Unfair dismissal risks for employers

The Fair Work Commission routinely rules that a dismissal is relevantly unfair (ie justifying of a remedy) if there are real deficiencies in the fairness of the process which is followed in effecting the dismissal. Here is an example in this extract from a recent case in which the Commission determined that there was a valid reason for the dismissal but that the dismissal was harsh unjust and unreasonable because of the defects in process.

“Was Mr Kavanagh given an opportunity to respond to any valid reason related to his capacity or conduct?

An employee protected from unfair dismissal must be provided with an opportunity to respond to any reason for dismissal relating to the conduct or capacity of the person. This criterion is to be applied in a common-sense way to ensure the employee is treated fairly and should not be burdened with formality.64

Expo only became aware of Mr Kavanagh’s artificial inflation of his sales pipeline after he was dismissed, therefore it was unable to provide him with the opportunity to respond to this reason for dismissal prior to his dismissal.

Expo concede that Mr Kavanagh was not explicitly warned that he would be dismissed for poor sales performance prior to the decision being made to terminate his employment. 65 Expo say that he should have been aware that his employment was under scrutiny by implication as Mr Kavanagh was subject to a probationary period and by virtue of discussions Ms Dunning had with him and his team regarding sales performance. Expo also say that Mr Kavanagh had the opportunity to respond to performance issues raised with him during discussions with Ms Dunning about his sales performance.66

There is no evidence of Mr Kavanagh being formally warned about his performance or placed on any performance improvement program. The fact that he wasn’t dismissed with Mr Young or expressly warned about his performance at the 7 February 2020 meeting despite the comments he made could have led him to conclude that his employment was not at risk. While Mr Kavanagh may have held suspicions that his employment was in jeopardy, it was incumbent on Expo to make this explicitly clear so that he had a real opportunity to respond to those concerns.

As Mr Kavanagh was not notified of the reason for his dismissal in explicit, plain and clear terms before the decision was made to terminate his employment, he had no real opportunity to respond to the reasons for his dismissal before he was dismissed.

I therefore find Mr Kavanagh was not given an opportunity to respond to the reasons for his dismissal……………………………….




Was the dismissal of Mr Kavanagh harsh, unjust or unreasonable?

Mr Kavanagh’s dismissal clearly suffered from procedural defects. A dismissal is not necessarily harsh, unjust or unreasonable merely because of the existence of procedural defects. In this regard Expo sought to rely on the decision of SDP Lacy in Roweena Ann De Silva v ExxonMobile Chemical Australia Pty Ltd (Unreported, Print PR10623, SDP Lacey, 9 January 2002) (ExxonMobile Case) and the decision of Commissioner Bissett in Damien Lennen v Hallmark Editions Pty Ltd t/a Hallmark Editions [2012] FWA 6691 (Hallmark Case).

However, having considered each of the matters specified in section 387 of the FW Act, I am satisfied that the dismissal of Mr Kavanagh was unjust because the extent of procedural defects resulted in him suffering a substantial denial of procedural fairness.

Mr Kavanagh’s circumstances can be distinguished by those of the applicant in the ExxonMobile Case. In the case cited by Expo the applicant had been placed on a formal performance improvement plan. The evidence before SDP Lacy satisfied him that the applicant had been warned on several occasions that her performance was unsatisfactory and that a failure to improve may result in the termination of her employment. Similarly, Mr Kavanagh’s circumstances can be distinguished from those of the applicant in the Hallmark Case in which Commissioner Bissett was satisfied that the applicant had been given prior warnings about their conduct and an opportunity to respond to at least of the some reasons for which they were dismissed.

I am therefore satisfied that Mr Kavanagh was unfairly dismissed within the meaning of section 385 of the FW Act.”

Kavanagh v Expo Signage and Digital Pty Ltd – [2021] FWC 537 – 10 February 2021 – Binet DP