Unfair dismissals and employer policies; what matters

Many employees are dismissed for contraventions of employer policies. But what is required for an employer’s policies to be valid and binding such that they constitute a line over which an employee may not go without risking discipline or demotion or dismissal? And what level of gravity of contravention is required to justify these measures?

Well here is passage from a recent Fair Work Commission case which endeavours to cast light on the legal issue.

“The ambit of the conduct which may fall within the phrase “harsh, unjust or unreasonable” was explained in Byrne v Australian Airlines Ltd 1 by McHugh and Gummow JJ as follows:

“… It may be that the termination is harsh but not unjust or unreasonable, unjust but not harsh or unreasonable, or unreasonable but not harsh or unjust. In many cases the concepts will overlap. Thus, the one termination of employment may be unjust because the employee was not guilty of the misconduct on which the employer acted, may be unreasonable because it was decided upon inferences which could not reasonably have been drawn from the material before the employer, and may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted.”

This matter concerns detailed instructions to an employee given in an employer policy document and other employer directions. Such policies have been considered in a range of decisions which include the following:

In Bostik (Australia) Pty Ltd v Gorgevski (No 1) 2, Sheppard and Heerey JJ observed:

“Employers can promulgate polices and give directions to employees as they see fit, but they cannot exclude the possibility that instant dismissal of an individual employee for non-compliance may, in the particular circumstances of an individual case, be harsh, unjust and unreasonable.”

In Woolworths Limited (t/as Safeway) v Brown 3, a Full Bench of the Commission said:

“[34] In summary, a breach of an employer’s policy involving or amounting to a failure to obey a lawful and reasonable direction of the employer sufficient to justify dismissal at common law will amount to a valid reason for termination of employment within the meaning of s.170CG(3)(a) in the sense of a reason that is ‘sound, defensible or well-founded.’ A failure to comply with a direction to do or refrain from doing something in compliance with an employer’s policy will not provide a valid reason for termination of employment where:

(a) the policy, or a direction to comply with the policy, is illegal;

(b) the policy does not relate to the subject matter of the employment or matters affecting the work of the employee; or

(c) the policy, or a direction to comply with the policy, is unreasonable.

[35] What is reasonable will depend upon all the circumstances including the nature of the employment, the established usages affecting it, the common practices which exist and the general provisions of the instrument governing the relationship. A policy will be reasonable if a reasonable employer, in the position of actual employer and acting reasonably, could have adopted the policy. That is, a policy will only be unreasonable if no reasonable employer could have adopted it. A policy will not be unreasonable merely because a member of the Commission considers that a better or different policy may have been more appropriate. As the Full Bench observed in the XPT Case, albeit in a somewhat different context, it is not the role of the Commission ‘…to interfere with the right of an employer to manage his own business unless he is seeking from the employees something which is unjust or unreasonable.’

[36] Even where a breach of policy (or failure to comply with a direction to observe a policy) provides a valid reason for termination of employment, it is well established that the termination may nevertheless be harsh, unjust or unreasonable. For example:

  • the employee may establish ignorance of the policy;


  • termination of employment may be a disproportionate response to the breach having regard to its nature and the employee’s length of service and prior history;


  • the employee may demonstrate prior non-enforcement or inconsistent application of the policy which, in the particular circumstances, render termination for breach of the policy harsh, unjust or unreasonable (although it should be noted that ‘…merely because in the past, another employee in breach of the policy may have been dealt with in a particular way other than dismissal is not, of itself, a reason why subsequent dismissals in similar circumstances might be said to be harsh.’);


  • the evidence may disclose that the policy is being applied in a discriminatory fashion or is used as a pretence to disguise a real reason that is impermissible (eg union membership or non union membership).


This list is not intended to be exhaustive and each case will turn on its own facts.” [References omitted]

In David Dawson v Qantas Airways Limited 4, the Full Bench said:

“[30] We note that the Qantas Group Cabin Crew Operations Manual makes it clear that the removal of aircraft stores from the aircraft is strictly prohibited and may lead to termination of employment. Further, under section 15.24 of the Qantas Group Standards of Conduct Policy, employees of the Respondent are not to engage in conduct including deliberately providing incorrect or misleading information, at any time, which is relevant to the employee’s employment.

[31] It is not disputed that, on 14 February 2016, alcohol was found to be in the possession of the Applicant. Further, the Applicant admitted that his explanation regarding how the alcohol came into his possession was “not true” in his letter to Ms Elliott dated 22 March 2016.

[32] Noting the above and considering the factual matrix as a whole, we are satisfied that the Applicant did remove the alcohol from the aircraft and subsequently misled the Respondent as to how and why the alcohol came into his possession. As such, the Respondent had a valid reason to dismiss the Applicant from his employment.”

In Cameron Woodman v The Hoyts Corporation Pty Ltd 5, the Full Bench said:

“[34] We have concluded that the appellant’s lie, being dishonest, was a breach of his obligations pursuant to the Employee Handbook and a breach of his common law duty of fidelity. We have concluded also that there was a valid reason for the termination of the appellant’s employment for the purposes of s.170CG(3)(a). That reason related to his conduct in representing that the ice creams had been paid for. We find that the employee was notified of the reason (s.170CG(3)(b)) and given an opportunity to respond (s.170CG(3)(c)). Nevertheless we think that the termination of his employment was harsh. The appellant himself was a participant in the theft only in an indirect way in that his statement that the ice creams had been paid for amounted to an attempt to cover up the theft. But the lie was not premeditated nor was it intended to benefit the appellant. It was not persisted in for long and it was given in connection with the pilfering of goods of fairly low value. We are unable to say what led to the appellant’s subsequent admission that he had lied about payment. Although Hoyts challenged his assertion that he had decided to tell the truth when he knew that Wentworth’s employment had been terminated, no alternative reason for the change of heart was advanced. We do not think that the resolution of this issue has any real bearing on the outcome of the case. While we do not underestimate the importance of maintaining high standards of honesty amongst staff working in this industry, we think the appellant’s conduct warranted a warning and no more. Dismissal for dishonesty had the potential to entirely alter his employment prospects for the rest of his life. In the circumstances that penalty was unwarranted. We have no doubt that this is a case of the kind referred to in Byrne and Frew v Australian Airlines Limited (1995) 185 CLR 410 in which the termination was disproportionate to the gravity of the misconduct in respect of which the employer acted (per McHugh and Gummow JJ at 465).”


Section 387 of the Act sets out factors which must be considered to determine if the termination of Mr Johnson’s employment was unfair. I am required to consider, make findings about, and give weight to each of these factors 6. I consider each of these in turn.”

Johnson v North West Supermarkets T/A Castlemaine IGA (2017) FWC 2866 delivered 1 June 2017 per Hamilton DP