Serious misconduct and the doctrine of repudiation in the workplace

There are many instances where the Fair Work Commission has equated grave misconduct which justifies summary dismissal with the common law concept of repudiation. Indeed in the last year there have been multiple occasions where attempts have been made in Fair Work Commission decisions to link the two.

“Serious misconduct” is defined by the Act as having the meaning prescribed by the regulations and sub-regulation 1.07 of the Regulations defines the expression as follows

“(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.

(4)  Subregulation (3) does not apply if the employee is able to show that, in the circumstances, the conduct engaged in by the employee was not conduct that made employment in the period of notice unreasonable.

(5)  For paragraph (3)(b), an employee is taken to be intoxicated if the employee’s faculties are, by reason of the employee being under the influence of intoxicating liquor or a drug (except a drug administered by, or taken in accordance with the directions of, a person lawfully authorised to administer the drug), so impaired that the employee is unfit to be entrusted with the employee’s duties or with any duty that the employee may be called upon to perform.”

The common law doctrine of repudiation is not consistent with this as Deputy President Colman of the Commission clearly recognizes.

 

“The applicants contended that for conduct to constitute serious misconduct and justify instant dismissal it must be serious, a ‘radical breach’ of the employment relationship that is inconsistent with its continuation. In this regard they referred to the decision of the Full Federal Court in Melbourne Stadiums Ltd v Sautner. 317 However, the Full Court in that case cites a passage from Rankin318 noting that ‘there are offences which justify dismissal but which would not, in themselves, show that the employee was intending not to perform contractual obligations in the future’.319 The Full Court in Melbourne Stadiums also noted that the applicant’s conduct in that case did not necessarily have to amount to a repudiation of his contract of employment to justify his summary dismissal.320

Summary dismissal embraces termination of employment arising from breach of an essential term of the employment contract, a serious breach of a non-essential term, or conduct manifesting an intention not to be bound by the contract in the future. 321 In my view Mr Hatwell’s treatment of Mr Flens on 31 July 2017, and Mr Gelagotis’ actions in seeking to exclude Mr S.P. from the lunchroom because he had accepted employment with UGL, were serious matters, and of sufficient gravity to constitute serious misconduct.”

Gelagotis and another v Esso Australia Pty Ltd (2018) FWC 2398 delivered 2 May 2018 per Colman DP