The issue of the entitlement of an employer to dismiss an employee summarily, that is to say without notice, and in circumstances of ignominy for the employee is reasonable complicated. This is because there are various contexts by which the issue is tested. Those differing implications are provided by
(a) the Fair Work Act (see for example sec 387) ;
(b) the employee’s contract of employment;
(c) the employer’s lawful and reasonable policies if incorporated expressly or by implication as obligations upon an employee; and
(d) the common law, especially the law of contract.
The following extract from a well known case on the issue looks at it from the perspective of the common law.
In Concut Pty Ltd v Worrell, Kirby J said of the common law:
“3. The ordinary relationship of employer and employee at common law is one importing implied duties of loyalty, honesty, confidentiality and mutual trust. […]
4. It is, however, only in exceptional circumstances that an ordinary employer is entitled at common law to dismiss an employee summarily. Whatever the position may be in relation to isolated acts of negligence, incompetence or unsuitability, it cannot be disputed (statute or express contractual provision aside) that acts of dishonesty or similar conduct destructive of the mutual trust between the employer and employee, once discovered, ordinarily fall within the class of conduct which, without more, authorises summary dismissal. Exceptions to this general position may exist for trivial breaches of the express or implied terms of the contract of employment. Other exceptions may arise where the breaches are ancient in time and where they may have been waived in the past, although known to the employer. Some breaches may be judged irrelevant to the duties of the particular employee and an ongoing relationship with the employer. But these exceptional cases apart, the establishment of important, relevant instances of misconduct, such as dishonesty on the part of an employee […] will normally afford legal justification for summary dismissal. Such a case will be classified as amounting to a relevant repudiation or renunciation by the employee of the employment contract, thus warranting summary dismissal.” 103IR 160, at PNS173-174″