Unfair dismissal for alleged misconduct

When an employee challenges the fairness of the termination of his or her employment in an unfair dismissal case in the Fair Work Commission when the reason for the employer’s decision relates to alleged misconduct by the employee the test is not whether the employer reasonably believed that the misconduct occurred but whether the Commission after hearing all of the evidence, including evidence not potentially available to the employer at the time is of the opinion that there was a valid reason for the dismissal.

“In the circumstances, I am reluctant to place much weight at all on the expert report because it is the product of enquiries that were reasonably open for Blugibbon to make prior to dismissing Mr Gates. Blugibbon had little more than suspicions of foul play and decided to dismiss Mr Gates based on those suspicions rather than find out if the suspicions were correct. Understood in this way, Blugibbon’s under-investigated suspicion was not a valid reason for dismissal.

[68] However 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. 5 The Commission’s does not stand in the shoes of the employer and determine what it would do in the employer’s position.6 Nor is the test whether the conclusion reached by the employer reasonable on the information available to it at the time.7

[69] The test is whether, on the evidence before the Commission, there was a valid reason for dismissal connected with the employee’s capacity or conduct.

[70] As such, there is no barrier for the Commission to receive and consider evidence of facts not known to the employer at the time of the dismissal 8 as long as the facts existed at the time of dismissal.9 The way in which such evidence might be considered will depend on the circumstances of the case. As Von Doussa J reasoned in Lane v Arrowcrest Group Ltd (1990) 27 FCR 427 at 45610:

“… In my opinion it is still open to an employer to justify a dismissal by reference to facts not known to the employer at the time of the dismissal, but discovered subsequently, so long as those facts concern circumstances in existence when the decision was made. Whether the decision can be so justified will depend on all the circumstances. A circumstance, likely to favour the decision to dismiss, would be that fraud or dishonesty of the employee had caused or contributed to the employer’s state of ignorance. A circumstance likely to weigh against the decision would be that the employer had failed to make reasonable inquiries which would have brought existing facts to its knowledge before the dismissal occurred…”

[Emphasis added].

[71] It may be that after-acquired knowledge/evidence improves an employer’s case in relation to establishing a valid reason for dismissal but, as the Full Bench in APS Group (Placements) Pty Ltd v Stephen O’Loughlin (2011) 209 IR 351; [2011] FWAFB 5230 found, such evidence might weaken the employer’s case in relation to procedural fairness:

“[51] Section 387(a) of the FW Act requires FWA to consider “whether there was a valid reason for the dismissal”. This language directs attention to whatever reason or reasons for dismissal emerge from the evidence and are relied upon by the employer. The tribunal is not confined to a consideration only of the reason or reasons given by the employer at the time of the dismissal. An employer is entitled at the hearing of an application for an unfair dismissal remedy to rely upon whatever reason(s) the employer wishes to rely upon at that time, albeit that in relation to any reason not relied upon at the time of dismissal the employer will have to contend with the consequences of not giving the employee an opportunity to respond to such reason (see s.387(b) and (c) of the FW Act).”

Extract from Gates v Blugibbon Pty Ltd (2021) FWC 6143 delivered 15 October 2021 per- Easton DP