Unfair dismissal cases and standard of proof issues

This interesting extract from recent unfair dismissal decision of the Fair Work Commission sets out some relevant principles which the Commission uses in determining what standard of proof is required in such cases.

“s.387(a) – Whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees)

[235] When considering whether there is a valid reason for termination, the decision of North J in Selvachandran v Peterson Plastics Pty Ltd (1995) 62 IR 371 at 373 provides guidance as to what the Commission must consider:

“In its context in s.170DE(1), the adjective “valid” should be given the meaning of sound, defensible or well founded. A reason which is capricious, fanciful, spiteful or prejudiced could never be a valid reason for the purposes of s.170DE(1). At the same time the reasons must be valid in the context of the employee’s capacity or conduct or based upon the operational requirements of the employer’s business. Further, in considering whether a reason is valid, it must be remembered that the requirement applies in the practical sphere of the relationship between an employer and an employee where each has rights and privileges and duties and obligations conferred and imposed on them. The provisions must “be applied in a practical, common-sense way to ensure that the employer and employee are treated fairly.”

[236] However, the Commission will not stand in the shoes of the employer and determine what the Commission would do if it was in the position of the employer.106

[237] Where a dismissal relates to an employee’s conduct, the Commission must be satisfied that the conduct occurred and justified termination.107 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.”108

[238] Relevant to the standard of proof of the conduct, in Brinks Australia Pty Ltd v TWU 109 the Full Bench said:

“[6] The appellant’s submission is that this passage indicates that the Commissioner fell into error in weighing the evidence because he failed to apply the correct onus of proof – namely, the balance of probabilities. The appellant submitted that the standard in civil proceedings is always proof on the balance of probabilities. Reliance was placed on the following passage from the joint judgment of Mason CJ, Brennan, Deane and Gaudron JJ in Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd and Others:

‘2. The ordinary standard of proof required of a party who bears the onus in civil litigation in this country is proof on the balance of probabilities. That remains so even where the matter to be proved involves criminal conduct or fraud. On the other hand, the strength of the evidence necessary to establish a fact or facts on the balance of probabilities may vary according to the nature of what it is sought to prove. Thus, authoritative statements have often been made to the effect that clear or cogent or strict proof is necessary “where so serious a matter as fraud is to be found”. Statements to that effect should not, however, be understood as directed to the standard of proof. Rather, they should be understood as merely reflecting a conventional perception that members of our society do not ordinarily engage in fraudulent or criminal conduct and a judicial approach that a court should not lightly make a finding that, on the balance of probabilities, a party to civil litigation has been guilty of such conduct. As Dixon J. commented in Briginshaw v. Briginshaw:

“The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved …”

There are, however, circumstances in which generalisations about the need for clear and cogent evidence to prove matters of the gravity of fraud or crime are, even when understood as not directed to the standard of proof, likely to be unhelpful and even misleading.’

[7] It seems to us beyond doubt that the standard of proof to be applied in Commission proceedings is proof on the balance of probabilities. While it is true that the strength of the evidence necessary to establish a fact on the balance of probabilities may vary according to the nature of what it is sought to prove, the standard of proof never changes. The Commissioner indicated that he thought it appropriate to apply a higher level of satisfaction in relation to findings of fact involved than the bare civil onus of the balance of probabilities. That was an error of law.”

Chapman v Sepos Truck Trust T/A J&S Transport – [2021] FWC 5173 – 20 August 2021 – Hunt C