During an unfair dismissal conciliation conference I recently attended a lawyer accused my client of fraud in circumstances where the allegation was tenuous at best and quite possibly completely wrong. It brought to mind a passage from a Fair Work Commission case which reminds us all of the care which needs to be taken in this context.
“There could hardly be a more serious allegation against an employee than to be accused of fraud. If true, it would undoubtedly constitute a ‘valid reason’ for dismissal, including, dismissal without notice. However, before an employer starts throwing around accusations of lies, deception and fraud, he/she ought be certain they have a sound basis for such claims and more importantly understand what the meaning of ‘fraud’ is in a legal context, and as commonly understood in society.
Meaning of ‘fraud’
The Concise Macquarie Dictionary defines ‘fraud’ as ‘deceit, trickery, sharp practice or breach of confidence by which it is sought to gain some unfair or dishonest advantage’.
Section 192E of the Crimes Act (NSW) defines ‘fraud’ as:
(1) A person who, by any deception, dishonestly:
(a) obtains property belonging to another, or
(b) obtains any financial advantage or causes any financial disadvantage,
is guilty of the offence of fraud.
Maximum penalty: Imprisonment for 10 years.
(2) A person’s obtaining of property belonging to another may be dishonest even if the person is willing to pay for the property.
(3) A person may be convicted of the offence of fraud involving all or any part of a general deficiency in money or other property even though the deficiency is made up of any number of particular sums of money or items of other property that were obtained over a period of time.
(4) A conviction for the offence of fraud is an alternative verdict to a charge for the offence of larceny, or any offence that includes larceny, and a conviction for the offence of larceny, or any offence that includes larceny, is an alternative verdict to a charge for the offence of fraud.
In Macleod v R  HCA 24, the High Court, Gleeson CJ, Gummow, Hayne JJ, said at paras -:
‘35. In Peters v The Queen, which concerned charges of conspiracy to defraud the Commonwealth under ss 86(1)(e) and 86A of the Crimes Act 1914 (Cth), Toohey and Gaudron JJ said that, ordinarily, fraud involves:
“the intentional creation of a situation in which one person deprives another of money or property or puts the money or property of that other person at risk or prejudicially affects that person in relation to ‘some lawful right, interest, opportunity or advantage’, knowing that he or she has no right to deprive that person of that money or property or to prejudice his or her interests”. (emphasis added)
- Their Honours explained that the term “dishonestly” in a statutory offence may be employed in its ordinary meaning or in some special sense. The line of authorities concerning the statutory offence of dishonestly obtaining property by deception provides an illustration of the latter.
- In a passage that has significance for the present appeal, Tooheyand GaudronJJ stated:
“In a case in which it is necessary for a jury to decide whether an act is dishonest, the proper course is for the trial judge to identify the knowledge, belief or intent which is said to render that act dishonest and to instruct the jury to decide whether the accused had that knowledge, belief or intent and, if so, to determine whether, on that account, the act was dishonest. … If the question is whether the act was dishonest according to ordinary notions, it is sufficient that the jury be instructed that that is to be decided by the standards of ordinary, decent people.”
Their Honours rejected any further requirement, derived from R v Ghosh, that the accused must have realised that the act was dishonest by those standards.
- A question presented by s 173 of the Crimes Actis whether the taking or application was “fraudulent” or “dishonest” according to ordinary notions. The passage cited above from the joint judgment in Petersindicates the preferred approach to the meaning of the term “fraudulently” in s 173.’ (footnotes omitted)
In my opinion, the objective bystander would consider ‘fraud’ as being wrongful or criminal deception intended to result in financial or personal gain. In my assessment, the objective facts surrounding the circumstances of Ms Tinker’s annual leave and the applicant’s approval of that leave, cannot possibly support an allegation that the applicant acted in a fraudulent manner, consistent with serious misconduct. In my view, by making such a serious finding about what in fact occurred, was not only (perhaps deliberately) designed to elevate the incident to a level of seriousness which was grossly exaggerated, but the allegation of fraud or fraudulent conduct was simply wrong and ultimately prejudicial to the applicant. Let me set out some of the matters which corroborate my finding in this respect.”
McGlashan v The Entrance Discount Variety Pty Ltd (2018) FWC 3284 delivered 29 June 2018 per Sams DP