that Mr Carmody was summarily dismissed rather than dismissed with notice or payment in lieu.
Remedy
[147] I now turn to the question of remedy.
[148] Remedies available to the Commission under s 390 of the FW Act are reinstatement (in the same or other position) or (but only if reinstatement is inappropriate) compensation (within statutory limits). Whether to order a remedy is discretionary.
[149] I consider it appropriate to order a remedy but only on the terms outlined below.
[150] I conclude that reinstatement is inappropriate. The loss of trust and confidence was reasonably based. Dismissal was not unfair; simply one characteristic of the dismissal (its summary nature) made it harsh.
[151] I turn to the issue of compensation. Section 392 provides:
“392 Remedy—compensation
Compensation
(1) An order for the payment of compensation to a person must be an order that the person’s employer at the time of the dismissal pay compensation to the person in lieu of reinstatement.
Criteria for deciding amounts
(2) In determining an amount for the purposes of an order under subsection (1), the FWC must take into account all the circumstances of the case including:
(a) the effect of the order on the viability of the employer’s enterprise; and
(b) the length of the person’s service with the employer; and
(c) the remuneration that the person would have received, or would have been likely to receive, if the person had not been dismissed; and
(d) the efforts of the person (if any) to mitigate the loss suffered by the person because of the dismissal; and
(e) the amount of any remuneration earned by the person from employment or other work during the period between the dismissal and the making of the order for compensation; and
(f) the amount of any income reasonably likely to be so earned by the person during the period between the making of the order for compensation and the actual compensation; and
(g) any other matter that the FWC considers relevant.
Misconduct reduces amount
(3) If the FWC is satisfied that misconduct of a person contributed to the employer’s decision to dismiss the person, the FWC must reduce the amount it would otherwise order under subsection (1) by an appropriate amount on account of the misconduct.
Shock, distress etc. disregarded
(4) The amount ordered by the FWC to be paid to a person under subsection (1) must not include a component by way of compensation for shock, distress or humiliation,
or other analogous hurt, caused to the person by the manner of the person’s dismissal.
Compensation cap
(5) The amount ordered by the FWC to be paid to a person under subsection (1) must not exceed the lesser of:
(a) the amount worked out under subsection (6); and
(b) half the amount of the high income threshold immediately before the dismissal.
(6) The amount is the total of the following amounts:
(a) the total amount of remuneration:
(i) received by the person; or
(ii) to which the person was entitled;
(whichever is higher) for any period of employment with the employer during the 26 weeks immediately before the dismissal; and
(b) if the employee was on leave without pay or without full pay while so employed during any part of that period – the amount of remuneration taken to have been received by the employee for the period of leave in accordance with the regulations.”
[152] I now consider each of these criteria.
Viability: s 392(2)(a)
[153] There is no evidence before me to suggest that the compensation order will adversely affect the viability of Bureau Veritas.
Length of service: s 392(2)(b)
[154] Clause 4.1 of Mr Carmody’s employment contract47 states that notice on termination is provided “in accordance with the FW Act”. Having been employed for approximately eighteen months, the amount of notice (or payment in lieu) Mr Carmody would have been entitled to under the terms of the FW Act was two weeks.48
[155] However, somewhat incongruously, Schedule 1 of Mr Carmody’s employment contract provides that the notice period will be “one month”.49
[156] There is a potential discrepancy between clause 4.1 and Schedule 1.
[157] I resolve that discrepancy in the following way. I conclude that the period of notice that is to be paid in lieu is the equivalent of one month (gross). I do so for the following reasons:
• Section 117(2) of the FW Act, to the extent it is referenced by clause 4.1, provides a minimum period of notice only. It is lawful for an employer and employee to agree to a greater period; and
• Schedule 1 specifies a specific sum whereas clause 4.1 does not. The sum specified in Schedule 1 is for a greater period.
[158] I conclude that Mr Carmody’s service would have been extended by one month had he been provided notice or payment in lieu.
Remuneration that would have been received: s 392(2)(c)
[159] According to the employer’s materials,50 at the time of dismissal Mr Carmody was paid
$1,343.68 (gross) per week (for 32 hours). This equates to part-time remuneration of $69,888 per annum (gross). One twelfth of this sum (one month) is $5,824 (gross).
[160] Based upon Mr Carmody’s remuneration at the time of dismissal, one month’s notice or payment in lieu would have amounted to $5,824 (gross).
Mitigating efforts: s 392(2)(d)
[161] Although no material efforts in mitigation were taken by Mr Carmody, it was not reasonable to expect that he would do so inside the notional notice period. I make no deduction on this account.
Remuneration earned: s 392(2)(e)
[162] There were no earnings during the notional notice period. I make no deduction on this account.
Income likely to be earned: s 392(2)(f)
[163] The period for which I will order compensation (the notice period) does not extend to a period of projected future work. I make no deduction on this account.
Other matters: s 392(2)(g)
[164] There are no other matters or contingencies that need to be provided for.
Misconduct: s 392(3)
[165] I have found a serious failure to exercise due care by Mr Carmody but that dismissal for those reasons nonetheless warranted the provision of notice. I make no deduction on this account. To do so would deny Mr Carmody the payment in lieu of notice he was entitled to.
Shock, Distress: s 392(4)
[166] As a professional, Mr Carmody was distressed at being accused of serious and wilful misconduct. The dismissal impacted his sense of professional standing. However,
compensation allowable by the FW Act does not include a component for hurt feelings. The compensation order will make no provision for such matters.
Compensation cap: s 392(5)
[167] The compensation ordered does not exceed the six-month compensation cap.
Conclusion on compensation
[168] The compensation order will be for an amount equivalent to one month in lieu of notice. I consider this to be the appropriate sum.
Conclusion
[169] I find that Mr Richard Carmody, a person protected from unfair dismissal, was dismissed by Bureau Veritas Minerals Pty Ltd on 13 September 2024, and that his dismissal was harsh on the ground that he was dismissed summarily (without notice), but on that ground only.
[170] The amount of compensation payable by Bureau Veritas under s 392 of the FW Act will be $5,824 gross (plus superannuation calculated at the superannuation guarantee rate applicable at the time of dismissal). I will order these sums to be payable within fourteen (14) days.
[171] An order to this effect is issued in conjunction with publication of this decision.51”
Carmody v Bureau Veritas Minerals Pty Ltd [2025] FWC 259 delivered 29 January 2025 per Anderson DP