“The relevance of instances of prior misconduct by an employee to a finding of “valid reason” under s.387(a) was also recently considered by a Full Bench of the Commission in Diaz v Anzpac Services (Australia) Pty Limited [2016] FWCFB 7204 at [12]-[16] (references omitted):
“[12] It is correct, as submitted on behalf of Mr Diaz, that there is some division in the authorities concerning whether mitigating factors relevant to whether dismissal was a proportionate sanction for any misconduct on the part of the relevant employee should be considered under s.387(a) or under s.387(h), although we note that in the recent decision of Sayers v CUB Pty Ltd, the Full Bench said that the “balance of authority under the FW Act” was in favour of such mitigating factors being considered under s.387(h). However, we consider that the authorities are clear that s.387(a) requires consideration, in a case where misconduct is the reason for dismissal, first as to whether the relevant conduct occurred, and second, if the conduct did occur, whether it was of sufficient seriousness or gravity to constitute a valid reason for dismissal. In this respect we endorse the analysis in Bista v Glad Commercial Cleaning at paragraphs [34]-[42] in relation to the consideration required by s.387(a).
[13] As was made clear in Bista, assessing whether a particular instance of misconduct is of sufficient gravity to constitute a valid reason for dismissal is not the same thing as considering whether dismissal was a disproportionate penalty for the misconduct. The former is “concerned with whether the conduct in question, considered in isolation, was intrinsically capable of constituting a valid reason for dismissal”. The latter involves taking into account a range of potential mitigating factors, which may include matters such as the employee’s length of service and disciplinary record, and weighing them against the gravity of the misconduct in order to determine whether dismissal was too harsh a penalty.
[14] In respect of the former task, it is not correct, as Mr Diaz submits, that the specific acts or omissions which constitute the relevant misconduct can be divorced from contextual matters relevant to the seriousness of that conduct. In Sayers v CUB Pty Ltd, the Full Bench made it clear that the “conventional position” in considering the valid reason issue is to take into account contextual matters bearing upon the degree of culpability on the part of the employee. The majority judgment in B, C and D v Australia Post might be read as standing for the proposition that contextual matters which operate to diminish the culpability of the employee should be taken into account under s.387(h) rather than s.387(a). However that does not assist Mr Diaz, because the majority also made it clear that the following matters, which concern the employee’s misconduct assessed from the employer’s perspective, arise for consideration in relation to the valid reason issue under s.387(a) (emphasis added):
“The acts or omissions that constitute the alleged misconduct on which the employer relied (together with the employee’s disciplinary history and any warnings, if relied upon by the employer at the time of dismissal) but otherwise considered in isolation from the broader context in which those acts or omissions occurred.”
[15] It is clearly the case that the gravity of an employee’s misconduct is increased in circumstances where the employee has previously engaged in conduct of the same or a similar conduct and has been warned not to repeat it. To put this another way, the employee’s defiance of the earlier warning(s) is an intrinsic aspect of his or her misconduct, and necessarily forms part of the assessment of the gravity of the misconduct. We do not consider that it is in any way controversial for such circumstances to be taken into account in determining whether there is a valid reason for dismissal under s.387(a). We therefore do not consider that Mr Diaz has demonstrated any arguable case of error in respect of the approach taken by the Senior Deputy President under s.387(a). Nor do we consider that Mr Diaz has identified any question of general application or any disconformity in the authorities in this respect.
[16] We would add that Mr Diaz’s submission that the outcome of his case might change depending upon the paragraph of s.387 under which his prior disciplinary record was considered is both artificial and counter-intuitive. That prior disciplinary record was, as the Decision makes clear, the critical factor which caused the Senior Deputy President to conclude that the dismissal was not unfair. It seems to us to be logically inexplicable that the dismissal could become unfair merely because that same disciplinary record was considered under s.387(h) rather than s.387(a), since in either case the degree of relevance of that disciplinary record and the weight to be assigned to it in assessing the fairness of the dismissal should be the same. Section 387 does not require any greater or lesser weight to be assigned to paragraph (a) as compared to paragraph (h); provided each specified matter in s.387 is properly taken into account, the weight to be assigned to them is a matter for the Commission member in the exercise of his or her discretion.”
[31] In my view, the following principles are apparent from these authorities on the question of reliance by an employer on earlier instances of misconduct on the part of an employee when making a later decision to dismiss the employee:
• where an employer with full knowledge of earlier instances of misconduct on the part of an employee has decided to retain the employee in employment, those earlier instances of misconduct cannot, of themselves, constitute valid reasons for dismissal;
• however, the earlier instances of misconduct may be relevant to the question of whether there was a valid reason for dismissal because they may increase the gravity of later misconduct, particularly where the earlier misconduct was of the same or a similar character and the employee was warned not to repeat it, thereby contributing to a finding that the reason(s) for dismissal were “sound, defensible and well founded”; 16 and
• the earlier instances of misconduct and any warnings in relation thereto may also be “relevant matters” (s.387(h)) to an assessment of whether the dismissal was too harsh a penalty in the circumstances.”
Conicella v Phillip W Hill & Associates Pty Ltd T/A Hunter Legal & Conveyancing (2016) FWC 7906 delivered 21 November 2016 per Saunders C