Fair work cases and misconduct and “serious” misconduct

The distinction between “misconduct” and “serious misconduct” under the fair work sustem is ved. Theese onbsrevations made in an unfair dissal case of gthe Fair Work Commssion displays the legal issue.

“(a) Valid Reason

[55] As noted above, the Applicant’s misconduct was described by the Respondent in the termination letter of 30 September 2021 as serious misconduct, involving:

“(a) During the Escort, whilst the Applicant and the Detainee were seated in the van at approximately 21:07 hours (on 5 August 2021), the Applicant behaved inappropriately when he threw the face mask back at the Detainee and, in a loud and aggressive tone, stated to him “put on your fucking mask” in addition to other words and phrases;

(b) In the Officer’s Report submitted by the Applicant at approximately 21:10 hours (on 5 August 2021), the Applicant failed to report:

(i) details of his inappropriate behaviour and language towards the Detainee; and

(ii) details of the Applicant witnessing his colleague’s inappropriate behaviour, language and physical assault towards the Detainee; and

(iii) an accurate account of the sequence of events as they occurred in the van, thus making the information provided in the Applicant’s Officer’s Report false and misleading;

(c) The Applicant failed to sign Part D “Resources” section of the Escort Operations Order.”

[56] “Serious misconduct” is defined in the Fair Work Regulations 2009 (Cth) to the Act. Regulation 1.07 sets out the definition as follows:

“1.07 Meaning of serious misconduct

(1) For the definition of serious misconduct in section 12 of the Act, serious misconduct has its ordinary meaning.

(2) For subregulation (1), conduct that is serious misconduct includes both of the following:

(a) wilful or deliberate behaviour by an employee that is inconsistent with the continuation of the contract of employment;

(b) conduct that causes serious and imminent risk to:

(i) the health or safety of a person; or

(ii) the reputation, viability or profitability of the employer’s business.

(3) For subregulation (1), conduct that is serious misconduct includes each of the following:

(a) the employee, in the course of the employee’s employment, engaging in:

(i) theft; or

(ii) fraud; or

(iii) assault;

(b) the employee being intoxicated at work;

(c) the employee refusing to carry out a lawful and reasonable instruction that is consistent with the employee’s contract of employment.”

[57] The Respondent appears to rely on sub-ss.(2)(a), 2(b) and 3(a)(iii) of the above Regulation. However, that in itself is not necessarily determinative. In Sharp v BCS Infrastructure Support Pty Limited  4 a Full Bench of the Commission said at [33]-[34]:

“[33] The relevance of the definition of “serious misconduct” in reg.1.07 to the matter is also, with respect, obscure. Section 12 of the Act contains a definition of “serious misconduct” for the purposes of the Act which simply cross-refers to reg.1.07. Apart from s.12 itself, the expression “serious misconduct” is used in only three places in the Act. In s.123(1)(b), a dismissal for serious misconduct is a circumstance in which the notice and redundancy entitlement provisions of Pt 2-2 Div 11 are not applicable; in s.534(1)(b) a dismissal for serious misconduct is one to which the requirements for notification and consultation in Pt 3-6 Div 2 do not apply; and in s.789(1)(b) a dismissal for serious misconduct is one in relation to which the requirements established by Pt 6-4 Div 3 for notification and consultation do not apply. The expression “serious misconduct” is not used anywhere in Pt 3-2, Unfair Dismissal, of the Act. Section 392(3) requires the Commission, in relation to the award of compensation for an unfair dismissal, to reduce the amount that it would otherwise order by an appropriate amount where it is “satisfied that the misconduct of a person contributed to the employer’s decision to dismiss the person”. However, it is clear that conduct may constitute “misconduct” for the purpose of s.392(3) without necessarily being “serious misconduct”. The expression is used in the Small Business Fair Dismissal Code, but that had no application in this case (and it is at least highly doubtful in any event whether the reg.1.07 definition applies to the Small Business Fair Dismissal Code). Reg.1.07 therefore had no work to do in the application of the provisions of Pt 3-2 to the circumstances of this case.

[34] It may be accepted that an assessment of the degree of seriousness of misconduct which has been found to constitute a valid reason for dismissal for the purposes of s.387(a) is a relevant matter to be taken into account under s.387(h). In that context, a conclusion that the misconduct was of such a nature as to have justified summary dismissal may also be relevant. Even so, it is unclear that this requires a consideration of whether an employee’s conduct met a postulated standard of “serious misconduct”. In Rankin v Marine Power International Pty Ltd  Gillard J stated that “There is no rule of law that defines the degree of misconduct which would justify dismissal without notice” and identified the touchstone as being whether the conduct was of such a grave nature as to be repugnant to the employment relationship. “Serious misconduct” is sometimes used as a rubric for conduct of this nature, but to adopt it as a fixed standard for the consideration of misconduct for the purpose of s.387(h) may be confusing or misleading because the expression, and other expressions of a similar nature, have been considered and applied in a variety of contexts in ways which are influenced by those contexts. In McDonald v Parnell Laboratories (Aust) Pty Ltd Buchanan J said:

“[48] The terms ‘misconduct’, ‘serious misconduct’ and ‘serious and wilful misconduct’ are often the subject of judicial and administrative attention as applied to the facts of particular cases but there is relatively little judicial discussion about their content and meaning. Naturally enough, when the term ‘serious misconduct’ is under consideration an evaluation of what conduct represents ‘serious’ misconduct is influenced by the (usually statutory) setting in which the phrase must be given meaning and applied. Frequently, for example, the question at issue is whether an employee is disentitled by reason of his or her conduct to a statutory entitlement (eg. in New South Wales, where Ms McDonald was employed, see Long Service Leave Act 1955 (NSW) s 4(2)(a)(iii); Workers Compensation Act 1987 (NSW) s 14(2).””

