What is serious misconduct in fair work law

Most Australians know that an employee can be lawfully and reasonably dismissed if he or she is guilty of serious misconduct which has a sufficient relationship with the workplace or job. But what is serious misconduct in this legal context. Here is the answer, at least in the case non-small business employers, for whom separate considerations apply*

“Lucev J summarised the meaning of serious misconduct in Wintle v RUC Cementation Mining Contractors Pty Ltd (No.3) [2013] FCCA 694, at paragraphs [97]-[103], where His Honour said:

‘97. To define “serious misconduct” by reference to its “ordinary meaning” as is done in reg.1.07(1) of Div.2 of Part 1-2 of Ch.1 of the FW Regulations is not of particular assistance in determining whether or not the conduct for which the employee has been terminated is serious misconduct disentitling an employee to the minimum period of notice prescribed under the NES. That is because, both historically and in more modern times, courts have been wary of defining the extent of “misconduct” which justifies dismissal, and where they have attempted the task have made it clear that the misconduct must be sufficiently “serious” as to warrant non-continuation of the contract between employer and employee. Thus, the “ordinary meaning” definition of “serious misconduct” adds little, if anything, to the content of the meaning of “serious misconduct”.

  1. In Clouston & Co Limited v Corry it was observed that there “is no fixed rule of law defining the degree of misconduct which would justify dismissal”.
  2. In Laws v London Chronicle (Indicator Newspapers) Ltd it was observed that:

… if summary dismissal is claimed to be justifiable, the question must be whether the conduct complained of is such as to show the servant to have disregarded the essential conditions of the contract of service.

… one act of disobedience or misconduct can justify dismissal only if it is of a nature which goes to show (in effect) that the servant is repudiating the contract, or one of its essential conditions; and for that reason, therefore, I think that one finds in the passages which I have read that the disobedience must at least have the quality that it is “wilful”: it does (in other words) connote a deliberate flouting of the essential contractual conditions.

  1. In North v Television Corporation Ltd the Australian Industrial Court was called upon to consider the word “misconduct” as used in an industrial award covering journalists. In the joint judgment in North it was observed that:

It is of assistance to consider the expression “misconduct” by reference to subject matter to which it is related and the context in which it appears. The subject matter is the termination by one party against the will of another of a continuing contract of employment on the ground of breach of one of the terms of the contract. And the context is such as to indicate that certain breaches of a non-serious nature, some of which would be within the connotation of misconduct, are not regarded as grounds for termination. In such a situation it is reasonable to interpret the expression “misconduct” as referring to conduct so seriously in breach of the contract that by standards of fairness and justice the employer should not be bound to continue the employment.

This situation would arise if there were conduct inconsistent with the fulfillment of the express or implied conditions of service. It is conduct of that kind which will justify dismissal at common law.

  1. It was also observed in North by a single judge that although the conduct of the journalist concerned was “reprehensible” it fell short of misconduct justifying summary dismissal because it was an isolated incident which occurred “under [the] considerable strain” of preparing for a nightly news bulletin.
  2. In Gera v Commonwealth Bank of Australia Ltd the employee’s Australian Workplace Agreement provided for termination without pay in lieu of notice for misconduct if the misconduct was serious. In that case it was observed that:

The use of the adjective “serious” imposes an additional requirement before the Bank can terminate employment without notice. Something more than mere misconduct is required.

  1. In Gera the Court went on to find that there was no doubt that the sexual or indecent assault of a fellow employee was serious misconduct warranting summary termination without payment in lieu of notice, as it constituted a fundamental breach of an employee’s duty, particularly where the employee was a senior employee and mentor to the employee who had been assaulted.’ (footnotes omitted)”

Puth v Precision Valve Australia Pty Ltd  [2020] FWC 7027 delivered 29 December 2020 per Sams DP

*See Small Business Fair Dismissal Code