What is a valid reason for dismissal?

This extract from a recent decision of the Fair Work Commission in an unfair dismissal case deals with the legal principles used to determine whether there is a valid reason for the dismissal of an employee; one of the elements of such a case.

 

“Consideration

[56] In its consideration of predecessor provisions to s.387(a), the former Industrial Relations

Court of Australia confirmed that the expression “valid reason” means a reason that is sound,

defensible or well founded.20 It was there said that a reason that it capricious, fanciful, spiteful

or prejudiced could never be a valid reason for the purposes of s.170DE of the former

Workplace Relations Act 1996.21 Although the wording of the present provisions differ, the

approach continues to apply to the issue of “valid reason” under s.387(a).22

[57] When considering whether there is a valid reason relating to the conduct of an employee,

the Commission must decide whether, on the balance of probabilities, the conduct said to have

been engaged in by the employee actually occurred.23 The test is not whether the employer

believed on reasonable grounds, after sufficient inquiry, that the employee was guilty of the

conduct.24

[58] As to the question of onus or burden of proof in matters of this kind, a Full Bench of the

Commission observed in the matter of Newton v Toll Transport Pty Ltd:25

[81] Contrary to the Appellant’s contention, the extent to which the legal concept of

onus or burden of proof applies to matters before an administrative tribunal such as the

Commission is somewhat vexed. As observed by the Full Bench in Advanced Health

Invest Pty Ltd T/A Mastery Dental Clinic v Mei Chan:

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‘As to the issue of onus agitated by the Respondent, it must be said that the extent

to which the legal concept of onus or burden of proof arises in relation to

matters considered by an administrative tribunal such as the Commission is a

difficult one. However, in the context of the question whether a dismissal is

unfair, to the extent that there is a legal onus or something analogous to it, the

onus rests on the applicant in the sense that it is the applicant who bears the risk

of failure if the satisfaction required by s.385 including s.385(c) is not

reached. As to evidentiary onus, plainly a party seeking to establish a fact bears

onus of adducing evidence necessary to establish that fact. In a practical sense,

in most cases the question of where an evidentiary onus resides will be

answered by asking: in relation to each matter about which the Commission

must be satisfied, which party will fail if no evidence or no further evidence

about the matter were given?

[59] In order to be satisfied that there was a valid reason for the dismissal here I must

conclude that the Applicant had no intention of returning to work her allocated shifts when she

applied for annual leave and that in that event, she was dishonest and mislead her employer into

believing that she did intend to return to work. The Applicant asserted that at all times it was

[2023] FWC 2570

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her intention to return to Australia to work on her allocated shifts. The conclusion for which the

Respondent contended was based largely on adverse inferences that they maintained should be

drawn from the Applicant’s failure to produce documents. Mr. Hughes accepted in crossexamination that the Respondent did not provide the Applicant with any evidence that she had

mislead the Respondent but that the Respondent simply stated to the Applicant that they

believed that she did not intend to return.27 The Respondent’s case was that the Commission

could nonetheless be satisfied that the conduct occurred because the surrounding agreed or

proven facts were of a kind that that allowed the Commission to draw an inference, as the

Respondent had done, as to the Applicant’s real intention at the time the leave was requested.

[60] In DesignInc (Sydney) Pty Ltd v. Xu28 a Full Bench of the Commission restated the

relevant principles relating to the drawing of inferences as follows:

(i) an inference is assent to the existence of a fact which the drawer of the inference bases

on the existence of some other fact or facts;

(ii) the drawing of an inference is part of the process of fact finding;

(iii) an inference can be drawn if it is reasonably open on the basis of agreed or proved

facts;

(iv) the question whether a particular inference can be drawn from the facts found or

agreed is a question of law;

(v) where direct proof is not available, it is enough if the circumstances appearing in the

evidence give rise to a reasonable and definite inference;

(vi) the circumstances must do more than give rise to conflicting inferences of equal

degrees of probability so that the choice between them is a mere matter of conjecture;

(vii)matters to be taken into account in drawing an inference include circumstances whose

relation to the fact in issue consists in the probability or increased probability, judged

rationally upon common experience, that they would not be found unless the fact to be

proved also existed;

(viii) generally it is not lawful to take into account moral tendencies of persons,

their proneness to acts or omissions of a particular description, their reputations and

their associations;

(ix) the degree of probability required to found the necessary inference will depend on the

nature of the proceeding:

(x) in a criminal case the facts must be such as to exclude reasonable hypotheses

consistent with innocence;

(xi) in a civil case you need only circumstances raising a more probable inference in

favour of what is alleged;

(xii)a party’s failure to give evidence on some issue in cases where it is within that party’s

power to provide or give evidence, may result in more ready acceptance of the

evidence for the other party or the more ready drawing of an inference that is open on

that evidence.”

 

Zobair v Sydney International Container Terminals Pty Limited T/A Hutchison Ports [2023] FWC 2570 delivered 5 October 2023 per Roberts DP