(footnotes omitted)

[58] The onus of proof in relation to misconduct rests with the Respondent. The standard of proof is the balance of probabilities, with the more serious the allegation, the higher the burden on the Respondent to prove the allegation. 5

[59] The Commission itself must be satisfied that the misconduct occurred. In King v Freshmore 6, a Full Bench of the AIRC said at [24], [26], [28] and [29]:

“[24] The question of whether the alleged conduct took place and what it involved is to be determined by the Commission on the basis of the evidence in the proceedings before it. The test is not whether the employer believed, on reasonable grounds after sufficient enquiry, that the employee was guilty of the conduct which resulted in termination.

[26] As we have noted above, s.170CG(3)(a) obliges the Commission to make a finding as to whether there was a valid reason for the termination of employment. In circumstances where a reason for termination is based on the conduct of the employee the Commission must also determine whether the alleged conduct took place and what it involved.

[28] It is apparent from the above extract that his Honour answered the question of whether the alleged misconduct took place on the basis of whether it was reasonably open to the employer to conclude that the employee was guilty of the misconduct which resulted in termination. This is not the correct approach. The Commission’s obligation is to determine, for itself and on the basis of the evidence in the proceedings before it, whether the alleged misconduct took place and what it involved.

[29] In our view the Senior Deputy President failed to determine for himself whether Mr King was guilty of misconduct in the way alleged by Freshmore and he should have done so as part of determining whether the termination had been harsh, unjust or unreasonable. When the reason for a termination is based on the misconduct of the employee the Commission must, if it is an issue in the proceedings challenging the termination, determine whether the conduct occurred. The absence of such a finding leads us to conclude that the member below failed to properly determine whether there was a valid reason for the termination of Mr King’s employment.” (emphasis added)

[60] I find that the alleged misconduct regarding the Incident and the reporting of the Incident, as outlined in the letter of 30 September 2021, took place.

[61] Regarding the Incident, the CCTV footage shows beyond any doubt that the physical and verbal events of the Incident occurred, and the stills of that CCTV footage show the Applicant observing those physical and verbal events involving the Second DSO.

[62] It was not in dispute that when the Applicant commenced employment as a Casual DSO, he executed the Code of Conduct, or that the Applicant was required to participate in refresher training involving an online learning tool which included a document referred to as “Our Code of Conduct” in the year of the Incident. All DSOs at the Centre were required to complete scheduled training modules. That the Applicant was aware of the key accountabilities of his role, and that he failed to meet those accountabilities, was clear from answers he gave in the hearing. He agreed: 7

(a) He did not interact with, listen to, and respond attentively to, the Detainee;

(b) His behaviour was not professional or ethical;

(c) His interactions (with the Detainee) were not suitable and inflamed the situation 8;

(d) His actions were not responsive to the Detainee’s known mental health issues 9; and

(e) His actions did not promote the duty of care for the Detainee. 10

[63] Regarding the reasons relating to the Applicant’s Report, each of the allegations of misconduct have been established by the Respondent. The Applicant knew a key accountability of his role was accuracy and attention to detail in preparing communications, records and reports, including reporting abuse and impropriety, and unsurprisingly conceded he failed to do so. 11 The Applicant’s Report was so far from recording the events of the Incident to be false and misleading, and I find that, bearing in mind the Applicant’s clear knowledge of his reporting responsibilities, it was deliberately so.

[64] The consequence was that the Applicant failed to report:

(a) Details of his inappropriate behaviour and language towards the Detainee;

(b) Details of the Applicant witnessing the Second DSO’s inappropriate behaviour, language and physical assault towards the Detainee; and

(c) An accurate account of the sequence of events as they occurred in the van, thus making the information provided in the Applicant’s Officer’s Report false and misleading.

[65] The Applicant failed to sign the Part D “Resources” section of the EOO, however the alleged involvement of the DSM in the faulty preparation of the EOO, the disciplinary action taken by the Respondent against the DSM, and the Respondent’s failure to call the DSM to give evidence, does not allow a conclusion of fault attributable to the Applicant. This was, however, a relatively minor limb of the alleged misconduct of the Applicant.

[66] I find that there were valid reasons for the dismissal. I find that the conduct alleged actually occurred, and that, but for the issue of signing Part D of the EOO, it constituted serious misconduct and justified the dismissal.”

Matongorere v Serco Australia Pty Ltd (2022) FWC 1504 delivered 30 June 2022 per Cross DP